ITALY. The Nuance Group co-parent Stefanel has poured cold water on Italian press speculation that it is considering an offer for UK retail-to-catering company Alpha Airports Group.
The original article in Il Mondo suggested that Stefanel was interested in bidding for publicly-quoted Alpha, leading to speculation that such a move could allow Nuance to go public via a reverse takeover. But Stefanel rejected this in a statement to the Italian stock exchange, saying it had not presented any such plans to shareholders. Nuance had nothing to add to the Stefanel announcement.
Nuance’s owners, Stefanel and GECOS/Gruppo PAM, have all along been keen on an IPO but only when the conditions are right. As Nuance President and CEO Roberto Graziani told The Moodie Report last year: “They [the owners] are not interested in listing a company that from a financial point of view is not at the highest level.”
The theory among some Italian financial commentators is that by buying into an already-listed travel retail company, Nuance’s owners could “˜fast track’ that public status and begin to recoup their investment. Alpha Airports declined, as always, to comment on market rumours.
For the first quarter of 2005 Nuance sales as reported by Stefanel (i.e. 50% of total business) eased -0.8% to €118.7 million. But EBIT improved from €4.9 million to €3.0 million. Net borrowing for Nuance improved by €1.9 million.
The retailer’s key problem remains the impact of traffic-linked concession fees on margins at a time when spending remains weak in many locations, notably Australia. Understandably therefore, much management effort continues to go into cutting costs. As one analyst put it: “The company is now focused on improving its operating margins rather than on increasing sales volumes.”
However, as evidenced by Nuance’s recent participation in the Miami International Airport tender and its current involvement in the Kuwait Airport duty free tender, it is prepared to invest in new business where it sees profitable opportunities.
MORE STORIES ON STEFANEL AND THE NUANCE GROUP
Nuance posts EBIT improvement amid 2004 full-year losses, parent Stefanel remains upbeat – 15/02/05
