Coca-Cola Amatil Limited (ASX: CCL)

Ongoing progress towards Growth Strategy - Coca-Cola Amatil Limited (CCA) manufactures, distributes and sells ready-to-drink beverages in the Asia-Pacific region. The Company's segments include Non-Alcohol Beverages; Alcohol & Coffee Beverages, and Corporate, Food & Services. The Group has performed well in 2017 and especially in New Zealand. The company delivered an underlying net profit after tax (NPAT) of $416.2 million for FY 17, which was broadly in line with the previous year and in line with guidance provided in April 2017. The company’s statutory net profit after tax (NPAT) grew 80.9 per cent to $445.2 million in FY 17.

CCL’s main focus is to stabilise the earnings and return to growth in Australian Beverages. Despite of increased competitive pressures and shifts in channel mix in the first half; revenue, volume and EBIT are expected to further improve as its initiatives are gaining traction. The Group has a long history of successful partnerships in the production, packaging, sales, and distribution of a world-class range of brands. Moreover, during the year it was seen that the Group extended its relationships with partners including Monster Energy, Beam Suntory, and Molson Coors International and conducted campaigns in Australia and New Zealand. The Group delivered substantial business transformation in Indonesia by delivering efficiency gains in manufacturing and route-to-market, and it is worth noting that despite challenging conditions the Group gained market share in sparkling beverages and tea, and revenue and volume growth in dairy.


Segment EBIT Contribution (Source: Company Reports)

CCL launched a new product that is Amatil X and is focused on creating experiences that will delight its customers into the future, beyond its core products and services. The Group has undertaken initiatives like it took the efforts relating to recycling and solar energy in Fiji, community investment in Indonesia and conducted product reformulation in Australia and New Zealand. Meanwhile, one of its directors, Paul O’Sullivan acquired 6500 ordinary shares at a price of $9.179 per share from the market and now he holds 22,500 shares in the Company. In the past days, the Group has witnessed insider buying. Even director, Alison Mary Watkins was seen to have acquired 414,204 share rights. There were few changes in the Board as well as the Chairman and three other Directors retired from the Board at the last AGM. Overall, the initiatives undertaken, and other changes made, have helped CCL improve its ROE from 8.0 per cent in June 2017 to 19.5 per cent in December 2017. The stock was up by 4.6 per cent since the start of the year but declined by 3.17 per cent in last five days. We give a “Buy” recommendation at the current market price of $8.98 as the Company is continuously making a solid progress towards the delivery of its strategies as being reflected in its performance.

 
Disclaimer
 
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.