Last close As at 05/08/2026
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Market capitalisation
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Research: Consumer
SandpiperCI Group’s FY22 results confirm another outstanding performance following a year that was once again affected by pandemic-related challenges. The food retail side of the business continued its industry beating performance; the non-food shops were affected by some forced closures but showed significant growth versus the prior year, and footfall trends have continued to improve. We expect FY23 to be characterised by an underlying slowdown in food retail and a further improvement in non-food, as shopping habits return to normal. The inflationary environment is likely to provide a tailwind to revenues, though we broadly maintain our profit forecasts at this juncture given the prevalence of cost inflation, which is likely to adversely affect margins.
Written by
SandpiperCl Group |
Growing undeterred |
FY22 results |
Retail |
28 June 2022 |
Share price performance
Business description
Next events
Analysts
SandpiperCl Group is a research client of Edison Investment Research Limited |
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SandpiperCI Group’s FY22 results confirm another outstanding performance following a year that was once again affected by pandemic-related challenges. The food retail side of the business continued its industry beating performance; the non-food shops were affected by some forced closures but showed significant growth versus the prior year, and footfall trends have continued to improve. We expect FY23 to be characterised by an underlying slowdown in food retail and a further improvement in non-food, as shopping habits return to normal. The inflationary environment is likely to provide a tailwind to revenues, though we broadly maintain our profit forecasts at this juncture given the prevalence of cost inflation, which is likely to adversely affect margins.
Year end |
Revenue |
PBT* |
EPS* |
DPS |
P/E |
Yield |
01/21 |
200.4 |
5.1 |
4.09 |
3.00 |
22.5 |
3.3 |
01/22 |
210.7 |
7.3 |
5.82 |
3.30 |
15.8 |
3.6 |
01/23e |
216.1 |
6.9 |
5.50 |
3.50 |
16.7 |
3.8 |
01/24e |
221.4 |
6.4 |
5.15 |
3.60 |
17.9 |
3.9 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
FY22 results
FY22 revenue of £210.7m was up 5.1% y-o-y while trading EBITDA of £12.7m was up 12% y-o-y. Net debt reduced by £4.0m during the year to £13.6m, despite the acquisition of Red Group for £0.9m (net of cash acquired). We note that the food retail business witnessed like-for-like sales growth of 16% over two years, which undoubtedly benefitted from the pandemic, but the performance was materially stronger than food retailers in mainland Britain during the same period.
Expansion to drive growth in the long term
Sandpiper has leveraged its relationships with its franchise partners to introduce their brands in additional geographies, while finding opportunities in existing geographies, such as the acquisition of Le Cocq’s Stores in Alderney in 2021. In our view, there are some opportunities for in-fill across existing geographies and scope for entry into new territories, although we believe the larger long-term opportunity is likely to be an expansion into an adjacent segment such as hospitality.
Valuation: Fair value of 130p
We value Sandpiper primarily on a DCF basis. We have rolled forward our DCF model and increased our WACC assumptions to reflect rising interest rates. Our model assumes medium-term sales growth of 3.5%, terminal growth rate of 1.5% and broadly flat margins. At a WACC of 8.7% this results in an unchanged fair value of 130p/share. While there are not many direct peers, Sandpiper trades on a CY22 P/E of 16.6x and EV/EBITDA of 9.1x, a c 25% premium to a peer group of food retailers and franchisors. We believe a premium is justified by Sandpiper’s significant freehold property portfolio and its attractive and well-underpinned dividend yield (3.8% in 2022).
FY22 results
FY22 revenue of £210.7m was up 5.1% y-o-y while trading EBITDA of £12.7m was up 12% y-o-y. Net debt was reduced by £4.0m during the year to £13.6m. The food retail business witnessed like-for-like sales growth of 16% over two years, a stronger performance than food retailers in mainland Britain. Gross margins were up 80bp during FY22 and trading EBITDA margins were up 40bp. As discussed above, we expect the food retail side of the business to decelerate in volume terms as trading normalises in FY23, while the non-food retail business should continue to recover as consumer footfall improves. In addition to these trends, inflation is starting to feature across the entire business. We expect FY23 revenues to see some benefit from this as prices rise, and of course the food retail side is less discretionary and hence less likely to see an adverse impact on volumes (though downtrading could start to feature). We also expect rising costs, however, and hence our profit forecasts are broadly unchanged. We illustrate the changes to our forecasts below.
