ATM - A2 Milk Corporation Limited

[Harrie]

The 5pm boys could become the 7pm boys on A2M. Then we know that the selling is coming from Australia.
I'm starting to think that Milford could be a seller. There is a heap of selling going on relatively speaking. Milford may have got a bit carried away with buying and seeing the fruits of their brilliance as the price shot up to 97c. Slightly different story now as their KS funds don't look as flash. They have done OK on THL and RBD though where they also have significant holdings.

[see weed]

If it carries on like this, I'll be a happy millionaire in 6 weeks:D:t_up:

[blobbles]

Geez, big day on opening, I suppose its to be expected. 4.5 million shares traded so far, lets see if we can hit 1% by end of the day...

[sb9]

Its strange to see half cent increments on ASX whereas its one cent on NZX. Wonder why?

[Ginger_steps_]

And the moment we have all been waiting for (5pm) duuuun dindu derrrr STOP - HAMMERTIME????

[NT001]

And the moment we have all been waiting for (5pm) duuuun dindu derrrr STOP - HAMMERTIME????

Actually I think we're waiting for 7pm. Switch on StocknessMonster, pour another long drink and just wait, GS!

The volumes traded today at least indicate there's substantial interest in the stock on both sides of the Tasman, and a 10%-plus increase in the SP (as we speak) is not too bad at all. Be interesting to see what happens at the end of the day, but with such heavy trading it would seem unlikely anyone can kick the SP back down to where it was.

[winner69]

ASX closes 4pm ..... so only have to wait to 6

[Nasi Goreng]

holy cow! 57c, 4.5M shares traded on ASX with 15 minutes to go. What a nice pop for opening day.

[Ginger_steps_]

holy cow! 57c, 4.5M shares traded on ASX with 15 minutes to go. What a nice pop for opening day. Where are you getting your data from Nasi??

[Nasi Goreng]

My broker site, ANZ Securities.

[Ginger_steps_]

My broker site, ANZ Securities. seems to be much faster than SNM and ASX!

[iceman]

A good start but way too early to celebrate anything 🙏
And the moment we have all been waiting for (5pm) duuuun dindu derrrr STOP - HAMMERTIME????

[winner69]

methinks 60 cents tomorrow and 70 cents by end of week.

MAC said 70 cents (pretty sure) shortly after listing so he will proved to be right

Go ATM or is it A2M leading the way?

[psychic]

Well, congratulations MAC - as you sit in the naughty corner. Have a beer mate. Pleased for you, may it roll on.

[blobbles]

Good to see we got over the 1% mark today with what... about 6.8m shares traded on both sides?

Does that mean we should be OK for a 58c opening tomorrow on NZX?

[winner69]

Amazing stuff - after all the excitment and action today it's hard to comprehend that share price is still the same it was a few weeks ago.

It's a cruel and weird world

But next week it will be over 70 cents so no worries.

[JohnnyTheHorse]

Well well well... That went better than most would have expected. Big volume on ASX and NZX, so there is demand from Aussie instos. Big volume means if AMP isn't already out, they are within a million or two shares. Everything chart wise is lining up for a VERY strong buy signal (all technical indicators I use, 50DMA and shorter term downtrend breakout). It has faked before so exercise caution however!! The only key signal left for this long term downtrend reversal and a definite technical buy for me is a break of 58c on the NZX, then she is all go. I have a feeling we may be seeing this tomorrow.

DYOR

[see weed]

Good to see we got over the 1% mark today with what... about 6.8m shares traded on both sides?

Does that mean we should be OK for a 58c opening tomorrow on NZX?
7,853,879 shares traded today. $39,604,018.74c lift. Will be interesting what tomorrow brings.

[babymonster]

I bought at 49.5c this morning, but later today, the 0.5c is not allowed.
Its strange to see half cent increments on ASX whereas its one cent on NZX. Wonder why?

