Dairy Farmers, the Australian dairy group, has insisted its strategy of turning the business from a co-op to an FMCG company remains on-track despite falling profits last year.
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The company saw profits fall over 7% to A$57m (US$53m) last year thanks to rising commodity costs as the Australian drought threatened milk supply.
Dairy Farmers moved to up payments to its farmers in order to secure supply and had to absorb other costs linked to the disposal of a cheese inventory backlog.
Dairy Farmers is mulling whether to float on the Australian Stock Exchange next June. A decision on the listing has yet to be made but chief executive Rob Gordon said the company had created “a strong platform from which to unlock the underlying value of shareholders’ equity in Dairy Farmers”.
Gordon said: “In fiscal 2007, we said our focus would be on driving the business through growth in our champion brands. As a result, Dairy Farmers ended the period having grown strongly ahead of the market and key competitors, lifting our share of every branded retail category in which we operate.”
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By GlobalDataRevenues rose 4% to A$1.2bn.
Gordon was coy over whether Dairy Farmers would proceed with the listing. “Consistent with our fiduciary duties, Dairy Farmers directors will consider all liquidity options, including an ASX listing, to determine which stands to deliver the greatest value for our shareholders.
“The option which provides the best outcome for shareholders will determine the timing and nature of any liquidity opportunity.”
