5 Quick Things Investors Should Learn About Super Group Ltd

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

The company, which is perhaps most well-known for its instant beverages such as coffee and tea, has two main business segments, namely branded consumer (BC) products and food ingredients (FI). You can read more about Super Group in here.

Below are five short but useful things I learned about Super Group from listening to its webcast for its fiscal third-quarter earnings release:

  1. Summing up the quarter, Chief Financial Controller Koh Chun Yuan highlighted three key points:
    • Super Group continues to face challenges in terms of weaker currencies in Malaysia, Myanmar, and Indonesia when compared to the Singapore dollar and US dollar.
    • There were some bright spots though: Higher sales were recorded in Myanmar, Singapore, and China.
    • The company’s management team remains committed to its three-pronged growth strategy of product innovation, branding, and geographical diversification. Koh highlighted the launch of ESSENSO microground coffee and Owl Kopitiam Roast as examples of the company’s efforts in implementing its strategy.
  2. Speaking of cost, Super Group improved its gross margin to 33% in the reporting quarter on the back of lower material costs. Selling and distribution expenses, though, was 13% of revenue, higher than the 12% recorded in the same quarter last year. Selling and distribution expenses were up due to sample packs for SG50 and advertising. The effective tax rate rose to 28% as well, up from 20% in the same quarter last year; the expiry of an overseas tax incentive contributed to the higher tax.
  3. The BC segment contributed 65% to Super Group’s total revenue for the third-quarter with the FI segment contributing the rest. This is more or less unchanged from the same quarter last year.
  4. The FI segment also had new products rolled out including freeze dried coffee, botanical herbal extract, and nutritional oil powder. Super Group recruited FI sales professionals and is looking to appoint key distributors to widen its distribution reach.
  5. The BC segment also had a busy first nine months of the year. Super Group launched four flavoured coffee series in the first-half of 2015 in China. The ESSENSO product was also touted as the “next wave” of instant coffee. The new Owl Kopitiam Roast series includes local classics such as Kopi-O, Kopi-O Gau, Kopi-C, Kopi-C Kosong and Kopi Siew Tai.

Foolish takeaway

To buy and hold a company’s shares for the long-term also means the need to keep up with developments in the firm.

The access to management teams via webcasts and transcripts 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