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the real reason why this is continues to slide... Burns Philp 1H earnings step backwards
4/02/04 By: Sarah Richards

Burns Philp & Company Limited (BPC) today posted a 9.3% slump in first half net profit to $86.3 million. The Australian food company however, said that its businesses have generally performed in accordance with expectations and its financial position is in line with budget.

Sales in the six months ended December 31 2003 more than doubled to $1.86 billion, reflecting the company's acquisition of Goodman Fielder in March last year. Operating cash flow before interest and tax payments also increased in the period as a result of the purchase.


“Similarly, interest payments increased due to the higher level of indebtness incurred to finance the acquisition.”

Burns Philp said at the beginning of the six month period, it was focused on completing tow initiatives at Goodman Fielder: restructuring the Australian business groups and their management and reaching a targeted $100 million in net annualised cost savings.

“As at the end of December we had exceeded this target,” the company highlighted.

Burns Philp said the teams have already made a significant contribution, both with respect to cost savings and efficiency improvements.

Looking at its North American herb and spice operations, the company advised it experienced lower profits for the first half.

“Revenue was down due to several unusual events, including two customers filing for bankruptcy, protracted strike action at several retail customers, and an abnormally high vanilla price.”

Turning to its North America yeast and bakery ingredients division, Burns Philp advised that its profitability was in line with target.

“Whilst lower than the prior period, as a result of pricing pressure, the business delivered a sold performance and has protected its leading market position.”

At 1207 AEDT Burns Philp & Co nosed up 1c to 57c.