# YOW - Yowie Group



## Walker (13 December 2007)

Is anyone following this stock and/or have any thoughts on the long term prospects with their projec in Zambia


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## So_Cynical (3 February 2008)

*Re: GSF - Greater Seafood*

Moving from Seafood to Mining....a natural progression.

Market Cap:	22,217,784
Issued Shares:	453,424,164


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## nyo (24 July 2008)

*Re: GSF - Greater Seafood*

Anyone following this company?

Last:0.027 	
Change: +0.004 	Open: 0.024 	High: 0.028 	Low: 0.024 	
Volume: 5,198,021
Percent Change: +17.39% 		
52 Week Range: 0.019 to 0.105


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## Family_Guy (25 July 2008)

*Re: GSF - Greater Seafood*

I don't know much about the company, but i bought back in late April at 2.1 and sold a month later at 3c, bought back in 2.5, sold again at 3.5 and bought again 2 weeks ago at 1.9. 
I love this stock, but only because it makes money for me. Can't say the same about others. Like is said, i know nothing about it, just bought originally because the SP was at lows and there was some volume at the time (i think), and it's one i've watched ever since. I have my current package on the market, hopefully will go off today. I seem to be lucky picking the top and bottom, not sure how, just do. And i think there is still an announcement to come.


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## Family_Guy (26 August 2008)

*Re: GSF - Greater Seafood*

Every month, does the same thing. No volume for a few days or week, then slowly makes a progression north with smallish volume. This is a perfect quick profit stock IMO because there is a definite pattern.

Pattern i have observed without charts is as follows.
2 weeks at lows, practically no volume
then a couple of days with .1-.2c rises with a bit of volume. (which is what we are seeing now)
then a .5-.8c rise with volume (for this stock) over a day or 2
couple of days at the top and the volume fizzles
then the few days of falls again.

I missed my usual 2c buy in because i think i had other things on my mind and saw it at this price of 1.7c 2 weeks ago and watched it fall and wait for no volume and then managed to pick up at the latest low.

This is not a ramping post, i bought early last week at 1.3c and i sold out late this arvo for 1.7. It's just my observation of a stock that i dont even know what they do, who runs it or if they have any assets, but the pattern is def there for fairly quick profits.

Does anyone actually know what this company is doing??? Couldn't be bothered researching it.


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## Family_Guy (25 September 2008)

*Re: GSF - Greater Seafood*

Dead set, not kidding. Bottom of the cycle again. Is anyone else trading this in the cycle or is it just me? (obviously someone must trade it, but anyone from asf?) My other 2 posts are a month apart and its this 4 week cycle as described above has started again. I think this is the 3rd day with no volume again in a row and a week on some sort of bottom. 

Anyone?

disclaimer, i don't own this time, waiting for sbm to sell first


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## skc (26 February 2014)

Has anyone followed this company? I have been looking at its recent announcements and for some reason just feels like it is some sort of a satiristic joke (I am not saying it is, but it feels that way to me). The only thing they do (or intends to do) is so sell some chocolate branded "Yowie". But does the market really need to know when your marketing department has finished with the 3D characters (see announcement 15 Jan). Share price is up 400% in Feb by the way .

Yes it looks like they are steaming towards actual prodution and sales... but a $63m market cap you'd need to sell a $hit load of chocolates. 

The history of the company suggests that it will probably become a mining company again in a few years, but I am not entirely certain if the same board is in charge from the last few transformations.


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## VSntchr (26 February 2014)

Yeah I have been following it and haven't invested. I agree about the wierd ann's. That one about buying a wrapping machine was a bit hilarious....I mean how sophisticated and awesome did they make that machine sound!

Tough gig to capture market share in the US confectionery market I would think..I'll be watching from home on this one.


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## skc (26 February 2014)

VSntchr said:


> Yeah I have been following it and haven't invested. I agree about the wierd ann's. That one about buying a wrapping machine was a bit hilarious....I mean how sophisticated and awesome did they make that machine sound!
> 
> Tough gig to capture market share in the US confectionery market I would think..I'll be watching from home on this one.




And this from 3 Sept...



