Acquisitive German industrial baker Kamps is labouring under what eponymous CEO Heiner Kamps believes is an unfairly sceptical stock market. In the last few years Kamps has proved the darling of the German stock market, raising its sales almost eight times to DM3.26bn (US$1.4bn) to become Europe’s largest bakery group. A little over a year ago its share price had soared to €46.25 (US$39.83) but it has since plummeted to just €11 and over the last year was the poorest performer on the MDAX, the German stock exchange’s mid-cap index.
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According to a report in the Financial Times newspaper, Heiner Kamps blames his group’s problems on stock market wariness over rapid growth, prompted primarily by high-profile dotcom failures. If true, this is a rich source of irony, as the industrial bakery sector is one of the most traditional of all.
Industry sources, however, found problems closer to the company that could explain investor apathy. The business is said to be poor at communicating strategy to investors, for example failing to explain the revised schedule for its Italian openings. Kamps admitted that it is soon to divide the group’s public and investor communications departments, which are currently managed by the same person.
Managing market expectations effectively is crucial if a company is relying on the stock market to fund further expansion plans. As Kamps told the Financial Times: “Growth may be slowing now but our market is worth DM150bn, which leaves plenty of room to grow by acquisitions within the next two to three years. But in order not to overspend, I need a better share price.”
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