Leading analyst Simon French at Cenkos has said that given the impressive progress made with the integration of Orchid, he thinks acquisitions will feature on M&B’s agenda – particularly in the context of higher operating costs, driven by the introduction of the National Living Wage.
Ahead of the group’s full-year update tomorrow, French said: “It will also be the first opportunity for recently appointed chief executive Phil Urban to outline his strategy which we believe will focus on fewer brands and higher volumes.
“Given the impressive progress made with the integration of Orchid we also think acquisitions will feature on the agenda – particularly in the context of higher operating costs, driven by the introduction of the National Living Wage.
“The stock is inexpensive trading on a CY 2016E adj EV/EBITDAR of 7.0x and with dividends likely to be introduced at the next year-end will yield 3.5%, Buy.”