> Yowie Group Ltd (the ‘Company’ or ‘Yowie’) is pleased to announce the completion of US market consumer testing *designed to determine a preferred chocolate taste *for US consumers.
> 
> A selection of Yowie chocolate recipes have been evaluated by over one thousand U.S. consumers comprising both adults and children. Consumers were asked to rate a selection of competing recipes on taste, texture, consistency, quality and preference. The preferred Yowie chocolate recipe is a *delicious fine milk chocolate with a quality taste and smooth mouth feel. *The chocolate is being sourced from a reputable local supplier. It is ethically sourced and certified and contains no palm oil ingredient.
> 
> Yowie chocolate has been designed to taste match ‘equal to or better than’ the US market leading chocolate brand.




Yummy! They did some market research on 1000 customers and they are going to discover the preferred chocolate tase of US consumers... because no one has ever thought of that before!


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## JTLP (26 February 2014)

skc said:


> And this from 3 Sept...
> 
> 
> 
> Yummy! They did some market research on 1000 customers and they are going to discover the preferred chocolate tase of US consumers... because no one has ever thought of that before!




How funny! Weren't Yowie's around years ago?

You have to burn a lot of cash to get to market...and current supermarket prices worldwide are very depressed. I'll pick it as my loser for the year.


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## ROE (26 February 2014)

The name makes me laugh already  must be a funny business  j/k
first I heard of it dont know much about it


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## Valued (26 February 2014)

Big supermarkets will make you pay for the right to put your products on their shelves. It's not easy to get a product onto a shelf unless you are a big name (e.g. coke could go to market with any crap and get prime shelf space e.g. the old mother drink that failed).


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## boredmember (2 February 2015)

I like how this thread goes from Yowie to seafood and back to Yowie, hoping to revive this thread though, there's been a lot of new information coming out of this company and I want to see what you guys think. I've been pretty bullish on this stock for a while but the past few weeks have really validated my thoughts, I liquidated some of my shares last year for some other plays but got back into it at .40 cents back in october. So far my faith has been rewarded and the stock is doing really well (100% gains YAY!). to quote from another site:
(http://www.hotstockmarket.com/t/283630/ywgrf-yowie-group-ltd)

Yowie Group Ltd

Background: Yowie is an Australian based company which is seeking to replicate the success of Kinder-surprise in the US market. Yowies are basically hollow chocolate eggs with toy animals inside and unlike Kinder surprise toys, Yowie toys meet US specifications as a non-choking hazard (an issue which eventually doomed Nestle's once WILDLY popular "wonder ball"). The company just released news that after a very encouraging trial run its completed a deal with a tier 1 retailer (its been leaked that its walmart) in the US to roll out its products to 1500 stores across the country. The company also reported very encouraging results from a second trial run with another tier 1 retailer (Safeway) which indicates that within a month or so the company will have a second MAJOR retailer carrying their chocolates. 

Alongside this news the company announced that it was raising capital from some institutional investors which has diluted the stock somewhat, keeping the price (on the Aus market) hovering at about 60 cents. Assuming no major hiccups this stock is looking like a good buy to me, the share dilution has kept prices down and judging from previous news related price jumps this stock has a few more price spikes in it when more details of these deals come out in a few weeks or so.


Anyway, with the US dollar up wildly against the Aussie dollar and with US consumer spending increasing it stands to reason that this company is in for a very good year, especially if these toys can hit the shelf by Easter (Last time I was in the US I was shocked at how much candy consumption occurs around these holidays). I admit I'm a bit bullish but what do you guys think?


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## skc (2 February 2015)

boredmember said:


> Anyway, with the US dollar up wildly against the Aussie dollar and with US consumer spending increasing it stands to reason that this company is in for a very good year, especially if these toys can hit the shelf by Easter (Last time I was in the US I was shocked at how much candy consumption occurs around these holidays). I admit I'm a bit bullish but what do you guys think?




I think it's a fantastic story... the comeback of Yowie. I think it will sell a lot of chocolates in US.

However, I have no idea how to value the company. To justify the current market cap of ~$70m... may be $5m NPAT will do. But what would be a typical net profit margin for someone like Yowie, and does that translate into a achievable total sales? :dunno:

Anyone want to have a crack?

Here's some photos of the old Yowie aussie animals done by someone with a bit of spare time.
https://www.flickr.com/photos/emmoff/sets/72157626658923464


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## McLovin (3 February 2015)

skc said:


> I think it's a fantastic story... the comeback of Yowie. I think it will sell a lot of chocolates in US.
> 
> However, I have no idea how to value the company. To justify the current market cap of ~$70m... may be $5m NPAT will do. But what would be a typical net profit margin for someone like Yowie, and does that translate into a achievable total sales? :dunno:
> 
> ...




