I am a shareholder of A2M since 2017 with a small position and have never done really intensive DD on it. What I learned is that their latest half year report was well received by the market due to positive revenue-surprises. I had a quick look into the report and it doesn't look bad imo. Profitability in relation to invested capital (taking into account the huge cash-pile) does look good. But what concerns me is whether their suppy is secured. I learned that the majority of the supply for Infant milk is outsourced to Synlait - a company A2M is a 20 % shareholder of. They paid approx 280 m AUD for their stake Synlait seems to be in serious financial problems and insolvency is a concern. A2M did huge write-offs in their books on the Synlait-stake which lead to a charge of around 30 m AUD in the HY-report to write down the Syanlait-asset to appro 40 m AUD. I also learned that they aquired a 75% stake in a milk-supply-company called Mataura to bring supplies inhouse. my question is:
1. Will Mataura be able to supply the Infant milk-segment or parts of it ?
2. What happens when Synlait goes out of business - will A2M run out of supplies ?
Good profitability does not help if A2M loses the necessary supplies. I walked through their 2023 yearly report but didn't find any valuable information regarding this. 150 pages ob blabla and no word on this - imo - most interesting questions. Can anyone help me ?
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A2M
the a2 milk company limited
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$7.86

Supply Side for A2M secured or not ?
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Last
$7.86 |
Change
-0.090(1.13%) |
Mkt cap ! $5.708B |
Open | High | Low | Value | Volume |
$7.97 | $8.02 | $7.86 | $3.711M | 468.9K |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
9 | 2990 | $7.86 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$7.87 | 6007 | 17 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
16 | 10496 | 7.880 |
17 | 21655 | 7.870 |
19 | 14915 | 7.860 |
15 | 18997 | 7.850 |
11 | 22570 | 7.840 |
Price($) | Vol. | No. |
---|---|---|
7.890 | 400 | 11 |
7.900 | 12565 | 20 |
7.910 | 7586 | 12 |
7.920 | 21309 | 14 |
7.930 | 20977 | 8 |
Last trade - 12.53pm 24/06/2025 (20 minute delay) ? |
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A2M (ASX) Chart |