Showing posts with label Charlies Group. Show all posts
Showing posts with label Charlies Group. Show all posts

Thursday, July 21, 2011

Charlies Group Ltd: Grant Samuels recommend Asahi Group offer

Offer documents and all associated paperwork in relation to the takeover of Charlies Group Ltd [CHA.NZX] by Asahi Group Ltd [2502:JP] are available here to download.

The independent adviser’s report prepared by Grant Samuel & Associates Limited recommends the takeover for the following reasons:

A value range of $121.3 million to $133.3 million has been attributed to Charlie’s Group’s business operations. This valuation range is an overall judgement having regard to:

*the earnings multiples implied by the prices paid for comparable businesses and the share prices of comparable listed companies;

*the attributes and earnings outlook for Charlie’s Group; and

*the consolidation of the non-alcoholic beverage sector in Australasia.

The valuation represents the estimated full underlying value of Charlie’s Group assuming 100% of the company was available to be acquired and includes a premium for control. The value exceeds the price at which, based on current market conditions, Grant Samuel would expect Charlie’s Group shares to trade on the NZSX in the absence of a takeover offer or proposal similar in nature to the Asahi Offer. The valuation reflects the strengths and weaknesses of Charlie’s Group and takes into account the following factors:

*the strong cash flows and high gross margins across the portfolio;

*the strong portfolio of brands;

*the rapidly growing presence in the grocery segment in Australia;

*the Group’s domination of the organic sector in New Zealand;

*the innovative and creative management;

*the potential for growth beyond Australia; and

*a good pipeline of new products.

It looks like a good offer by Asahi, based on the future trading of Charlies and its good growth prospects and multiples paid for several beverage companies in this part of the world over the last few years; the Kirin Holdings Ltd [2503:JP] buyout of Lion Nathan and Coca Cola Amatil Ltd [CCA.ASX] purchase of Fosters Group Ltd [FGL.ASX] assets just two examples.

CHA investors would be advised to take the offer given the absence of any competing offer for the company.

Charlies was a pick at 17.5c in Share Investors 2011 Stock Picks.

Takeover Documents

Charlies Group @ Share Investor

Charlies Group Ltd: Asahi make takeover offer
Share Price Alert: Charlies Group Ltd
Share Investor Q & A: Charlies Group CEO Stefan Lepionka
Chart of the Day: Charlies Group Ltd
Charlies Group: A Triumph of Style over Substance
Charlies juicing through Shareholder cash

Discuss CHA @ Share Investor Forum
Download CHA Company Reports

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Buy Bird on a Wire: The Inside Story from a Straight Talking CEO & more @ Fishpond.co.nz




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Monday, July 4, 2011

Charlies Group Ltd: Asahi make takeover offer

What was looking likely all along has happened to Charlies Group Ltd [CHA.NZX] this morning. An offer has been made for full control of the company by 
Asahi Beverages New Zealand Limited, whose parent company is Asahi Group Ltd [2502:JP], the Japanese brewing and drinks giant.

The offer made this morning is 44c which is 16c or 57% higher than its trading close of 28c last Friday. Directors have given their full support for the takeover and it is likely that shareholders will accept given the significant premium over the market price.

Asahi have obviously seen the positive progress of the company over the last year or so and the distribution channels (1, 2) that they have opened up in Australia recently would compliment their Schweppes Australia softdrink business and also open up further shelf space for Charlies products.



Investors only have to ask themselves if they think current management would be able to add the same value that Asahi will do for the Charlies brand and how long they would take to do that and therefore propel the share price to the level of thew Asahi offer.

Depending on your long-term outlook for the company, the offer looks like a good one for the short to medium term shareholder and will be a good cash boost for the founders of the company Marc Ellis and Stephan Lepionka.


Charlies was a pick at 17.5c in Share Investors 2011 Stock Picks.


Takeover Documents


Charlies Group @ Share Investor


Share Price Alert: Charlies Group Ltd
Share Investor Q & A: Charlies Group CEO Stefan Lepionka
Chart of the Day: Charlies Group Ltd
Charlies Group: A Triumph of Style over Substance
Charlies juicing through Shareholder cash

Discuss CHA @ Share Investor Forum





c Share Investor 2011





Wednesday, April 6, 2011

Share Price Alert: Charlies Group Ltd



Charlies Group Ltd [CHA.NZX]hasn't been a favourite of mine since listing around 6 years ago. I have been critical of its money losing history.

