Goodman Fielder has said it expects its full-year earnings before interest and tax to some in at the lower end of its previous forecast.
In an announcement this morning (23 July), the Australian manufacturer said its business has been hit by the “very challenging” conditions it faces in Australia and external markets.
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“Increased competitive pressure, including price reductions for supermarket private label bread and the resulting pricing pressure on proprietary branded bread, together with higher labour and logistics costs continue to impact earnings in the Australia/New Zealand Baking division,” the company said.
The company now expects annual earnings to be at the lower end of its A$230m (US$237.1m) to A$245m guidance range.
Goodman also revealed its results will be hit by A$110m in relation to the re-valuation of some the assets carried by its bakery business.
In total, the company expects to incur A$260-275m in one-off costs, including A$70-75m in redundancy costs associated with 600 jobs being cut in a major restructure.
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By GlobalDataGoodman has felt the impact of a price war between Australia’s largest retailers, as Woolworths Ltd and Coles use private-label bread as a loss-leader to drive traffic.
The company has reacted to the difficult trading conditions it faces by a restructuring initiatives it hopes will cut A$100m from operating costs by fiscal 2014.
Goodman added the planned sale of its Integro commercial oils division and its NZ milling business was progressing well. The group confirmed it is engaged in talks with several unnamed parties.