Isn't the bigger issue that the patent expires in 2018 (iirc), so it's not just if they can sell chocolates it's also whether they can build a big enough moat in such a short period of time. Once the patent runs out the guys at Kinder Surprise will surely be launching before you can say "Yow...ie".


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## McLovin (14 April 2015)

Interesting prezzo yesterday, the rollout seems to be going very well. If their estimates bear out then $100m mc will seem cheap. Unfortunately, they're so scant on any details beyond very top line sort of estimates and plenty of blue sky. Still they're going to have 3 years of patent protection which even if they only achieve a quarter of what they're estimating could prove very lucrative.


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## prawn_86 (14 April 2015)

McLovin said:


> Still they're going to have 3 years of patent protection which even if they only achieve a quarter of what they're estimating could prove very lucrative.




Full disclosure; i know very little about this company other than the fact they are similar to kinder surprise.

However, the amount of times i have heard personally, and heard of, Aussie companies coming over here to the US stating "even if we get 0.x % market share we will be fine" and it doesnt happen. The US is a complicated, massive (both population and geography) market that many Aussie firms struggle with due to underlying, hard to perceive cultural differences.

In fact, most of the consultants i partner with that work with Aussie firms, spend time telling aussie companies they are not yet ready to enter the market


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## McLovin (14 April 2015)

prawn_86 said:


> Full disclosure; i know very little about this company other than the fact they are similar to kinder surprise.
> 
> However, the amount of times i have heard personally, and heard of, Aussie companies coming over here to the US stating "even if we get 0.x % market share we will be fine" and it doesnt happen. The US is a complicated, massive (both population and geography) market that many Aussie firms struggle with due to underlying, hard to perceive cultural differences.
> 
> In fact, most of the consultants i partner with that work with Aussie firms, spend time telling aussie companies they are not yet ready to enter the market




These guys have a bit more than a pipe dream. They had a successful trial in Wal-Mart and are now being rolled out to 1,500 stores. They're now in 5,000+ stores (including CVS, Walgreens, Safeway) in the US although I still think it's early days with a lot of those stores being on a trial basis.

This announcement lists them all...

http://www.asx.com.au/asxpdf/20150318/pdf/42xcgvgq79knhp.pdf


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## galumay (14 April 2015)

I had a look at YOW recently, i didnt get much further than the patent protection running out in 2017 and thinking about what a volatile market kids sweets might be - popular one day and poison the next if the kids get into something else. Will be interesting to see how it pans out.


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## skc (14 April 2015)

McLovin said:


> Interesting prezzo yesterday, the rollout seems to be going very well. If their estimates bear out then $100m mc will seem cheap. Unfortunately, they're so scant on any details beyond very top line sort of estimates and plenty of blue sky. Still they're going to have 3 years of patent protection which even if they only achieve a quarter of what they're estimating could prove very lucrative.




I actually purchased some YOW (stocks, not the chocolate) on the back of this. I agree with you that it only takes a fraction of what they claim to justify the current market cap.

Personally, I think the patent protection is not really meaningful. Most parts of the world don't require a patent to sell toy encapsulated in a chocolate... yet Kinder Surprise still dominates them. May be there will be new comers after the patent ends, but 3 years is a long time to establish a market position (if done well).

The question is about execution. I haven't check what their production capacity is like at the moment... but I doubt they went all out to 100m units p.a. from the get go.

Anyhow... it's a smallish trading position. If their roll out works out (and frankly, if you put them at the check out, they will be sold), and can report strong growth over a number of periods, I can see the market pricing them above the current level easily.


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## galumay (15 April 2015)

skc said:


> Personally, I think the patent protection is not really meaningful. Most parts of the world don't require a patent to sell toy encapsulated in a chocolate... yet Kinder Surprise still dominates them.




As I understand it, the benefit of the protection is specifically that Kinder Surprise cant be sold in those outlets where Yowie is being stocked. Thats the risk that is near term, i have seen how popular Kinder Surprise is where they are sold!


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## McLovin (15 April 2015)

galumay said:


> As I understand it, the benefit of the protection is specifically that Kinder Surprise cant be sold in those outlets where Yowie is being stocked. Thats the risk that is near term, i have seen how popular Kinder Surprise is where they are sold!




Kinder Surprise is not approved for sale by the FDA because of a decision in 1938 that makes it illegal to sell food with embedded toys. YOW has got around this because their patented capsule is the only one currently approved for sale with an embedded toy. My concern is that KS has probably already come up with a modified product that uses the patent technology so day one after patent expiration they'll be competing. The three year patent does give YOW  a good head start, especially as KS is virtually unknown in the US.


