2016-Year of the Yowie!

Nearing the end of 2015 I think it would be appropriate to reflect on the companies achievements over the last 12 months and also list some of the main catalysts for growth heading into 2016. This may serve to help newer investors who are interested in the company gain a fundamental understanding of the company (sorry for the long read).

These were some of the major news items that management were able to achieve over 2015-
Jan 30: Raised $10m through placement which was significantly oversubscribed and was taken up by existing and new Australian and Asian institutional investors.
Feb 18: Announced first major roll-out to 1318 Safeway stores nationally.
April 24: Successful completion of a small, twelve store trial in a Tier 1 grocery retail account in Dubai, Middle East. The twelve trial stores are part of a major international supermarket chain.
June 8: Introduced to the American stock market through the OTC platform.
June 17: Full roll-out nationally to 4300 Walmart stores. Walmart being the largest retailer by revenues in the world.
Nov 23: Signed a 3 year contract with Rovio entertainment, the maker of 'Angry Birds', to manufacture and distribute chocolates with Angry Birds collectable surprises inside for the US market.

Our recent quarterlies have shown exceptional growth in receipts from customers.
Second quater 2014:$10,000
Third quarter 2014: $33,000

Fourth quarter 2014: $221,000
First quarter 2015: $723,000
Second quarter 2015: $1,345,000
Third quarter: $2,480,000

This shows that the product is being strongly endorsed by the American public along with the increasing number of stores Yowie is being stocked in. From the recent AGM presentation, management stated that Yowie was the fastest growing Novelty Brand in America. Nielson data included also showed Yowie was ranked number 10 in the grocery channel outperforming Nestle Kit Kat King Size, Hershey King Size and Hershey Ice Breakers on a $ per store, per week basis.

From the numbers given in the presentation we can also conclude that 1.15 million Yowies had been sold in the month of October. It has been understood that to break even the company must sell 1 million Yowies per month, so from this we can see that we may have had our first profitable month in October.

I think it is a worthwhile exercise to estimate as best I can how many stores we are currently stocked in as at the end of 2015. It is also worth noting that Yowies are now available in every state of the U.S included Hawaii.
They currently have 47 Active Group & Individual Accounts including
Walmart-4500
Kroger-2625 (not 100% confirmed but is understood to be happening, Kroger symbol shown on page 32 of the AGM presentation which shows current accounts)
Safeway- 1326
7/11-1500 (with the potential for 6700 more)
Heb-313
Cost plus world market-259
Raleys-128
ITSUGAR-75
Hy-Vee-40
Bel air- 20
Candyopolis-11
Lolliandpops- 10

Stores where Yowies have been spotted and bought from but number of stores is unknown include,
Toys R Us (865 stores)
Bed bath and beyond (1000 stores)
Hobby Lobby (600 stores)
Jungle Jims
Rocket Fizz

Stores where Yowie has completed successful trials but have not signed up for roll-outs yet include
Walgreens (8232)
Valero (7000+)
Carrerfour (11,000 world wide)

From the above we can estimate we are in currently stocked in over 10,000 stores across the U.S, the number of potential stores we could be stocked in is over 55,000 (page 23 AGM presentation) so there is still a lot of room to move in the next few years.

2016: I believe the following to be the key share price catalysts for the company coming into next year-
Moving into profitability: Using the 1 million Yowies sold per month in order to be breakeven-even and knowing that we sold 1.15 million in October it is very likely that the upcoming 4th quarterly will show our first profitable quarter. I think it is fair to assume that sales in November and in particular December (christmas yowies stocked in Walmart) were considerably stronger due to the seasonality then in October.
Tier 1 stores: 2016 should see more tier 1 stores sign up for full roll-outs. Top of the list being Walgreens following a successful trial.
Angry birds: Yowie are set to release Angry Birds themed chocolate surprises in May around the time the highly anticipated movie (which cost U.S 185 million to produce) is released. This follows the most download app of all time. This should increase Yowies revenues substantially whilst also increasing brand awareness. This is Yowies first licensing deal and they stated in their recent presentation that they are in "advanced discussions in relation to other Yowie Licensing opportunities".
Advertising/In store merchandising: All the sales thus far have been achieved with basically ZERO advertising. As advertising kicks off in 2nd quarter 2016 we should see a solid uptick in sales as a result of this. Costs for advertising are unknown but will no doubt provide substantial value to the Yowie brand. A permanent Yowie branded in store display unit will also be released early next year which should help to catch shoppers eyes.
Merchandise: It is my view that in the latter half of 2016 Yowie may move into producing Yowie merchandise including books, pencil cases/bags, hats, puzzles, plush toys. These are low cost products which have great margins. At the AGM it was mentioned that Walmart are very keen on Yowie themed books.
International expansion: We could potentially see an overseas expansion in 2016 which in my view would most likely be into the middle East Market through Carrefour.
Depreciating Aussie dollar: Having all our earnings in U.S dollars bodes well to an Aussie dollar which is widely expected to depreciate in 2016.

I have left out the cartoon series which is currently under discussions as I believe it is likely to be a 2017 story. However the company expects to release an animation of a new 3 minute Yowie Story in 3D format next year. A script for the Yowie movie which Hollywood Studios and Distributors are excited by the potential of is also unlikely to happen next year.

The above points are just some of the main reasons I believe the company will be one of the best performers on the ASX in 2016.

Feedback is welcome!