Vivo Energy (VVO) chief executive Christian Chammas toasted 2018 as “a remarkable year” for the pan-African forecourt retailer and fuel distributor. Scan through Vivo’s first set of full-year results as a public company, and the most remarkable thing appears to be the 165p a share price tag investors agreed to pay in May’s initial public offering.
That statement is made with the benefit of hindsight. But there’s good reason why the stock is down a fifth on the float, despite early signs of optimism: in the last six months of 2018, Vivo’s gross cash unit margin dropped to $71 (£54) per thousand litres of fuel sold, compared with $74 during 2017. Citing a more conservative outlook, management now expects those margins to fall to “the high 60s” in 2019.
This assumes static market conditions in Vivo’s single largest retail market, Morocco, where the contribution to group cash profits fell from 29 to 18 per cent last year (and to 14 per cent in the second half of 2018). References to “consumer activism”, engagement with “relevant government stakeholders” and the roll-out of lower-margin products fail to mention the rising prospect of a return of fuel price regulation in the country.
On average, analysts expect adjusted earnings to remain flat at 13¢ a share in 2019.
| VIVO ENERGY (VVO) | ||||
| ORD PRICE: | 132p | MARKET VALUE: | £1.68bn | |
| TOUCH: | 127-133p | 12-MONTH HIGH: | 198p | LOW: 94p |
| DIVIDEND YIELD: | 1.1% | PE RATIO: | 16 | |
| NET ASSET VALUE: | 42¢* | NET DEBT: | 55% | |
| Year to 31 Dec | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
| 2015^ | 5.97 | 136 | n/a | n/a |
| 2016^ | 5.73 | 174 | n/a | n/a |
| 2017^ | 6.69 | 211 | n/a | n/a |
| 2018 | 7.55 | 229 | 11 | 1.9 |
| % change | +13 | +9 | - | - |
| Ex-div: | 16 May | |||
| Payment: | 10 Jun | |||
| £1=$1.31. *Includes intangible assets of $134m, or 10.5¢ a share. ^Pre-IPO figures. | ||||
