If at first you don't succeed, have another go

Punter: If at first you don't succeed, have another go

Business
BGFC aims to sell branded "clean and green" products to India, China and south-east Asia. Its current range includes dairy, meat and seafood. Photo Shutterstock

BGFC aims to sell branded "clean and green" products to India, China and south-east Asia. Its current range includes dairy, meat and seafood. Photo Shutterstock

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Punter seriously hopes he does not regret buying back into Beston Global Food Company.

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The Punter has no regrets about selling his stake in Beston Global Foods (ASX code BFC) in May last year.

The shares later halved in price. He seriously hopes he does not regret buying back in last week.

Beston is effectively a portfolio of companies managed by the private Beston Pacific Asset Management group.

RELATED: A lack of abundance leaves Punter at a loss

BPAM, which receives management fees from the publicly quoted Beston Global Food Company, is controlled by two of South Australia's movers and shakers, Dr Roger Sexton and Stephen Gerlach, both are also directors of the public BGFC.

Since it was launched on the stock market in 2015, at 35 cents a share, there have been a series of setbacks. 

Among others, a third party failed to deliver on what the company thought was a commitment on sales to China; a cheese factory it wanted to buy was bought by someone else and demolished; BGFC then bought a new mozzarella factory from Italy, but it arrived months behind schedule, missing the peak milk season and forcing milk to be sold at cost.

The latest half-year report shows a 138 per cent rise in sales revenue, but operating losses almost doubled to $7.5m. Interest charges and impairments took the loss after tax to $11.5m for the six months.

Operations resulted in a cash outflow of $4.3m, and $12m had to be borrowed, mainly to invest $9.2m in the businesses.

However, the past year has seen a restructure. An underutilised factory in Victoria has been sold, third party sales agents have been replaced by in-house sales staff, the mozzarella plant is up and running, and so is the lactoferrin factory.

The meat business has been rebranded as Provincial Food group, and has secured new contracts. Milk production from BFC's farms is up 17 per cent, and silage production doubled.

The Punter has taken a deep breath, and bought 15,000 BFC at 13 cents each.

  • The Punter has no financial qualifications and no links to the financial services industry. He owns shares in a number of companies featured in this column.
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