Exhibit 1: Old versus new forecasts (FY22–24)
Year end January |
FY22e |
FY22 |
Change |
FY23e |
FY24e |
||||
Old |
New |
Change |
Old |
New |
Change |
||||
Revenues |
205,182 |
210,674 |
2.7% |
210,424 |
216,063 |
2.7% |
215,659 |
221,433 |
2.7% |
Gross profit |
15,937 |
18,836 |
18.2% |
16,344 |
18,454 |
12.9% |
16,750 |
18,912 |
12.9% |
Gross margin |
7.8% |
8.9% |
1.2% |
7.8% |
8.5% |
0.8% |
7.8% |
8.5% |
0.8% |
Trading EBITDA |
11,833 |
12,715 |
7.5% |
12,135 |
12,176 |
0.3% |
12,437 |
12,479 |
0.3% |
Trading EBITDA margin (%) |
5.8% |
6.0% |
4.7% |
5.8% |
5.6% |
(2.3%) |
5.8% |
5.6% |
(2.3%) |
Normalised PBT |
5,306 |
7,281 |
37.2% |
5,334 |
6,881 |
29.0% |
5,357 |
6,432 |
20.1% |
Reported PBT |
5,306 |
7,422 |
39.9% |
5,334 |
6,881 |
29.0% |
5,357 |
6,432 |
20.1% |
Normalised basic EPS (p) |
4.25 |
5.82 |
37.2% |
4.27 |
5.50 |
29.0% |
4.29 |
5.15 |
20.1% |
Normalised diluted EPS (p) |
4.25 |
5.82 |
37.2% |
4.27 |
5.50 |
29.0% |
4.29 |
5.15 |
20.1% |
Reported basic EPS (p) |
3.87 |
5.55 |
43.2% |
3.89 |
5.02 |
29.0% |
3.91 |
4.70 |
20.1% |
Dividend per share (p) |
3.30 |
3.30 |
0.0% |
3.50 |
3.50 |
0.0% |
3.60 |
3.60 |
0.0% |
Net debt/(cash) |
17,018 |
13,640 |
(19.8%) |
16,737 |
11,719 |
(30.0%) |
16,417 |
10,641 |
(35.2%) |
Source: Edison Investment Research, company data
Valuation
We value Sandpiper primarily on a DCF basis, which we have rolled forward to commence in FY23. Our model assumes medium-term sales growth of 3.5%, a terminal growth rate of 1.5% and broadly flat margins. We have raised our WACC to 8.7% (from 8.2%) to capture the effect of rising interest rates. At a WACC of 8.7%, our DCF analysis results in a fair value of 130p per share. Our medium-term sales growth of 3.5% reflects long-term RPI forecasts of c 3% over the cycle and modest growth in store space, as Sandpiper expands across its existing geographies.
We illustrate Sandpiper’s valuation metrics versus its peers in Exhibit 2 below. Comparison is not straightforward as there are not many direct peers. We include the listed franchisors as peers although we recognise their business models are slightly different. Sandpiper trades on a CY22 P/E of 16.6x and EV/EBITDA of 9.1x, a c 20% premium respectively to its peer group on both measures. We believe a premium is justified by Sandpiper’s significant freehold property portfolio, its attractive and well-underpinned dividend yield (3.8% in 2022), and management’s recognition that dividend yield is important to its investors. While there is no defined catalyst to suggest a revaluation is imminent, we believe continued earnings growth will underpin the shares. In addition, the significant freehold property valuation (last valued in January 2022) lends support to the valuation.
Exhibit 2: Peer group valuation (calendarised)
Market cap |
P/E (x) |
EV/EBITDA (x) |
Dividend yield (%) |
|||||
(m) |
2022e |
2023e |
2022e |
2023e |
2022e |
2023e |
||
Sainsbury |
£4,958.1 |
9.9 |
9.8 |
5.1 |
5.1 |
5.8 |
5.9 |
|
Tesco |
£19,108.4 |
12.0 |
11.5 |
6.8 |
6.6 |
4.2 |
4.4 |
|
Wm Morrison |
£2,839.0 |
8.0 |
8.2 |
4.6 |
4.7 |
3.6 |
5.0 |
|
Marks & Spencer |
£391.3 |
20.2 |
17.6 |
8.4 |
7.4 |
0.0 |
0.0 |
|
Hotel Chocolat |
£168.9 |
9.8 |
5.9 |
4.2 |
3.6 |
0.0 |
6.4 |
|
Card Factory |
£1,361.0 |
14.9 |
13.7 |
12.6 |
11.8 |
3.5 |
3.8 |
|
Domino's Pizza |
£80.5 |
17.7 |
11.8 |
9.1 |
7.9 |
0.0 |
0.0 |
|
DP Eurasia |
£4,958.1 |
9.9 |
9.8 |
5.1 |
5.1 |
5.8 |
5.9 |
|
Peer group average |
13.2 |
11.2 |
7.3 |
6.7 |
2.4 |
3.6 |
||
SandpiperCI Group |
£92.0 |
16.6 |
17.8 |
9.1 |
8.9 |
3.8 |
3.9 |
|
Premium/(discount) to peer group |
26.0% |
58.6% |
25.1% |
32.5% |
54.6% |
7.3% |
||
Source: Refinitiv, Edison Investment Research, company data. Note: Priced at close on 27 May 2022.
