Huge Aussie deal for Charlie's

Tuesday 19th October 2010

Juice maker Charlie’s has closed a deal with Australian supermarket chain Coles, giving it national exposure in Australia’s billion-dollar juice market, lifting its shares to a 28-month high.

The juice company will have eight of its brands in 750 Coles outlets from early next month.

Chief executive Stefan Lepionka said the deal has the potential to double the size of its Australian unit, which had sales of $7 million and underlying earnings of $1.8 million in the year ended June 30, though he said competition will be tight.

“This is the largest retail deal we’ve ever done as a group in 11 years – it’s a significant step for us,” Lepionka said. “It’s not going to be easy taking on very large multi-nationals.”

In August, when it announced its annual profit of $2.5 million, Charlie’s said it would invest more across the Tasman as its Australian performance outshone the domestic market.

The shares climbed by almost a third in trading on the NZX today, up 5 cents to 16 cents after being put on a halt this morning. Charlie’s will have to ramp up its production by between 30% and 35%, though Lepionka said it has the spare capacity to meet this increase.

The deal comes after a 12-month trial in 37 Coles stores across Australia.

Businesswire.co.nz

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