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## galumay (15 April 2015)

McLovin said:


> Kinder Surprise is not approved for sale by the FDA because of a decision in 1938 that makes it illegal to sell food with embedded toys.




Thanks for the clarification McLovin.


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## McLovin (15 April 2015)

Digging around further, YOW does not own the patent, it's owned by an American, Hank Whetstone. I believe he also owns the contract manufacturing facility in Florida, but am not certain. YOW has exclusive right to use the patent until 2018. The technology protected by the patent is actually in making the product, once unwrapped, fall into three pieces (two pieces of chocolate and the encased capsule).

The long run thematic of the business seems to be around licensing. There's a whole suite of other products that will be launched with the chocolates. Whether that takes off or doesn't is the $2b question. In the meantime these guys have plenty of cash, a capital light business model, plenty of inventory and the ability to scale up their production to 20m units very quickly. Further production increases will have an eight month lead time from ordering the machinery to it being commissioned. Aside from the general market acceptance risk the other big risk is that they will be deriving almost half their revenue from WM. 

I'll keep reading.


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## Ves (15 April 2015)

What about the patent infringement claims by Yowie / Whetstone against Candy Treasure?    I believe that CT does have FDA approval, but the claim is their product is based on the patent owned by Whetstone  (see McLovin above).

There was some stuff in the news back in May 2014 I could find here,   but it appears they were unsuccessful in the initial injunction as the judge didn't believe it would result in an immediate material loss of market share & cited lack of similarity in price point & marketing,  but did comment that they would probably be successful in the trial to uphold the patent infringement.

Has there been anything since?  Is it relevant?   I think it definitely shows that there are competitors in the wings  (there would have to be since they have been locked out of the market in the US for 75 years!).

Yowie is an interesting story,   looked like a gimmick / pipedream at first,  nice for a laugh,  but I can see why you guys are looking at it.


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## Ves (15 April 2015)

Ves said:


> What about the patent infringement claims by Yowie / Whetstone against Candy Treasure?    I believe that CT does have FDA approval, but the claim is their product is based on the patent owned by Whetstone  (see McLovin above).




Out of court settlement?  See here for possible reference.

Maybe I'm being a bit slow,   but I can't see where YOW announced this to the market?   Is there anything stopping the owners of Kinder Surprise from buying this company for instance as an entry point into the US market?

I think these companies like YOW,   are really marketing companies,  that are using chocolate as their conduits.  Guys like Whetstone probably don't have the marketing nous,  so they license the patent,  and do the manufacturing  (where his expertise probably lies) on contract. It's all in selling an experience,   and any competitive advantage probably comes from there.


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## omac (15 April 2015)

McLovin said:


> Aside from the general market acceptance risk the other big risk is that they will be deriving almost half their revenue from WM.





There are a number of other retailers looking at distributing. I believe a decision for Valeros is due in the next few months and then there is another large retailer due October-ish. Currently it is heavily weighted towards WM but longer term the plans look to roll out to all 'tier 1' retailers, which will help with the diversification.


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## omac (15 April 2015)

Ves said:


> Out of court settlement?  See here for possible reference.
> 
> Is there anything stopping the owners of Kinder Surprise from buying this company for instance as an entry point into the US market?
> 
> I think these companies like YOW,   are really marketing companies,  that are using chocolate as their conduits.  Guys like Whetstone probably don't have the marketing nous,  so they license the patent,  and do the manufacturing  (where his expertise probably lies) on contract. It's all in selling an experience,   and any competitive advantage probably comes from there.




Agree wholeheartedly. The patent gives them a headstart to build a market, but the moat is in the brand. if kids dont take to it, then the patent isn't useful to YOW.

its an interesting story. my concern to potential upside is a buyout as soon as they have done the hard work in establishing a market, the sweets/chocolate industry is pretty concentrated.


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## Value Collector (15 April 2015)

I don't see the patent as being useful at all, at the end of the day it's a toy in a chocolate shell, there is more than one way to skin a cat and there is more than one way to achieve the results this patent does, It wouldn't take much for a competitor to imitate.

The strength is going to come from branding, if they can win the hearts of the children they will have a business, but imagine if a competitor with an established supply chain and network got wind of a growing fad of these things, brought out a similar range of chocolates, only they licenced Disney characters, Would a yowie be a strong enough brand to beat a Disney based chocolate with a Disney toy inside? I don't know.

