Bowcalf hangs on as SoftBev shows some fizz
Plastics packaging specialist Bowler Metcalf (Bowcalf) served up a dose of good news to shareholders on its investment in struggling soft-drink bottler SoftBev at its annual general meeting recently (8 November).
Bowcalf CEO Friedel Sass said SoftBev, which bottles brands such as Jive, Pepsi and energy drink Reboost, traded ahead of budget in the first four months of the new financial year. He said that not only was the aggressive budget exceeded at turnover level, but SoftBev also broke even in October.
“These are the first signs that we have turned the corner.”
There has been talk of Bowcalf wanting to sell its stake in SoftBev so that management can focus on guiding the perennially profitable plastics packaging operations through a highly competitive trading environment.
It seems, though, that Bowcalf wants to restore profitability at SoftBev before any decisions are taken on potential offers.
Sass confirmed that Bowcalf had been inundated with offers to buy SoftBev. “But we need to return value to shareholders, and have subsequently taken a view that we would not entertain further offers for SoftBev until the end of January or February next year.”
Bowcalf nonexecutive director Michael Brain said Reboost, which enjoyed good margins, was proving a strong performer for SoftBev. “I’d be very happy if we can push sales to 5-million cases a year.”
Brain said that in time, Reboost could account for up to 20% of SoftBev’s turnover and operating profit.
Of the effect of the water shortage in the Western Cape on Bowcalf’s operations, Sass said that alternative water sources were being secured, including boreholes and reverse-osmosis systems. Brain said that these initiatives would have a two-year payback.
Listed plastics packaging group, Bowler Metcalf, has said it’s critically appraising its continued involvement in its 43%-owned beverages associate, SoftBev.
An unexpectedly flat performance from plastic packaging specialist Bowler Metcalf’s 43%-owned soft-drink bottling subsidiary, SoftBev, has resulted in a swathe of speculation, reports the Financial Mail.
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