What’s Recent With The Consumer Staples- WHA and BKL?

What’s Recent With The Consumer Staples- WHA and BKL?

July 2, 2019 Off By administrator

Requirement for consumer staples marks one of the essential requisites of any individual, irrespective of the financial situation. Examples of these products include food and beverage, hygiene products and household commodities. Considering that the demand for these products is constant and prevails across the year, they are non-cyclical.

Major global firms dealing with consumer staple products include Procter & Gamble (P&G), Johnson & Johnson, Kellogg Co., Altria Group and Walgreens Boots Alliance.

Let us take a look at few consumer staple products which are listed on the Australian Securities Exchange:

More on the top 10 consumer staple stocks (based on market capitalization) on ASX can be READ here.

With this backdrop, let us now look at the recent updates and present stock performances of two consumer staple stocks, on ASX- WHA and BKL:

Wattle Health Australia Limited (ASX: WHA)

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Company Profile:  A provider of health and wellness products, WHA sources locally grown ingredients and creates formulations and organic products with scientific and nutritional benefits. Adhering to international standards, the company aims to protect the earth’s natural resources. With its registered office in Abbotsford, the company was listed on ASX in 2017. The company has offices in China, Vietnam and India. WHA has three product ranges- The nutritional infant formula dairy range, Nutritional range dairy and WattleBaby natural baby food.

Company products (Source: Company website) 

Stock Performance: The company’s stock was voluntarily suspended from trade on ASX, awaiting an acquisition announcement which came in today, on 2 July 2019 (related to Blend & Pack, discussed below). The stock last traded on 24 June 2019, at A$0.520, 2.97 per cent up relative to its last trade, which was re-instated to official quotation today. It closed the day’s session at A$0.520, up by 2.97% (As on 2 July 2019). The EPS of the stock is a negative A$0.051 and it has generated negative returns of 28.87 per cent, 39.16 per cent and 44.51 per cent in the last one, three and six months, respectively. The YTD of the stock is a negative 44.51 per cent.

Acquisition of Blend & Pack: On 2 July 2019, the company announced that it had signed a revised debt facility term sheet for net cash funding with Gramercy, which now amounts to $85 million. This funding was $75 million, before the revision. With a coupon rate of 9 per cent per annum and OID of 13 per cent, the debt facility is valid for a term of four years.

The revision of this debt facility term sheet would aid the company to receive additional working capital and increase the proposed purchase of B&P shares. Blend & Pack is Australia’s largest CNCA certified manufacturing facility. The company is aiming to increase its shareholding interest in Blend & Pack to 93. 5 per cent, which would facilitate the construction of Australia’s first dedicated organic nutritional spray dryer. Post the acquisition, the…

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