[babymonster]

I cannot remember when was last time I saw 60c..😝

[see weed]

Don't know Winner, Danni never made a vid quite like that one ?

Couple of Hollywood celeb endorsements in California might kick matters along, next best thing only to sending see weed to frequent Beverly hills supermarkets.

I could go to Beverly Hills and promote a2 , but they will have to pay my return air fare. Can also stay at my sisters place. She lives somewhere around there. I'll wear my swandry gumboots shorts and hat, but will have to get a passport first. I reckon I could sell milk to a cow give me half the chance. That reminds me, must get another 100 flyers printed out:D

[ratkin]

I could go to Beverly Hills and promote a2 , but they will have to pay my return air fare. Can also stay at my sisters place. She lives somewhere around there. I'll wear my swandry gumboots shorts and hat, but will have to get a passport first. I reckon I could sell milk to a cow give me half the chance. That reminds me, must get another 100 flyers printed out:D

Funny how these "we are spending loads of YOUR money" announcements always lead to a short term price rise. Its the same with Wynard and co

[iceman]

Glad you're in this one with us mate. My trading portfolio has made a small realised gain on this one in the last 12 months but my ATM quite heavily overweighted investment portfolio is still a couple of cents (average buy price) in the red, even after yesterday's good rise :-(.
Like you, I am excited about future prospects :-)


All I have said over the last few weeks is 1) ATM is overvalued and not a screaming buy at current prices 2) ASX listing will not be as hot as the likes of MAC makes it out to be and 3) Danny is hot and the girls love him but it is costing a2 milk heaps.

I stick with 1) and 3). Re 2) we have to wait to see if MACs 80 cents eventuates soon.

My play money goes into ATM at times .....driven by the squiggly lines despite 1). Today has been a good day ....but he'd some back in case MAC is right.

How you going iceman

[Bjauck]

I could go to Beverly Hills and promote a2 , but they will have to pay my return air fare. Can also stay at my sisters place. She lives somewhere around there. I'll wear my swandry gumboots shorts and hat, but will have to get a passport first. I reckon I could sell milk to a cow give me half the chance. That reminds me, must get another 100 flyers printed out:D
A friend in the UK mentioned that A2 milk has been advertised on Channel 4 and 4 On Demand in the last few days. It adds to the awareness of A2M and many UK investors are comfortable with investing in Australian equities.

[Bjauck]

seems to be much faster than SNM and ASX!
Provided you have an account and have traded with ANZ securities in the last three months, there is no delay for prices and depth is displayed.

[babymonster]

4mil shares traded today so far

[NT001]

Rather silly headline on this item in the Brisbane Courier Mail.

http://www.couriermail.com.au/business/kiwi-dairy-group-a2-milks-listing-on-asx-for-capital-injection/story-fnihsps3-1227286884601

[sb9]

Know its early time, but checking depth on ASX currently only one seller with 10K @ 80c and 650K volume for all bidders ranging from 60c to 54c...

[iceman]

An interesting article http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11426052

[drcjp]

Looking at the bidding on ASX on SNM, its currently 0.60 for buy and 0.695 for sell. This is insane....:ohmy:

[Kirk]

Aussie investors that missed out on Bal could be seeing this as a good chance. Bal appears very similar at a glance

[sb9]

Looks like its going to open at 60c on ASX, which is 61c in NZD...there is trade off available for punters at 59c on offer on NZX at the moment...

[blobbles]

Looks like its going to open at 60c on ASX, which is 61c in NZD...there is trade off available for punters at 59c on offer on NZX at the moment...

There is a whole hour to go before ASX opens, normal games pre open apply, don't assume it will open at 60c.

[see weed]

Looks like the blocking games have started again at 59c on the nzx.

[drcjp]

Looks like the blocking games have started again at 59c on the nzx.

Indeed, 3 reasonable off markets at 230ish : what are they afraid of?

