BUG 0.00% 22.0¢ buderim group limited

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    OVERVIEW
    ********

    Food products are enhanced when things are tough because that's
    the last sector you cut down on, even confectionery.
    Buderim Ginger Ltd (ASX:BUG) is one company holding up against
    falling consumer demand.
    The Queensland ginger product maker which has also diversified
    into nuts, looks strong and well, judging by the chairman's remarks at
    the extraordinary general meeting on Friday in which he said that the
    company's expectations for the year to December 31 remain unchanged.
    In August, chairman John Ruscoe said that the company had revised
    its full-year profit forecast upwards after sealing a deal that will make
    the food company potentially the world's largest processor and marketer
    of macadamia nuts.
    The acquisition will enable the company to increase its 2008
    profit forecast as a result of both incremental operating profit and
    business combination benefits on acquisition.
    In response to a subsequent request from the ASX, directors
    advised that profit before tax for 2008 is expected to be in the range of
    $3 million to $3.5 million, well above the $900,000 result achieved in
    2007 and also strongly up on the guidance given last week when the
    company announced a forecast of un-audited half-year results.
    Back at the EGM, the chairman told shareholders there was a
    determined need for additional equity to support recent strategic
    acquisitions and to prepare for further expansion, as well as to
    strengthen the company's balance sheet.
    "As you are all aware, during the last 10 months the company
    purchased the assets of Agrimac Macadamias, based in Alstonville NSW, and
    those of MacFarms of Hawaii making us arguably the largest processor and
    marketer of macadamias in the world in an industry that holds enormous
    growth potential.
    "We have done this at what we believe to have been an opportune
    time in the business cycle and, in the case of MacFarms, at a very
    favourable time in terms of exchange rate.
    "We intend to capitalise on the many synergies between these
    businesses and with our core ginger business, leveraging in areas such as
    customer base, geographic penetration, distribution, sales and marketing,
    manufacturing, logistics and of course our expertise in agriculture," Mr
    Ruscoe declared.
    Over the next few months, the company is undertaking a major
    expansion at its bakery at Kunda Park, near Buderim, as well as making
    further modest investment in its tourism operations in Yandina.
    Buderim Ginger has, within the last week, opened its cooking
    school which is still in construction phase of a purpose-built facility
    to re-establish the "Superbee" attraction on the Sunshine Coast,
    following its closure at the former site earlier this year.
    "So far, we have financed our investments through cashflow and
    borrowings, but it is now time to raise additional capital," the chairman
    said, adding that the instability in financial markets which has been so
    manifest in recent weeks makes this prudent as well as practical.
    Although the present volatility makes forecasting in the short
    term extremely difficult, the company believes that the broadening of its
    business base makes it both a larger and more resilient company and
    positions it for future profitable growth.
    "The economic turmoil of recent months clearly has implications
    for our business," Mr Ruscoe said.
    "There are a number of factors affecting us.
    "The spectacular decline of the $A obviously has longer-term
    benefits for our export focused businesses.
    "It is also impacting (sic) on the value of our recent US
    investment and will eventually act as a spur to increased domestic
    tourism - the 'bread and butter' of our tourism business.
    "Food price inflation is also expected to be strong for some time
    to come," the chairman said.
    However, he added that reduced consumer discretionary spend will
    have an impact on some of its business and the company is already seeing
    effects of this, particularly in the UK, and in demand for premium pastry
    products domestically.
    "In response, we are reviewing each of our businesses and
    tightening expenditure where appropriate.
    "At this time, it is too soon to quantify any potential overall
    impact on the business, but we remain confident in our existing market
    advice for 2008," Mr Ruscoe concluded.
    Back in September, Buderim Ginger reported that its share
    purchase plan (SPP) and associated placement program had been
    successfully completed.
    A total of $3,866,746, of new equity was raised, in line with the
    company's target of $4 million.
    Mr Ruscoe said at the time the Board was delighted with the
    response received, especially in light of the turmoil in equity markets.
    "We believe it is a strong vote of confidence in our specialty
    foods strategy which is now delivering results."
    Given the strong response, the 15 per cent equity threshold was
    exceeded.
    The issue of all placement shares was approved by shareholders at
    the EGM, allowing for 7,033,556 shares to be issued on November 7.

    SHARE PRICE MOVEMENTS
    *********************

    Shares of Buderim Ginger on Friday traded steady at 42.5c.
    Rolling high for the year is 59.5c and low 40.5c. Dividend is 2c to yield
    4.71 per cent. EPS is 3.17c and p/e ratio 13.41. The company has 30.6
    million shares on issue with a market cap of $13 million.
    Buderim Ginger's website has made these observations about its
    product.
    For over 5,000 years ginger was revered as the "universal
    medicine" by the ancient Orientals of China and India and highly sought
    after by spice traders.
    Today, ginger remains a component of more than 50 per cent of the
    traditional herbal remedies and has been used, over the centuries, to
    treat nausea, indigestion, fever and infection and to promote vitality
    and longevity.
    It is claimed that Ginger can save tens of thousands of lives and
    billions of dollars in lost workdays. The world's favourite spice is
    reputed to have qualities that may prevent heart attacks, arthritis pain,
    aid digestion, prevent colds and flu, skin cancers and aid weight loss.
    Confucius and Pliny praised it, Nostradamus included recipes for
    wine and ginger preserved in honey and the Koran speaks of a fountain of
    ginger flavoured water.
    British University's Professor Roger Collier developed a ginger
    and garlic cocktail which he claims thins the blood, dissolves clots and
    lowers blood pressure.
    Further, these tests showed that ginger cuts down on bad UDL and
    raises good HDL cholesterol, contains no fat or sugar and can be added to
    foods to heighten flavour without adding calories.

    BACKGROUND
    **********

    Buderim Ginger joined the Australian Stock Exchange list on
    December 14, 1989.
    But its history has stretched much longer than that.
    Not long before World War 1, some pieces of raw ginger found
    their way to Buderim - which was then a small farming area about 100km
    north of Brisbane, where the comparatively high rainfall and humidity
    combined to produce conditions which were ideal for growing this unusual
    crop.
    The interruption to the supply of ginger from China, caused by
    World War 2, provided the opportunity for growers in the Buderim area to
    expand their sales.
    As a result of this, five Buderim farmers met together in an old
    blacksmith's shop and formed The Buderim Ginger Grower's Co-operative
    Association Ltd. Between them they had capital of 25 pounds, two wooden
    vats and 14 tons of green ginger.
    In 1979 an area of nearly nine hectares was leased from the
    Department of Commercial & Industrial Development and the first stage of
    a new factory complex was commenced, being opened in time to help in
    processing the 1980 early harvest.
    The establishment of the Tourist and Administrative Complex in
    Yandina during 1985 completed the industry's relocation program. In 1989,
    Buderim Ginger Ltd was listed on the stock exchange.
    Through out the 1990s, and into the current decade, Buderim
    Ginger has become globally recognised for producing the world's finest
    ginger.
    This has been achieved by investing in production facilities and
    meeting the needs of customers in overseas markets, from the UK to the
    USA and from Japan to New Zealand. In Fact Buderim Ginger exports to over
    17 countries.
    This distribution success has been greatly enhanced by opening
    offices in the UK, Germany, the US and agents in Japan, New Zealand and
    Singapore.

    Sydney - Monday - November 3: (RWE Aust Business News)
 
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