CARLSBERG Brewery Bhd is one of those companies with a rather generous policy in so far as bonus issues and dividend distribution are concerned.
Since its listing on the KLSE in 1971, it has rewarded shareholders with a total of seven bonus issues, but made only one rights call 1-for-2, at the share's par value of RM1. That was 30 years ago, in 1973.
Since 1990, it has declared four scrip issues. Based on the four bonus issues, 1,000 shares bought at RM11.20 apiece on Jan 2,1990, (pre-adjustment), would have multiplied into 3,750 shares worth a total of RM40,125 at the closing price of RM10.70 on Dec 31, 2002, a capital appreciation of more than 3.5 times.
In addition, Carlsberg has made a total dividend payment of RM7,350 gross up to Sept 30, 2002.
This works out to an average dividend payment of at least RM565 a year.
This means the investor who had kept his shares over the 13-year period would have netted a total gain of RM36,275 in both capital and dividend from his original investment.
Not bad at all, even considering the fairly lofty initial investment of RM11,200 for that one lot in January 1990. It underscores Carlsberg's continuing strength as a market leader in its field.
Indeed, the company has been so successful in its sales and marketing strategy in the Malaysian market that it is now estimated to control some 65% of the beer market and close to 17% of the market for stout.
Carlsberg at present produces and markets a range of 10 alcoholic and non-alcoholic beverages in Malaysia, including Green Label Pilsner, Carlsberg Special Brew, Jolly Shandy, Tuborg, Royal Stout, Nutrimalt, Carlsberg Ice Beer, Carl's Signature Lager and, recently, Chang beer.
But it is the Green Label Pilsner that is its undoubted success in Malaysia, said to account for more than 60% of the duty-paid beer market in Malaysia. Two years ago, it was even claimed that the company's 65% share of the domestic beer market was the largest achieved by Carlsberg anywhere in the world.
Royal Stout, too, is said to be steadily increasing its share of the local duty-paid stout market, and now claims more than 10% share.
To ensure that it has the capacity to satisfy the demand of thirsty Malaysians, and to keep up with modern technology, the company is continually reinvesting in new plant and equipment.
Its physical growth has been phenomenal, evident in the swelling of its fixed assets from a mere RM11.5mil in 1972 to RM211.6mil as per its last published balance sheet at Dec 31, 2001.
By the time the second phase of its current expansion programme in completed next year, it should have enlarged its production capacity to 2 million hectolitres a year.
While the bulk of its production is consumed in Malaysia, some 15% is exported to a number of countries such as Singapore, Maldives, Sri Lanka, Brunei, Republic of Nauru and East Timur.
And while its profit margins this year are likely to come under some pressure because of smuggling and price discounting in the local market in order to maintain its lead, analysts generally rate the stock as a buy'' because of its position as a lead player in the market and good dividend yield.
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