Nzx full year results, page-104

Well folks I guess this puts the nail in the coffin for blackeyed’s PHD in risk analysis lol. He was only $70-175M wrong on the revenue front.

My takeaway from the report are:

*Increased stock on hand for a bumper 11.11 sales event

*Kantar market share grew approx 30% in FY19 - hope to replicate again

*Purchase of ingredients from Fonterra will help to up IF production output (hopefully to begin meeting ANZ IF demand).

*Fruits of upped marketing spend should show in FY20, hopefully see good momentum in lower tier cities

*With near half a billion COH there is pressure on management to invest in assets and growth.

*Increased focus on lucrative Hong Kong market

*US progressing well but more growth required.

*Sad to see the UK go but the silver lining is profitability / EPS will increase.

*Mention of further expanding product portfolio

Much like last year it is a solid report, and exceeded analysts early consensus (which was rev $1.24B) but missed later consensus, and as a result is being smashed (games will always be played). As always we now go into a limbo period up until 11.11 sales events, but with more pressure to smash expectations this year. I expect the SP to flounder until then unless we get some material news. Jaynes share sales also loom but hopefully not the same reaction if they do eventuate.

As a side note, I think this result could be a fair indication that China label IF margins may actually be lower than English label as one analyst has suggested, and contrary to popular belief. This doesn’t really surprise me as we are dealing with a Chinese state owned enterprise that so far has pushed our agenda superbly, and therefore they most likely receive favourable wholesale prices.