Forum Archive Index - January 2001

["Peter Maiden" <pmaiden@xtra.co.nz>]

Good article in The Australian about how the hot weather is driving up beverage sales this summer - but it includes some thoughts on Frucor...............

 

http://finance.news.com.au/common/story_page/0,4057,1649608%255E462,00.html

 

 

In respect of Frucor the not too flsttering (indpendent?) view is

New Zealand beverage company Frucor, which listed last July, is best known for and highly dependent on its V energy drink.

Three years ago, almost all its sales came from its position as New Zealand's largest producer of fruit juices, but diversification means that juice sales now account for only about a third of its sales revenue.

Apart from V, Frucor bottles New Zealand's Pepsi products under licence and distributes a brand of bottled water called H2Go, which rates highly in the NZ club and dance scene. It is looking to expand into South Africa and the UK.

Frucor's share price has been volatile since listing in June at $1.20. It hit a high of $1.90, slid back to $1.30 in December, then rebounded to $1.54.

The newsletter rates Frucor as a hold due to sales expectations not being met in the UK, negative publicity about caffeine-loaded energy drinks and a forced restructuring of distribution arrangements.

As an afterthought, investors might consider the stock So Natural as a potential beneficiary of the rising interest in soy drinks.

Intelligent Investor, however, cautions investors to stay clear on the grounds that sales are sliding despite the company doubling its capacity.

The management issued a profit warning just before Christmas and says the dividend is under review.