Bega V BFC

Shareholders,

Had a look at Bega's FY219/20 results announcement - key points,

• a full-year normalised after-tax profit increase of three per cent, to $31.9 million.

on a statutory basis, profit after tax jumped to $21.3m, up from $4.4m a year ago.

strong growth in Bega's international branded business, but not quite strong enough to offset the impact of reduced margins from Bega's bulk dairy ingredients, nutritional products and food services business caused by coronavirus disruption.

total revenue lifted 5pc, of $73m to $1.49 billion, thanks largely to significant cash generation from its grocery brand businesses and a 15pc rise in export sales to $523m.

declared a fully franked final dividend of 5 cents per share, payable on October 7.

launched a number of new products including a new Happi nutraceutical formula range for children, containing lactoferrin made at the company's new Koroit plant.

Bega has,

• 2 Lactoferrin plants - total capacity if all milk processed has Lactoferrin extraction = approx 70 tonnes pa. Evidently doesn't make and sell that volume otherwise NPAT figure would be much higher. So what is the problem?? CF - BFC when fully operational = 13 tonnes going to ??
• Bega processes approx 1bn++ litres of milk (2 sites). CF - BFC = going to180m litres 1 site.
• Bega makes more than just Mozzarella. Has product spread therefore less risk. CF - BFC Mozzarella = 95% of Cheese production??
• Bega has big export business. CF - BFC export business = ?? Tried and failed in China how many times?

BFC processes approx 2% of Australia's annual milk production. Yet on Sexton claims BFC can be 5% of global Lactoferrin production?? Do the maths, why would Bega/others in Australia allow BFC to get to that number or is the Lactoferrins market a sleeping giant? Sleeping giants have a habit of waking up and small fish (BFC) get swallowed or can't play in the big space.

Looks to me like we are being subjected to more unsubstantiated sping from Sexton and the BFC Board. Change needed.

I invite Sexton and the BFC Board to pray with me.