Forbes rates Frucor among world top 20

By ELLEN REED and NZPA

New Zealand drink manufacturer Frucor Beverages has been tipped as one of the world's 20 best small companies for next year by US finance magazine Forbes Global.

Frucor, which produces the V energy drink, was chosen from more than 20,000 qualifying companies.

Forbes devised the list - the magazine's third - by conducting polls of fund managers, entrepreneurs, bankers and equity analysts.

Companies must be publicly listed and draw annual earnings of less than $US500 million ($1.2 billion) to qualify.

It is the second time this year a New Zealand company has featured in Forbes Global. In August it named the Warehouse Group as "one of the best retail operations in the entire world".

Frucor chairman Simon Pillar attributed the company's selection by Forbes to its acquisition of drink distributor Spring Valley in January and a solid financial performance in its first year.

The company is proving a comeback performer on the stock market, its price rising 29 per cent in little more than a month.

The stock dropped to $1.42 after the terrorist attacks in the US caused global market jitters, but closed at $1.88 on Friday.

While bullish about Frucor, analysts believe its future is pinned to the success of its flagship energy drink V, which they worry could prove to be a fad.

Frucor, having listed at $1.50 in June last year, was trading near its 12-month high at $2.30 in April, but its share price weakened when it warned it would not meet its profit forecast, largely because the British market had proved tough.

However, Frucor managing director Mark Cowsill said the transtasman drinks group was well positioned to exploit growth opportunities.

Increased investment in V for summer campaigns in the UK and Australia this year, and the launch of Mizone sportswater in Australia, would dent first-half earnings growth next year, said Mr Cowsill.

But by the end of the year the company was expecting a strong overall performance and a good result.

Chairman Simon Pillar said: "Given the hard yards we've done this year, the board is confident that next year's results will speak for themselves."

In the year to June 30, Frucor's net profit fell 14 per cent to $11.7 million. Acquisitions in Australia and lagging sales in Britain were largely responsible for the decline.

Frucor, part of the Apple & Pear Marketing Board until it was sold to a group of private investors in 1998 for $50 million, says it will rely on its Australian operations to drive earnings growth.

Last year in Australia it nearly doubled its earnings before interest and tax (ebit), to $10.8 million.

Frucor's highest-paid employee during the year was Mr Cowsill, who earned $538,000, up $165,000 on the year before.