[sb9]

Indeed, 3 reasonable off markets at 230ish : what are they afraid of?

yeah, more than 400k at 58c as offmarket...while it sits at 57c on Asx.

[see weed]

Very quiet around here tonight. Another big day with 11,935,493 going through both markets. Up 12% yesterday and 3.6% today. Looks pretty good to me. How about another couple of cents tomorrow for Easter:).

[JohnnyTheHorse]

Very quiet around here tonight. Another big day with 11,935,493 going through both markets. Up 12% yesterday and 3.6% today. Looks pretty good to me. How about another couple of cents tomorrow for Easter:).

It's at a key resistance zone right now. We are seeing big volumes so there is distribution going on. With the ASX listing I think the buyers may now outnumber the sellers, so I am banking on a high likelihood of a break of resistance. It may hold here for a bit though to allow the distribution to happen. If it does break 58 cents, expect 65-70 cents quite quickly. It will then be in a confirmed medium-long term uptrend.

[drcjp]

3.6M vol. on NZX already, all international.
Aussies getting their bots on?

[bull....]

the shine coming of again at the resistance level yet again shall I wait at low 50s yet agaian lol

[sommelier]

That downwards pressure is relentless...

[Nasi Goreng]

Buy at 50c, sell at 58c. Someones making good money. That elusive 60c close we holding out for seems a bit further away.

Wonder when / how Freedom will get rid of theirs?

[blobbles]

Looks like people got all over excited, now have realised a large seller is in control, so are cutting their losses?

Sure looks that way to me...

Lots of off market stuff going on, I am thinking this is our big seller offloading?

[Nasi Goreng]

A good way to look at it is the extra liquidity will help large sellers offload. These sort of volumes would have taken months to sell on NZX.

[see weed]

Looks like people got all over excited, now have realised a large seller is in control, so are cutting their losses?

Sure looks that way to me...

Lots of off market stuff going on, I am thinking this is our big seller offloading?

a2m getting hammered too. Just bought some at 57c and 58c :eek2: It gives me the SNK Media feeling:confused:.

[drcjp]

yah, prob AMP CapInvest getting rid of their current holding as they no longer have mandate from NZS. Mind you, neither do Milford now either.....so it could get "complicated"

[see weed]

the shine coming of again at the resistance level yet again shall I wait at low 50s yet agaian lol

Just put in another order at 52c lol.

[bull....]

wow they are spending 20m on the us

http://www.stuff.co.nz/business/67574771/a2-milk-tags-20m-for-united-states-stores

more on this market than china and the uk wow does that mean the us is going to be the big one? looks to me like the other markets are marking time as wouldn't you invest more money into say the uk if it was gaining traction? confused punter to say the least

[bull....]

Just put in another order at 52c lol.

nice trading range is has beats buy an hold on this stock anyway

[RGR367]

wow they are spending 20m on the us

http://www.stuff.co.nz/business/67574771/a2-milk-tags-20m-for-united-states-stores

more on this market than china and the uk wow does that mean the us is going to be the big one? looks to me like the other markets are marking time as wouldn't you invest more money into say the uk if it was gaining traction? confused punter to say the least

Probably in support of getting that former Pepsi-Cola executive to head the USA market. He will be useless without tons of money to spend on marketing of course. And like XRO, USA is The Goal. Hoping both companies make it there.

[bull....]

Probably in support of getting that former Pepsi-Cola executive to head the USA market. He will be useless without tons of money to spend on marketing of course. And like XRO, USA is The Goal. Hoping both companies make it there.

of course marketing isn't cheap in the us especially prime time oh I wonder f he has a big pay-check due if things don't work out or will the 20m cover that?

[macduffy]

I see that ATM is trading on the ASX under the unfortunate ticker of A2M. They may want to reconsider that one!

