MENU

What’s Left In Fraser & Neave?

Fraser and Neave Limited (SGX: F99) is one of the oldest publicly-listed companies in Singapore and Malaysia. Its history dates back all the way to 1883 when it was founded by John Fraser and David Neave. It was 15 years later, in 1898, that F&N gained its status as a public company.

For more than a century since its listing, the company has grown its beverage business from a small setup into a regional powerhouse. In fact, the creation of famous brands like Tiger Beer and 100Plus can all be traced to F&N.

In 1985, the company started to diversify into real estate and since then, the property business has become its main bread and butter. In later years, F&N also added a publishing arm after gaining majority control of the previously-listed Times Publishing Group.

While it spent more than a century building different businesses, F&N had began a divestment program in recent years starting in 2012. It first sold its entire stake in Asia Pacific Breweries (the home of Tiger Beer) to Heineken N.V., which has since grown to be one of the largest companies in the beer industry in Asia. At the same time, F&N’s major shareholders, Oversea-Chinese Banking Corporation (SGX: O39) and Great Eastern Holdings (SGX: G07), sold their stakes to Thai Beverage Public Company (SGX: Y92) and the private investment group TCC Group.

After all that twist and turns, F&N is now owned by Thai billionaire Mr. Charoen Sirivadhanabhakdi (he’s in effective control of both Thai Beverage and TCC Group) and the company recently embarked on a restructuring programme that saw it spin of its property business into Fraser Centrepoint Limited (SGX: TQ5).

With all the changes that F&N had seen over the years, what exactly is left of its businesses?

Beverages

After all that corporate maneuvering, F&N continues to have a strong presence in the beverage business. However, most of it is actually due to F&N’s 55.8% ownership of the Malaysia-listed Fraser & Neave Holdings Berhad. And although it still has a beer business through Myanmar Brewery (maker of the popular Myanmar Beer brand of alcoholic beverages in the country of – what else – Myanmar), which it owns 55% of, it’s lacking the scale it once enjoyed with Asia Pacific Breweries.

Dairy Products

F&N’s second largest business now revolves around dairy products with the supply of sweetened condensed milk and evaporated milk mainly in Thailand and Malaysia. For the first quarter of F&N’s 2014 financial year (FY2014), this segment generated a profit before interest and taxes of S$16million.

Printing and Publishing

F&N’s printing and publishing arm has been struggling for a few years now with revenue and profits continuing their downward march. In the first quarter of FY2014, this segment’s profit before interest and taxes fell 50% year-on-year to S$1.7 million.

Foolish Summary

After the sale of Asia Pacific Breweries and the spinoff of Fraser Centrepoint, F&N is no longer the company it used to be. However, with a beverage and dairy business that is still one of the largest of their kind in Asia, it might be premature to strike off this company with 130 years of history.

Click here now for your FREE subscription to Take Stock Singapore, The Motley Fool's free investing newsletter. Written by David Kuo, Take Stock Singapore tells you exactly what's happening in today's markets, and shows how you can GROW your wealth in the years ahead.  

The Motley Fool's purpose is to help the world invest, better. Like us on Facebook  to keep up-to-date with our latest news and articles.

The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Stanley Lim owns Fraser Centrepoint Ltd