By Dan Stratful
Monday 31st October 2011
|Text too small?|
A2 Corporation (NZX: ATM ) owns and commercialises unique intellectual property (patents, trademarks, proprietary processes) relating to a2 Milk and related products in international markets. A2 Milk is dairy milk which contains primarily the A2 type of beta casein protein whereas most standard milks contain a mixture of A1 and A2 beta casein.
A2 Milk is naturally obtained from cows tested and confirmed to be A2 producing. ATM has operations in Australia and New Zealand while pursuing international growth opportunities.
ATM’s strategic review of its business model has shown instant results, as the company repositions itself from a company earning revenue from its intellectual property, to a fast moving consumer goods (FMCG) company making sales of A2 milk. The move has showed immediate results with the company reporting a maiden preliminary net profit of $2.1 million in the year ending 30 June 2011, a vast improvement on several years of losses, including a $2.2 million loss in the previous financial year.
The result was a significant milestone for ATM and a direct result of its repositioning into a differentiated, branded, consumer goods and ingredients company. It has acquired its former JV partner A2 Dairy Products Australia giving it a dairy milk business in Australia, while also constructing a processing facility in Sydney to support continued growth.
During the year ATM reported strong growth in the Australian business which saw A2 Milk sales volumes increase 32% to 21.6 million litres giving it an estimated market share in the grocery channel of 4.2%. ATM’s maiden profit is encouraging but it needs to show more evidence that its bold new strategy is delivering results. In the meantime the shares are worth watching.
ATM shares last traded at 24c.
For sharemarket and fixed income trading enquires contact:
Dan Stratful at Investment Research Group (IRG)
Authorised Financial Adviser (AFA)
0800 437 8489, 09 304 0232, email@example.com
**A disclosure statement is available, on request and free of charge.
In accordance with the Financial Advisers Act 2008 (“the Act”) Sharechat is “Class Advice” and any advice or recommendations contained on this webpage is not “Personalised Advice” as defined by the Act. This means Sharechat does not take into account an investor’s particular financial position, financial needs, financial goals, risk profile or asset allocation. Investor’s who require “Personalised Advice” should contact an Authorised Financial Adviser (AFA).
No comments yet
A2 Corp's Babidge, Mair take advantage of soaring price to sell 6M shares
A2 shares touch record-high as investors buy into growth story
A2 FY profit slips on cost of setting up UK joint venture, sales jump 51 percent as Australian shines
A2 first-half profit dented by UK joint venture, affirms annual earnings target of $11.2M
A2 to raise $20M in placement, big shareholders sell down
A2 Corp mulls capital structure in face of growth opportunities
A2 Corp, in talks to move to main board, halts shares pending statement
A2 in talks with NZX about shifting to main board
A2 Corp to take control of NZ marketing; enter North America, Europe
A2 Corp talks up Chinese infant formula market potential