Premium Brands Holding Corp. 2018 Earnings & Price Target Update
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Premium Brands owns a broad range of branded specialty food processing, food wholesaling and food distribution businesses with operations in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Nova Scotia, Nevada, Ohio, Arizona, Minnesota, Mississippi, California and Washington State. Revenues are reported in two segments; Specialty Foods comprise 60% of revenues and 65% of gross profit and Premium Foods contributes 40% of revenues and 35% of gross profits. Approximately 70% of sales are from Canada and 30% from the US. The Specialty Foods segment's sales are to: (i) retailers, including delicatessens, small specialty grocery chains, convenience stores, gas bars, large national and regional grocery chains and warehouse clubs; and (ii) cafés selling convenience type grab-and-go foods such as fresh pre-made sandwiches, wraps and pastries. Acquisitions for the 2018 of $753M compared to $243M for 2017. A total of 12 companies were acquired in 2018. Total assets increased to $2.45B at Dec-31-2018 compared to $1.5B as at Dec-31-2017. Revenues peak in the spring and summer months due to favourable weather conditions and decline in the fourth quarter due to a return to poorer weather conditions.
AFFO for 2018 was $164.6M(5.08 per share) compared to $121.3(4.40 per share) for 2017. Dividends were increased from $1.90 to $1.68, and increase of 13.1% compared to AFFO per share increase of 7.9%.
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