.Regular readers will know that since restarting the blog I have been fishing at the nano-cap end of the Australian market, on the simple logic that this is where the genuinely mispriced securities live. And while the sample size is small, the market gods have been kind to us over the last quarter or so:

I should mention I have recently tripled my position in Wisr (WZR), at much higher prices; stay tuned for further developments there, I won’t rehash the thesis in full here. I also remain involved in Alara. But in general, I continue to believe this is the best pond to fish in anywhere in my universe right now. Let’s go back to the well again, in this vein, for another busted micro-cap that seems completely forgotten and mispriced (for now).

SPC Global Holdings (ASX: SPG) – last price 7.5c – ~A$90mm market cap

SPC Global owns the Australian pantry: SPC, Goulburn Valley, Ardmona, ProVital and Original Juice Co, plus the Nature One Dairy infant-formula business. The stock sits at 7.5c, down from 75c at its December 2024 listing. In May the company raised A$100mm at 10c — against a 34.5c last price, and 28% below even the 14c TERP. Just 20% of the register took up its rights, and existing holders were obliterated. But if you look past the wreckage of that transaction upon prior owners, the balance sheet is fixed: leverage falls from 3.9x pre-raise to ~1x by the December balance date, and interest expense drops from ~A$15mm to ~A$5mm. A new management team of rare pedigree — the ex-Group CEO of Asahi Beverages as CEO; the ex-Metcash CEO as Chair — is executing a cost-out programme that requires no heroics. And through all of this, the company has reiterated guidance of >10% revenue growth and >20% EBITDA growth this year. On those numbers the stock trades at roughly 4x EV/EBITDA and 3-5x free cash flow. Bega and SunRice — the direct comps — trade at 9-9.5x on a strictly like-for-like basis. This is not a heavy-lift restructuring. Nothing here needs to be invented or believed; it needs only to be delivered, by people who have done far harder jobs than this. Simple stabilisation should be worth 2-3x the current quote. The endgame I expect — a break-up or sale of the brands — runs the arithmetic well past 20c against 7.5c today. Rarely do you get paid this much for the hard part already being done.

Background: a century-old company with a thoroughly checkered share-register history

Every Australian knows these brands; almost nobody knows the corporate history. The Shepparton Preserving Company was founded in 1917; for a century SPC, Goulburn Valley and Ardmona have been the fruit, tomatoes, baked beans and spaghetti in the national pantry. Coca-Cola Amatil paid roughly A$500mm for the business in 2005, spent a decade writing it down — by 2014 the Shepparton operation was within a whisker of closure, saved in part by a A$22mm co-investment from the Victorian government — and finally sold it to private equity in 2019 for roughly A$40mm. In December 2024 the business came to the ASX via a three-way merger with the listed Original Juice Co (ASX: OJC) and Nature One Dairy, relisting as SPC Global at an effective ~75c.

What followed was a very complete demonstration of why microcap Australia distrusts re-listings. FY25 was restated (the loss increased by A$21.8mm); the auditor flagged a material going-concern uncertainty in February 2026 (prior to the recent cap raise); the company is now suing its former chairman and another former director; net leverage reached 4x; and the stock fell from 75c to the low 30s before being suspended for nine days in May 2026 ahead of the inevitable massively dilutive recap.

Deeply discounted rights offering transfers ownership to new money

The May 2026 recapitalisation needs a more detailed examination, because, whilst it recapped the business, it has left for a temporarily broken register (and hence the opportunity today). The company raised A$100mm at 10c — against a last traded price of 34.5c (a 71% discount) and a theoretical ex-rights price (TERP) of 14c (a 28% discount even to that) — via a ~5-for-1 entitlement offer that quintupled the share count from ~194mm to 1,193mm shares. Eligible holders, exhausted and diluted, took up just ~20% of the A$97mm entitlement; the ~A$77.5mm shortfall failed to clear above the 10c offer price at bookbuild, and ~80% of the shortfall landed with the sub-underwriting group. Since then the largest of those holders has been an outright seller below its own entry price. The stock now sits 25% below even the deal price; at half the TERP price, and an insane discount to comps – even though business momentum appears strong (to be discussed shortly).