Maybe yowie should speak to Disney first, lol.


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## Value Collector (17 April 2015)

Value Collector said:


> Would a yowie be a strong enough brand to beat a Disney based chocolate with a Disney toy inside? I don't know.
> 
> .




Here is an interesting article posted by CNN, It is talking about the toy industry, and shows the effect of branding.

Mattel toys the owner of Barbie is in trouble at the moment, Not only did sales of Barbie crash last year, due to the success of Disney's Frozen, Suddenly the girls want Anna and Elsa dolls, but mattel also lost the contract to produce Disney princess dolls.

It's competitor "Hasbro" won the contract to produce Disney princess dolls, while also having the licence to the rights to Disneys other brands such as Marvel and Star Wars.

It really shows the power of Branding and how important good Content is.

http://money.cnn.com/2015/04/16/investing/mattel-barbie-earnings-versus-hasbro/index.html


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## Ves (17 April 2015)

VC,  I wholeheartedly agree with you re the patent not being the big deal here for a long term holder,    outside of whatever first mover advantages it make bring in the USA,  at the end of the day if there is no strong brand and pricing power over competitors the valuation is much, much lower after the five year exclusive period ends because profitability will be in line with costs of capital.

And you raise a good point with this comment,  and it applies to not just Disney but any major brand that may team with a chocolate manufacturer.



Value Collector said:


> Maybe yowie should speak to Disney first, lol.



There's probably a few questions we could consider re: this threat to Yowie:

What incentive is there for Disney to put their name on a chocolate that sells in the $1-3 "impulse" price point?  

What margin would they get, and how much margin is there for them to take before the venture becomes unprofitable or unattractive for the manufacturing partner?

Have Disney exploited confectionery,  chocolates,  or snack food on a major scale before?  If not,  why not?   

Does Disney's entry into this price point cheapen their brand?  Could they fit toys into the capsules on the cheap without making them look cheap? If not, is there room for premium pricing to allow for this to happen with better results outside of this pricing point?

Does the association with "junk food" add value to Disney's brand or does it hurt their image in terms of social responsibility? In other words, does it fit in with their ideals?

Would a partnership with Disney be attractive for a chocolate manufacturer? Would it leave them any profit on the table?

Why haven't Disney done the same thing in Europe and Asia?  (these products have not been illegal over there as far as I know)

What I am trying to say is that Disney,   even if they have stronger bargaining power,  still needs to leave a profit motive for the chocolate manufacturer.  This wouldn't work with Yowie,  because like Disney,  they are a branded / marketing company,  not a manufacturer.  There's a clear conflict because both companies are valued on their intangible assets and their ability to exploit that at a pricing & consumer captivity level (falling in love with the brand).  

It's an interesting question,  what is stopping Disney,   or another major branded player, to work with a chocolate manufacturer (either with an alternative patent or after 2019)?   What can Yowie do with their product that someone else cannot?  

I think Yowie's digital tie-in is really interesting by the way.   It has lots of potential,  but it also has lots of potential for willing suitors to the industry who partner with other manufacturers.


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## Ves (17 April 2015)

And really,  the elephant in the room,  before we get stuck into the minutiae,  what sort of money is there in selling branded chocolate,  or chocolate in general, and is there any evidence that putting a toy inside a chocolate egg will achieve long-term profitability above cost of capital?

Anyone had a look at Ferrero's financial statements,  do they break down into product segments?


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## Value Collector (17 April 2015)

Ves said:


> What incentive is there for Disney to put their name on a chocolate that sells in the $1-3 "impulse" price point?
> 
> .




Disney certainly isn't shy of putting their brand on low cost things, If you have shopped at Woolworths recently, you may have noticed that when you spend more than $20 you get free Dominos with Disney characters on them, In the past Disney characters have been licenced as give away toys with happy meals etc, but if you walk into a target or kmart, Disney characters have been licenced on everything from expensive bikes, helmets and bedding, down to cheap birthday cards, crayons, pencils and colouring books.

Thinking of the free woolworths dominos, to me thats a clear example of a retailer respecting the Disney brand enough, that they think it might sway some shoppers to come to woolworths instead of coles and outlaying cash to achieve it. If it can sway you to change shopping centres, it could easily sway you to switch chocolates.



> What margin would they get, and how much margin is there for them to take before the venture becomes unprofitable or unattractive for the manufacturing partner?




