Super Group struggles with shaky turnaround plan in 2015
The sales drought will continue well into the second half.
Super Group has been starving for profits in the past quarters. The group, once a stalwart in Singapore’s consumer-staples sector, has been struggling with sluggish sales and rising costs for seven consecutive quarters.
According to Maybank Kim Eng, Super is on the way to a slow and painful recovery in 2015. Super is rolling out plans to recover lost market share in its key markets Thailand and Myanmar, and the group expects a slow initial recovery but the pace should gather strength in 2H15.
“Consensus is still negative but that sets the stage for positive surprises, in our view. Risks of adding positions are lower now that the stock is down 55% from its peak and has reverted close to its 5-year mean,” stated Maybank Kim Eng.
Here’s more from Maybank Kim Eng:
Although macro conditions are not yet fully conducive, Thailand has already responded well to its new products and expansion into the north while Myanmar now has new products to sell as well.
Thailand’s northern provinces now account for 25% of its country sales where previously, it sold entirely in the south.
Sales grew 5% in 3Q14. In Myanmar, previously an all-coffee market, it has introduced new tea products.
Volume is growing by mid-single digits. In Malaysia, Super has taken back distribution and is trying to expand north and into the Malay coffee market.