Sandpiper trades at a premium to its peers on both P/E and EV/EBITDA. This is due to its strong property portfolio, attractive dividend yield and relatively low level of debt, in our view. The current equity market valuation is £92m, or an EV of £106m. With a property portfolio valued at £67.5m, this implies the franchise operations are valued at just £38.5m. Of course, for full comparison, an operating company stripped of the property would have to bear rental costs instead of depreciation. The dividend is well covered by free cash flow and Channel Island investors should benefit from tax relief on any dividends paid after December 2020.
Exhibit 3: Financial summary
£'k |
2018 |
2019 |
2020 |
2021 |
2022 |
2023e |
2024e |
2025e |
||||
31-January |
FRS102 |
FRS102 |
FRS102 |
FRS102 |
FRS102 |
FRS102 |
FRS102 |
FRS102 |
||||
INCOME STATEMENT |
||||||||||||
Revenue |
|
|
174,884.0 |
189,056.0 |
188,475.0 |
200,380.0 |
210,674.0 |
216,062.8 |
221,433.3 |
226,940.5 |
||
Cost of Sales |
(160,200.0) |
(174,956.0) |
(173,836.0) |
(184,148.0) |
(191,838.0) |
(197,609.2) |
(202,521.1) |
(207,557.9) |
||||
Gross Profit |
14,684.0 |
14,100.0 |
14,639.0 |
16,232.0 |
18,836.0 |
18,453.6 |
18,912.2 |
19,382.6 |
||||
EBITDA |
|
|
8,444.0 |
10,013.0 |
10,973.0 |
11,310.0 |
12,715.0 |
12,176.0 |
12,478.6 |
12,789.0 |
||
Normalised operating profit |
|
|
3,838.0 |
5,003.0 |
5,834.0 |
5,972.0 |
7,868.0 |
7,494.6 |
6,974.5 |
7,186.5 |
||
Amortisation of acquired intangibles |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||||
Exceptionals |
(1,395.0) |
4,309.0 |
(2,390.0) |
(389.0) |
141.0 |
0.0 |
0.0 |
0.0 |
||||
Share-based payments |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||||
Reported operating profit |
2,443.0 |
9,312.0 |
3,444.0 |
5,583.0 |
8,009.0 |
7,494.6 |
6,974.5 |
7,186.5 |
||||
Net Interest |
(1,306.0) |
(1,207.0) |
(1,058.0) |
(854.0) |
(587.0) |
(613.8) |
(542.5) |
(488.6) |
||||
Joint ventures & associates (post tax) |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||||
Exceptionals |
0.0 |
0.0 |
(257.0) |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||||
Profit Before Tax (norm) |
|
|
2,532.0 |
3,796.0 |
4,519.0 |
5,118.0 |
7,281.0 |
6,880.8 |
6,431.9 |
6,697.9 |
||
Profit Before Tax (reported) |
|
|
1,137.0 |
8,105.0 |
2,129.0 |
4,729.0 |
7,422.0 |
6,880.8 |
6,431.9 |
6,697.9 |
||
Reported tax |
(1,248.0) |
(1,348.0) |
(1,281.0) |
(1,462.0) |
(1,873.0) |
(1,857.8) |
(1,736.6) |
(1,808.4) |
||||
Profit After Tax (norm) |
(247.2) |
3,036.8 |
3,563.8 |
4,094.4 |
5,824.8 |
5,504.7 |
5,145.6 |
5,358.3 |
||||
Profit After Tax (reported) |
(111.0) |
6,757.0 |
848.0 |
3,267.0 |
5,549.0 |
5,023.0 |
4,695.3 |
4,889.5 |
||||
Minority interests |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||||
Discontinued operations |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||||
Net income (normalised) |