They have thus far churned through millions of dollars of shareholder cash growing the business but have achieved a major turnaround into profit over the last year or so with their latest profit result showing good revenue growth on last year and a better profit result to boot.

They have scored some big contracts over the last 6 months with their product going into 750 Coles stores late last year and today announcing some of their range will be sitting in Woolworths supermarket shelves in Australia.

What can I say. I am impressed by the turnaround and I was wrong. It pains me to say that.

The news in October 2010 sent the stock up over 40% in a few days, (see 1 year chart above) from 11c to 16c and rose to around 22c in February where it has been trading between 20-22c since then. This rise in share price has been characterized by low trading volumes, with the notable exception of a big trading spike in late November, early December 2010 when CHA shares moved from 14c to 19c.

Today's news has sent shares up 4c or over 18% to close at 26c today. This beats a previous all-time high of 25c reached in early 2007. (see 5 year chart below)



Keep in mind that this stock has risen from 8-9c levels from a year ago, so its rise to 26c at close of business yesterday is a spectacular rise of approx 180% in less than a year.

If the company is able to get the same sort of leverage in sales that they have from their Coles deal, that reflected so well in their latest result, then the Woolies deal will probably see them power ahead in terms of increased revenue and hopefully profit in the subsequent two reporting periods.

If you have been looking to buy you may want to consider getting in before eager investors like me snap up shares or hold back for some bad news or overall market weakness.

It looks like this company might be a good long term investment after all.

About Charlie’s - From Charlies PR

Charlie’s Group Limited is a New Zealand owned company listed on the New Zealand Stock Exchange and operating principally in the Australasian market. The company manufactures and markets a range of ‘not from concentrate’ fruit juices as well as smoothies and organic beverages. Principal brands are Charlie’s and Phoenix Organics. The business was established by friends Stefan Lepionka (CEO), Marc Ellis (director) and Simon Neal (distribution manager) in 1999 and floated on the New Zealand Stock Exchange in July 2005. Charlie’s operates in New Zealand and Australia and exports to territories in Asia, the Pacific, the Middle East and the Indian sub-continent.

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Charlies Group @ Share Investor


Share Investor Q & A: Charlies Group CEO Stefan Lepionka
Chart of the Day: Charlies Group Ltd
Charlies Group: A Triumph of Style over Substance
Charlies juicing through Shareholder cash

Discuss CHA @ Share Investor Forum
Download CHA Company Reports

From Fishpond.co.nz

Bird on a Wire: The Inside Story from a Straight Talking CEO

Buy Bird on a Wire: The Inside Story from a Straight Talking CEO & more @ Fishpond.co.nz

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c Share Investor 2011

Wednesday, October 20, 2010

Share Investor Q & A: Charlies Group CEO Stefan Lepionka on Australian Expansion

With news yesterday that Charlies Group Ltd [CHA.NZX] had expanded its presence into Australia by getting their product on 750 Coles supermarket shelves, Charlies PR representatives contacted me and asked if I wanted to put some questions to group CEO Stefan Lepionka to flesh out what is happening over the ditch and with the company in general, so I put some questions to him via email last night and got them back earlier on today.

Charlies has long been a straggler in terms of profit since its backdoor listing in 2005 but its most recent result finally showed a profit for the full year to June 2010. The Australian expansion was well planned and a major coup for the company and should help establish its presence there, where it currently lacks broad brand awareness and scale.




The CHA share price leaped by more than 45% yesterday on the news.

Enough about what I think, lets see what Stefan has to say.

The Q & A

Share Investor - How much revenue and profit do you expect to gain from the deal with Coles to move your brands into 750 of their Supermarkets in the 2011 year?

Stefan Lepionka We believe it has the potential to double the size of Charlie’s Group Australia in sales. Last year we achieved $7m however we do not go live till 1st Nov which is 5 months into our new financial year. This ranging has now opened the brand to the second largest retailer of a $1 billion dollar juice category.


