High-end milk-maker A2 Corporation tripled net profit after tax and increased revenue by nearly 50% in the last six months of 2011.
In a six-monthly financial statement to December 31 posted to the NZX, A2 reported unaudited net profit after tax of $3.1 million compared with $0.9 million for the prior period.
Operating revenue, spurred by solid sales in Australia, increased to $30.1 million from $19.3 million.
Chairman Cliff Cook said the result came despite heavy price discounting in fresh milk in Australia.
“Whilst the Australian supermarket chains are going head to head in discounting standard milk, a2 brand sales have continued to accelerate with no change in our pricing,” he said.
Mr Cook said A2 now made up 4.7% of branded fresh milk sales in Australia.
Plans were advanced to expand into the United Kingdom this year, Mr Cook said. “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.”
Managing director Geoffrey Babidge said a legal dispute with a Korean company had been settled for $1.1 million, underscoring the strength of the company’s intellectual property.
Gross margins increased to 35% from 29% and cash at hand declined from $7.5 million to $5.5 million.
By Matt Nippert
The National Business Review