•  H1 net profit up 137%
  •  Adjusted profit down 4%
  •  Adjusted operating profit down 17%
Goodman Fielder sees mixed H1

Goodman Fielder sees mixed H1

Australian dairy-to-bakery group Goodman Fielder has reported a mixed first half, with a jump in net profit but lower adjusted operating profit and sales.

Goodman Fielder said today (13 February) that net profit more than doubled to A$51m (US$52.7m) in the six-month period ended 31 December. The result was boosted by lower restructuring costs and one of gains from the sale of assets.

However, adjusted net profit - stripping out exceptional items - fell 4% to A$41.2m, while adjusted EBIT dropped 17% to A$95.3m.

Goodman Fielder said "very challenging" retail conditions in Australia resulted in a 9% drop in revenue, which slid to A$1.17bn.

Over the past year, Goodman Fielder has worked to rationalise its production base and exit under-performing businesses. The group revealed its restructuring initiative is progressing and it is ahead of its target to achieve A$100m in annualised savings by 2015.

Goodman Fielder is also strengthening its balance sheet. Net debt is now 35% lower year-on-year, the company revealed. 

The company added efforts to win price increases from retailers are paying off, emphasising that it has raised bakery prices over the past six months.

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? Reported Net Profit After Tax of $51.0m – increase of 137 per cent  

o includes gain on Integro sale and significantly lower restructure costs compared to previous corresponding period 

o reflects lower net interest expense from strengthened balance sheet 

o earnings per share up 86 per cent to 2.6 cents per share 

o further increase in Asia Pacific earnings, improvement in NZ Dairy result  demonstrates diversity of group earnings    

? Normalised Net Profit After Tax $41.2m – down 4 per cent  

o reflects lower normalised EBIT partially offset by reduced net interest expense 

o revenue down 9 per cent; normalised EBIT down 17 per cent reflecting lower  volumes and pricing, primarily Baking/Grocery Australia – note  first half of FY13  included three months’ contribution from Integro (which was sold on 2 October  2012) compared to six months in the prior corresponding period  

o first half EBIT includes $10m increased reinvestment in DME/provisions for staff  incentives (subject to financial performance) to create sustainable earnings growth 

? Group financial position strengthened further 

o net debt reduced by 35 per cent to $498m

o improved credit metrics 

o Leverage Ratio (Net debt/EBITDA) 1.85 times vs 2.58  

o Interest cover (EBITDA/Net Interest expense) 3.73 times vs 3.09  

o strong focus on working capital management assists in significant improvement in  free cash flow by all operating divisions – Group net free cash flow up 81 per cent to $150 million  



? Continued delivery of key milestones of Strategic Plan   

o improved alignment with retail partners results in price increases related to ‘cost to serve’ model in Baking, recovery of input costs in Baking/Grocery 

o project Renaissance ahead of schedule to achieve $100m in annualised cost savings by FY15 

o successful completion of non-core divestments provides greater focus of funding and resources on core categories 

o commenced reinvestment in branded core category innovation to drive top line growth  

? Board has revisited the company’s dividend policy at the half year 

o In light of the significant progress already made to strengthen the group’s financial  position and the achievements being delivered in the strategic plan to provide more sustainable earnings outlook for the group, it is the Board’s current intention to resume the payment of dividends at the full year, subject to trading conditions and market outlook 

o Going forward, the Board expects to pay 50-80 per cent of Net Profit After Tax as dividends 


Original source: Goodman Fielder