Ann: Freedom Foods Group Limited Full Year Results June 2019, page-12

Nice to see a few of the same loyal fnp posters still holding and following.

i had sold a minority of my holdings around $6 a year or so back as I needed to free up some cash and it had run hard.

given I’ve been overweight cash and bonds and underweight equities the past 6mo, I topped up a big chunk of fnp at around 4.10 as I couldn’t understand the price weakness coming into the result.

glad to see it popped 25% straight away! Don’t be fooled though, this sp jumps all over the shop because it has low liquidity (trades on low volumes). It could easily go up another 10% or drop 10% Monday. But it doesn’t matter if you’re a genuine investor, just pick your price with a margin of safety and set a buy limit.

anyway I’ve read the full presentation and report tonight and I’m as confident as ever in the bright future of the company.

they will I’m sure grow ebitda by over 50% this year and the capex will be down from 170m to 50m.

i love their new brands and buy many of them for myself and my kids, as they are often the healthiest 5 star option and tastiest option in the shelves at both woollies and coles.

i love that they are growing strongly in every business division and across all geographies.

i even love that they are going to get a nice little 15m operating ebitda lift next year due to accounting changes (see end of presentation) which is equivalent to a 40% ebitda growth hahahaha. The headline numbers will fool some people next year when the ebitda growth is so strong from genuine growth plus an ebitda bonus of 40% growth.

I’m not bothered about the lack of guidance because when I look at the pipeline I see at least 30% sales growth and 50% ebitda growth per year over the next 2 yrs, being conservative. I actually think it will be higher. Listing the areas that will contribute substantially:
- growth from 250 to 350m litres dairy (40%)
- new drinking yoghurt factory completed, sales commence q1
- China milk, yoghurt, cereal and formula growing at 40%+ and only v early in China growth curve
- SE Asia outside of China at beginning of expansion but with good growth to date
- UHT expansion complete selling into anz and China / SE Asia
- kids foods growing rapidly and expanding selection
- adult cereals and bars etc growing rapidly
- protein supplement/ health foods growing rapidly
- milk lab growing rapidly
- micellar casein and lactoferrin massive growth expected for 2020

and so on....

only interesting/ suspicious thing is that I havnt seen any mention of infant formula in Australia which suggests to me that it’s a flop and losing money.
also, no real mention of the A2 products that got many excited when first announced as a potential competitor to A2M

anyway I’ve been happy holding for a few years and happy to hold for next couple of years. I certainly don’t lose any sleep at night over this one.

cheers and GlTAH