Belhaven Grp. Share Discussion Threads

[domtheone] 01/8/2005 17:49

Couple a nice buys at the end of play :-)

[domtheone] 25/7/2005 16:17

Aye, theres not much volume. Maybe some larger trades will show up in time.

Excellent progress though. Since BHG started this rally we've had 12 trading days now, 11 blue and 1 green :-)

[ed 123] 25/7/2005 13:18

Yes, but they're not getting much (unless there are some delayed trade reports to follow). MM's have been quick to mark up on seemingly little volume.

[domtheone] 25/7/2005 12:46

Somebody after stock perhaps.. :-)

[waldron] 23/7/2005 05:57

Edinburgh brewer sees no half measures in hops to top

ALISTAIR MCARTHUR


AS another hot and sticky week draws to a close, many of us will be looking forward to a cold beer or two to wind down.

Not so long ago, drinkers had a wealth of independent breweries from which to select their favourite tipple.

Companies brewed ales with their own distinctive flavours, from their own recipes and using local water. Travel to a different part of the country and you would find a different tasting beer.

But that has all changed, particularly with the explosion in lager and pilsner sales. Although the likes of East Lothian brewer Belhaven and a scattering of micro breweries still provide drinkers with a bit of variety, many of the independent players have been swallowed up by a handful of multinationals, with the result that the same beers are now available in every part of the country, with - some would argue - the same taste.

And these big boys have been buying up well-known, premium brand names with which they are attempting to increase their market share.

So where does all of this activity leave the biggest name in this country - Scottish & Newcastle?

The Edinburgh-based brewer, which took over rival Courage in 1995, has been seen by some commentators as a "minnow" on the world stage, as high-profile deals take place around it. But the Scots firm has its sights firmly set on its own strategic growth plans.

S&N's corporate affairs manager Linda Bain disputes the title of minnow. "We are a highly significant brewing company, placed at number seven in the world and the UK's biggest brewer," she retorts.

Mark Wilkinson, divisional director at stockbroker Bell Lawrie, agrees. "S&N is a big company, with a market capitalisation of about £4 billion," he says. "It is not a minnow by any standard. There are many much smaller breweries in the market."

South African giant SABMiller, which brews Miller, Castle and Peroni, is itself the product of a 2002 merger between South African Breweries and rival Miller Brewing. It is one company that has grown through acquisition.

The latest deal - announced on Tuesday - was between SABMiller and South America's biggest beer-maker, Bavaria. The firm had been keen to gain a bigger foothold in the area.

Meanwhile, Stella Artois, Beck's and Brahma brewer InBev was created through the 2004 marriage of Interbrew and AmBev. InBev recently struck a deal with S&N to secure the exclusive marketing and distribution rights to the UK for Beck's, which the Capital-based firm decided to relinquish seven years earlier than stated in its licensing arrangement.

IN the meantime, S&N, led by chief executive Tony Froggatt, has been quietly continuing in its own way. But its only recent major UK acquisition has been the Caledonian brewery site in Slateford.

This is something that Mr Wilkinson believes is reasonable and does not see the company competing with the global brewing giants when it comes to headline-grabbing deals. "It has deep pockets - but not as deep as the big players," he observes. "There are pockets of opportunity that it can take advantage of, but it needs to be nimble on its feet. It is a sensible strategy to adopt at this stage."

In a deal announced yesterday, S&N is to pass the marketing of Miller Genuine Draft and Peroni back to SABMiller in order to concentrate on its four core products of Foster's, Kronenbourg 1664, John Smith's and Strongbow.

Analysts have been generally happy with the change. "It has not had a huge impact on the market," says Mr Wilkinson. "But it highlights that it will concentrate on a small number of brands." Mr Wilkinson highlights the transformation taking place at S&N - such as the sale of its retail pub operations and budget hotels - but notes at the same time, the brewer is trying to take on the likes of SABMiller, which is something it may find difficult to do. "But it will continue to form joint ventures and strategic alliances," he adds.

While S&N has been relatively quiet in Britain on the M&A front, it has started to build up its presence in other parts of the world, both through acquisitions and joint ventures with other brewers.

The company is number one in three of the top six European beer markets - UK, France and Russia. It is also in first place in a further 12 markets. According to Ms Bain, this has been the company's strategy for a number of years. "We are continuing to develop the business in western Europe and taking opportunities in the emerging markets," she says. "Our aim is to grow across Europe by promoting our premium brands."

