Carrefour SA, France’s largest retailer, said it’s still waiting for the right moment for an initial public offering of its shopping mall property unit as it reported higher full-year profit.
The division, called Carmila, still plans an IPO, Chief Financial Officer Pierre-Jean Sivignon said on a call to reporters, though he declined to be drawn on whether that means this year. The property company might be worth €4.5 billion ($5 billion), according to Sanford C. Bernstein analyst Bruno Monteyne.
Carrefour set up Carmila in 2014 with a group of investors including Axa SA and Colony Capital taking a 58 per cent stake. The property company controls more than 180 sites near Carrefour hypermarkets in France, Italy and Spain to make sure they are properly maintained. While France’s CAC 40 Index dropped 16 per cent from the start of January to mid-February, it has since bounced back.
"It was always likely that the financial investors would want to realize their investment at some point and an IPO is the most likely way for them to do that," Monteyne wrote in a note.
Recurring operating income rose 2.4 per cent to €2.45 billion ($2.7 billion), Boulogne-Billancourt, France-based Carrefour also said Thursday. That matched the average of 24 analysts’ estimates.
Carrefour is out of the casualty ward that Chief Executive Officer Georges Plassat found it in four years ago, according to Bloomberg Intelligence analyst Charles Allen. The CEO is now looking to generate the next stage of growth, which will involve reviving the grocer’s European non-food business as well as boosting Chinese sales, which fell last year. Rival Casino Guichard-Perrachon SA on Wednesday reported a 35 per cent drop in profit, hurt by price cuts in France.
The 2.9 per cent dividend increase to 70 cents a share was short of the Bloomberg forecast for 74 cents.
Carrefour shares fell 0.8 per cent to €25.14 as of 9:49 am in Paris.
The company said it will continue opening different format stores, particularly convenience, earmarking as much as €2.6 billion for investment, the same budget as last year. The grocer also said it will convert another 500 DIA stores to the Carrefour brand and maintain its debt rating, which Standard & Poor’s has at BBB+.
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