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.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Banks: Westpac Keeps Core Government Transactions Contract

The local arm of Westpac Banking Corp has kept its contract with the New Zealand government to provide core transactions, but will have to share peripheral services with its rivals. More>>


Science Investment Plan: Universities Welcome Statement

Universities New Zealand has welcomed the National Statement of Science Investment released by the Government today... this is a critical document as it sets out the Government’s ten-year strategic direction that will guide future investment in New Zealand’s science system. More>>


Scouring: Cavalier Merger Would Extract 'Monopoly Rents' - Godfrey Hirst

A merger of Cavalier Wool Holdings and New Zealand Wool Services International's two wool scouring operations would create a monopoly, says carpet maker Godfrey Hirst. The Commerce Commission on Friday released its second draft determination on the merger, maintaining its view that the public benefits would outweigh the loss of competition. More>>


Scoop Review Of Books: She Means Business

As Foreman says in her conclusion, this is a business book. It opens with a brief biographical section followed by a collection of interesting tips for entrepreneurs... More>>


Hourly Wage Gap Grows: Gender Pay Gap Still Fixed At Fourteen Percent

“The totally unchanged pay gap is a slap in the face for women, families and the economy,” says Coalition spokesperson, Angela McLeod. Even worse, Māori and Pacific women face an outrageous pay gap of 28% and 33% when compared with the pay packets of Pākehā men. More>>


Housing: English On Housing Affordability And The Economy

"Long lead times in the planning process tend to drive prices higher in the upswing of the housing cycle. And those lead times increase the risk that eight years later, when additional supply arrives, the demand shock that spurred the additional supply has reversed. The resulting excess supply could produce a price crash..." More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news