Admission to AIM
09 Mars 2006 - 8:12AM
UK Regulatory
Under embargo until7:00am 9March 2006
Gold Frost
Admission to AIM
Gold Frost ("Gold Frost" or the "Company"), a designer, developer and
distributor of dairy kosher food products announces the commencement today of
trading in its ordinary shares on AIM.
The Company possesses proven R&D capabilities for "koshering" chilled, frozen,
dairy and other products, a number of which have a health advantage by virtue
of being low in fat and cholesterol.
As part of the flotation, Corporate Synergy Plc placed 12,857,142 ordinary
shares at 35p per share raising a total of �4.5m for the Company. At admission,
there are 52,857,142 in issue giving a market capitalisation of �18.5m at the
placing price. The Company's AIM symbol is GLF.
Zwi Williger, Chief Executive of Gold Frost, commented: "We are delighted with
the support that we have received from investors. The proceeds will help us to
develop additional products, invest in additional marketing in the
international and domestic markets, increase our logistical capability in
Israel, locate new sources of diary products and expand internationally through
joint ventures or acquisitions.
"The kosher food market world-wide is worth around $33.5bn and is growing at
15% pa. Kosher products are widely consumed by non-jews, reflecting the actual
or perceived health attributes resulting from the strict controls over
manufacturing and ingredients inclusion. To cater for this growth we are
deliberately developing low fat and low cholesterol kosher foods."
Contacts:
Gold Frost +972 54 432 4924
Zwi Williger, CEO
Corporate Synergy 020 7448 4400
Rhod Cruwys / David Seal
Threadneedle Communications 020 7936 9605
Graham Herring/Alex White 07793 839 024
Notes to Editors:
THE BUSINESS
Gold Frost's principal business is designing, developing and distributing
chilled and frozen food products into Israel. The Directors believe that the
Company's key strength lies in its ability to identify niches within the market
and to develop new products to meet demand in the kosher market.
The Products
The challenge faced when creating kosher products stems from the fact that they
are subject to very strict testing and scrutiny by the religious authorities in
the locations where they are manufactured. These religious factors make it
extremely difficult to innovate or bring new products to market that fit modern
taste and demand. Dairy and frozen products, in which Gold Frost specialises,
present some of the most difficult challenges. It is the Company's success in
overcoming these challenges that has enabled it to grow rapidly and profitably
since 2001.
The Directors believe that the Company's know-how and its management's
long-standing relationships with kosher regulatory authorities throughout the
world provide it with an advantage over some of its competitors when developing
new kosher products.
The Company currently distributes 18 categories of product in more than 60
variations. Of these 18 categories, 12 were co-developed by the Company. The
most common products are spreadable butter, fetina cheese (a feta style),
butter, Swedish Lo-Chol, Odam (an Edam style) and processed cheese which
together comprise approximately 72 per cent. of sales for the nine months ended
30 September 2005.
There are products, manufactured using processes developed by the Company,
which are low in cholesterol which meet the needs of the health food sectors,
as well as the kosher and mainstream markets. The Company intends to launch at
least 2 new dairy products in the first half of 2006 that are low in fat as
well as low in cholesterol.
Most of the products that are imported by the Company are approved as kosher by
and/or under the supervision of various supervisory institutions including the
Badatz Igud Harabanim Manchester, Chug
Chatam Sofer, Circle K, the Chief Rabbinate of Israel, certain Jewish
organisations administering kosher procedures and certifications (such as the
Union of the Orthodox Jewish Congregation of America (OU) etc.) and rabbis of
local Jewish congregations abroad.
Products are packaged by various manufacturers and suppliers abroad and
labelled in Hebrew, English and, in certain cases, Arabic and Russian,
according to the Company's instructions and requirements.
The Company markets certain products under the trademark "Gold-Frost," which is
registered in Israel, and markets certain products under the trademark
"Willi-Food". The Company also markets Cheeses for pizza under the trademark
"Pizza Top" which is registered in Israel by G.Willi-Food International Ltd
("G. Willi-Food"). G.Willi-Food has signed an agreement for the transfer of the
rights in the trademark "Pizza Top" to the Company. Other products imported by
the Company under their original brand name are "Arla", "Lurpak", "Raskas" and
"Zanetti". The Company sells several products to the Supersol and Club Market
supermarket chains, that are sold under those supermarkets' own brand labels.