THE emerging markets, including eastern Europe, India and China, provide challenges for the company.

The local brewer has a stake in Russian beer venture Baltic Beverages Holding (BBH), which it jointly operates with Denmark's Carlsberg group. The markets covered include Russia, Ukraine, the Baltic countries and Kazakhstan.

It has strengthened its presence in the Indian beer market, by expanding its partnership with United Breweries, controlled by the Indian beer baron Vijay Mallya. With beer only having a small share of alcohol sales, the market is growing at between seven and ten per cent a year.

And in China, the group has a stake in Chongqing Breweries, the number five brewer in an economy expanding at 9.5 per cent a year.

"We currently have big positions in India and China," says Ms Bain. "They are markets where people are moving to beer for the first time, opening up new sales channels for us."

China's beer industry, also growing by about seven to ten per cent a year, has in recent years attracted a flood of overseas heavyweights including InBev and SABMiller, all increasingly turning to Asia as growth stagnates at home.

Eastern Europe also holds possibilities for S&N because of the growing economies and the growing incomes of the countries' population. "There is a first generation of people who are choosing beer rather than spirits," says Ms Bain.

Despite S&N's growing presence outside the UK, some commentators still see the company as a takeover target, with marketing partner SABMiller seen as a potential suitor.

But Ms Bain says the brewer is continuing to run its business to the best of its ability, without paying too much attention to market speculation.

Mr Wilkinson is more cautious. "It is up to the other companies whether Scottish & Newcastle will fit in with their existing business," he warns.

And when it comes to being the acquisitor, S&N's Ms Bain does not rule anything out. "We will look at a number of opportunities, but we want them to create value, not volume for volume's sake," she said.

Time called on S&N's Miller marketing rights

SCOTTISH & Newcastle and SABMiller have struck a deal to hand back the marketing rights of Miller Genuine Draft (MGD) and Peroni in the UK to the South African brewer.

At the same time, S&N will continue to brew MGD and the draught Miller Beer brand, while retaining the development rights to the latter.

A particular emphasis will be placed on expanding the Miller Beer brand north of the Border.

SABMiller has set up a new operating company - Miller Brands. The firm will manage the sales, marketing and distribution of its premium beers, in which it will invest £30 million over two years, signalling the company's determination to increase its share in this market.

S&N's corporate affairs manager Linda Bain said the new arrangement was beneficial to both parties. "We were coming to the end of the agreement to market these products, but we agreed to continue brewing the products as SABMiller does not have any breweries in the UK."

Ms Bain says the trading arrangement will be financially positive for S&N despite the Edinburgh-based company losing sales, as it will also be saving on advertising and marketing and have a better royalty agreement.

The deal will also allow S&N to concentrate on its four core products - Foster's, Kronenbourg 1664, John Smith's and Strongbow.

Gary Whittle, managing director of Miller Brands, adds: "Our investment demonstrates our commitment to this market.

"We are determined to bring a fresh approach to satisfying the needs of our customers and consumers. This is a premium brand business, which will leverage our global experience in building profitable beer brands."

[domtheone] 19/7/2005 10:13

Someone happy to accumalate then :-)

[edmundshaw] 18/7/2005 10:24

Given BHG assets and track record, I would hope a good premium would be needed... but price will depend partly on institutions and how keen they are for the quick buck.

Though hard to compare, premiums for Burtonwood and Jennings were around the 40% mark; more if the 'speculative' price increases before the announcements are taken into account.

The deals were reasonably fair IMO because the asset value of the running business is not in the share price (sell the assets and you have no business), but the acquirer values the assets and the continuing business when compared with buying new assets in the market (and aims to get value out of synergies and adequate EPS ROCE).

The big question is, is there someone who wants those assets to expand their business?

Holding still; AGM news I expected to be good, in fact was better than expected.

[paulf99] 15/7/2005 18:41

I would be sorry to see BHG go because the management have proved themselves over the years (in my view). It's not so often that you can find a company like this which has grown sensibly but steadily over the years. However if they get taken out, the price will be what the price will be - arguably the larger traditional pub companies (such as GNK, which I also hold, and Wolves) are rather over rated because of their perceived growth prospects. So if there's to be a premium if/when BHG is taken over, maybe that will at least take the share price up to a reasonable (if not overly generous) value.