Therein lies our opportunity today. Firstly, much of the forced selling evident in a situation like this has already happened. Since the new shares were allotted on 10 June, approximately 204 million shares have traded across the 82 sessions to date — more than the entire pre-raise register (193.5mm shares), roughly 1.5x the ~135mm of shortfall stock placed with genuinely new investors at the bookbuild, and about a third of the 640mm sub-underwriter block itself. Nor has it dribbled out evenly: the turnover has come in a handful of discrete distribution episodes — ~15mm shares on 16 June, ~11mm on 26 June, ~10mm on 1 July, a ~25mm cluster through mid-August as the largest sub-underwriter was selling at 8.0-8.5c, and, most tellingly, ~55 million shares across 28-29 September alone — on which the stock rose 16%. When the biggest volume days of the entire post-raise period clear on a rising price, the marginal seller is being absorbed, not accommodated. The involuntary holders who actually wanted out have had every opportunity to get out, in size, and the stock has stopped going down — the 6c print of mid-September increasingly looks like the low of the entire cycle. The loose stock, in short, is likely largely washed through; what remains of the sub-underwriter position sits with parties who have now watched two clean months of absorption and have little reason to hit a 7.5c bid into an improving story.

Thesis bullet #1: the turnaround relies on simple cost-out ‘blocking and tackling’

Whilst this thesis is undeniably a turnaround, it is not a revenue moonshot, a product bet, or a balance-sheet workout. It is the most boring and most reliable kind of corporate repair that exists: taking costs out of a business – by a new, competent management team – that had never been properly integrated. Consider what the FY26 result already shows, in the middle of the chaos described above: normalised EBITDA rose 27% to A$38.5mm (margin 8.1% → 11.6%) on revenue that fell 12% — the signature of a company deliberately shedding empty calories. Branded mix rose from 69% to 76% of domestic sales; the SKU count was cut by more than 20%; sales contribution margin went from 47.1% to 60.2%; over A$20mm of merger synergies have already been banked since December 2024.

And the next leg is already specified, costed and under way: the Mill Park closure — consolidating juice production into Shepparton with co-packing at Griffith — completes in October 2026 and delivers ~A$8mm of EBITDA benefit in FY27, annualising at over A$11mm, on capex of less than A$3mm: a sub-twelve-month payback. That is, the Mill Park benefit alone exceeds the entire guided FY27 EBITDA uplift of A$7.7mm. The guidance floor literally assumes nothing from 10% revenue growth, nothing from further procurement gains, nothing from automation. One project, already in motion, covers the whole bridge. That is what I mean by “not a heavy lift”: you are not underwriting execution risk on a grand strategy; you are underwriting a factory consolidation that is two-thirds complete.

This ‘low hanging fruit’ interpretation is supported by management’s own words on the FY26 results call. Asked to break down the drivers of the FY27 EBITDA target, the CEO itemised them: Mill Park, “on track to deliver $8 million in FY’27, which is annualised greater than $11 million”; automation at the Auburn frozen-meals site, which “will deliver greater than $2 million of savings in FY’27”; and the strengthened operating model at the Shepparton factory, which “will deliver approximately $4 million of benefits from a synergistic viewpoint” — before concluding, “the majority of the EBITDA uplift in FY’27 are from projects that have either been implemented or close to being concluded and largely within our control… we’re not overly reliant or materially reliant on that organic growth to deliver the uplift.”

Itemise the full cost programme as management has detailed it — Mill Park A$8.0mm, reduced senior KMP A$4.2mm, supply-chain headcount A$2.6mm, automation A$1.5mm — and you have ~A$16mm of identified, in-motion savings against a guided uplift of A$7.7mm. Layer it onto the FY26 base and the math looks like this:

Thus, FY26’s A$38.5mm EBITDA plus the itemised, already-implemented cost-outs alone takes you to ~A$55mm — before counting a single dollar of the guided >10% revenue growth. My own model gets to A$54.8mm on the deliberately hostile case: legacy SPC revenue at half the guided rate, gross margin haircut a full point below the ~32% management guided flat, opex growth at the high end — and to A$61.6mm EBITDA – well, well ahead of consensus which sits at $52mm. In other words, I believe the market is missing a pretty low bar for a large ‘beat-and-raise’ here simply on cost-outs and vanilla execution, given how exhausted sentiment has become here.

