LON (ASX) - Tapping Premium Trends to drive growth


Why I Invest

- Highly credentialed CEO Laura McBain (former CEO of Bellamy)

- Today’s consumer seeks upgraded experiences in everyday occasions, driving growth of the small, yet important premium segment

- “Premium currently represents 9% of the overall food and beverage marketplace, and we believe … within the next decade that will probably double,” Ms Laurie Demeritt, chief executive officer of the Hartman Group

- This amounts to a retail market worth about $75 billion with average year-over-year growth of 10% over the past decade, Ms. Demeritt said

- In the coming years, premium is expected to expand in scope, moving from mainly health and performance benefits to include a desire for higher quality ingredients and complex, sophisticated tastes and textures. Consumers are reevaluating what is fundamentally good, healthy and distinctive, said Tamara Barnett, vice-president of strategic insights at the Hartman Group

- “Traditional food culture was about big brands that offered packaged food that was uniform, affordable, safe, reliable and very consistent,” she said. “We have now emerged into this participatory, experiential, transformational culture in which we are much more driven by diversity and fragmentation… We’re bringing much more purposefulness to our food, and the expectations we have for food experiences are now being elevated.”

- “Consumers believe all symbols of fresh, less processed add up to this food-driven experience of wellness, and nutrient density becomes the aspiration out of that food-driven experience of wellness, that you’re getting the most from the inherent goodness of foods,” Ms. Barnett said.

- Saville Capital: LON is currently trading on a P/E < 15x (with no Debt) and EV/EBITDA < 8x, DCF Valuation of $0.08

https://savillecapital.com/wp-content/uploads/2018/01/Saville-Capital_Fund-Update_December-2017.pdf -

ABOUT

People are more and more focused on healthy, convenient food choices, sustainable food production, and building a connection to the way their food is made. In addition, across the globe our increasingly busy lifestyles are driving changes to the when and how we eat. These changes drive our passion for the opportunities in the food and beverage segments both in Australia and globally.

Our mission is to be a leader in matching the high expectations of consumers for new, high quality food and beverage experiences to the behavioural changes we see. This means being at the forefront of mainstream trends, but not side-tracked by fads, recognising that opportunities arise locally & internationally.This strategic direction informs our structure, where individual premium products or brands can focus on what they each do best without limiting the broader group’s business trajectory.

Former Bellamy's boss Laura McBain's new recipe for success with Maggie Beer business. "I think we've got a Melbourne Cup jockey here," said Primary Opinion director and Bell Potter principal, Hugh Robertson. McBain will emerge with a 19.9 per cent stake in the company if she exercises an option to buy 70 million shares at 2¢ each, on top of the 35 million shares she will be issued at 1.8¢.

NEWS

Longtable Group has entered an agreement to acquire Saint David Dairy for $15.25m.Formerly known as Primary Opinion, Longtable Group will pay $12.25m in cash and $3m in shares under the agreement.Based in Australia, Longtable Group is a manufacturer and seller of food and beverage products, while Saint David Dairy is a premium inner-city dairy business.The acquisition will expand Longtable Group’s business.

Longtable, the part owner of Maggie Beer Products, just posted a loss. “We are very pleased with our acquisition of Paris Creek. Our immediate focus is transitioning the business from its family owned roots to a sophisticated business model given the exciting growth opportunities we see for this business.”

Paris Creek is Australia’s second largest source of organic milk. The company had $45 million equity capital raising in December and January to fund the purchase of Paris Creek. Longtable’s cash position is $9.1 million.

3 speculative small-cap shares to watch this year. This food company is headed by former Bellamy’s Australia Ltd (ASX: BAL) CEO Laura McBain. Up until recently the only asset on its books was its 48% stake in the Maggie Beer product range. However, the company recently raised $43 million in order to fund the acquisition of leading biodynamic-organic dairy products company B.-d Farm Paris Creek at a multiple of 2.1x sales. I think this acquisition and McBain’s experience in taking a small company onto the global stage puts Longtable in a position to grow strongly over the next few years.

Wilson Asset Management - Update_December-2017

Saville Capital_Fund - Update_December-2017

CHART UPDATES

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http://www2.aspecthuntley.com.au/pdf/andrewwest/companyprofile/today/POP_cp.pdf

http://www.buysellsignals.com/BuySellSignals/report/Australia/Stock/PDF/Daily/Australia_pdf_1199.pdf


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