[Snoopy]

wow they are spending 20m on the us

http://www.stuff.co.nz/business/67574771/a2-milk-tags-20m-for-united-states-stores

more on this market than china and the uk wow does that mean the us is going to be the big one? looks to me like the other markets are marking time as wouldn't you invest more money into say the uk if it was gaining traction? confused punter to say the least

Nothing new in this article. The $20m spend - over three years - to grow in the USA was revealed in the half year results

From the article:
"In China a2 sold mainly through distributors, who received product from a wholly-owned a2 subsidiary. This subsidiary contracted Canterbury-based Synlait Milk to do the manufacturing. The a2 Milk Company also did some direct spending on marketing in China."

China doesn't cost much to service because they don't have to sign up and quality check any milk supply from China. All that is done in NZ. "A2 Milk China" is in essence just a marketing operation based on NZ milk.

The UK is a different story with milk sourced locally. Perhaps the lack of traction in the UK is becasue A2 don't have enough money to make traction (see below for my comparative costing of the US start up)?

I presume the US expansion will ultimately involve sourcing A2 milk from the USA. That cost will have to be added to the marketing cost. So it stands to reason that launching in the USA will cost more. So lets say A2 want to spend $NZ7m this year to get things started. That translates to around $US5.1m. So how to spend that?

1/ Buy a warehouse, in the outskirts of LA, say $US2m.
2/ Hire four sales reps: Pay 'em $40k cash with a $60k sales target top up payment. Add $30k for signwritten van for them to drive around in. Expenses for each sales rep $40k per year (fuel, out of town sleepovers). Total $US0.63m / year
3/ Hire a branch manager with some branch office support staff $US0.37m /year.
4/ Have some stock on hand to sell $US1m.
5/ Put up $1m for promotional purposes, including advertising.

Add that up and there is just $100k left to start scouting around for some A2 milk suppliers on the ground. I can't see much fat in the budget. Can A2 do the 'Conquer the USA' plan for this price?

SNOOPY

[winner69]

Snoopy - your ATM 'roadmap' was something like AU profits to drive UK growth, UK profits to drive China growth, China growth to drive US growth (something like that)

With that much spend planned for US big money being made somewhere in the world

Yes?

[Snoopy]

Snoopy - your ATM 'roadmap' was something like AU profits to drive UK growth, UK profits to drive China growth, China growth to drive US growth (something like that)

With that much spend planned for US big money being made somewhere in the world

Yes?

Still not sure how to best model the China growth plan? I am now thinking that China is more like a lucrative branch of Australasia as all the product is imported from NZ/Oz.

So I think the ATM growth model is more like:

(Oz/NZ/China) funds (UK) funds (USA)

Of course 'conquering the UK' seems to be mainly happening in the lower right hand corner of England including London. And conquering the USA might initially translate to conquering just California. So I am picking that UK will have to fund growth over the rest of the UK as well as the USA. Or maybe Australian growth covers the expansion into the rest of the UK? That is the money that Australia generates that isn't needed to develop China! The problem is $20m over three years for the USA is big money for ATM, but not big money for the task they want to do. All the future cashflow looks to be on a knife edge. Keeps me on the sidelines not buying. I wonder when the necessary upcoming cash issue will happen?

When ATM was 70c, the institutions balked at paying more than 50c for new shares. So with ATM arround 55c, I think 40c is looking likely. But wouldn't that leave you as a fund manager looking red faced if you paid 50c for the last cash issue? Perhaps that is why those institutions don't want to do it?

Big cash being generated in Australia? I guess so, but 'big' only in relation to ATM shareholder funds, not the road map that ATM have drawn out ahead of them.

SNOOPY

[NT001]

Perhaps the lack of traction in the UK is because A2 don't have enough money to make traction.

Who says there's a lack of traction there?


I presume the US expansion will ultimately involve sourcing A2 milk from the USA.

That's for sure, and not just "ultimately".



So let's say A2 want to spend $NZ7m this year to get things started (in the US). That translates to around $US5.1m. So how to spend that? ...