It depends, some deals are a annual licence fee, others are a percentage, 5% royalty is pretty standard, Disney approves the product and then just collects the checks. 



> Have Disney exploited confectionery,  chocolates,  or snack food on a major scale before?  If not,  why not?




Every Easter and Chrismas there is Disney confectionery, also various snack foods.



> Does Disney's entry into this price point cheapen their brand?




I don't think so, Disney has licenced everything from things that cost a $1 through to expensive jewellery.

Does the association with "junk food" add value to Disney's brand or does it hurt their image in terms of social responsibility? In other words, does it fit in with their ideals?



> Why haven't Disney done the same thing in Europe and Asia?  (these products have not been illegal over there as far as I know)




I guess it's up to a partner to come do them with a deal, Disney isn't in the business of making clothes, bed linen, bike helmets, lego, dolls, colouring books, pencil cases, skate boards, push bikes, jewellery, key rings, bed lamps etc etc, the simple licence the use of their charaters and other companies do the work.

 even if they have stronger bargaining power,  still needs to leave a profit motive for the chocolate manufacturer.  

I think a Disney princess or Buzz lighter year chocolate could easily sell for an extra 50cents.

But look, Disney is just an example, it could be Transformers, Peppa pig, Bob the builder, anything really.


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## Ves (17 April 2015)

Thanks for that.   I'm certainly not discounting the threat,  I think you're right on the money,  and if it's not Disney,  it will be a well resourced company or lots of other companies attacking the strength of their brand and its profitability, if it is indeed as successful as they hope initially.  

I do however think that a lot of the food related stuff you've mentioned in relation to Disney is probably more "promotional" in nature,  and used to promote awareness of their brand,  rather than strictly compete for profit against existing competitors like Yowie  (ie.  most of it is more temporary or seasonal in nature,  and not fixed at all times). I think any additional income they get from this type of thing probably attests more to the strength of their core businesses,  rather than act as a decision making focus. But I guess,  as you said a willing confectionary competitor may strike a permanent deal with them,  like some other merchandising companies have.

Very interesting train of thought.   Really makes me think about who the potential competition is in my mind.


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## McLovin (17 June 2015)

Wal-mart rolling out YOW to all 4,300 stores from August. There was this little teaser at the end too...



> The Company is excited about the permanent ranging in all of Walmart’s U.S. stores and is working towards being in a position to make further announcements in the coming weeks regarding additional major accounts.


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## Ves (18 March 2016)

Anyone still watching this?

Looks like they've told Hank Whetstone  (owned the patent + manufacturing facility) that they no longer require his services.  (Who knows if it's relevant, but I note he's in the middle of a nasty law dispute with his sister).

Since that announcement on 31 December 2015 the share price has crashed.

They are now contracted to a manufacturer in New York with better facilities and lower costs (their claims, not mine).

It looks like they're claiming that they are still able to legally sell chocolates with encapsulated toys in the US  (they do have a newly developed patent, but I don't think it's been approved yet).  How is this possible?  Apparently they don't need to get FDA approval again,  but the question remains if the new patent will infringe the old patent and whether there will ever be a challenge.

Sounds risky to me. 

However,  there could be a lot of upside if the patent does not breach  (I assume since it's a new patent it has a much longer lifetime than 2018) and could create an artificial moat for the length of its existence? Then again,  if it was that easy for Yowie to get another new patent,  then why can't anyone else?

Something doesn't seem 100% right.


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## McLovin (18 March 2016)

I ditched this in mid-November.  A lot of talk but no real action. New contracts were supposedly imminent in June (see my post above), but then total silence. I think whatever chance they had of this being the next big thing has probably passed. It all smells a little BSey to me. Fun ride up though.


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## omac (22 March 2016)

Im still following, not sure where I stand though. I like the idea and it seems like a simple business and previous success in Oz shows potential. However, nothing has happened in the last 6mths wrt sales and those imminent contracts have vanished.
                   I have my suspicions about the switch in manufacturers. That would have taken a fair while to sort out, along with the patent and I wonder whether they have been managing supply for a while due to the change they had planned. The announcement came out of the blue pretty much at the last minute which I find odd.

Its all speculation but I wonder whether there were manufacturing issues (not quality but supplier related) that forced management to keep it on the down low and announce at the last minute or it's just amatuer hour.... There is currently a dispute over the wrapping machine at the old manufacturer which suggests its not a clean break.

If the manufacturing gets up and running cleanly then the next question is whether lack of sales momentum is real or was a result of the changes that have happened.

