RMB - Rand Merchant Bank’s Post

The August edition of our investment publication Market Insight is available to read.   We explore drink manufacturer Diageo and the recent Japanese market turmoil in this issue.   Read the publication here: https://bit.ly/3TnRbS9   #Stockbroking #Investments

https://lnkd.in/eQtrTMMK Very interesting article from Eddie Devlin from The Grocer reporting on the level of M&A activity with a specific focus on Food and Drink. The data for this report coming from Oghma Partners. Given the general noise surrounding 'dry powder' waiting to be deployed from the investment world, It was interesting to see that corporate firms have really been taking the opportunity to buy and build through acquisitive actions with M&A activity hitting an eight-year high! Corporate buyers up a massive 79.1% with PE only making up 9.3% of volume. This bias perhaps accounting for the lesser cumulative value of the deals. In my professional capacity focused on leadership effectiveness and operational efficiency I see a growing need for corporates who are acquiring firms to consider at what point do they look to assess synergies of scale and the relative merits of integration of operations, people and resources. Often an after thought for many businesses and arguably one of the biggest reasons/factors as to why acquired companies struggle to deliver upon the strategic intention that drove the acquisition decision in the first place. With easing inflationary pressure, and a hopeful fall in interest rates, then the forecast for the year ahead does look more favourable certainly for PE firms who have been more cautious in terms of deal volumes. One question that does spring to mind beyond the consideration around integration surrounds whether or not the PE firms run the risk of holding on for too long and loose the opportunity to acquire some very interesting brands/businesses to the corporates. Will they have as many attractive options to consider or will their focus be on undervalued or distressed purchases? #privateequity #dealflow #mergersandacquisitions #foodanddrink #fmcg #fastmovingconsumergoods

Alliance Select Foods International, Inc. (ASFII) grew consolidated net revenue 63% in 2023 to US$56.5 million, driven by higher volume and recalibration of selling prices. #bonds #stockmarket #stocks #realestate #finance #Business #Corporate #Corporation #Entrepreneur #Philippines #Financial #Invest #Investment #investingtips

Why productivity is important in the current high-inflation environment Craig Funnell, the former Chief Supply Chain Offer of The Arnott's Group, shares his insights based on four decades of FMCG expeeince in Asia Pac. Listen here: https://lnkd.in/gWXKVZJs #ManufacturingExcellence; #OperationalExcellence

Businesse News. International Breweriers Sixth month Deficit Grows to N107 billion. International Breweries Plc, a Nigerian alcoholic beverage maker, reported a widening after-tax loss in the first six months of 2024. The company's revenue grew to N223.2 billion from N116.1 billion, driven by a price increase to offset deteriorating business margins due to high inflation. However, the cost of sales grew to N160.6 billion from N78.7 billion, and other expenses surged to N134 billion from N35 billion. The company faced macroeconomic challenges in 2023, including a cash crunch, fuel scarcity, FX scarcity, and steep Naira depreciation. The company completed its 161.2 billion rights issue in June, offering shareholders six new ordinary shares for every existing share held at an issue price of N3.65/s. CSL Research analysts forecast a gradual recovery in profitability, driven primarily by price increases and enhanced operational efficiency. Sorry for your loss. #roverpublishers #newsupdate #news

R.L. Hulett has published its Q3 M&A Update on the Food & Consumer Industry. Report highlights included: ‣ The median EV/EBITDA multiple for reported private equity deals increased to 5.93x in 2024 from 4.07x in 2023, and increased for strategic deals to 13.58x from 6.51x in the prior year. Please visit our website to discover the full insights and detailed analysis. #Food #Consumer #MergersAndAcquisitions #MiddleMarket

Would you invest in this business? It’s an Australian food company founded 5 years ago that makes condiments (think: sauces). They also make ready-to-drink (RTD) alcoholic cocktails in a can. All products are made by third party manufacturers. Revenue split by distribution channel: - Online 12% - Domestic retail 38% - Export 50% The company was looking to raise up to $3.8M to fund working capital ($2.8M) and marketing ($700K). Here’s the financial performance snapshot: • Modest revenue increase of 5.4% year-to-year . • Gross margin fell from 64% to 53%. • Net loss widened significantly from $348K in FY22 to $659K in FY23. • Gross margin fell from 64% to 53%. • Negative operating cash flows over last two years. • Current assets decreased from $2,364,740 to $1,487,538. • Non-current assets increased from $630,637 to $1,422,177, primarily due to a substantial increase in intangibles. What are these intangibles? Who knows. There are no details in the offer document. • Relying on substantial equity injections to fund operations (over $1.6M over FY22-23). In fact, the business raised almost $2M in equity investment in another raise in 2020). So what valuation did the business put on itself? You’ll need to check out the carousel below to find out 😊 What do you think: Deal or no deal? #capitalraise #equityraise #investment #FMCG #CPG

Together and with a committed team, despite a very challenging context, Comer Industries confirms solid results and the investments to pursue its medium-long term and strategies. Sustainable growth remains the main focus of the Group's growth path. #comerindustries #team #results #resilience #accountability

𝘼𝙙𝙣𝙖𝙢𝙨 𝙨𝙩𝙞𝙡𝙡 𝙚𝙭𝙥𝙡𝙤𝙧𝙞𝙣𝙜 𝙤𝙥𝙩𝙞𝙤𝙣𝙨 𝙩𝙤 𝙛𝙪𝙣𝙙 𝙛𝙪𝙩𝙪𝙧𝙚 𝙜𝙧𝙤𝙬𝙩𝙝 𝙥𝙡𝙖𝙣𝙨 𝙖𝙨 𝙞𝙩 𝙧𝙚𝙥𝙤𝙧𝙩𝙨 𝙨𝙖𝙡𝙚𝙨 𝙪𝙥 11% 𝙞𝙣 𝙛𝙞𝙧𝙨𝙩 𝙦𝙪𝙖𝙧𝙩𝙚𝙧: 😍 🍻 Suffolk brewer and retailer Adnams has said it is still exploring a range of options to fund its future growth plans as it reported sales up 11% in the three months to 31 March 2024. The business said: “While multiple factors continue to challenge the brewing, distilling and hospitality sectors, total sales increased 11% year-on-year in the period, supported by growing volumes in beer and spirits, with a notably strong contribution from our on-trade and off-trade business. Falling inflation is improving demand in both the on-trade and off-trade, as well as softening some of the company's cost increases. The company is continuing to explore a range of options to fund its future growth plans with the support of its advisors and has received an encouraging response to the process. The board's preferred option remains the raising of additional capital from another party and/or the sale of freehold assets to return capital to the company. However, no decision has yet been taken. The company will continue to keep shareholders appraised of developments at the appropriate time.” Adnams said it intends to file full-year accounts for the period ending 31 December 2023 in late May ahead of its planned annual general meeting on Thursday, 27 June.

European beverage stocks faced significant challenges in the stock market over the past year, experiencing declines of 20% to 40%. Several fundamental factors contributed to this downturn, such as the potential imposition of Chinese tariffs on brandy and declining spirit volumes in the US. Additionally, companies like Diageo faced internal issues. As a result, spirits companies have seen a substantial reduction in their high valuation premiums, leading to more reasonable multiples. For instance, Diageo is now trading at 17.7 times forward earnings, which the Financial Times reports is a 33% premium to the MSCI Europe, down from 100% in 2022. For contrarian investors like us at ECP, this shift has piqued our interest, prompting us to revisit the sector. #ecplu #valueinvesting #equities