You're making quite a lot of assumptions about sales strategy, Snoopy. For example, I would think ATM will get deals signed with two or three significant retail chains before they start, rather than hiring sales agents to run around trying to sign up retailers.

[Jasemc]

I think they will play a patient game and just slowly build UK . USA they will push harder than Uk and china who knows what will happen there fresh milk looks promising. I think the history shows slow and steady or perhaps conservative is a better word. As before the future sp price is all on another market gaining traction. If your not patient then this company is not for you.

[Snoopy]

Who says there's a lack of traction there?


It was bull who speculated on a lack of traction in the UK. I wasn't claiming there was a lack of traction. I did note that managment said that nothing like $20m was being spent to get into the UK and China. So I was joining the dots, wondering if the budget to conquer the UK was a little light? I don't know the answer to my question.



That's for sure, and not just "ultimately".


I imagine they would ship in product into teh USA from NZ/Oz initially to get things started? While local suppliers are signed up?



You're making quite a lot of assumptions about sales strategy, Snoopy. For example, I would think ATM will get deals signed with two or three significant retail chains before they start, rather than hiring sales agents to run around trying to sign up retailers.


Ideally, I think you are right. But supermarket chains don't have shelf space to waste on a punt. I suspect signing up one supermarket chain might be harder than driving four vans around the country. I imagine there would have to be quite a bit of point of sale promotion to get things moving. But I don't know. As you said Nt001, I'm speculating.

SNOOPY

[Jasemc]

Looks like Milford has been selling plenty new notice.

[bull....]

Looks like Milford has been selling plenty new notice.

yes looks like milford and nz super sold some and milford has transferred all there nz holdings to nz super be interesting to see what nz super do with all these extra shares in some companies.

[NT001]

yes looks like milford and nz super sold some and milford has transferred all there nz holdings to nz super be interesting to see what nz super do with all these extra shares in some companies.

It would actually be doing a great service to those of us who find these SSHs rather opaque if someone who is literate in these matters could explain exactly what they mean in layman's terms, with relevant figures and percentages. What's the net result? And is there a lot more such info to come? Presumably this is largely due to recent revelations about Milford?

A quick look at the Milford statement suggests that during the period covered (up till December), that company bought and sold roughly equal numbers of ATM shares, something over 8m each way. So on the face of it, it was neither a big net buyer or seller.

[blobbles]

I imagine they would ship in product into teh USA from NZ/Oz initially to get things started? While local suppliers are signed up?

No, they will source the milk from USA, according to the company. They can quite quickly and easily test and separate A2 only producing cows from any dairy herd. Farmers have an incentive to do so due to the increased premium A2 pays for little added cost to the farmer. In fact I remember reading that ATM already has some suppliers lined up from there last foray into the states.



Ideally, I think you are right. But supermarket chains don't have shelf space to waste on a punt. I suspect signing up one supermarket chain might be harder than driving four vans around the country. I imagine there would have to be quite a bit of point of sale promotion to get things moving. But I don't know. As you said Nt001, I'm speculating.

SNOOPY

Supermarkets are already "wasting space on a punt" in the USA. A2 will be sold in West Coast Kroger, Safeway and Wholefoods this month, according to this: http://www.foodnavigator-usa.com/Manufacturers/a2-milk-to-make-US-debut-in-California-in-April

So... really there is nothing standing in the way of their success in terms of signing contracts.

[blobbles]

It sounds to me like Milford sold ~23m shares, lowering their holdings from 97m to 74m. NZ Super appears to have taken over the shares previously held by Milford? They state "On 31 March 2015, the Guardians of New Zealand Superannuation determined to become the manager of securities previously held for it by Milford Asset Management Limited pursuant to an investment management agreement"

[NT001]

No, they will source the milk from USA, according to the company. (And) A2 will be sold in West Coast Kroger, Safeway and Wholefoods this month, according to this: http://www.foodnavigator-usa.com/Manufacturers/a2-milk-to-make-US-debut-in-California-in-April. So... really there is nothing standing in the way of success in terms of signing contracts.