Still mulling it over, nature abhors a vacuum and I've filled it with my own take on things which may be a couple of steps too far.


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## McLovin (23 March 2016)

McLovin said:


> I ditched this in mid-November.  A lot of talk but no real action. New contracts were supposedly imminent in June (see my post above), but then total silence. I think whatever chance they had of this being the next big thing has probably passed. It all smells a little BSey to me. Fun ride up though.




Annnndd....They land Walgreens less than a week after I said the above.


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## Ves (23 March 2016)

McLovin said:


> Annnndd....They land Walgreens less than a week after I said the above.



Lol...  I just noticed that myself.

So you've got a contract announcement of sorts on the same day as an update on the legal dispute (which sounds more complicated than they are making it out to be).

I'd actually feel sorry for them if they made headway in the USA and it all unravelled due to patent / legal issues.

edit:  I think it's too much of a possible torpedo (even if it is remote) to risk a long-term hold for me even if I was convinced re their competitive position.


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## McLovin (23 March 2016)

Ves said:


> Lol...  I just noticed that myself.
> 
> So you've got a contract announcement of sorts on the same day as an update on the legal dispute (which sounds more complicated than they are making it out to be).
> 
> ...




Pretty much of the same opinion. I really don't understand how you can cite patent protection as one of your core competitive advantages then start manufacturing using your own capsule design. Will the existing patent holder not find someone else to license to? If it's that easy to create a legal design that doesn't breach patent then what's to stop everyone doing it, or why haven't Kinder Surprise already done it? There seems to be a lot going on that hasn't been made public.

My thesis entering this stock was that contracts needed to come on line quickly and I could more or less ride the revenue momentum. That hasn't eventuated and the legal stuff going on means I'm happy to not be in there anymore even with Walgreens on board.


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## omac (6 April 2016)

Starting to see some movement in google trends and facebook followers, advertising seems to be working. Interested to see if it correlates to increased sales.


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## Rob Cheema (4 January 2017)

risk of loss by new joined executive, high risk of huge loss history from previous company


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## Rob Cheema (12 January 2017)

Rob Cheema said:


> risk of loss by new joined executive, high risk of huge loss history from previous company



the new joined one created over USD4m due to lack of commercial sense, inventory control also some business ethics. hope this is not carried over to YOW


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## skc (26 June 2017)

skc said:


> Has anyone followed this company? I have been looking at its recent announcements and for some reason just feels like it is some sort of a satiristic joke (I am not saying it is, but it feels that way to me). The only thing they do (or intends to do) is so sell some chocolate branded "Yowie". But does the market really need to know when your marketing department has finished with the 3D characters (see announcement 15 Jan). Share price is up 400% in Feb by the way .
> 
> Yes it looks like they are steaming towards actual production and sales... *but a $63m market cap you'd need to sell a $hit load of chocolates.*




This was my post from early 2014, when strong share price gains in YOW caught my attention. 

Almost three and a half years later, YOW has a market cap of... $66m, almost exactly the same as before. In the meantime, they have gone from no sales, no product and no distribution to now selling ~$20m worth of chocolates in FY17. Yet the share price has gone exactly no where, with most holders underwater. 

This situation happens a lot in the share market... the price for the bluesky phase can often be much higher the price when actual reality comes. YOW has managed execution reasonably (to a certain extent), but hasn't managed expectations that well. 

YOW is now forecasting a 55-70% growth for FY18, with H2 being profitable. So may be it's worth a look soon.


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## mcgrath111 (28 July 2017)

skc said:


> This was my post from early 2014, when strong share price gains in YOW caught my attention.
> YOW is now forecasting a 55-70% growth for FY18, with H2 being profitable. So may be it's worth a look soon.
> 
> 
> ...



I dare say that the team at YOW struggle to forecast - '
According to the release, Yowie delivered revenue growth of 23% in the fourth-quarter.

Whilst this is a strong level of growth, it fell well short of the 37% growth guidance given on June 21 when there were only nine days remaining in the quarter.

As a result, full-year revenue grew 51% on FY 2016, compared to guidance of 55% growth.' (From the fool, because I only quote reputable sources...lol)

I want to like yow, but I really can't. 
I love a low sp and NTA to match, but I just can't seem to like a company. 

Feels like it will be a bang or bust.


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## greggles (3 January 2018)

Bad news for Yowie Group and its shareholders today.

