From my other broker. ( Copy and paste ) New Listing - Country Bird Holdings (CBH) Country Bird, the poultry and stock feed group, is listing on the JSE Main Board on the 3rd of May 2007. CBH is the holding company for three main operations: Supreme - the third largest poultry operation in SA with a current market share of 10%, Nutrifeeds - a recently acquired feed supplier to the livestock industry, and Ross Africa - a breeding operation in Zambia and Botswana. Supreme is the main operation in the group, contributing 77% of EBITDA for financial year end December 2006. The operation produces an average of 1.1 million birds per week distributed nationally as a complete range of frozen and fresh products. Currently capacity is 1.35m birds per week. Supreme currently supplies around 65% of its produce to independent wholesalers but has opportunities to expand into the more lucrative food services and retail spheres. One of its abattoirs has recently been awarded the KFC Star award, enabling Supreme to supply to KFC in SA and abroad. This is an achievement shared only by Rainbow in South Africa. These new opportunities offer very attractive margins and should influence the product mix substantially. CBH's aim is have 30% of revenue coming from this area in the future. Nutrifeeds account for approx. 11% of group EBITDA, a figure the group aims to increase substantially. Nutrifeeds currently produces 348 000 tons of feed per annum supplying Supreme, Chubbychick and other groups. This operating capacity will be expanded to 660 000 tons by end FY08, at an estimated cost of R30m. Ross Africa holds the exclusive rights to breed the Ross broiler parent stock in 6 Sub-Saharan countries and non-exclusive rights in 4 more countries. The group are the leading poultry breeder in Zambia with a market share in excess of 50%. Ross Botswana also holds a market share in excess of 60% in the breeding market in Botswana. Ross Africa is however a relatively small area of the group, contributing only 5% of revenue for FY06. The group recorded revenue for FY2006 of R1.05bn, achieving growth of 57% year-on-year. HEPS was up 108% to 47cps. The listing consists of a private placement of 65.5m CBH shares, with a possible further allotment of 9.3m shares, should the need arise. This would mean that the free float post listing will be in the range of 35 to 40%. The estimated price range of the initial placement will be between R4.85 and R5.35 per share, to be determined by a book-build process. This places the company in a historical PE range of 10.3x to 11.4x. According to research, the group should earn around 73cps in F2008, placing the stock on a 12-month rolling P/E of approximately 7.5x (using the upper end of the price range). This pitches the stock at an estimated 15%-20% discount to Astral Foods forward P/E (using I-Net consensus figures.) The book build for this listing closes at 12:00 on Tuesday 24th April.
