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With a price gain of more than 8,000 percent in 20 years, Lotus Bakeries is just about the best investment in Brussels. The company finally wants to convert that favorite status into a ticket for the premier league and is launching a charm offensive towards foreign shareholders.
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Who around the turn of the millennium 1,000 euros in Lotus Bakeries
invested, has meanwhile saved more than 83,000 euros. Few companies on the Brussels stock exchange can present a better track record. The holding company Texaf comes somewhat close with a profit of 6,000 percent over the same period. On Tuesday, the risen share price of the biscuit producer took another leap thanks to a banging half-year report. The success story of the Biscoff branded caramelized biscuit products increased sales by 13 percent and profits by 17 percent.
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The growth story is not over yet. The healthier snack brands such as Nakd, Kiddylicious and Bear have seen a strong recovery after the corona crisis and can play an important role in the growing on-the-go trend where consumers are replacing meals with convenient and nutritious snacks on the move. A consumer pattern that KBC Securities analyst Guy Sips describes as ‘snackification’ and which he believes forms a strong foundation for future growth .
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Our shareholding is now entirely Belgian and that is no longer in line with the international company we are today.
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Lotus Bakeries reached a new record price of 5,500 euros after the impressive figures. To make the nominally more expensive share more accessible, small investors have long been dreaming of a stock split. But this time too Lotus is formal: ‘A stock split is not considered.’
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However, the company is taking a different approach to its shareholders. It intends to significantly increase its so-called investor relations, specifically towards potential foreign shareholders. ‘Our shareholding is now entirely Belgian and that is no longer in line with the international company we are today,’ explains communications director Brechtje Haan. ‘We want to harmonize both better and make foreign investors enthusiastic about our story, including through roadshows.’
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By bringing foreign capital on board, Lotus wants to increase the turnover rate or velocity of its share. This shows the ratio of the number of traded shares to the total number of available shares. It thus implicitly expresses the ambition to join the Bel20, because velocity is one of the Bel20 criteria for an entrance ticket.
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With a market capitalization of 4.71 billion euros, Lotus is already large enough. Lotus Bakeries would immediately be a solid middle ground that is larger than six of the current Bel20 employees: Melexis, Galapagos, Cofinimmo, Befimmo, Telenet and Aedifica. But a second requirement, the so-called free float velocity, is below the liquidity criterion of 35 percent and currently prevents entry.
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If we can get into the Bel20 through an increased turnover rate, that’s a plus.
Brechtje Haan
Communicatiedirecteur Lotus Bakeries
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‘If we can get to the Bel20 through increased velocities, that’s a nice bonus,’ says Haan. A seat in the star index would automatically increase Lotus Bakeries’ international resonance and diversify its shareholding. Lotus Bakeries is 70 percent owned by the Lotus Bakeries Administration Office (STAK) of the founding families Boone and Stevens. The first step in the charm offensive towards foreign capital has already been taken. Lotus Bakeries published for the first time an English presentation about its half-year figures on its renewed investor page.
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The essence
- Lotus Bakeries jumped 10.4 percent on Tuesday after strong sales and profit growth.
- The biscuit manufacturer from Lembeke has seen its stock market value rise by 8,000 percent since 2000.
- As a result, the share has become very expensive in nominal terms: 5,500 euros. A stock split is not considered.
- Lotus is starting an offensive to get more foreign capital in its shareholding. With this it wants to increase the turnover rate (velocity), a criterion that it must meet in order to gain access to the Bel20.
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