Three UK companies make big moves: Which stocks should you keep or dump?
A well-known drinks maker shows promising growth plans while two other companies reshape their business models. Latest market analysis shows why some investments are worth holding onto while others need quick action
The UK-based soft-drinks producer Nichols recently held its first-ever capital markets day‚ showing off a three-part business plan thats looking quite solid. The company (which makes popular drinks like Vimto) splits its operations into UK drinks‚ international sales and out-of-home services; implementing new SAP software to boost its day-to-day work
Their goals look pretty straight-forward: grab more UK market share (about 1/2 of total sales now)‚ push harder in Middle East and Africa markets (1/4 of revenue)‚ and trim costs in their hospitality division. The numbers theyʼre aiming for are interesting: 30% more sales a 2.5% bigger profit margin and £45m in pre-tax income - which means the stock trades at just 14x future earnings; thats quite cheap for a no-debt company with 20% margins
The FTSE 100 company DCC is making some big changes: after its shares dropped more than 20% (while FTSE 100 went up 10%)‚ theyʼre now planning to break-up the business and focus on energy. The companys value dropped from 22x to 15x earnings‚ but with this new two-year break-up plan its worth keeping an eye on
Engineering firm Ricardo isnt working out as planned - even with their 40.2p per-share dividends (including the Nov-22 payment). They want to sell their defense business and move into environmental consulting; which sounds good but brings too many what-ifs about selling prices future purchases and how theyll put it all together. Its time to step away from this one
