QUALITATIVE TECHNIQUES ASSIGNMENT

PREPARED BY: RAMAWTA ASHWAYE KUMAR( ID: 1980021)

SUBMITTED TO: MR BOOPEN SEETANAh
DATE OF SUBMISSION: 04 MAY 2020
Assignment:1
Select any firm on the SEM and write a small report including the following
1. A brief background of the company
2. A brief analysis of its recent performance
3. Using data on its previous share prices (At least 5 past years, from the annual
accounts that you can download), calculate the average return on the share and
also the average risk) . Discuss your answer.
4. If you were to construct a portfolio with this share and another share, which
company will you choose and why?

Company chosen: Phoenix Beverages LTD

Phoenix Beverages ltd, formerly known as Mauritius Breweries Ltd (MBL) was founded on the 9 th of
September 1960. Phoenix Beverages Limited is a holding company. The Company is engaged in brewing
of beer, bottling and sale of beer, soft drinks, table water and alternative beverages, and the
manufacture and sale of glass-made products. In the year 1931 the company was incorporated as
Phoenix Camp Minerals Ltd. The company signs a bottling agreement with the coca-cola company in
1953 and then MBL was established in 1960. Inauguration of the Phoenix Brewery was done in 1963.
The Mauritius Brewery Ltd was listed on the Stock Exchange of Mauritius in 1993. Mauritius Beverages
ltd was renamed in 2008 as the Phoenix Beverages Ltd and in the year 2014 it acquired the ‘Eski’
company and get also engaged in wine bottling. The main product of the company is the world-famous
Phoenix beer but it also manufactures other beers and soft drinks. Its headquarters are located at Pont
Fer, Phoenix. The company has a production output of 1.2 million hectolitres of alcoholic and non-
alcoholic drinks. It has total assets wort rs3,202 billion. The chief Executive Officer of Phoenix Beverages
Ltd is Mr. Arnaud Lagesse and the top management consists of several board of directors.

Overall market performance

The overall market performance from the recent years has been quite stable after the drop it suffered
after March 2018. Before that the company enjoyed an exponential growth with its share price of
January 2014 rising from Mur 205 to Mur 650 in March 2018. After March 2018 the share priced
dropped subsequently to Mur 540 in March 2019. Since the the price has been going up and down with
the latest data of March 2020 displaying a Price of Mur 615.
The share value and market capitalization dropped in the year end June 2019.
The company has been quite profitable for the year ended 30 June 2019 below is a statement of profit
and loss account for the year. The earnings per share have been also include

The profit of the year after tax has been MUR 631731000 and the earning per share is calculated to be
MUR 38.47.

Share Prices for recent Years: Dividend per share

2014: Mur 205 2014: Mur 8.40

2015: Mur 325 2015: Mur 9.00

2016: Mur 366 2016: Mur 9.60

2017: Mur 455 2017: Mur 10.25

2018: Mur 600 2018: Mur 10.90

2019: Mur 580 2019: Mur 13.30

Return= dividend + capital gain

Average return for previous 5 years :

Year 2015: (9/205) + (325-205)/205 = 62.9%

Year 2016: 15.57%

Year 2017: 27.11%

Year 2018: 34.26

Year 2019: -1.52%

Average Return= (62.9+15.57+27.11+34.26-1.52)/ 5

= 27.66%

Variance=1/5 [ (62.9-27.66)^2 + (15.57-27.66)^2 + (27.11-27.66)^2 + (34.26-27.66)^2 + (-1.56-27.66)^2)]

Risk = 21.4

The risk is quite big as it is + or – 21.4% . but it is understandable as to have a high return a high risk
needs to be taken.

(d) If a portfolio of this share and another share would be created, LMLC limited would be a suitable
company.

Given that the prices of the two companies are both above MUR 500 per share, we would tend to
compare the risk involved and the return we are getting. Earnings per share for Phoenix Beverages
limited are around MUR 39 and for LMLC earnings per share are around MUR 9.00so obviously we will
tend to go towards Phoenix Beverages Ltd.

However regarding the Market capitalization over the last year, Phoenix Beverages LTD faced a
downfall.

So an investor would be tempted to create a portfolio of these two companies so as to know where to
invest.