AstraZeneca is the flagship of the FTSE 100. The pharmaceutical group now has a market capitalization of £182 billion. This places it firmly ahead of Shell, the second largest constituent of the index, with a market capitalization of £161bn.
This might be hard to believe given the well-documented resurgence of oil in the wake of the war in Ukraine. But it’s a testament to the power of both AstraZeneca’s pipeline and its current drug portfolio.
The company recently overtook Pfizer in market value, a significant milestone given that the US firm attempted a hostile takeover of its British rival nine years ago. AstraZeneca’s shares have soared more than 123% over the past five years, despite the well-documented turmoil surrounding its Covid-19 vaccine.
Some corners of management are clearly feeling optimistic about the company’s continued growth prospects. It was announced this month that Michel Demaré, the non-executive chairman of the board, had bought 2,000 ordinary shares of the company at a price of £117 each.
On the other hand, Chief Financial Officer Aradhana Sarin sold £1.15m worth of American Depositary shares a couple of days later. Two ADSs are worth one ordinary share.
Sarin had previously sold more than 16,000 shares in November last year, a deal valued at £2.15m. Since then the share price has risen about 9%.
Broker FactSet’s consensus says sales could rise to $46bn (£36.8m) for the full financial year, up from $44bn last year. By December 2025, analysts currently estimate that revenue will grow to more than $54 billion.
The boss of Superdry gets rich with a capital increase
Shares of Superdry have tumbled 40% this year on weak trading and the withdrawal of earnings guidance. Management had told the market it expected pre-tax profits for this financial year of £10m – £20m. This was downgraded to an approximate break-even position in January. Then, last month, “given the difficult trading environment,” that too was removed.
The fashion retailer attributed trade woes — growth in retail sales “at a slower-than-expected pace” and a difficult wholesale recovery — on the cost-of-living crisis and its impact on consumer spending. Demand for the company’s spring-summer collection has also been affected by the bad weather, according to the board. Investors, as the year-to-date decline in shares indicates, are far from satisfied.
Against this backdrop, the turnaround plan that founder and CEO Julian Dunkerton is spearheading seems much needed. Around £35m of upfront cost savings have been identified, through means such as property optimization and procurement improvements (which the company expects to be fully implemented in financial year 2024) and work is underway to achieve an further cost reduction. Management expects this to lead to a “substantial increase” in underlying profitability over the medium term.
A turnaround needs cash. Superdry proceeded with a capital raise, via a retail offering and placement of common shares, earlier this month and has raised gross proceeds of £12m. Dunkerton’s upside on the company’s future was evident in his acquisition of 4.5 million shares on May 4 as part of the raise, which takes his interest in the company’s stock to more than 25%.
The shares are valued at 15 times forward earnings, according to consensus forecasts on FactSet, in line with the five-year average. Analysts expect sales of £624 million this financial year, in the middle of management’s guidance range of £615 million to £635 million, and a net loss of more than £7 million.
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