SPC Global Holdings (SPG) – Bearing fruit

SPC Global Holdings is a food and drinks supplier that sells its products under the eponymous SPC brand and other brands such as the Original Juice Company, Juice Lab, Eridani, Aussie Juice Growers, Thirsty Brothers Original Juice, and Australia's Garden brands. The company is based in Mill Park, Australia.

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Ord Minnett has initiated coverage of SPC Global Holdings (SPG) with a Buy recommendation and a target price of $1.00, as the three-way December merger of the iconic SPC brand, the Original Juice Co (OJC) and Nature One Dairy (NOD) has given rise to a food group that we see as capable of delivering operating earnings (EBITDA)growth of circa 34% per annum over the next three years.

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There are cost savings and revenue benefits to come from the merger, and opportunities to grow volumes and margins, principally through a rebound in SPC volumes, expansion of the NOD customer base, and boosting production capacity at OJC. Other growth options once the merger is bedded down include possible international expansion, cross-selling, and/or M&A activity.

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