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[sharechat] FRUCOR

From: "G Stolwyk" <>
Date: Sun, 27 May 2001 14:43:27 +1200

Sofar, technical analysis of this stock was shown to be an " additional weapon " in the battle for the protection of an investment.
I don't hold any FRU but am trying to predict the outcome of the following events:
There will be a big promotion during June in the UK- correct me if that has changed. This requires a lot of cash before the following phase start: To make large sales.
Securing shelf space will be expensive as are other connected matters. The financial year finishes on June 30.
So, if I read the action correctly, then most, if not all of the June marketing costs will need to be written off during the current year when a lower profit is predicted. One hopes that all the costs have already been factored in. 
However, should the initial response to the marketing be slow - perhaps due to one or two competitors increasing their promotions at the same time, and they have the cash! - then the dreaded point of no return may be reached:
To stop marketing and take the costs up front once again or go past this point and spend a great deal more in the hope that FRU has a future in the UK. One needs cash to do that!
If Frucor takes this chance, then the June balance sheet may not look pretty!
Some commentators suggested that a more partial approach by FRU may be in order: Concentrate most of the promotional effort in say, Ireland, get well established and then move to the next phase. One would still see heavy promotions from competitors, but at least, Frucor's promotion will not be so diffused.
It seems to me that a lot of cash is needed to overcome the efforts by competitors!
Whatever the outcome, the future of Frucor does not depend alone on the students drinking the stuff around the universities.

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