3 Quick Things to Learn About Super Group Ltd

Super Group Ltd. (SGX: S10) is one of the cool companies in Singapore which shares webcasts of their quarterly earnings presentations (the link for Super Group is here).

As a leading instant food and beverage brand owner, Super Group’s business can be segmented into branded consumer (BC) products and food ingredients (FI). You can read more about the company here.

Seeking growth

Below are three short but useful things I learned about Super Group from listening to the webcast of its most recent first quarter earnings release:

  1. Summing up the quarter, Chief Financial Controller Koh Chun Yuan highlighted several events that affected the financials for Super Group:
    • For the first quarter, revenue was $121.7 million – a 2% decline compared to last year’s first quarter. The BC segment saw a 5% year over year decline in sales, which was partially offset by a 4% sales increase from the FI segment.
    • The FI segment made up 31% of sales for the first quarter, with the BC segment contributing the rest. As the FI segment has a lower gross margin, this led to an 18% decline in operating profit during the quarter for Super Group.
    • The expiry of an overseas subsidiary’s tax incentive also caused the company’s tax rate to increase and thus the net profit to fall by 22% year over year.
    • Koh made the point that Super Group’s EBITDA (earnings before interest, taxes, depreciation and amortization) rose 0.4% from a year ago – that’s a sign that the firm’s income generating capability remains intact.
  1. On the geographical picture, BC sales in East Asia grew by 22% year on year, driven by sales in China. BC sales from this region is still small in the overall scheme of things, clocking in at just $10.6 million in the reporting quarter. With Super Group’s focus on geographical diversification, it may be worth keeping an eye on this region.
  2. The balance sheet for Super Group remains strong with a debt to equity ratio of only 0.18 and a high net-cash position of S$82.4 million ($102.4 million in cash and $20 million in total borrowings).

In closing, we should be watching for Super Group’s progress in executing its three-pronged growth strategy (highlighted in its last webcast) of branding, product innovation, and geographical diversification. The earnings webcas was a short one this time around.

Foolish takeaway

To buy and hold a company’s shares for the long term also means keeping up with developments in the firm’s business.

The access to management teams via webcasts gives the Foolish investor a fair chance to judge for themselves whether they would like to be invested alongside those teams. It also helps us put together a more complete thesis around a company and keep up with developments in its industry.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong owns shares in Super Group