[salpara111] 15/7/2005 13:44

Well I am still a holder but am somewhat dissapointed that the share price does not seem to reflect the serious quality of the business but then again who ever said that the stock market was rational.
M&S announced the other day its seventh consecutive quarter of falling sales and what did the share price do....yes of course it went up to within 5p of its 2 year high...hmmm. So I guess that logic has little to do with it. I am just a little concerned that a predator may be able to take BHG off the market for what I would consider to be a cheap price.

[ed 123] 15/7/2005 12:23

Mistake by AFX.

Correct picture is that at end of March 2005 had 270 pubs. Aiming for total of around 300 by this year end.

[paulf99] 15/7/2005 11:54

Agreed - a good statement but I note the newswire report said "The brewer said it is back on track to grow its portfolio by 300 pubs by year end." I didn't spot that it was offtrack in the first place. Anyone know about that? Or is that remark just journalistic licence?

[ed 123] 15/7/2005 11:35

Good statement today. share price through £5, more to come methinks.

[samg99] 14/7/2005 16:53

domtheone - I agree, SETSMM has been quite benevolent on this one. Seems to be rising fairly steadily. Looks as if it could break through a fiver fairly soon.

[ed 123] 14/7/2005 16:01

Even at this level pe ratio low for sector, however smoking ban arrives next year. Good summer for the boozers so far. Bid may arrive for this one day, perhaps after the smoking ban takes effect (less risk for bidder when the effect can be quantified), but the larger pub groups can afford to move ahead of the ban due to relatively small size of Belhaven. Still holding, waiting for £7+, then reassess.

Narrow spread may give a false impression, since volume may not be available at the best quoted prices. Level 2 would give more detail.

[domtheone] 14/7/2005 13:12

No complaints so far since the 11th.

Nice move up (holding till £5+++).

Spread quite narrow at times too.

[bigbertie] 05/7/2005 14:58

I see Greene King bought Ridleys yesterday - are Ridleys a private co? Well that's one more gone, BHG must be moving up the target list.

[bigbertie] 30/6/2005 10:21

SamG99, thanks for that, I'm out of touch. I shall be away for a week from July 11th so won't need to trade then - I'll let the rest of you test it. Cheers.

[samg99] 29/6/2005 20:49

bigbertie - Not SETS, but a hybrid version called SETSMM, which covers the whole of the mid-250 constituents which aren't on pure SETS - those shares went over to SETSMM in November 2003.

200 of the largest smallcaps (broadly, most non-AIM shares with a market cap of over £100 million) are going to SETSMM on July 11th (including BHG), and as I understand it, the LSE wants to put pretty well everything else on to it in December.

Have a look at the Naked Trader discussion thread (PBB) for traders' views (including mine) on this - very few people seem to be in favour of the change. Also Robbie Burns' latest ADVFN column discusses the matter at some length.

Regards.

[bigbertie] 29/6/2005 19:31

SamG99 - is it really going on SETS? I thought that was only for stocks with a lot of trades, where matching of buyer & seller is done by computer. Perhaps I am out of date.......what is the current status of SETS? Are all stocks on LSE going on?

[samg99] 29/6/2005 16:45

paul - I agree about xd - trouble is, that's the point where MMs can really screw around with the price, relying on a few ignoramuses who don't realise the stock has gone xd, think it's dropping and sell. Anyway, I'm still holding, hoping for a bit more.

My fear is that SETSMM, which BHG will be traded on from July 11th, will make it more illiquid and harder to trade.

[ed 123] 29/6/2005 16:38

Still holding. Enterprise and Punch looking good today.

[paulf99] 29/6/2005 15:48

Same for me - I see this as a long term hold although Dom may be right that it could be traded once xd but that's only worth it IMHO if the spread is favourable (and how reliable is that?)

[edmundshaw] 29/6/2005 14:52

Hi dto,

Yes, BHG up a penny today after taking the 8p ex divi into account.

I'm here for the longer term, still. Looking to top slice somewhere over #5 for weighting reasons only.

[domtheone] 29/6/2005 13:26

Everyone still in? Anybody sold out hoping to buy back for less (once the divi is taken into account).

I see that practically EVERY sell over the last few days has been significantly above the bid price...

[ed 123] 24/6/2005 12:54

Offer price 500 pence atm.

Will Christmas come early this year?