Expectations are not matched yet in the numbers. The positive I can see is the network sales are up by 8.8% and 4.9% against previous periods. The revenue is still moving up at a decent rate, specially in ANZ with new products in the market. The consumers still prefers the products on offer from DMP.Hopefully when this new products are introduced in the other markets, it should result in higher sales increases. It seems margin improvement are slow in coming. Restructuring cost savings will happen , we don’t know the progress of it. Margin improvement is slow in coming. Will the cheese and grain price reductions in the world market start showing up in the 12 to 18 months. We don’t have the information on supply contract arrangements which normally have lagged impact. I hope it is the case. If you look at the cheese prices chart in the world market, it came down in middle of last year and went up and came down again towards the end. The forecast is it to come down further going forward. I am not sure how they will recover the delivery cost that was removed . These are actual cost that needs to be recovered one way or other. They seems to be having issues in Japan which are yet to be addressed. My take is sales are still growing, it is not a product or brand that has been discarded. Need to get those margin improvement and cost reduction in the books.
DMP Price at posting:
$57.30 Sentiment: Buy Disclosure: Held
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