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

 

China Shopping: NZ-China FTA Upgrade Agreed Among Slew Of New Deals

New Zealand Prime Minister Bill English and China Premier Li Keqiang signed off a series of cooperation deals spanning trade, customs, travel and climate change and confirmed commencement of official talks on an upgrade to the nine-year old free-trade agreement between the two countries. More>>

ALSO:


Media: TVNZ Flags Job Cuts To Arrest Profit Decline

Chief executive Kevin Kenrick said the changes were aimed at creating "a sustainable future video content business for TVNZ in an ever-changing media market." More>>

ALSO:

Reserve Bank: Wheeler Keeps OCR At 1.75%

Reserve Bank governor Graeme Wheeler kept the official cash rate unchanged at 1.75 percent, as expected, and reiterated his view that the benchmark rate doesn't need shifting for the foreseeable future. More>>

ALSO:

Trade Plans: Prime Minister's Speech To International Business Forum

"The work to improve public services, build infrastructure, and solve social problems is possible only because we have enjoyed sustained, solid economic growth. A big reason for that is the Government’s consistent agenda of economic reform, and our determination to open up more opportunities for trade with the world." More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news