I've been wanting CCL to sell Korea for while.I hope they do...

I've been wanting CCL to sell Korea for while.
I hope they do it.
Return on Capital is the first number I look for in a business, it determines the price I am willing to pay, and Korea have been dismal.

If you look at the 2005 Annual Report, you will find that CCL have been improving, which first attracted me, and probably many others, to rerate CCL after many years of underwhelming performance.

For Instance, the past 5-year performance on Return on Average Capital Employed has been :

2001 7.6%
2002 8.8%
2003 10.2%
2004 21.6%
2005 17.5%

Before I continue, the first question investors need to resolve is whether the 2005 result (a combination of CCL outlaying capital for acquisition, SPC etc, and the commodity price headwind is temporary or permanent. Personally, I dont think that this 5-year record can be put down to luck, and that CCL will continue to perform well)

Now Korea. Look at these numbers :

Net Assets :

2004 $787 M
2005 $861 M

EBIT :

2004 $11 M
2005 $(7) M

Compare to Australia ...

Net Assets :

2004 $1,530 M
2005 $1,620 M

EBIT :

2004 $433 M
2005 $456 M

Why would you want to have capital invested in a business like South Korea ? You get better returns in Commonwealth Bank Term Deposits.