Zetar plc (ZTR)
Market cap of £27m
Current share price (as at 19 May) 202p
EPS 2010 35.4p (adjusted) Giving current P/E of 5.7
Forecast EPS 2011 37p Giving forecast P/E of 5.5
Forecast EPS 2012 38.9p Giving forecast P/E of 5.2
Zetar plc pays no Dividend currently.
What do they do?
Zetar has two main businesses – confectionary and natural snacks.
The confectionary division specialises in novelty chocolates such as kids character advent calendars and easter eggs, baileys filled chocolate, caramel filled salted chocolate biscuits, and so on. They have a range of large licenses including Disney Pixar, Barbie, Hello Kitty and Top Gear as well as their own brand (Kinnerton). The natural snacks division makes other such unusual snacks as marmite nuts, reggae reggae cashews, vimto fruit snacks, as well as their own range of snacks.Customers
Zetar have an impressive range of customers. The majority of the supermarkets are customers as Zetar produce a lot of the supermarket own brand items.
Strengths
Zetar are known for their quality and product innovation, and it is this innovation that is part fuelling their growth (they introduce around 400 new products a year out of a total product range of 2000).
Outlook
They are keen to expand both organically and through acquisitions with the focus being on more “everyday” (i.e. all year round) products and impulse buy items to reduce seasonality. There is also a focus on value and increasing margins through a better product mix (i.e. coating cashews in reggae reggae sauce mix allows a much higher price to be charged and hence increases margins).
Summary
The company clearly has growth aspirations, which are not factored into the current share price. Infact the share price was well above 500p just a few years ago, and could well get back to that level once the market wakes up to how undervalued the company is.
Zetar have an impressive range of customers. The majority of the supermarkets are customers as Zetar produce a lot of the supermarket own brand items.
Strengths
Zetar are known for their quality and product innovation, and it is this innovation that is part fuelling their growth (they introduce around 400 new products a year out of a total product range of 2000).
Outlook
They are keen to expand both organically and through acquisitions with the focus being on more “everyday” (i.e. all year round) products and impulse buy items to reduce seasonality. There is also a focus on value and increasing margins through a better product mix (i.e. coating cashews in reggae reggae sauce mix allows a much higher price to be charged and hence increases margins).
Summary
The company clearly has growth aspirations, which are not factored into the current share price. Infact the share price was well above 500p just a few years ago, and could well get back to that level once the market wakes up to how undervalued the company is.
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