Dentsu Group (4324): Initiation - Simplification to boost growth and margins
The balance sheet has been strengthened by the sale of most of the Recruit shareholding and Dentsu is considering a sale and leaseback of its Tokyo headquarters.
- The balance sheet has been strengthened by the sale of most of the Recruit shareholding and Dentsu is considering a sale and leaseback of its Tokyo headquarters.
- Restructuring inevitably means some short-term disruption, but this should drive revenue growth (targeted at 3-4% CAGR FY21-24) and improve margins.
- Successful implementation of management's plans, simplifying the structure and driving profitability, should help drive shareholder value and underpin the rating.
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