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Scandi Standard shares rise, amid signs of Norway revival

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Shares in Scandi Standard touched a five-month high after the poultry group unveiled a bigger-than-expected rise in earnings, helped by signs of a turnaround in the difficult Norwegian market.

Scandi Standard unveiled a 5.1% rise to SEK48.5m in the July-to-September quarter, ahead of the figure of SEK45.3m that investors had expected.

The increase, on sales up 2.7% at SEK1.40bn, reflected in the main improvements in the key Danish market, the group's biggest by revenues, where underlying operating profits soared 56% to SEK38.0m, a rise attributed by chief executive Leif Bergvall Hansen to "continued improvements in the supply chain".

In Sweden, underlying operating profits rose by 32% to SEK39.2m, "driven by continued good market growth and successful product launches".


However, Mr Hansen also flagged an "encouraging" rise in sales, in local currency terms, in Norway after a January-to-June half in which takings fell by 18%.

The improvement reflected in part the group's success in winning a supply agreement with Coop Norway.

However, Mr Hansen also noted improvement in the underlying market, with the key chilled chicken products segment showing "some growth in the quarter year over year, after three consecutive quarters of decline".

Norway's retail market for chicken shrank by 4% in the April-to-June period, and by 13% in the first three months of 2015, with troubles for operators exacerbated by elevated stocks levels.

Market reaction

Indeed, Mr Hansen added that "we believe it will take some time before the [Norwegian] market is fully recovered".

However, that reflected an improvement on his comment three months ago that he was "uncertain" when the market would revive.

Shares in Scandi Standard, formed in 2013 as a merger of assets from private equity group CapVest and agricultural co-operative Lantmannen, soared nearly 6% in early deals in Stockholm to SEK 53.30, before profit-taking set in.

The shares stood up 0.5% at SEK 51.50 in lunchtime deals.


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