Forum Archive Index - January 2001

["Douglas Stewart" <dougstew@ihug.co.nz>]

What a very strange announcement Frucor made on Friday 12/01/01.  With its half year revenue results due at the end of next week, why come out with some carefully selected information a week early? 

 

Strange to the point of surreal is their statement that:

 

 "Sales of "V" are ahead of budget since Frucor Australia took over its distribution on 08/01/01"

 

Sorry, but between 08/01/01 and 12/01/01 is one working week!!!!!!!  In my experience, a company reporting progress to any stock market after just one weeks' operations is unusual to say the least!!  Has Frucor made a mistake with its dates or are we now to expect weekly reports from selected locations? 

 

"Frucor Beverages advised that it has successfully established its own Australian distribution network and has effected the quick and smooth transition of "V" distribution from Spring Valley with increased sales and a bright outlook for the company."

 

Okay - Frucor shares have been on a bit of a downtrend lately and maybe Frucor are simply flying the flag and telling their shareholders to keep the faith - but I still can't figure out why announce this now rather than next week.

 

It can be imprudent for any company, particularly one such as Frucor where significant growth and shareholder expectation is already priced into the share, to make announcements such as this.  The market can grow to expect progress reports and if, for whatever reason, these are not forthcoming, the stock can be punished badly causing delight for traders but anguish for the many who have invested in the hope of strong but steady growth.  For example, if Frucor make new arrangements for distribution or marketing or sales or something in the UK and we haven't heard anything for two or three weeks should we begin to expect the worse?

 

p.s.  I have followed Frucor with interest but I am neither short nor long in this stock.