FUTURE STRATEGY
The Company has grown rapidly since 2001 by implementing its strategy of
developing innovative kosher
products for distribution into the Israeli market. The strategy for future
growth can be split into product strategy and geographical strategy.
Product Strategy
The Company expects to expand its current food product lines and diversify into
additional product lines by focusing on sourcing, locating and developing
additional kosher products, some of which may be new to the consumers. The
Company further intends to develop low fat and low cholesterol products
answering the consumers' demand for healthier products.
The Company will also seek to enter into additional arrangements with
recognised manufacturers to develop and market kosher products under the
manufacturers' brands and, additionally, the Gold Frost brand.
Geographical Strategy
The geographic strategy of the Company can be divided into the Israeli market
and the international market.
International Market
The Directors believe that there is potential for significant expansion of the
business outside of Israel, in particular, in the USA and Europe. Within
Europe, the Company will focus initially on France and the UK. France, which
has the largest Jewish population in Europe, already represents a major market
for kosher food, estimated at $550 million per annum, where over 70 per cent.
(source: GAIN USDA) of supermarket chains have a developed kosher strategy that
features a dedicated in-store kosher section.
The Company has a number of different opportunities in these regions but
considers that it is most important to secure control of distribution.
Currently, the Directors are considering different approaches, including:
* Selling kosher product direct to supermarket chains - this option is being
considered in the US, as the most sophisticated kosher market outside of
Israel. The Company has commenced discussions with a number of US supermarket
chains with a view to securing shelf space in their stores. These discussions
are at a preliminary stage.
* Entering into joint venture arrangements with, or acquiring a controlling
stake or absolute control of, a US and/or European distributor. In this
respect, the Company is in early stage discussions both in the US and Europe.
It is anticipated that both the joint venture route or acquisition route would
require significant financial outlay from the proceeds of the Placing.
* Entering into a joint venture arrangement with a manufacturer or supplier of
kosher products. The Company has existing relationships with a number of
manufacturers and suppliers and is in early stage discussions regarding the
setting up of a joint venture for the distribution of kosher products outside
of Israel.
Israeli market
The Directors estimate that the market for dairy kosher products in Israel is
in the region of $1.5 billion. Gold Frost's share of this market today is less
than 0.6 per cent. Whilst small in terms of the overall market, the Group's
sales have grown from zero in 2000 to $7.23 million in 2004 and $6.27 million
for the 9 months ended 30 September 2005.
The Company intends to continue to seek to grow its market share in Israel
through the introduction of additional innovative niche products designed to
give the customer more choice, healthier and/or cheaper products and, where
permitted, by expanding its supplier/manufacturer relationships. The Directors
believe that increased expenditure on marketing and sales activities would
increase the market penetration of the products that are currently sold by the
Company in Israel.
The Company also plans to expand its logistical capabilities in Israel by
utilising a new logistics centre that is currently being built by G. Willi-Food
and which is expected to be operational in October 2006. This centre will
include a dedicated automatic packing line for chilled food products. The
facility will, the
Directors believe, enable the Company to take full advantage of the sales
channels available to it through
G. Willi-Food and will also allow the Company to consider adding new sources of
dairy products in Israel to provide further products to meet consumer demand.
KEY STRENGTHS
The Directors believe that the Company has the following strengths:
* A track record of and know-how in identifying, designing, developing and
distributing innovative
chilled, frozen, dairy and other kosher products.
* Success in designing and developing low fat, low cholesterol dairy products,
which provide important opportunities both in the kosher and the mainstream
markets.
* Long term distribution agreements/arrangements with established manufacturers
/suppliers.
* A stable and organised distribution system with proven track record.
* A well-defined growth strategy for its products, the domestic market and
international expansion.
* Long-standing relationships with kosher regulatory authorities throughout the
world.
* Excellent controls and monitoring systems implemented over many years whilst
the Company was operating under the G. Willi-Food group.
