Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


A2 1H profit dented by UK JV, affirms FY earnings target

A2 1H profit dented by UK JV, affirms FY earnings target of $11.2M

By Paul McBeth

Feb. 27 (BusinessDesk) - A2 Corp, which markets milk products with a protein variant claimed to have health benefits, reported an 82 percent slide in first-half profit as the cost of setting up its UK joint venture eroded the bottom line. The shares gained 3.9 percent as it affirmed its annual earnings forecast.

Net profit dropped to $243,000, or 0.09 cents per share, in the six months ended Dec. 31 from $3.4 million, or 0.53 cents, a year earlier, the Sydney-based company said in a statement. That came from a $1.5 million loss on establishing its UK joint venture with Robert Wiseman Dairies, which only started selling product in October last year.

"Our first priority (for the UK venture) is to build our rate of sales - we need to justify our shelf space," managing director Geoff Babidge told BusinessDesk. "Then we need to have a plan to achieve breakeven."

Earnings before interest, tax, depreciation and amortisation jumped 54 percent to $3.5 million, on a 57 percent gain in sales to $44.3 million. The company affirmed ebitda guidance of $11.2 million before intercompany charges from its Australasian businesses.

The company more than doubled its Australian segment profit to $3.8 million in the period, and now makes up some 6.9 percent of supermarket sales of fresh milk by value and is targeting 10 percent.

"We're continuing to be very strong in moving toward that number, and I am confident we should exceed it," Babidge said.

A2 is still looking at options to develop the brand in New Zealand in conjunction with the existing licensee, it said.

The shares rose 2 cents to a six-week high of 54 cents, and have climbed 70 percent in the past 12 months. The board didn't declare an interim dividend.

In December, A2's three cornerstone shareholders - ASX-listed Freedom Foods Group, Mountain Road Investments, associated with chairman Cliff Cook and Equity Group Investments sold down their stakes as part of a $20 million capital raising and shift to the NZX main board.

Babidge said A2's sales of infant formula into China are expected to kick off in June, and it is still looking at other potential opportunities, such as entering North America, Europe, or expanding its range to include ultra-heat treated products.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Wine: 20% Of Marlborough Storage Tanks Damaged By Quake

An estimated 20 percent of wine storage tanks in the Marlborough region, the country’s largest wine producing area, have been damaged by the impact of the recent Kaikoura earthquake. More>>

ALSO:

ACC: Levy Recommendations For 2017 – 2019 Period

• For car owners, a 13% reduction in the average Motor Vehicle levy • For businesses, a 10% reduction in the average Work levy, and changes to workplace safety incentive products • For employees, due to an increase in claims volumes and costs, a 3% increase in the Earners’ levy. More>>

Women's Affairs: Government Accepts Recommendations On Pay Equity

The Government will update the Equal Pay Act and amend the Employment Relations Act to implement recommendations of the Joint Working Group on Pay Equity. More>>

ALSO:

Immigration: Increase In Seasonal Workers For RSE

The current cap will be increased by 1,000 from 9,500 to 10,500 RSE workers for the 2016-17 season. Mr Woodhouse says the horticulture and viticulture industry is New Zealand’s fourth largest export industry, producing almost $5 billion in exports. More>>

ALSO:

Hurunui: Crown Irrigation Invests Up To $3.4m In North Canterbury

Crown Irrigation Investments will invest up to $3.4m in the Hurunui Water Project, an irrigation scheme that will be capable of irrigating up to 21,000 hectares on the south side of the Hurunui River in North Canterbury. More>>

ALSO:

Not So Great:Butterfly Eradication Success

The invasive pest great white butterfly has been eradicated from New Zealand in a world-first achievement, Primary Industries Minister Nathan Guy and Conservation Minister Maggie Barry say. More>>

Gordon Campbell: On The Government’s Tax Cuts Fixation

Long before the earthquake hit, the dodginess of the government tax cuts programnme was evident in the language of its packaging. It is being touted as a “tax cuts and family care” package... More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news