Apologies if duplicate Bellamy’s sets its sights on Australian...

Apologies if duplicate

Bellamy’s sets its sights on Australian farmers

The Australian
February 19, 2016 11:04AM
Damon Kitney
Victorian Business Editor
Melbourne


Bellamy's Organic chief executive officer Laura McBain.

Bellamy’s Organic is in advanced discussions with a range of Australian farmers about converting their farms to organic produce as it works to meet booming demand for its products, which underpinned a 325 per cent increase in net profit to $13.6 million.

Revenue for the Tasmanian-based company, as expected, leapt 83 per cent to $105.14m from $56.38m a year earlier.

Despite the strong result shares in Bellamy’s, one of the glamour stocks on the Australian Securities Exchange over the past year, fell almost 12 per cent this morning as the company said its EBIT margin in the second half would be in line with the first half.

It said group revenue for the 2016 full financial year would be in the range of $240m to $260m.

Bellamy’s shares have soared from the $1.40 mark when the company floated in August 2014 to $13.45 in mid-January.

Chief executive Laura McBain said several initiatives were underway to ensure that the ongoing demand for Bellamy’s products would be met, including supporting the conversion of Australian farms to organic.

“We have been in discussions for a number of different opportunities and we are at delicate stages of those negotiations,’” she said.

“There is a conviction from farmers that organic is an opportunity for them. We see organic is a way for farmers to have long term confidence in their businesses.’’

Ms McBain also revealed that the company was looking at growing its milk pool from international sources in New Zealand and Europe.

She said Bellamy’s had contracted additional formula volumes to be supplied to the company through the second half of this financial year and beyond.

“We expect the benefit of additional Fonterra volumes early in the 2017 financial year,’’ the company said in a statement.

Analysts have grown wary of Bellamy’s in recent months amid concerns about its ability to source enough organic product to meet demand, especially from China where its products are sold through both grey channels and directly over the internet.

The company declared an interim fully franked dividend of 4.1c per share payable on March 23.

http://www.theaustralian.com.au/bus...s/news-story/d720bbcfef25238ea7809119f8e4f030