Edison Issues ADR Update on Yowie Group

LONDON, February 26, 2016 /PRNewswire/ --

Yowie Group's retail revenues rose 29% on a sequential basis in the December quarter to an estimated US$6.2m as the company completed its roll-out to 4,300 Walmart stores in the US. December quarter numbers include both retail and stock-building sales, so we are maintaining our top-line expectations for now. However, based on the company's recent move to a new contract manufacturer and the resulting discontinuation of patent royalty fees, we believe there may be upside to our estimates.

     (Logo: http://photos.prnewswire.com/prnh/20130417/608168 )

The shares have dropped about 42% since our initiation in September 2015, which we believe reflects overall market weakness, along with the 16% increase in shares outstanding. A reverse DCF at the current price with a WACC of 10% implies compound average revenue growth from FY16 to FY18 of 70%, fading to terminal growth of 2% and a terminal EBIT margin of 14%, a margin we believe may be achievable by FY18. There is nothing in our forecasts for roll-out to other geographies, which would present further upside. We also believe that there is a real opportunity for investors as Yowie demonstrates that it can move beyond confectionery into licensing the brand for other products.

Click here to view the full report.

All reports published by Edison are available to download free of charge from its website http://www.edisoninvestmentresearch.com.

About Edison: We are an international equity advisory firm. We enable our client companies to achieve their capital market objectives. The team is made up of more than 80 analysts and investment professionals with many decades of experience. Our extensive company knowledge and industry expertise spans 10 business sectors and more than 700 listed companies globally. We give our corporate clients and investors privileged insight into global investment trends. Our distribution capability is key to ensuring a global investor audience can access our investment knowledge. Edison is authorised and regulated by the Financial Conduct Authority.

Edison is not an adviser or broker-dealer and does not provide investment advice. Edison's reports are not solicitations to buy or sell any securities.

Contact details: Learn more at http://www.edisongroup.com and connect with Edison on:  

LinkedIn: http://www.linkedin.com/company/edison-investment-research
Twitter: http://www.twitter.com/Edison_Inv_Res
YouTube: http://www.youtube.com/edisonitv
Google+: https://plus.google.com/105425025202328783163/posts

For more information please contact:
Beth Senko, Edison Investment Research, +1-646-653-7026
Paul Hickman, Edison Investment Research, +44(0)20-3681-5201 [email protected]

SOURCE Edison Investment Research

WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?

440k+
Newsrooms &
Influencers

9k+
Digital Media
Outlets

270k+
Journalists
Opted In

GET STARTED