Thanks for that, Blobbles. I knew I'd seen it somewhere. But Snoopy's next question might well be, assuming it takes a year or three for the California operation to generate decent profits, how is the company going to fund a rapid expansion across the US? Good question. It can't just sit around, so will this require a new capital raising?

My guess is that if the California operation succeeds, as seems probable, other operators across the US may be interested in replicating it in other areas. Regions such as Chicago, the Northeast and the Gulf states come to mind as being prime target markets. And as Blobbles says, procuring A2 milk won't be a problem, nor will finding outlets. The challenge will be to get the milk processed and packaged (not difficult in itself) and distributed and marketed by people who understand those markets and have the right infrastructure.

My guess is that a2MC might revert to its original sales strategy of licensing other operators with established track records in such regions to use the "A2" label and relevant IP, and just take a percentage on sales. No need to raise new capital or build facilities or employ a huge staff. OK, the company had some bad experiences with that formula in the past but will have learned from them. And the ex-Pepsi man should be able to put some good deals together, ensuring there isn't a big delay in expanding to other parts of the US. Just thinking.

[Xerof]

Well, there's clearly some serious **** going down with Milford - a whole bunch of SSH notices released after market close before a very long weekend. It's clear they have lost the mandate to manage part of the Cullen Fund. With some of the notices, they appear to have also sold a few more than just those transferred back to the fund - this could be to cover client withdrawals/switches out of their other funds/kiwisaver, or just be part of normal portfolio management.......


Oh, I see the financial press have latched on to the mandate suspension story - NBR and Herald have shallow, minimalist reports online

[Baa_Baa]

Indeed there is, **** hitting the fan. The tarnished brand falling from grace, in this industry it's guilty until proven innocent, or so it seems. Judge Super has decided, passed down it's verdict and to heck with the FMA. Perception is everything, Milford moving to damage control. Are we on the correct thread?

Quiet day on A2M, some bewildered punters wondering why the stock went backwards. Check hotcopper for psychology insights, plenty there who bought knowing nothing, expecting a big pop. Good buying? Who knows, this is fickle and fraught, confusion reigns.


Well, there's clearly some serious **** going down with Milford - a whole bunch of SSH notices released after market close before a very long weekend. It's clear they have lost the mandate to manage part of the Cullen Fund. With some of the notices, they appear to have also sold a few more than just those transferred back to the fund - this could be to cover client withdrawals/switches out of their other funds/kiwisaver, or just be part of normal portfolio management.......


Oh, I see the financial press have latched on to the mandate suspension story - NBR and Herald have shallow, minimalist reports online

[Jasemc]

it will explain price drop i presume

[blobbles]

Indeed there is, **** hitting the fan. The tarnished brand falling from grace, in this industry it's guilty until proven innocent, or so it seems. Judge Super has decided, passed down it's verdict and to heck with the FMA. Perception is everything, Milford moving to damage control. Are we on the correct thread?

Quiet day on A2M, some bewildered punters wondering why the stock went backwards. Check hotcopper for psychology insights, plenty there who bought knowing nothing, expecting a big pop. Good buying? Who knows, this is fickle and fraught, confusion reigns.

Milford have proved themselves to be a team that can make a lot of money, but whether it is ethical or even legal is questionable. The minimalist reporting may be the government in damage control mode, moving funds away before the story breaks big time. They are certainly privy to more information than we are (having the FMA onside), so there could be a big story about to hit the papers. Looks good for them if they are out before the s hits the f.

[Harrie]

Milford could lose its KS status like hulitch in which case funds will be distributed to default providers. Most would sell a2...too speculative. They wait until success is proven then buy after everyone else has. Xero is at good example. Most bought around the $30 mark

[drcjp]

I tend to think positively here. Despite the deliberate downward pressure from two frustrated and stressed insto sellers, A2M still rose 10% this week on a ~2% turnover of shares.

