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


A2 Corporation posts strong profit growth

Media Release

21 February 2012

A2 Corporation posts strong profit growth
Global expansion accelerates

Specialist New Zealand-based milk producer A2 Corporation Limited (A2C) has confirmed its growth strategy with an almost 50 per cent increase in sales revenue and unaudited net profit after tax increasing to $3.1 million for the six months ended 31 December 2011.

Group Profit after Tax for the previous comparable half was $893,517 and $2.1 million for the financial year ended 30 June 2011. Sales revenue for the six months to December 2011 was $28.3 million, an increase of 48.7 per cent on the previous comparable half.

Chairman Cliff Cook says the result was very pleasing in the face of continuing price discounting in fresh milk in Australia.

“Whilst the Australian supermarket chains are going head to head in discounting standard milk, a2TM brand sales have continued to accelerate with no change in our pricing. The current market share by value of a2TM brand fresh milk in the grocery channel is now estimated to be 4.7 per cent.”

“Our success in Australia gives us confidence for our international expansion. The formation of a joint venture with the largest fresh milk dairy company in Britain, Robert Wiseman Dairies, is a major milestone and will open a market three times the size of Australia.”

a2TM is pure dairy milk from selected cows that produce the A2 beta casein protein rather than A1. Many people who have issues drinking standard milk find they can enjoy all of the benefits of dairy when they switch to a2TM.

Managing Director Geoffrey Babidge says a focus on effective marketing and communication and management of costs ensured that earnings before interest, tax, depreciation and amortisation (EBITDA) for the 2012 half year of $2.27 million (2010:$1.58m) grew broadly in line with sales. Settlement of a legal dispute with a former Korean licensee contributed $1.1 million, underscoring the strength of the company’s intellectual property.

“Considerable achievements were made consistent with our growth strategy to position A2C as an innovative fast moving consumer goods and ingredients company with a global focus.”

“Increasing sales in Australia demonstrate that consumers in this market understand the a2TM brand proposition and are willing to pay a significant premium over standard milk for our products.”

“We look forward to the launch of a2TM brand fresh milk in the UK later this calendar year and our further expansion into additional markets of interest in the not too distant future.”

Progress is also being advanced to introduce an a2TM brand infant formula commencing with a market in Asia.

A2C is continuing to explore opportunities with its licensee in New Zealand to build brand awareness and sales of a2TM brand milk consistent with the successful business model in Australia.

Later this month, A2C will commission its own new fresh milk processing facility in Sydney. Initially, the A$8.4 million plant will produce high quality product for the New South Wales market allowing contract processors to support growing demand in other states of Australia.

Mr Babidge says: “Consumer awareness of a2TM brand dairy products is increasing. Our recently introduced “Thank-you a2TM” media campaign, successful PR and social media activities, consumer recommendation, Health Care Professional endorsement and support from our business partners are all helping to drive further growth in sales.”

Half Year Financial summary

31 December 201131 December 2010
Trading Revenue28,33019,074
Gross Margin35%29%
Non-recurring items1,101
Cash on Hand5,4847,467
EPS (cents per share)0.570.17


© Scoop Media

Business Headlines | Sci-Tech Headlines


Stats NZ: Falling Prices In June Quarter Amid COVID-19 Uncertainty

The consumers price index (CPI) fell 0.5 percent in the June 2020 quarter as the COVID-19 global pandemic saw cheaper petrol and falling hotel and motel prices, Stats NZ said today. It was the first fall in quarterly inflation since the December 2015 ... More>>

Transport: International Arrivals In May Lowest In 61 Years

The number of people that arrived in New Zealand in May 2020 was the lowest for any month since May 1959, because of COVID-19-related border and travel restrictions, Stats NZ said today. There were 5,600 arrivals in May 2020 compared with 4,700 in ... More>>


It’s All In The Genomes: New Study Reveals Scale Of Havelock North Campylobacteriosis Outbreak

When the campylobacteria outbreak hit Havelock North in 2016, no-one fully understood how widely it affected the local communities. Gene-sequencing technology used by scientists has shown the true scale of the outbreak. The joint study from ESR, Massey ... More>>


Tiwai Point: Rio Tinto Announces Plans To Close Tiwai Point Smelter

Rio Tinto has just announced that it will wind down New Zealand Aluminium Smelters - the Tiwai Point smelter - saying the business is no longer viable. More>>


Freight: New Report On Auckland Port Relocation

The Government has released a major new report on the options for relocating the Port of Auckland’s freight operations while deferring any decision on the issue. More>>


XE Data Update: RBNZ Official Cash Rate Decision

The RBNZ will keep the Official Cash Rate (OCR) at 0.25%. T he key points in the RBNZ statement are: RBNZ keeps the OCR unchanged at 0.25% Maintain the LSAP (large scale asset purchase) at NZD$60 billion. Committee prepared to use additional monetary ... More>>


Electricity: Kiwis Ignore Promise Of Cheaper Power

Electric Kiwi and Flick Electric Co are joint winners of Canstar Blue’s award for Most Satisfied Customers | Electricity Providers From putting on an extra layer – rather than turning on a heater – to turning off lights and choosing the energy-saving ... More>>


ASB: Regional Economic Scoreboard Q1 2020

ASB NZ Regional Economic Scoreboard Gisborne still the place to be It has been Gisborne’s year, and the region comes out tops on our regional rankings for the fourth successive quarter. Like everywhere, question marks are about the COVID-19 impact on the future. ... More>>

RNZ: Economic Activity And Business Confidence Bouncing Back

Two surveys from ANZ show business confidence and economic activity have rebounded, but uncertainty about the future remains extreme. More>>


NIWA: The Climate Record That Keeps Getting Broken

Among the multitude of New Zealand climate statistics there is one record that continues to be broken month after month. Since January 2017 there has not been one month that recorded a below average nationwide temperature, according to NIWA’s seven station ... More>>


Govt: Extended Loan Scheme Keeps Business Afloat

Small businesses are getting greater certainty about access to finance with an extension to the interest-free cashflow loan scheme to the end of the year. The Small Business Cashflow Loan Scheme has already been extended once, to 24 July. Revenue and Small ... More>>


Science: 2019 Prime Minister’s Science Prizes Announced

The 2019 Prime Minister’s Science Prizes have been announced in a digital livestream event today. The Prizes recognise the impact of science on New Zealanders’ lives, celebrate the achievements of current scientists and encourage scientists of the ... More>>


Stardome Observatory: Young Kiwi Astro-Photographer Shoots For The Stars

Matariki by Josh Kirkley. The stars are aligning for up-and-coming Auckland-based astro-photographer Josh Kirkley (Kāi Tahu). During lockdown, one of his images was picked up by NASA and shared on the space agency’s Instagram to its 59.2 million ... More>>

DCANZ: Time For EU To Commit To A Level Playing Field For Trade

The Dairy Companies Association of New Zealand (DCANZ) has welcomed New Zealand Trade Minister David Parker’s statement that it is unacceptable for New Zealand exporters to continue facing an ‘unlevel playing field’ in the EU. Details leaked ... More>>


New Zealand Government: Supporting Kiwi Businesses To Resolve Rent Disputes

The Government will legislate to ensure businesses that suffered as a result of the COVID-19 response will get help to resolve disputes over commercial rent issues, Justice Minister Andrew Little announced today. More>>