Saturday, March 11, 2006
Coca Cola Amatil Ltd (CCLAY)
This company goes back to 1904 as the British Tobacco Company (Australia) Ltd., went public in 1927. They bought controlling interest in Coca-Cola Bottlers (Perth) Pty Ltd in 1964. Changed their name to Amatil Ltd in 1977. Acquired Coca-Cola bottling franchises in Austria in 1982 and continued buying bottler territories in Fiji and NZ in 1988. They dumped the tobacco business in 1989 and KO became a major shareholder. They continued expansion in 1991, dumped some snack businesses in 1992. They acquired the Philippines operations in 1997. In 1998 they dumped the Eastern Europe business and expanded into South Korea. In 2001, they dumped the Philippines operations. In 2002, they acquired Rio Beverages in NZ and Pacific Beverages in AU. In 2003, they acquired Neverfail Springwater Ltd. in AU. They also acquired Peats Ridge Springs (bulk water supplier). In 2004, they acquired Quirk's Refrigeration (commercial refrigerators), Crusta Fruit Juices Pty Ltd, Quenchy Crusta Sales, and they opened a materials handling facility in AU. In 2005, the acquired the assets of Grinders Coffee, they acquired SPC Ardmona (packaged fruit, vegetables, jams, sauces), and some sales, disti, and production assets from Parmalat Australia.
In other words, they're serial acquirers.
The company now covers Australia, NZ, Indonesia, Papua New Guinea, Fiji, and South Korea. Incorporated in Australia. Their 2004 annual report seems good despite also being slick and conspicously including photos of hot babes (and here) presumably from Down Under (UPDATE: more likely Fiji, since people have been searching for "Fiji + Coca Cola + babes" and stuff like that... so I upgraded the photos since people seem to care so much). They have some derivatives. They own controlling interest in a large number of bottlers, mostly in Australia. 707 million shares. Options declined from 31 million at the end of 2002 to 14 million at the end of 2004. The 2005 report is due out in April.
Their balance sheet is fair. The current ratio is 1.0. More than half the assets are unconsolidated investments in bottlers' agreements. About half equity. PP&E is AU$1.2 billion, net.
Revenues have been increasing slightly over the years. Earnings have been all over the map, but seem to average around 30 AUS cents. Operating margins are around 14% (up from 13% in prior year). Revenues are about AU$3.6 billion.
Free cash flow is very weak for the past 2 years. They received AU$3.5 billion from customers and paid AU$2.9 billion to suppliers and employees and had a net AU$380 million cash from operations (vs earnings of AU$280 million). So far, so good. But capex was AU$210 million (was AU$185 million in 2003). They borrowed a net AU$263 million and paid AU$170 million in dividends. There was an overall net increase in cash of AU$316 million.
Earnings are about US$0.59 per ADR (which consists of 2 shares). I'd say they're probably worth somewhere between US$6.00 and US$16.00, probably closer to US$6.00. Currently selling for US$10.30 per ADR.
UPDATE: It's funny how many people click on the "hot babes" link above.