Thesis bullet #2: new management you don’t often see at a $90mm market cap

I don’t typically put my faith in the jockey rather than the horse, but here, new management quality screens far more impressive than you typically see at a nano-cap.  The Group CEO is Robert Iervasi — the former Group Chief Executive of Asahi Beverages, where he ran a A$5bn+ revenue consumer business across Australia, New Zealand and the Pacific and led the integration of Carlton & United Breweries (CUB), one of the larger FMCG integrations in recent Australian history. The Chair is Andrew Reitzer — chief executive of Metcash from 1998 to 2013, over which time that company went from a A$130mm to a A$3.1bn market capitalisation, and a man who should know the Australian grocery channel very well, to put it mildly. Beneath them sits an executive bench drawn from a2 Milk, PepsiCo, Mondelez and Kimberly-Clark.

I want to dwell on this, because it is the single most anomalous fact in the situation. Executives of this calibre do not, as a rule, attach themselves to A$90mm microcaps. When the man who integrated CUB chooses to run a canned-fruit turnaround, and the man who built Metcash chooses to chair it, the sensible inference is that they looked at the brand portfolio, looked at the cost base, and concluded the repair was both achievable and worth considerably more than the market price (and indeed Iervasi has been buying stock in the open market post rights issue).

Thus, the willingness of seasoned execs like this to sign up to a story in this period of transition gives me additional confidence the bar has been set satisfyingly low. The people responsible for the restatement era are gone (and being sued for repayment); the people now signing the accounts have no legacy to defend and every incentive to kitchen-sink first and deliver second. FY26, with its A$16.7mm of normalisations and its brutally honest commentary, reads exactly like that reset.

Thesis bullet #3: valuation makes no sense (4-5x FCF) given balance sheet risk has been completely removed

Let’s now discuss the valuation in more detail. At 7.5c on 1,193.3mm shares the market capitalisation is A$89.5mm; against June-2026 net debt of A$85.8mm, enterprise value is ~A$175mm. The company has guided — and, critically, reiterated at the FY26 result, after everything above — to >10% revenue growth and >20% EBITDA growth in FY27, i.e. at least A$46.2mm. That is 3.8x EV/EBITDA on the guidance floor. Yes, the Shepparton sale-and-leaseback leaves A$160mm of lease liabilities, and on that basis the multiple is 5.3x — but even here on that identical basis Bega trades at 9.8x and SunRice at 9.0x (the two direct listed comps in Australia), with flat-to-declining earnings against SPG’s guided +30% (after rent).

The free cash flow picture tells a similar story. Run my full FY27 model build — EBITDA of A$54.8-61.6mm as above, cash lease costs guided down to A$10mm, net finance costs of ~A$10mm (on a blended BBSW+400bps that itself looks ripe for refinancing at sub-2x leverage), capex of A$9mm at the top of guidance, A$5.5mm of cash one-offs, no cash tax until FY29 courtesy of ~A$45mm of tax offsets, and working capital roughly neutral with inventory guided down 5% — and the company throws off A$18-25mm of free cash flow this year, against a A$90mm market capitalisation: ~4-5x P/FCF, with an unlevered free-cash-flow yield of 17-21% on the enterprise. On the model’s EBITDA rather than the guidance floor, the EV/EBITDA multiple compresses to ~3.2x headline. As I mentioned, direct listed comps trade at 8-10x EV/EBITDA!

And the thing that kills microcaps in this situation — the balance sheet — is dealt with. Net leverage was 4x before the raise; it printed ~2.2x at June 2026 (a seasonal high — inventory peaks after the autumn fruit and tomato intake); the company targets 1.0-1.2x by June 2027, and because December is the seasonal working-capital trough, the December 2026 balance date should show leverage near 1x before the June target even falls due. Interest expense drops by two-thirds (and given the legacy losses there are no cash taxes for many, many years). There is no refinancing event, no covenant cliff, no plausible insolvency path. The downside case in a stock like this is ordinarily “they run out of money and dilute you again at the lows” — that case has already happened, at 10c, and cannot meaningfully recur. What remains is a cheap stock with a fixed balance sheet and contracted cost-outs. You are not being paid 2-3x to take a leap of faith; you are being paid 2-3x to wait for the stock register to wash through; find new owners; and simply see stabilization and cost-out execution from new management. That should all occur over the next 6-9 months.

