MC - $64.5m SOI - 724m Cash - $20.25 million strategic investment agreement with Careline Australia Pty Ltd.
The Food Revolution Group Limited is an Australian-based food processing company that uses a combination of conventional juice processing equipment and custom-developed equipment and processes to manufacture a range of high-quality juices. FOD is aiming to generate shareholder value through exploring opportunities for growth in the functional food, beverage and nutraceutical markets in Australian and key international markets, including China.
FOD expects to increase gross sales revenue by about 25% in FY20, with revenue guidance of at least $40 million. In addition to the clean room coming online, it is preparing to launch new products during the second half of FY2020.
FOD completed an upgrade to its plant in December 2019, which included construction of a state-of- the-art self-contained 1260sqm clean room and laboratory, which has capacity to produce and bottle numerous products including gels, powders, oils and cosmetics. The plant was upgraded to provide FOD with added flexibility to produce a variety of products efficiently to cater for the substantial demands of the Chinese market.
The Commissioning of the bottling line is currently underway.This bottling line has capacity to bottle a variety of sizes up to four-litre bottles. The bottling machine is multi-purpose; in addition to bottling products such as canola oil, FOD has confirmed it is suitable to produce and bottle products such as hand sanitiser. It plans to commence production of the hand sanitiser before the end of February.
FOD has received an order for more than $2 million of hand sanitiser products which will be sold through distribution partner Careline Australia Pty Ltd. - First order expected to be filled and cash received within four weeks. - FOD’s expects further orders to materialise.
Careline Australia Pty Ltd, FOD’s distribution partner controlled by Chairman Norman Li, has received unprecedented demand for hand sanitiser locally and from China, which is in short supply due to the Coronavirus. Careline will distribute the FOD products through both its Daigou network and to fill orders it has directly from supermarkets and distribution customers. Dr Li commented: “We believe this is the first of many orders for our hand sanitiser product. Careline has demand for this product from both Australian supermarkets and pharmacy chains as well as direct demand from China. FOD’s aim is to build these distribution channels so that FOD can continue to supply them beyond the current Corinavirus outbreak.”
Significant rerate underway for FOD, Company predicted revenue of $40 Million before the hand sanitiser was launched this week!
FOD Price at posting:
8.9¢ Sentiment: Buy Disclosure: Held
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