Fund Manager Summary
The fund managers believe that the outlook for Top Shelf International Holdings Ltd (TSI) presents an opportunity for recovery despite recent challenges. In their opinion, the company's negotiations with senior lenders and creditors to address liquidity concerns are crucial for stabilizing operations. They highlight that TSI's focus on its premium spirits segment, particularly the upcoming nationwide launch of Act of Treason Australian Agave, could drive future growth. Furthermore, operational improvements are expected to enhance the company’s performance moving forward. Overall, while the current situation reflects a downtrend in share price, the managers maintain a cautious optimism regarding TSI's long-term potential.
Source: Trading View
Commentary From The Managers
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Salter Brothers
31 Dec 2024
Unknown
Summary
- Top Shelf International Holdings Ltd (TSI) has built momentum into the end of the year.
- Recent AGM confirmed quarterly improvements vs the pcp.
- Branded pro forma revenue increased by +34%.
- Group gross margin grew by +9% next of excise.
- Resulted in a +44% improvement on EBITDA vs pcp.
- The quarter aligns with company forecasts on the pathway to profitability.
- Salter Brothers continues to hold due to these positive developments.
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Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Salter Brothers
31 Dec 2024
Unknown
- Top Shelf International Holdings Ltd (TSI) has built momentum into the end of the year.
- Recent AGM confirmed quarterly improvements vs the pcp.
- Branded pro forma revenue increased by +34%.
- Group gross margin grew by +9% next of excise.
- Resulted in a +44% improvement on EBITDA vs pcp.
- The quarter aligns with company forecasts on the pathway to profitability.
- Salter Brothers continues to hold due to these positive developments.
Summary
Salter Brothers
30 Sept 2024
Unknown
- Top Shelf International Holdings Ltd (TSI) has experienced a continued downtrend in share price.
- The company requested a trading suspension in late September.
- TSI is currently negotiating with its senior lender and largest creditors to address short-term liquidity needs.
- It is exploring strategic options to strengthen its balance sheet.
- Despite these challenges, Salter Brothers remains optimistic about TSI's long-term prospects.
- Particularly positive developments are seen in the premium spirits segment.
- The nationwide launch of Act of Treason Australian Agave and operational improvements position the company for future growth.
Summary
Salter Brothers
31 Aug 2024
$0.07
- Top Shelf International Ltd (TSI) has faced a pullback in stock price despite improved operational results.
- The nationwide launch of Act of Treason Australian Agave highlights the company’s growth potential.
- Focus on brand portfolio distribution and cost base reduction has led to a 50% improvement in underlying EBITDA.
- The balance sheet remains a concern for the market, which may limit valuation upside until resolved.
- The company is actively working on solutions for balance sheet strengthening.
- Salter Brothers continues to hold because of the company’s long-term strategy to capitalise on premium Australian spirits.
- Recent developments in agave production position TSI for future growth.
Summary
Salter Brothers
30 June 2024
$0.08
- Top Shelf International Holdings Ltd (TSI) was the main detractor of the month due to share price retraction from tax loss selling.
- The company secured nationwide distribution for its Act of Treason Australian Agave with Endeavour Group.
- Act of Treason will be available in all Dan Murphy’s outlets nationwide from mid-July and selected BWS stores.
- This agreement complements ongoing efforts to grow the brand’s footprint in strategic locations along the eastern seaboard.
- Endeavour ranging confirmation follows Act of Treason winning gold medals at three prestigious international spirits competitions in May.
- The product was also named World’s Best Speciality Spirit at the World Drinks Awards.
- The Manager believes this is a positive step, reinforcing conviction that the company is undervalued.
Summary
Salter Brothers
31 May 2024
$0.10
- Salter Brothers updates its investment thesis on Top Shelf International Holdings Ltd (TSI).
- The main detractor in May was the capital raise carried out by TSI.
- TSI implemented a 2 for 3 non-renounceable entitlement offer to raise up to $13.9 million at a price of $0.10 per share.
- The Manager participated in the capital raise.
- Shareholders received 1 free attaching option for every 2 shares applied for and issued.
- Funds raised will be used to repay the Longreach Financing Facility, cover transaction expenses, and provide working capital.
- Despite the expected benefits, TSI's share price retracted to its issue price of $0.10.
- Salter Brothers believes the restructuring efforts will strengthen the company.
- The company is expected to overcome current negative sentiment.
- Medium-term prospects remain positive for delivering strong results.
Summary
Salter Brothers
31 Mar 2024
$0.16
- Salter Brothers notes that Top Shelf International Holdings Ltd (TSI) faced negative share price performance despite low trading volumes.
- The market's attention in March was likely on the balance sheet, which overshadowed early gains in CY2024 from improved operating performance.
- TSI has proactively addressed balance sheet concerns by initiating a non-binding term sheet for a $10.0 million sale and leaseback of agave farmland and distillery assets.
- Salter Brothers continues to hold investment in TSI because of these proactive measures and the potential for operational improvements.
Summary
Salter Brothers
28 Feb 2024
$0.17
- Salter Brothers updates their investment thesis on Top Shelf International Holdings Ltd (TSI).
- The key detractor for the month was TSI, releasing their 1H24 results.
- The market reacted negatively due to cash balance and low liquidity levels.
- Gains from January have been negated.
- TSI has initiated a non-binding term sheet for a $10.0m sale and leaseback of agave farmland and distillery assets.
- Salter Brothers continues to hold the investment in TSI amid the challenges.
Summary
Salter Brothers
31 Jan 2024
$0.23
- Top Shelf International Holdings Ltd (TSI) has maintained momentum into 2024 with positive quarterly results.
- In January 2024, TSI achieved its first product release of the agave brand Act of Treason, which quickly sold out online.
- The company remains committed to its path to profitability, delivering results in line with management's forecasts.
- Despite positive developments, the market reacted negatively due to concerns over cash balance and low liquidity levels, impacting recent gains.
- TSI has proactively initiated a non-binding term sheet for a $10.0m sale and leaseback of agave farmland and distillery assets.
- Salter Brothers continues to hold because of TSI's strong product demand and ongoing commitment to profitability.
Summary
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
ANALYST INSIGHT
Equity Research Analyst
"While TSI grapples with short-term liquidity hurdles, its strategic pivots in the premium spirits space could be the spark for a turnaround. The launch of Act of Treason Australian Agave might just be the game-changer investors are waiting for."
Last Updated: 31 Dec 2024
Query The Data
Frequently Asked Questions
Who is investing in Top Shelf International Holdings Ltd (ASX:TSI)?
Fund managers including Salter Brothers have invested in Top Shelf International Holdings Ltd (ASX:TSI).
Why do fund managers invest in Top Shelf International Holdings Ltd?
Fund managers are investing in Top Shelf International Holdings Ltd due to its potential for long-term growth in the premium spirits segment, despite current challenges such as a downtrend in share price and liquidity issues. The company's strategic initiatives, including the nationwide launch of Act of Treason Australian Agave and ongoing operational improvements, are seen as key factors that could strengthen its market position and financial stability.
What happened to Top Shelf International Holdings Ltd (ASX:TSI)?
There have been no recent updates from fund managers regarding Top Shelf International Holdings Ltd although fund managers including Salter Brothers have previously commented.