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.
See IRG research reports
