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CASE STUDY WHAT THE ANALYSTS SAY We were expecting any
Page 44
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analyst we approached to express caution about Bulmer's growth strategy, not because it's intrinsically flawed but because common wisdom suggests this is a bad time to rack up significant debt or undertake large-scale capital expansion.
Yet David Pattison, senior analyst at Plimsoll, actively supports the move. This guy should be applauded. I understand the scepticism around aggressive growth strategies. And in this climate, any business that listens to the press or analysts would shy away from any bold move. But there are too many who chastise people prepared to grasp the nettle. If Bulmer can do the now he will be perfectly positioned when the market comes around," Pattison says. "Debt levels are reasonable, not vast, and the interest from that will impact profits. But their margins realistically are 2.5-3% I would guess, and that's good at the moment.
"In 2005 this was not a spectacular business but they've gone through a lot of change. I believe this industry needs a shaker like Johnathan Bulmer to rase the bar a bit and keep things moving," he adds.