Thesis bullet #4: will it get sold in parts, or as a whole?

Step back from the repair and ask what this company actually is: a ~A$330mm-revenue collection of strong but unrelated brands — shelf-stable grocery, chilled juice, infant formula — sharing a listed-company cost structure that the revenue base cannot comfortably carry. It is, in a word, subscale, in exactly the way Wisr and Mayne Pharma are subscale, and my view of the endgame is the same: once stabilised, this business gets sold — most likely in pieces — to the natural strategic owners of each brand. Looking at the some of the individual brands in this light:

• SPC / Goulburn Valley / Ardmona — the 1917-vintage heart of the business: baked beans, spaghetti, packaged fruit, and Australia’s only significant locally-grown canned tomato. The tailwinds are real and durable: the buy-Australian and food-security theme has genuine political and consumer momentum (Ardmona is now the exclusive Australian-branded canned tomato in Woolworths — the sole domestic alternative on a shelf otherwise ceded to imported Italian private label), and shelf-stable staples are structural beneficiaries of a value-conscious consumer. For a Bega, a SunRice, or any strategic consolidating Australian dry grocery, these brands bolt straight into an existing sales and distribution stack with near-total overhead elimination.
• ProVital — portion-controlled fruit and nutrition for hospitals and aged care, with new major-retailer ranging from July 2026. This is a pure demographics annuity: the aged-care channel grows with the 80+ population regardless of the cycle, and the format carries pricing power that supermarket grocery does not.
• The Original Juice Co — the chilled juice business (plus the Juice Lab brand) that provided the listing shell; beverages grew 11.7% in Q4 FY26 and the Mill Park consolidation takes the cost base down just as volumes inflect. Chilled juice is a scale-and-cold-chain game — an obvious tuck-in for any major beverage player, a category the CEO knows rather well from Asahi.
• Nature One Dairy — the quiet jewel: infant formula and dairy nutritionals with export registrations into Asia, new rangings at Costco (Japan and Australia), Emart Traders (Korea), Cold Storage (Singapore) and Amazon, a third-party manufacturing contract with Fonterra commenced November 2025, and an International division running 34.2% EBITDA margins (up 743bps) at a 60%+ contribution margin. A2 Milk trades at 18x EBITDA; Bubs at 0.8x sales with no earnings. A credible, profitable, export-registered infant formula platform is scarce strategic property, and it is buried inside a canned-fruit company at 4x.

While I do not think this happens before the business has stabilized and proven out its performance under new management (that is, not for the next year), it seems an obvious ‘escape hatch’ given the size of the listed entity; the obvious dyssynergy in being a small listed company (even if the valuation does rerate closer to comps); and the clear value in individual brands, at much higher prices, to other strategics.

But again, even if SPG stays together in its current form, the two direct comparables — Bega and SunRice — trade at 9.0x and 9.8x EV/EBITDA respectively (9.4x blended) on the identical lease-adjusted, pre-AASB 16 basis, 13.6x blended on EV/EBIT, and 20.5x blended on earnings — with flat-to-declining earnings profiles against SPG’s guided +30% (after rent). Marking SPG simply to these two, on its own guidance floor only (ie $47mm EBITDA pre leases), here is what you get:

Full parity implies 13-22c; and even two full turns below the blended comp multiple — a discount I consider generous compensation for everything bad about this story — the math lands at 12-16c, or 60-120% above the current price, on guidance the company reiterated three weeks after reporting. (Two technical notes, in the interest of the intellectual honesty: the P/E is the hardest test for SPG because depreciation consumes ~53% of its EBITDA against ~41% at Bega and ~29% at SunRice — which is precisely why EV/EBIT, at 15-18c, is the fairest single measure — and the untaxed P/E flatters slightly, though ~A$45mm of tax offsets mean no cash tax until FY29 and a further ~A$69mm of unrecognised losses sit entirely outside these numbers. And all of this is on the A$46.2mm floor: substitute my A$55-62mm model build from above and every number in the table moves 30-50% higher again, whilst the equity compounds at a ~20%+ free-cash-flow yield in the meantime.)

