Picture: ISTOCK
Picture: ISTOCK

An "extensive fair-value exercise" conducted on Bowler Metcalf associate SoftBev had resulted in a further impairment from the R70m flagged in the interim period to December 2016, the plastic packaging group said on Wednesday.

This prompted one analyst to surmise that the "fizz really has gone pop" at the SoftBev joint venture (JV), in which Bowler Metcalf owns a 43% stake.

The group expects the loss per share for the 12 months ended-June 2017 to be between 117.6% and 121.6% down on earnings per share of 79.2c in 2016 — much worse than previously thought.

SoftBev bottles, markets and distributes well-known brands including 7UP, Pepsi, Mountain Dew and Mirinda as well as niche brands Jive and Coo-ee.

"For over two years, management has taken criticism from shareholders on the JV and its poor performance," Anthony Clark, an analyst at Vunani Securities, said on Wednesday.

He said that, with value having been destroyed at the joint venture, an option to sell it was probably off the table.

"An option to list the JV … could have been an option … that’s now probably gone too. Who’d want to buy it?

"Somehow Bowler needs to right-size this business quickly or simply extricate itself," Clark said. He also said that SoftBev needed another huge write-down to correctly value "the flailing" business.

"Transparency [over] the JV has been opaque and rumours of strife between the two parties have swirled amongst those of us that cover the sector and follow such corporate whispers and machinations," Clark said.

"With management literally having dithered on what to do with this asset for two years, I hope at the coming results, they … actually make a firm plan. After years of Bowler being a sliding share price … maybe sorting out SoftBev will be the catalyst to end the share’s weakness," he said.

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