Ricapitolare.

March, 2024.

Commentary.

There were a few relevant events throughout the past month:

• Dino Polska reported its fiscal 2023’s results towards the end of the month. Compared to fiscal 2022, the company increased its sales and per-share profits by 29.6% and 24.1%, respectively. Throughout the year, Dino opened 250 new stores, representing an increase in total sales area of 11.8% (around 948,000.0 squared meters by year end) and, on a like-for-like basis, grew existing store revenues by 17.2% on 7.1% Polish food-price inflation.
  Operating profitability decreased by roughly a tenth during the last quarter of the year following higher marketing expenses and, to a lower extent, a continuation of the strategy to gain site traffic via promotions (low-price approach since the outbreak of the inflationary period in fiscal 2021). I expect operating profitability levels to normalise over the coming two-to-three years to around 7.0% to 8.0%.
  Another good development worth touching on was the substantial deleveraging that took place over the three months leading to the end of the year (halving debt levels to circa PLN800.0M), which should enable room for a faster store-opening pace in 2024.

Performance.

Notes:
Performance is measured following the money-weighed return (MWR) methodology.
Unless otherwise indicated, performance values are expressed in EUR terms.

The market quotation of the portfolio decreased by 1.7% in March, leaving the year-to-date performance at 2.0% and at 25.0% since inception in January 2022 (10.9% annualised). In TWR terms, the performance since inception has been 42.0% (17.6% annualised).
Comparatively, the S&P500 appreciated 3.1% in March, 13.0% since the start of the year and 22.3% since January 2022 (9.8% annualised).

Contributors.

The following table shows the top contributors and detractors to market performance on a weighted basis and converted to EUR during different time frames: last month, year to date (YTD) and inception to date (ITD):

The waterfall charts below are included for a more detailed breakdown of the individual contribution of each holding:

Activity.

There has been no activity during the period.

Content consumed during the period.

Some curated content whose read was enjoyable last month:

• Books:

  • Capital allocation (Jacob McDonough).

  • How the rubber meets the road (Dick Erickson).

  • Quality investing (Torkell T. Eide).