The real question, though, is parity valuation an appropriate measure for SPG? Bega and SunRice are ten to twenty times SPG’s size; they pay dividends; they have decades of history against SPG’s zero years of positive free cash flow; they did not restate last year’s accounts, carry a going-concern flag eighteen months ago, or vaporise their register at 10c. A A$90mm market cap with A$200k of daily turnover will always clear at a discount to a A$1bn+ index constituent, and I would not build a pitch that requires that discount to vanish. That is exactly why the table shows the two-turns-cheap column — and why my base target remains 20c: comfortably inside the parity range on the EV measures, a healthy discount to it everywhere else, and yet ~2.7x from here.

Still, what I like here is that if the market will not close the discount (assuming execution improves over the next year), a transaction likely would – and certainly I would be positioned to be involved in that dialogue. Once the earnings stabilise — call it two clean halves, FY27 delivered, leverage at ~1x — a sub-scale collection of century-old brands trading at 5-6x against listed consolidators at 9-10x would simply be an invitation to agitate for a transaction to close the gap. A larger branded Australian food player — Bega is the obvious name, with precisely the dry-grocery distribution stack these brands would bolt into, but the logic extends to any scaled FMCG platform — can pay the full comp multiple, fund it with synergies, and still create value on day one; and the register here (half of it held by sub-underwriters with no emotional attachment and an entry at 10c) is about as receptive an audience for a control transaction as exists on the ASX. Should the Board hesitate once the repair is done, I would regard agitating for exactly that outcome — publicly, if necessary, in the manner regular readers will recognise from my other Australian engagements — as the natural next step, and I suspect I would not be agitating alone. The rerating case does not rest on the market’s goodwill; it rests on the arithmetic eventually being collected by someone — the only question is whether shareholders are paid in multiple expansion or in a bid premium. Run the exit on a ~A$55mm FY28 EBITDA rate — below the A$61mm implied by management’s own FY28 incentive hurdles — and the strategic math runs well past 30c; I do not need anything like that to be right at 7.5c.

What would change my mind – thesis risks

This is a turnaround, and as a result there are obvious risks we should all be cognizant of. The FY27 guide could miss — revenue fell 12% in FY26 and the main customers are uncontracted supermarkets (though recall that decline in revenue was driven by dropping loss-making contracts and the recent uptick in revenue is largely being ‘demand-led’, ie the market is wanting more of these products. Elsewhere, the free cash flow definition is management’s (pre-working-capital), and the market will rightly demand statutory cash before paying full freight. Capex is running below depreciation and may need to catch up. The sub-underwriter overhang is real in size, though — as set out in the turnover analysis above — a substantial share of the loose stock has likely already washed through; what residue remains may still slow the first leg of any rerating around the 10c entry price — but again, that could also be a liquidity opportunity as even at 10c the story remains exceptionally cheap. And there is no takeover on any timetable I control: the break-up thesis is my judgment about where subscale brand portfolios end up, not an announced process. Also, day-to-day liquidity is very thin, so treat this as a 12-18 month hold, not a trade.

Conclusion

Strip the noise and the situation reduces to this: a portfolio of genuinely strong, century-old Australian brands; a balance sheet repaired (however brutally) at 10c; leverage heading to ~1x by December; interest costs down two-thirds; a cost-out programme that single-handedly covers the guided EBITDA bridge; a CEO who ran Asahi Beverages and a Chair who built Metcash; reiterated guidance of >10% revenue and >20% EBITDA growth; and a share register so traumatised that the stock trades at ~4x guided EBITDA, 3-5x free cash flow, and below the rescue price — whilst the comps for the eventual break-up sit at 9-9.5x. The market will notice somewhere between the December balance date and the FY27 result. I would rather own it before then.

Disclosure: long SPG.AX