C&C - Encouraging update - further progress at Matthew Clark Bibendum

Davy Research
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The key takeaway from C&C’s trading statement is the achievement of operational and commercial progress at Matthew Clark Bibendum (MCB) during the key Christmas trading period. Strong execution is likely to prompt the initiation of the ‘simplification’ phase (including synergies) at MCB. Trading momentum for the core business was sustained into H2, reflecting platform resilience. As such, we envisage a slight upward revision to FY19 forecasts. Trading on a FY20(F) P/E of 10.6x, a FCF yield of 9.0% and a dividend yield of 5.0%, the shares represent compelling value.