Wessanen

Wessanen is a supplier of organic and health foods. After a long period of relatively unsuccessful growth through acquisitions, the company is now focussing on its key areas of strength. Most weakness was in the US distribution and retail operations, which were perennial underperformers. The largest of these has now been sold and the proceeds will be used to pay down debt. A recent private placement of shares has added an additional financial cushion. Wessanen previously had well recognised brands but too broad and unfocussed a product portfolio. Following a change of CEO, the group is now cutting out sub-scale products, reducing production sites and reinvesting in brand promotion. A small improvement in its cost structure and top line should bring about a big improvement in profit, making the stock look very attractively valued at the current price.