(247.2) |
3,036.8 |
3,563.8 |
4,094.4 |
5,824.8 |
5,504.7 |
5,146.6 |
5,359.3 |
||||
Net income (reported) |
(111.0) |
6,757.0 |
848.0 |
3,267.0 |
5,549.0 |
5,023.0 |
4,695.3 |
4,889.5 |
||||
Basic average number of shares outstanding (m) |
100 |
100 |
100 |
100 |
100 |
100 |
100 |
100 |
||||
EPS - basic normalised (p) |
|
|
(0.25) |
3.04 |
3.56 |
4.09 |
5.82 |
5.50 |
5.15 |
5.36 |
||
EPS - diluted normalised (p) |
|
|
(0.25) |
3.04 |
3.56 |
4.09 |
5.82 |
5.50 |
5.15 |
5.36 |
||
EPS - basic reported (p) |
|
|
(0.11) |
6.76 |
0.85 |
3.27 |
5.55 |
5.02 |
4.70 |
4.89 |
||
Dividend (p) |
0.50 |
1.00 |
2.30 |
3.00 |
3.30 |
3.50 |
3.60 |
3.60 |
||||
Revenue growth (%) |
12.4 |
8.1 |
(-0.3) |
6.3 |
5.1 |
2.6 |
2.5 |
0.0 |
||||
Gross Margin (%) |
8.4 |
7.5 |
7.8 |
8.1 |
8.9 |
8.5 |
8.5 |
8.5 |
||||
EBITDA Margin (%) |
4.8 |
5.3 |
5.8 |
5.6 |
6.0 |
5.6 |
5.6 |
5.6 |
||||
Normalised Operating Margin |
2.2 |
2.6 |
3.1 |
3.0 |
3.7 |
3.5 |
3.1 |
3.2 |
||||
BALANCE SHEET |
||||||||||||
Fixed Assets |
|
|
76,015.0 |
92,809.0 |
95,748.0 |
98,468.0 |
100,743.0 |
100,382.9 |
100,414.6 |
100,485.6 |
||
Intangible Assets |
27,268.0 |
26,169.0 |
24,454.0 |
24,605.0 |
23,875.0 |
22,325.0 |
20,775.0 |
19,225.0 |
||||
Tangible Assets |
48,745.0 |
66,471.0 |
71,292.0 |
73,861.0 |
76,866.0 |
78,055.9 |
79,637.6 |
81,258.6 |
||||
Investments & other |
2.0 |
169.0 |
2.0 |
2.0 |
2.0 |
2.0 |
2.0 |
2.0 |
||||
Current Assets |
|
|
26,070.0 |
23,295.0 |
26,014.0 |
22,114.5 |
26,129.0 |
28,612.4 |
30,192.5 |
32,037.0 |
||
Stocks |
10,203.0 |
10,447.0 |
10,505.0 |
11,990.0 |
13,496.0 |
13,902.0 |
14,247.6 |
14,601.9 |
||||
Debtors |
4,089.0 |
5,229.0 |
5,714.0 |
5,742.0 |
6,126.0 |
6,282.7 |
6,438.9 |
6,599.0 |
||||
Cash & cash equivalents |
11,778.0 |
7,619.0 |
9,795.0 |
4,382.5 |
6,507.0 |
8,427.7 |
9,506.1 |
10,836.1 |
||||
Other |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||||
Current Liabilities |
|
|
(49,207.0) |
(31,127.0) |
(33,566.0) |
(30,916.3) |
(34,257.0) |
(34,857.7) |
(35,374.2) |
(36,000.3) |
||
Creditors |
(27,856.0) |
(29,215.0) |
(26,716.0) |
(29,054.0) |
(32,400.0) |
(33,000.7) |
(33,517.2) |
(34,143.3) |
||||
Tax and social security |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||||
Short term borrowings |
(21,351.0) |
(1,912.0) |
(6,850.0) |
(1,862.3) |
(1,857.0) |
(1,857.0) |
(1,857.0) |
(1,857.0) |
||||
Other |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||||
Long Term Liabilities |
|
|
(2,722.0) |
(25,047.0) |
(24,556.0) |
(23,957.0) |
(19,160.0) |
(19,160.0) |
(19,160.0) |
(19,160.0) |
||
Long term borrowings |
(101.0) |
(23,367.0) |
(22,038.0) |
(20,168.0) |
(18,290.0) |
(18,290.0) |
(18,290.0) |
(18,290.0) |
||||
Other long term liabilities |
(2,621.0) |
(1,680.0) |
(2,518.0) |
(3,789.0) |
(870.0) |
(870.0) |
(870.0) |
(870.0) |
||||
Net Assets |
|
|
50,156.0 |
59,930.0 |
63,640.0 |
65,709.2 |
73,455.0 |
74,977.5 |
