Forum Archive Index - September 2000

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

             Have to admit to being a true believer at this point so may be a little biased.

     I suspect the roller coaster share price has nothing whatsoever to do with anything

the company may or may not have done.  Just normal fluctuation for the nz market.

         Probably there were quite a few who bought for thre short term, ie to see how high

it would go at result time, these people bailing out probably caused the dips.

                The management are what gives me the real confidence about this company,

 they have been spectacularly succesful so far and seem to have the winning habit.

The chairman Mark Cowsill was on telstra buisness recently and looked confident

and had the manner of someone who would deliver.

        As for V it is slightly ahead of projections in uk.  They also have a rapidly growing sports

drink called g-force which is taking the sportr drink sector by storm. My fav though is

the flavoured milk drink - Wave - cant get enough of the stuff..

            Remember that the shhares were originally going to list at around 2.20, but a

weak stockmarket at the time led them to lower to 1.50.  Therefore all those who sent

in checks for the float were happy to pay 2.20 which is where the stock is now.

            I think at the current level the stock is a potential bargain.  Either way im happy

i bought a bundle at 1.45 .

            Here is an extract from the result regarding outlook. 

    OUTLOOK_
In the Prospectus it was forecasted that in the year to June 2001 profit
would increase to $20.4 m - a 50% increase over the adjusted net surplus
earned in the 2000 fiscal year._
Given the economic conditions remain as forecast the directors remain
comfortable with those projections._
Frucor's traditional core businesses remain sound.  The increase in
profitability is anticipated to come primarily from:_
-       New Age Beverages_
 Continuing revenue growth of "V" from the newly entered markets in
Australia, the UK and Ireland (with Ireland being EBITDA neutral in the FY01)
as well as from N.Z._
 Growth from g-force and other new product development_
_
-       Other Beverages_
 strong growth is also expected in this category in NZ, particularly
as the benefits are gained from the Pepsi and H2GO bottled water brands for a
full year._
_
-       Fruit Juice and Drinks_
 growth will be stimulated by a re-focus on new product development
for juice products_
 two new initiatives for spring based around functionality_
_
Frucor Beverages Group Limited is a rapidly growing cold beverage company
manufacturing, marketing and distributing New Age Beverages ("V" Energy
Drink, G-Force Sports Drink), Fruit Juices and Drinks (including Fresh-Up and
Just Juice) and Other Beverages (including Pepsi Soft Drinks, bottled water
and Wave flavoured milk) primarily in N.Z. but now increasingly off-shore -
Australia, UK, Ireland and South Africa.  It was recently listed on both the
NZSE and ASX._
_

 

The roller coaster effected due to the fact that this is a speculative share.

 

 If I remember correctly from reading the investment statement the profit projections were based around huge growth in the market for 'V" in Europe.  The shares were listed at $1.55  based on an ambitious marketing plan. Since then the hype has pushed the shares up by over 50%.  The players are mostly small punters, they have seen the reports of increasing sales of "V" in the UK but have forgotten that this was already factored in to the issue price. The fluctuations in the NZ dollar are irrelevant in this one.

 

Has anyone run the numbers? What revenue and earnings does this company have to do to justify the current price?

 

This could be the best thing since sliced bread but you would have to be a true believer.

 

Cheers

Mike H