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  1. Goblin

    59,234 Posts.
    16
    Capilano Honey (CZZ) $10

    AS Richard Hemming explains today in his Under The Radar column, the bottler of the golden nectar is a sadly rare example of a thriving food company.

    While the Capilano brand flies the Australian flag with 100 per cent local content, its Allowrie and Smiths brands contain honey imported mainly from Argentina.

    Capilano reported a 73 per cent surge in half-year earnings to $3.6m with sales up 37 per cent to $47m. A glorious “show me the honey” moment for 12.5 per cent holder Kerry Stokes, who normally opts for bulldozers and bugles over bees.

    According to Canaccord Genuity analyst and closet apiarist Mark Topy, the sourcing strategy enabled Capilano to maintain supply.

    As a result, market share has risen to 68 per cent, from 51 per cent a year ago.

    Tight supply has seen honey prices soar to an average $4.61 a kilogram over the first half, from $3.49 a kilogram previously.

    Improved winter conditions mean the bees are getting back to work and this should help Capilano target export markets with more l premium product.

    Topy at Canaccord, who values the stock at $10.18, expects full-year earnings of $6.4m (earnings per share of 74c).

    Buy.
    The Weeken
    d Australian accepts no responsibility for stock recommendations. Readers should contact a licensed financial adviser. The author does not hold shares in the stocks mentioned.

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