Ann: Trading Halt, page-6

Says:
"The reason of (sic) the trading halt is that the group intends to make an announcement of a material dairy processing contract for manufacturing of specialised dairy products in Australia for an international brand owner."

The TH is through to (*) the making of the announcement, or (*) Thursday, whichever occurs first.

Not certain, then, where this impending announcement fits in with the (*) shift to organic, and (*) the shift to infant powders, announced less than a month ago. There is simply not enough scale (farm or milk production wise) to accommodate both ventures. It also seems to suggest that AHF's own branded products may also now have gone by the wayside as there is now nil visibility of these either across the supermarket spectrum, or in any active promotional activity by the Company.

The reference however to "processing contract" may well be confirmation of both (*) the departure of ODFC and the LT JV that has been in place to date, and recognition that CDC is operating at a very low capacity utilisation (circa /sub-40) rate meaning /suggesting that it has the capacity to do a replacement "processing contract".

Either way, they will probably have to also confirm the loss of the ODFC venture which while previously not highly profit accretive to the Company nonetheless took care of a lot of CDC's operating costs (particularly during the downtime periods, etc).

The substance to the upcoming announcement therefore will be whether it is material (*) revenue or (*) profit wise. What AHF needs more than anything is margin generating /profit growing contracts /activities in place, not revenue harvesting with little to nil profitability in tow.

For now, the announcement is neutral. The devil however will be in the detail to see whether this is transformative in nature or whether it is merely plugging a revenue /OPEX hole caused by the recent losses of Aussie Farmers Direct, much of the WOW contracts and now, much more recently, of the LT ODFC JV arrangements.