As for Milford, I'm not surprised.

[dingoNZ]

Milford could lose its KS status like hulitch in which case funds will be distributed to default providers. Most would sell a2...too speculative. They wait until success is proven then buy after everyone else has. Xero is at good example. Most bought around the $30 mark


I think you'll find most don't actually own it (XRO)...

[Harrie]

I think you'll find most don't actually own it (XRO)...
Yes that is true but those who did purchased around the late 20's early 30's. Tendency also to follow each other so that performance differentials align more closely given that investors can easily change KS providers and tend to do so based on performance even though this represents around only 5% of savers. Most providers tend to stay away from stocks that don't produce dividends despite "potential future dividends" they will buy after everyone else has.
if the FMA close Milford down as a KS provider I think there will be some wholesale selling of A2mc as this stock is transferred to other providers. Then I would see 40c....sorry

[NT001]

Do we actually know how many ATM shares Milford and the Super Fund each now have? How many of Milford's shares were being held on behalf of the Milford group, how many for the Super Fund and how many in funds created to hold shares on behalf of other investors whom Milford advises. Do we know any of this stuff?

The Super Fund's statement that it has decided "to become the manager of securities previously held for it by Milford Asset Management" does not imply any change of ownership or any intention to sell down those securities, just an interim change of management of them. The same applies to big stakes in other Top-50 NZX companies

If there is going to be any further divestment, at least this will be in a much bigger market than previously, and both Milford and NZSF will presumably be more interested in selling gradually for a decent price rather than just dumping ATM shares on the market at a big loss.

[Xerof]

YES

Milford previously held 97,877,776
Milford now holds 74,272,862, a change of 23,604,914

They have transferred 23,263,857 back to the Superfund
they have sold 341,057, since the last declaration

[Harrie]

As we have seen recently Inst's are more concerned with investment mandates than they are with disposition or acquisition at any particular price. If shares don't fit within their investment. Philosophy then they get shovelled out the door until they have gone. AMP happy to let them go at lows 40's! Expect that to happen if Milfords get redistributed to default providers IMO.

[NT001]

Milford previously held 97,877,776
Milford now holds 74,272,862, a change of 23,604,914

They have transferred 23,263,857 back to the Superfund
they have sold 341,057, since the last declaration

Thanks Xerof. That part I understand. But I can’t reconcile that with the NZSF’s SSH which says that following the assumption of direct responsibility for securities previously held for it by Milford, its stake in ATM has NOT INCREASED but has DIMINISHED by about 5m shares.

It states that in its previous SSH dated 3 November 2014 its ATM stake was 41,344,622 shares or 6.264%, comprising 2.799% held directly by NZSF and 3.465% held for it by Milford.

But in its latest SSH dated 31 March its stake following the sacking of Milford is now shown as 36,888,681 shares or 5.589% of ATM.

How does this tally?

Just to confuse things further, ATM has declared to the ASX that as of 20 March (a fortnight ago) the NZSF held 37,848,680 shares or 5.98% of the company. And it did not list Milford at all among its top 20 shareholders (above 3.7m shares).

It listed TEA Custodians, known to be a custodian used by Milford, as being in 11th place among major shareholders, but holding only 16,153,397 shares, or 2.55% of ATM’s capital. Mind you, 33% of the company’s shares were shown in that declaration as being held by nominee and custodial companies, and there seems to have been a major rejig among them in the past few weeks, so a lot of what we’d like to know about the top shareholders in ATM remains hidden.

[Xerof]

I would suggest the decrease has everything to do with the AMP selldown since November.

I would also suggest that ATM would not know the status of each nominee, in terms of who holds 'beneficial' ownership.