SI - How hard was it to get your product on Coles shelves considering the competitive nature for space in Supermarkets there?

SL – Nothing’s easy in business however as a business we strive for having a leading edge in our offer vs. our competitors and this was picked up by the buyers in Coles. They set out to do a diligent trial – 37 stores - and yesterday’s announcement is proof of the success the trial has achieved.

SI - Are you expecting deals of s similar size with Coles competitors now that you have your foot in the door of this giant retailer?

SL – We are very focused in trying to build further distribution deals not only in Australia but internationally. We recently announced a significant distribution win in South Korea for our Phoenix Organic brand with a chain called Caffe Bene which has 300 cafĂ© outlets and we have a number of irons in fires as we continue our strategy of taking our brands to the world.

SI - Did you have to drop your profit margins by much to secure such a deal?

SL - We don’t reveal commercial information that could be useful to competitors but what I can say is the value of the deal or otherwise will be revealed at our half year announcement late Jan 2011.

SI - How much brand awareness is there for the Charlies name and its products in Australia?

SL - We have been in the Australian market specializing in the HoReCa channel - Hotels, Restaurants and Cafes. In the food and beverage world building brands first in this channel is imperative to building brand awareness and future success. To date we have been very successful in HoReCa and our brands can be bought by some of the leading and trendiest HoReCa outlets. This was also a big factor in helping us win Coles.

SI - Is there much competition in the premium end of the market in Australia where you operate?

SL - There is no shortage of competition in any food and beverage category. The key is to have a significant point of difference vs. your competitors which the Charlie’s and Phoenix Organics brands have.

SI - What kind of advertising are you using for brand awareness in Australia?

SL - Below the ground tactics will be used which include a business to consumer approach through social media and sampling in the cheeky Charlie’s way.

SI - On Charlies Group in general. When will the company start paying a dividend?

SL - This was a consideration after last year’s financial year however the directors see a lot more growth to be had so our profits at this stage are being committed to investing in growth and building an even larger business in the short to medium term.

SI - Are you looking at increased profits for the 2011 full year?

SL - Of course we’d love to announce increased profits but let’s just wait and see. As I say, at this stage we are investing for sustainable growth as per our strategy.

SI - Has the recession been tough on the company over the last 2 years, how have you managed costs and debt etc?

SL - Recession has been challenging for all and last year’s result is the outcome of taking action to manage the business in a different environment. We have survived and even prospered through this period.

SI - Will we see Charlies expand into other countries?

SL - Yes and we are currently in 14 countries.

SI - What is the 5 year outlook for your company in terms of sales and profit?

SL – To keep growing sustainably.

End.

About Charlie’s
- From Charlies PR

Charlie’s Group Limited is a New Zealand owned company listed on the New Zealand Stock Exchange and operating principally in the Australasian market. The company manufactures and markets a range of ‘not from concentrate’ fruit juices as well as smoothies and organic beverages. Principal brands are Charlie’s and Phoenix Organics. The business was established by friends Stefan Lepionka (CEO), Marc Ellis (director) and Simon Neal (distribution manager) in 1999 and floated on the New Zealand Stock Exchange in July 2005. Charlie’s operates in New Zealand and Australia and exports to territories in Asia, the Pacific, the Middle East and the Indian sub-continent.

Charlies Group @ Share Investor

Chart of the Day: Charlies Group Ltd
Charlies Group: A Triumph of Style over Substance
Charlies juicing through Shareholder cash

Discuss CHA @ Share Investor Forum
Download CHA Company Reports


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Tuesday, October 19, 2010

Chart of the Day: Charlies Group Ltd



One has got to say that if you were a shareholder in Charlies Group Ltd [CHA.NZX] today and sold you would have been practically dancing in the aisles. Its share price lept over 45% on news (see 10 day chart above) that its products were to be positioned on 750 Coles stores across Australia.

The share price hasn't done much for years (see 5 year chart below) but this little bit of positive news has given impetus to the share price and it will be interesting to see what happens tomorrow if the trend continues on higher volume. I suspect others will get carried away tomorrow and bid up the price.

Well done to those who made a quick buck. I am a little jealous.

I should have Stefan Lepionka on the mat answering questions on Charlies OZ expansion tomorrow.




