a2 Milk's net profit surges nearly 200pc, flags buyback (II)

Published on 2017-08-25

Assessing opportunities

The British business returned its first annual operating profit and a2 is assessing opportunities in Europe and the Middle East

Citi analyst Sam Teeger said there were many positives of the result noting the company is addressing the A2 Platinum inventory from current low levels and registration for the China Food and Drug Administration (CFDA) appears on track despite not being part of the first five batches approved.

Mr Babidge said he and manufacturing partner Synlait remain confident it will receive the CFDA registration for China-labelled formula, which is mandatory from January 2018.

He did not give any firm 2018 guidance but said positive momentum is continuing.

"This company is a growth company," he said. "We are about new product development, particularly in the infant nutrition space. We are about broadening the nutritional products space. We are also about growing our footprint."

A number of product launches are planned for the new financial year, including the launch of a2 Platinum Stage 4 formula for children three years and over in August 2017, as well as an extension to the milk powder range.

Mr Teeger questioned the Stage 4 launch, saying more opportunity could be offshore.