Synlait Milk has beaten the annual profit forecast in its prospectus with an $11.5 million result.
The outcome compares with a forecast of $10.8 million for the 12 months to the end of July, although the prospectus was issued as recently as June
The result compares with the previous year’s net profit of $4.4 million.
Synlait says all areas of its business advanced during the year, although its sales of nutritional products missed the target due to market disruption caused by regulatory changes in China, which affected infant formula sales.
Still, the company says it’s well-positioned to take advantage of the new regulations which focus on quality standards, product pricing and a consolidation of brands.
Total sales of $420 million for the year missed the prospectus forecast by 1.5%.
Managing director John Penno said margin growth due to increased sales across the company’s value-added products helped the company exceed its profit target.
Mr Penno said Synlait is focusing on its value-added milk powder and nutritional powder business and on growing the company through moves such as its lactoferrin plant, a blending and canning facility, a product-testing laboratory and extra warehousing.
He said the company expects to meet its profit target of $19.7 million for the 2014 financial year.
Because of its growth focus, Synlait won’t pay any dividends for the past year or for the current year.
Synlait raised nearly $70 million from its float.
Source: Radio New Zealand
