Bang & Olufsen A/S’ share price up, considers selling shares to fund growth in the U.S. and China

The Danish luxury stereos and televisions manufacturer Bang & Olufsen A/S, made an official statement today, revealing that it is considering selling shares in order to accelerate its revenue growth. This move of the company comes as part of the efforts of Bang & Olufsen to consolidate its capital base and follows an announcement made by the company in April, which had explained that it was thinking over raising its capital.

In its statement Bang & Olufsen also revealed that preliminary figures for its fourth quarter results of the fiscal year showed that the company’s revenue increased by 8.2% to 801 million kroner (146 million dollars). The company explained that its strong quarterly performance was due to reduced expenses, sales growth and improved profitability.

Despite the performance of the company over the fourth financial quarter was improved, some analysts remained cautious. One of the analysts, who work at Sydbank – Soren Lontoft commented the results for Reuters: “The results are better, yes, but its not enough to say they have overcome all hurdles. If Play (B&Os cheaper brand) is to generate growth, we must soon see some new products.”

The company took the opportunity to reiterate that its earnings before interest and tax will also rise as a proportion of sales during the current fiscal year, which just started. In addition, the Bang & Olufsen shared that it plans to investigate a book-building offering before announcing its annual report, which is scheduled for August 13th.

The capital raising planned by Bang & Olufsen is a key part of its strategy to increase its growth especially in regions such as the United States and China, as well as in some emerging markets.

Bang & Olufsen A/S was adding 3.88% to trade at 67.00 Danish kroner per share by 12:41 GMT, marking a one year change of +32.67%. According to the information published on the Financial Times, 3 analysts offering 12-month price targets for Bang & Olufsen A/S have a median target of 53.00, with a high estimate of 80.00 and a low estimate of 40.00. The median estimate represents a -17.83% decrease from the last price of 64.50.