Kaba Declines After ‘Too Ambitious’ Guidance Cut

Kaba Holding AG fell the most in more than a month after the Swiss maker of high-security locks cut guidance for fiscal 2013 earnings.

The stock declined as much as 2.8 percent, the biggest intraday decline since March 19, and was trading down 1.4 percent at 361 francs at 10:45 a.m. in Zurich. More than 9,000 shares exchanged hands, about 86 percent the average three-month daily volume. That gives the company a market value of 1.38 billion francs ($1.48 billion).

Kaba, based in Ruemlang, Switzerland, today said full-year sales growth and its margin on earnings before interest, taxes, depreciation and amortization would be “somewhat below guidance” after an “expected market recovery” in Europe and the U.S. failed to materialize. The company previously predicted sales growth in local currencies of between 1 percent and 2 percent, and an Ebitda margin of between 15.5 percent and 16.5 percent.

First-half results on March 13 “showed a decline of 3.7 percent in local currencies and it was already clear at that time that the top-line guidance was too ambitious although reiterated at that time,” said Serge Rotzer, an analyst at Vontobel in Zurich. “We’re slightly disappointed about the cut in the margin target as management was very confident to reach the target.”

The company also raised its target dividend distribution to 40 percent to 60 percent from 30 percent to 35 percent.

This might come as “a recompense for missed target and difficulties to invest cash fully in mergers and acquisitions,” Rotzer, who has a hold rating on the stock, wrote in a note to customers.

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