Comment: Good medicine Ica – Private Businesses

Equity The development of ICA Group has been swinging in the negative sense since last fall when some reports were not really shown up the profitability that the market had bespetsat on. The decline today is about 15 percent, but most share was down almost 25 percent when the stock exchange was tristast in February.

The interim report for the first quarter showed an unexpectedly strong rise in profits to 59 million, which was 11 percent better than market expectations. It is an unusually big difference to be a company with base in food sales.

The reason is primarily that ICA Sweden is now growing again in line with the market after having lost market share during the second half of 2015. The increase for comparable stores of 4.7 per cent gives a good increase in earnings and in addition it had Ica in the Baltic countries a strong quarter in which consumption rises in general and Ica obviously have a good store concept.

Although Pharmacy Cardiac now contributing to revenue and profit and increasingly integrated in close proximity to grocery stores, resulting in more sales.

cost-wise, the company incurred higher costs of its logistics projects, but compensated for it elsewhere. It has been a quiet quarter in terms of new store openings – but it will accelerate during the remainder of the year.

The expansion will also continue as more and more stores will be connected to the company’s online platform – totally be 250-300 stores come up with in 2016.

Ica is also financially stable and can be hard to invest in the business. Sales of properties in Norway will provide great income as well as the divestment of Inkclub – there are also opportunities that this means extra dividends next year.

As the stock has Ica group had a superb development since the transformation from Hakon Invest – and it has been a reasonable rebound since the peak around 325 SEK as the company came in slightly weaker in the fall.

But now it seems the company to be back on track where investments and divestments will further improve the company to become more attractive to the stock market. So for those looking for a share with a low risk, but with decent growth prospects should Ica group as a possibility.