Forum Archive Index - July 2000

["nick" <acummin@es.co.nz>]

     V is for victory

Shares in designer beverage maker Frucor Beverage Group have risen strongly since the company's float in Australia and New Zealand, soaring by 40 per cent this month from $1.25 to a peak of $1.75.

The rise has been fuelled mainly by retail investors, drawn by the prospect of strong sales of Frucor's energy drink, V, in Australia and the UK.

Talk that V has become so popular in the UK that Frucor has been unable to supply enough chillers to satisfy demand were in part confirmed on Friday when Frucor said sales in the UK were 10 per cent ahead of projections.

V has listings in the UK with more than 40 retailers, wholesalers and forecourt operators, including petrol giants BP and Shell, and grocery chains Sainsbury's Super Stores, Tesco, Waitrose and Safeway.

UBS Warburg's New Zealand office downgraded the stock from a "strong buy" to a "buy" earlier in the week after the price surge, which sent the stock up to the broker's $NZ2.17 valuation.

Frucor is expected to achieve earnings per share of NZ7¢ for the year to June 2000 and NZ16.3¢ for 2001, based mainly on forecasts made in the prospectus.

UBS Warburg upgraded its 2002 EPS forecast to NZ22.1¢, partly because of the strong earnings potential in the UK as well as in Australia, where per capita consumption of V is still well below NZ levels.