76,072.9 |
77,362.3 |
||
Minority interests |
0.0 |
0.0 |
0.0 |
(468.5) |
(912.0) |
(912.0) |
(912.0) |
(912.0) |
||||
Shareholders' equity (excl minorities) |
|
50,156.0 |
59,930.0 |
63,640.0 |
65,240.7 |
72,543.0 |
73,058.9 |
74,065.5 |
75,160.9 |
|||
CASH FLOW |
||||||||||||
Op Cash Flow before WC and tax |
8,444.0 |
10,013.0 |
10,973.0 |
11,310.0 |
12,715.0 |
12,176.0 |
12,478.6 |
12,789.0 |
||||
Working capital |
2,195.0 |
(1,306.0) |
(3,329.0) |
1,052.0 |
(226.0) |
38.0 |
14.8 |
111.6 |
||||
Exceptional & other |
(2,475.0) |
(3,849.0) |
(3,052.0) |
(1,498.0) |
(1,807.0) |
(613.8) |
(542.5) |
(488.6) |
||||
Tax |
(6.0) |
(30.0) |
(1,700.0) |
(1,471.0) |
(848.0) |
(1,857.8) |
(1,736.6) |
(1,808.4) |
||||
Net operating cash flow |
|
|
8,158.0 |
4,828.0 |
2,892.0 |
9,393.0 |
9,834.0 |
9,742.4 |
10,214.3 |
10,603.5 |
||
Capex |
(3,877.0) |
(3,458.0) |
(8,548.0) |
(2,325.3) |
(1,575.0) |
(4,321.3) |
(5,535.8) |
(5,673.5) |
||||
Acquisitions/disposals |
(4,212.0) |
(10,272.0) |
0.0 |
(2,610.0) |
(932.0) |
0.0 |
0.0 |
0.0 |
||||
Net interest |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||||
Equity financing |
0.0 |
0.0 |
2,419.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||||
Dividends |
0.0 |
0.0 |
(2,254.0) |
(2,996.4) |
(3,278.0) |
(3,500.0) |
(3,600.0) |
(3,600.0) |
||||
Other |
4,750.0 |
4,751.0 |
7,681.0 |
(6,885.8) |
(1,925.0) |
0.0 |
0.0 |
0.0 |
||||
Net Cash Flow |
4,819.0 |
(4,151.0) |
2,190.0 |
(5,424.5) |
2,124.0 |
1,921.1 |
1,078.4 |
1,330.0 |
||||
Opening net debt/(cash) |
|
|
(7,229.0) |
9,674.0 |
17,660.0 |
19,093.0 |
17,647.8 |
13,640.5 |
11,719.3 |
10,640.9 |
||
FX |
(270.0) |
(8.0) |
(14.0) |
12.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||||
Other non-cash movements |
(21,452.0) |
(3,827.0) |
(3,609.0) |
6,857.7 |
1,883.3 |
0.0 |
0.0 |
0.0 |
||||
Closing net debt/(cash) |
|
|
9,674.0 |
17,660.0 |
19,093.0 |
17,647.8 |
13,640.5 |
11,719.3 |
10,640.9 |
9,310.9 |
||
Source: Edison Investment Research, Company data
|
|
Research: Healthcare
We revisit our assessment for Pharnext after an eventful few weeks that saw the company announce encouraging new data (five years of trial time) from its PLEO-CMT-FU open-label extension study, complete patient enrolment in its pivotal Phase III PREMIER trial and make progress in raising new, non-dilutive financing. We maintain our outlook for the PREMIER study (likely to conclude in Q423), bolstered by the positive data from the extension study (sustained benefit to patients after five years of treatment). The recently announced €12m fixed-rate financing should ease the funding overhang in the short term, but we estimate the need to raise up to €10m in Q422 and a further €50m in FY23. We raise our overall valuation slightly to €267.4m (from €265.6m) but pare the per share valuation to €0.41 (from €2.0) following recent debt-to-equity conversions.