Charlies Group @ Share Investor


Share Investor Q & A: Charlies Group CEO Stefan Lepionka on Australian Expansion
Charlies Group: A Triumph of Style over Substance
Charlies juicing through Shareholder cash

Discuss CHA @ Share Investor Forum
Download CHA Company Reports


Chart of the Day @ Share Investor


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Wednesday, June 17, 2009

Charlies Group: A Triumph of Style over Substance

There was much fanfare, overwhelming hype and plenty of free publicity when Charlies Group [CHA.NZ] listed on the NZX through the back door in 2005 and that has been the way the company has operated for the last 4 years.


They had Marc Ellis as its largely titular head and Stefan Lepionka in the back room squeezing the juice and running the business side.

Shareholders who got in at the entry point have lost millions and are unlikely to get it back and many of these same people would have participated in the 42 below IPO a few years back expecting Charlies to pay back the same way that deal finally did.

We have learnt that the company is looking at raising capital in some way to enable them to continue to function as a going concern and their original idea to build up the company to sell it off to a major beverage player has failed because they cannot get what they think it is worth in the current economic climate.

Burger Fuel Worldwide [BFW.NZ] which is contemplating capital raising itself, is another one of those flash harries that investors got hyped up in and ended up largely kissing goodbye to the 2 million that was raised from them in that particular IPO in 2007.

These companies all share a sense of style over substance and should be avoided at all costs by those without money to lose and that should be pointed out clearly before virgin investors plunk down their cash.

The fact that these sort of IPOs were pitched to those without much financial nous and got caught up in the hype is a testament to Kiwis lack of financial skill and those that were raising funds were counting on when they targeted the financially illiterate for their hard earned moola.

Fare enough for Ellis & Co to take a big risk in business but to pitch there IPO without spelling out there was a fair chance the business would fail is, once again, a triumph of style over substance.

Footnote: Charlies have just issued a press release to the NZX softening up shareholders for more money.


Charlies Group @ Share Investor

Takeover Documents

Charlies Group Ltd: Asahi make takeover offer
Share Price Alert: Charlies Group Ltd
Share Investor Q & A: Charlies Group CEO Stefan Lepionka
Chart of the Day: Charlies Group Ltd
Charlies Group: A Triumph of Style over Substance
Charlies juicing through Shareholder cash

Discuss CHA @ Share Investor Forum
Download CHA Company Reports

From Fishpond.co.nz



Buy Bird on a Wire: The Inside Story from a Straight Talking CEO & more @ Fishpond.co.nz




c Share Investor 2009





Friday, August 29, 2008

Charlies juices through the shareholder cash

I have never liked Marc Ellis or his schoolboy type self promotion. It is very hit and miss.

While managing to garner alot of attention for short period of time, Ellis' promotional activities lack substance and I doubt do well in the long term for the business or product being promoted.

His university degree is in commerce at Otago University, majoring in marketing and management, so there is no surprise as to why marketing is at the forefront of his business regime.

His Charlies Group Juice Company [CHA.NZX] seems to be a case in point.

The announcement last week of a NZ$425,000 FY loss to June 2008 mounts on top of other losses incurred since it listed in 2005.

Charlie's was started in 1999 by Stefan Lepionka, Marc Ellis and Simon Neal and has grown rapidly in sales since its listing but has failed to sustain any profitable growth.

Its sales come from its Charlies brand juices and a number of other brands, in New Zealand and Australia.

Charlies seems to have the Burger Fuel or 42 Below approach to business-growth without profit- but that runs at odds with the way most business operates and the way I like the businesses that I own to run-at a profit, for the majority of the time.

I might have this all wrong though, as I could with Burger Fuel.

Charlies might be a big company in the making or a business that Ellis and his mates will flog off to a large conglomerate like Coca Cola Amatil [CCL.ASX] as one of Marc's fellow directors Stefan Lepionka did with his Stefan's Orange Juice which was purchased by Frucor Beverages in 1997.

However, there has been little sign of a good sustained profit thus far and they seem to be chewing through shareholder funds rapidly in the objective to grow yet bigger.

I would love to be proven wrong.


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c Share Investor 2008