Throwing investors a bone in the shape of the decision to sell its loss-making SPC business did not help Coca-Cola Amatil one bit at its investor day on Friday.
In fact, those ungratefuls focused on what the company’s management said about 2019 – telling investors that 2019 is another “transitional year”.
Fund managers took that to mean lower sales and earnings and down went the shares, plunging more than 14% to end at $8.64. That was a six month low.
The question is whether earnings drop and, if so, by how much.
Company management outlined a number of challenges including continued struggles in Indonesia, the rising costs of PET resin, a key ingredient in containers for liquids and foods, and the sale of SPC, which will mean losses next year.
And CEO Alison Watkins drew attention to the impact of the new container deposit schemes across Australia which she said was part of the cause of the “choppiness” the company had experienced recently.
The decision to sell the fruit and vegetable processor SPC followed a reported a $10 million loss to the company.
The sale coincides with the end of a four-year investment of $78 million by CCA and $22 million from the Victorian government.
Ms. Watkins told investors CCA would develop a divestment timeline and process over coming months, but that it was “business as usual” for the SPC team at Shepparton until then.
She said Coca-Cola Amatil now wants to sell the IXL jam and Taylor’s marinades as part of the SPC business, having halted their planned sale to Kyabram Conserves last month.