These strengths are set against the backdrop of a large and growing
international kosher market.
DIRECTORS AND SENIOR MANAGEMENT
Brief biographical details of the Directors are set out below:
Joseph Williger, Chairman (age 48)
Joseph Williger has served as the chief operating officer of the Company since
April 2001. He has also served as a director of G. Willi-Food since January
1994 and as a director and as chairman of the board of Willi-Food Investments,
the ultimate controlling parent company of the Company, since December 1992 and
June 1994, respectively. Mr Williger has served as a director of Titanic Food
Ltd since April 1990. Mr Williger received his academic education in economics
from the Bar-Ilan University in Israel in 1983. Mr. Williger is the brother of
Zwi Williger. Joseph has over 20 years' experience in the food business.
Zwi Williger, Chief Executive Officer (age 50)
Zwi Williger has served as the chief executive officer and chairman of the
Company since April 2001. He has also served as a director of the Company's
majority shareholder (G. Willi-Food) since January 1994 (as chairman since
January 1997), as a director of the ultimate parent company of the Company
(Willi Food Investment Ltd) since December 1992 and as a director of Titanic
Food Ltd since April 1990. Mr Williger attended Fresno University in
California. He is the brother of Joseph Williger. Zwi has over 20 years'
experience in the food business.
Gil Hochboim, Finance Director (age 36)
Gil Hochboim has served as chief financial officer of the Company since April
2001. Between April 1995 and February 1998, Gil Hochboim served as deputy
comptroller of Dan Hotels Corp. Ltd. and between
March 1998 and August 2000, he served as deputy manager of Ha'menia Goods
Transport Corp. Ltd. Mr. Hochboim is a certified public accountant (Israel). He
received his BA in Accounting and Business Management from the College of
Management, Tel-Aviv, Israel.
Barry Morris, Senior independent Non-Executive Director (age 58)
Barry Morris has retailing knowledge and experience, which is based on over 35
years in the industry. After graduating from the London School of Economics in
1968, he joined Marks and Spencer as a management trainee and with the
exception of 2 years (1981-3), when he became the sales director of Babygro
Ltd., he remained until 2001. After fulfilling a wide portfolio of roles from
store management to buying, Mr Morris became a PLC executive director in 1994.
At varying times over the next 6 years, he was responsible for food, womenswear
and lingerie and home. In his role as executive director, he gained valuable
experience in strategic policy making at the helm of one of the largest
retailing organisations in the world.
On his retirement from Marks and Spencer in 2001, Mr Morris became a
non-executive Director of Stylo Plc and Morgan (UK) and later became retail
industry advisor to Livingstone Guarantee. He is a past Chairman of the British
Israel Chamber of Commerce and Governor of the Shenkar College of Design &
Engineering in Israel.
Ron Guttmann, Non-executive Director (age 60)
Ron Guttmann has extensive experience in the retail and global trading
industry, being vice president of
K.P. Koor Trade Europe (based in Tel-Aviv), manager of Koor Trade (based in
Austria), vice president of V.P. Co-Op (Israel's second largest retail chain),
manager of Koor Trade Office (based in London), general manager of Hossen Ltd
(an Israeli import and distribution company for Hoover and Toshiba), commercial
director for Bestfoods Israel and chairman of Unilever in Israel and member of
Unilever's Regional Management Team. Mr. Guttmann is currently the chairman of
Kitan Consolidated Ltd and Maadanei Yehiam Ltd, and non-executive director of
Isracolor Industries (traded on Tel-Aviv Stock Exchange) and Manpower Israel
Ltd.
Yael Rothschild, Non-executive Director (age 31)
Yael Rothschild has extensive experience in finance and business development.
Between 1998 and 2002,
Yael was an auditor at PricewaterhouseCoopers ("PwC") in the US and Israel. At
PwC, Yael Rothschild supported clients with public filings, due-diligence, and
financial analysis. She received a BA in Accounting and Economics from Tel Aviv
University. After graduating with an MBA from New York University, Yael worked
with UBS Investment Bank and Teva Pharmaceuticals Ltd. Ms. Rothschild is a
certified public accountant.
END
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