Yowie shares dive as guidance slashed and CEO Bert Alfonso departs


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## Miner (3 January 2018)

greggles said:


> Bad news for Yowie Group and its shareholders today.
> 
> Yowie shares dive as guidance slashed and CEO Bert Alfonso departs



time for take over - weakest situation for any organisation and SWOT analysis shows the threat for YOW and opportunity for others.
DNH


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## greggles (14 February 2018)

Yowie Group now at all-time lows after more bad news. 

The company reported that US net sales quarter to date in Q3 have been materially behind the same period last year. The decline was attributed to the result of launch activity by a competitor into the US market in January.

Nothing but bad news for Yowie Group recently and not much to look forward to IMO. Today's announcement sent it down another 20% to 11.5c.


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## PZ99 (15 February 2018)

Yeah this stock will hand me the wooden spoon in the yearly comp I reckon. Still, Keybridge have increased their interest so maybe they know something we don't.  

Maybe some of those Yowie characters could use a bit of medicinal pot in the choc for all the right reasons of course


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## greggles (15 February 2018)

PZ99 said:


> Yeah this stock will hand me the wooden spoon in the yearly comp I reckon. Still, Keybridge have increased their interest so maybe they know something we don't.




Yowie Group has dipped below 10c today and is currently down around 14%. Hard to predict where the bottom will be, but I imagine it can't be too far away.


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## PZ99 (15 February 2018)

This is interesting > Class action surrounding the original 55% sales growth guidance.

https://classactions.gadens.com/Actions/Details/9


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## Value Hunter (14 October 2018)

It looks like a turnaround/cigar butt stock for those brave enough. The latest quarterly report shows positive free cash flow generation of around $200,000 U.S.D. and if you look at the projection for next quarters cash outflows, with a very small amount of smales growth they could be cash flow break even next quarter.  If the company forecatss are to be believed they will be profitable in FY2019. When you look at the net cash backing cash minus total liabilities) of around $16 million U.S. dollars and compare to the current market cap of AUD $24 million the stock looks very cheap. The board and management reshuffle of recent times appears to be a step in the right direction.

But there are massive risks:
1) The lawsuit against the company by its former manufacturing partner.
2) A potential shareholder class action supported by Gadens.
3) Management and directors are of questionable character. Too much mention of EBITDA, regularly trying to gloss over the negatives while talking everything up. Literally on the same slide of an investor presentation the slide is titled
"Appendix: One-Off Stock Adjustment Claim"
Further down the same slide it states: "Periodic stock adjustments are a regular
occurrence in the confectionery industry". Management seem confused as to whether it is genuinely a one-off occurrence or a periodic occurrence (I would suggest the latter).
-Trumpeting a decrease in marketing expenditure as smart cost saving initiatives. For a small company that still needs to increase its brand recognition that seems rather short-sighted to me.
Excessive promotional attitude (and share price focus) by the board and management:
"Your
Board
has been disappointed that the
Company’s share price does not reflect what has
been achieved in the last six months. As indicated above, costs have been brought under tight
control on all fronts, headcount has been reduced, gross margins have been maintained and
the revenue decline has been arrested and modest growth restored."

"We still have US$19.5 million in cash and profitable trading is in sight. We strongly believe that
these are grounds for the stock to be rerated. The current share price is
approximately 70% of
the cash backing per share."

Meanwhile in the same breath as implying the shares are extremely undervalued not a single director has stuck their hands in their pockets to buy shares in the company on market. In other words they have not put their money where their mouth is. Also if the shares are so undervalued why is the company diluting shareholders and paying directors/management by giving them shares in the company instead of paying them cash?

Verdict: Given how cheap the stock is and the current sales/business momentum the stock could end up being a 5+ bagger over a 3 year period. However given the litigation risks and the shady directors/management I personally would stay away from the stock.


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## galumay (15 October 2018)

Great analysis VH, I had my attention drawn to YOW again by a post on twitter by someone I follow and a link to an article about the potential turnaround. The overhang of the leagal actions was the first thing I noted - they had missed that. I also let it through to the keeper after a cursory glance.


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## greggles (13 March 2019)

Miner said:


> time for take over






PZ99 said:


> Still, Keybridge have increased their interest so maybe they know something we don't.




Accurate predictions and observations gents.

Keybridge Capital has advised this morning that it intends to make an off-market bid for all of the fully paid ordinary shares in Yowie Group for a consideration of 9.2 cents per share.

I wonder what the response of the YOW board will be.


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