How The Needle is Moving On The 2 Consumer Staple Stocks – BKL And CGC

How The Needle is Moving On The 2 Consumer Staple Stocks - BKL And CGC

Blackmores Limited (ASX: BKL) and Costa Group Holdings Limited (ASX: CGC) are two well-known companies in the consumer staples segment. This segment represents mostly the growth stocks at usually higher valuations. It is supported by the fact that as the population grows, demand for consumer goods increases proportionally.

Blackmores Limited has recently announced about the changes in its director’s interest and updates on director’s appointment, while Costa Group Holdings Limited also announced the change in its director’s interest. Let’s see how the two companies have performed in the financial terms and their expectations in the forthcoming year.

Blackmores Limited (ASX: BKL)

Blackmores Limited (ASX: BKL) develops, sells, and markets natural health products such as vitamins and herbal and mineral nutritional supplements for both humans and animals in Asia, New Zealand, and Australia.

It recently announced a change in its director’s interest, where Marcus Charles Blackmore acquired 5,343 fully paid ordinary shares at $89.85 per share to increase its holdings to 4,010,043 ordinary shares. In another update, BKL announced Richard Henfrey will be stepping down from his current position as CEO & MD, on March 29, 2019. Executive Director, Marcus C. Blackmore (Son of company Founder, Maurice Blackmore) will step in as Interim CEO effective from April 1, 2019.

In its H1 FY19 results, it reported an increase in revenue by 11% pcp to $319 million. This was due to strong revenue growth in Australia and New Zealand, along with the growth in Korea by 67%, Hong Kong by 39%, Taiwan by 150%, and Indonesia by 72%. BKL remains the number one brand in Australia with a 16.7% market share in Australia. It reported a marginal increase in NPAT by 0.1% pcp to $34.3 million. The Board of Directors declared fully franked interim dividend of 150 cents per share.

The company expects moderate revenue growth for the full year, but do not expect the second half profit to be ahead of the first half result as sales in China in the Q3 is being impacted by the changes in the consumers purchasing style, higher inventory in the trade and a general softening of the consumer sentiments. The established business progress program targets $60 million of savings over the next three years to fund further investments and deliver improved margins.

On stock information, at the market close (on March 28, 2019), the stock of Blackmores Limited was trading at $93.91, down 0.17% with the market capitalization of ~$1.63 billion. Its current P/E multiple is at 23.12x, and its earnings per share was reported at A$4.069. The company’s annual dividend yield was reported at 3.24%. Its 52 weeks high was noted at $166.76 and 52 weeks low at $80.45. Its absolute return for five years, one year, and six months are 266.74%, -27.59%, -31.33%, respectively.

Costa Group Holdings Limited (ASX: CGC)

Costa Group Holdings Limited (ASX: CGC) produces, packs and markets vegetables and fruits such as mushrooms, blueberries, raspberries, tomatoes, citrus, avocados, bananas, grapes, etc.

It recently announced a change in its director’s interest, where Janette Kendall acquired 19,191 ordinary shares at $5.22 per share to increase its holdings to 22,993 shares.

In the other announcement, Mr. Kevin Schwartz, Non-Executive Director resigned from the company effective from February 28, 2019, and Dr. Jane Wilson will join the Board as an Independent Non-Executive Director effective from April 1, 2019.

In its H1 FY19 result, the company reported a decrease in revenues by 2.4% pcp to $478 million due to lower Citrus revenue. Its EBITDA before SGARA decreased by around 42% pcp to $35.3 million, due to shifting in seasonality of earnings to Jan-Jun, citrus cycle, and African Blue consolidation. Its NPAT-S (before material items & amortization) decreased by around $20.1 million, due to higher depreciation and interest charges following African Blue acquisition and recent CapEx investments.

The company expects the outlook for the market, weather conditions and crop performance to be positive in H2 FY19. It also expects CY2019 NPAT-SL growth of at least 30%, with a further update to be provided at the AGM in May. During February, robust price recovery has been experienced across many categories from the earlier challenging period.

On stock information, at the market close (on March 28, 2019), the stock was trading at $5.110, up 1.59% with the market capitalization of ~$1.61 billion. Its current P/E multiple is at 13.96x, and its earnings per share was reported at $A0.360. Its annual dividend yield was reported at 2.68%. Its 52 weeks high was noted at $9.040 and 52 weeks low at $4.400. Its absolute return for six, three, and one-month period are -30.33%, -30.91%, and -7.37%, respectively.


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