BGA's Port Melbourne site sale was announced on 27 June 2023, for $114.6 million.
Yet net debt has only decreased by $57.5 million, and total borrowings are only down by $39.5 million to $269 million.
I must be missing something as it wasn't clear how BGA is going to solve the problem gorilla of the bulk products segment given it admits 'challenges remain'. How will the $A price BGA pays per kilogram of milk solids decline when there's to be further reduction in dairyfarmers' output in FY 24, and no industry rationalisation yet?
The dividend reduction from A$0.055 to A$0.03 is significant, but expected in this climate.
The only good news is that revenue was up 12 per cent indicating that (as previously discussed on 'HC') BGA is managing in its branded products division to secure price rises from the supermarkets and other entities to which it sells.
BGA's market share in the important yoghurt category inched up from 25 to 26 per cent, spreads (Vegemite, peanut butter) has decreased from 32 to 31 per cent, chilled juice's share has decreased from 23 to 22 per cent and creams and custards are down from 10 to nine per cent. Good growth as bowser1 implied, but inflation has been high, way above the RBA's target range.
I assume there'll continue to be more imports from New Zealand of butter and the like as apparently the milk solids price per kilogram over there is lower than Australian manufacturers like BGA are paying.
There is a briefing later this morning so that may shed some light on the strategy going forward.
BGA Price at posting:
$3.19 Sentiment: Hold Disclosure: Held
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