Ann: Results Announcement, page-7

Presumably the Blanco business was lost on the basis of SHM management not agreeing to revised terms.

If so, SHM's loss of the Blanco distribution rights reminds me of several companies in which management were happy to forego certain short-term earnings in order to pursue more durable longer-term earnings:

The closest analog is BRG - BRG lost the Kuering supply agreement in 2013/14; resulted in a re-allocation of capital to faster-growing, higher ROE activities. If SHM is able to even somewhat mimic the BRG experience since then, SHM shareholders will be cavorting and cartwheeling with joy.

There are several similar memorable examples of this kind of thing happening:

DTL - pivoted to the cloud some years ago. Short-term earnings took a hit, but the earnings growth exploded thereafter.

ARB - ran duplicated cost overheads for a period as it keep one manufacturing facility open while opening a more efficient one

CSL - acquired a flu vaccine business which was significantly under-earning, which depressed CSL's shrt-term earnings, but one the acquired business was right-sized, growth accelerated.

SNL - like ARB, ran duplicated cost overheads during a major DC relocation. Again, after the early pain was felt, the ensuing financial performance was beat expectations by far.


SHM's share price response following the announcement of the loss of the Blanco distribution had a distinct sense of de javu about it for me.

Prompted by my feeling I'd seen this movie several times before, I scrambled to get up to speed with the company and to commence buying shares.

My expectation, as a relatively new SHM shareholder, is a BRG-like ride in the years to come.

Heck, Heston Blumenthal is even the brand ambassador for SHM's Everdure range of BBQ's , just as he was for BRG's products between 2013 and 2018.

I'm not superstitious in any, so I'm not declaring that to be a good sign, but it sure isn't a bad sign.

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