You'll drive yourself batty trying to reconcile....best to accept the SSH notices as the truth, and ignore Top 20 lists

[Tsuba]

http://zeenews.india.com/news/health/health-news/pu-to-carry-out-research-to-find-benefits-of-milk-proteins_1572910.html

[Fisherking]

Supermarkets are already "wasting space on a punt" in the USA. A2 will be sold in West Coast Kroger, Safeway and Wholefoods this month, according to this: http://www.foodnavigator-usa.com/Manufacturers/a2-milk-to-make-US-debut-in-California-in-April

So... really there is nothing standing in the way of their success in terms of signing contracts.[/QUOTE]

Supermarkets do not waste space on a punt. If a2 have secured shelf space they will have paid for the privilege.

[winner69]

As we have seen recently Inst's are more concerned with investment mandates than they are with disposition or acquisition at any particular price. If shares don't fit within their investment. Philosophy then they get shovelled out the door until they have gone AMP happy to let them go at lows 40's! Expect that to happen if Milfords get redistributed to default providers IMO.

Don't forget that AMP got most if theirs at 10 cents or below.

[bull....]

looks like the big funds are selling still not just amp

[airedale]

ATM have two different announcements today. One for the ASX and another for the NZX. I would have thought that any anns would have been the same for each exchange. Does anyone have knowledge of the exchange regulations.?

[blobbles]

Is it just me or did the chairman just drop a whole lot of dosh on the company he chairs.

I don't mind being in companies where management literally put their money where their mouths are.

[Xerof]

It's just you blobbles......

He has been granted free options under the long term employee scheme. A pity they don't announce the terms and conditions - has anyone seen them? But, in short, no immediate cash to the company. He needs to mainline on on-market purchases of ords to gain any respect (from me anyway)

Edit: from an older notice, exercisable at .63 cents (AUD I presume)

[silverblizzard888]

Is it just me or did the chairman just drop a whole lot of dosh on the company he chairs.

I don't mind being in companies where management literally put their money where their mouths are.

5 Million options is not a bad way to show it, but its a reserved approach, shares would have been better.

[Baa_Baa]

One could argue from a perspective of good practice governance, that the Chairman is not an employee of the company and therefore not entitled to employee share/options scheme. The Chair and the Board are effectively employed by and report to the shareholders to set strategy and direct the management in making and achieving business plans, to return wealth to the owners. The Board also decides who is granted options, loans or shares, hence on various levels there is scope for conflict of interest. Nevertheless, this blurring of the lines of ownership, governance and management seems rife in NZ listed companies.


It's just you blobbles......

He has been granted free options under the long term employee scheme. A pity they don't announce the terms and conditions - has anyone seen them? But, in short, no immediate cash to the company. He needs to mainline on on-market purchases of ords to gain any respect (from me anyway)

Edit: from an older notice, exercisable at .63 cents (AUD I presume)

[winner69]

Don't really seem to have been issued as an 'incentive' but as payment for doing stuff

"The Options have been granted pursuant to the Company's new Long Term Incentive Plan, to remunerate Mr David Hearn for services to be provided as an executive/director of the Company's UK subsidiary and an adviser pertaining to the UK"

[blobbles]

It's just you blobbles......

He has been granted free options under the long term employee scheme. A pity they don't announce the terms and conditions - has anyone seen them? But, in short, no immediate cash to the company. He needs to mainline on on-market purchases of ords to gain any respect (from me anyway)

Edit: from an older notice, exercisable at .63 cents (AUD I presume)

Is it just me or do I sometimes skim those notices picking up only the before and after numbers...

Yep, you are on to it :-)

[Xerof]

Is it just me or do I sometimes skim those notices picking up only the before and after numbers...

Yep, you are on to it :-) It's just you blobbles :D

[MAC]

Bit of a recent lift in the UK ‘a2 milkometer’

Market re-launch exposure, the new internet advertising, and Danny the rugby guy perhaps. Well and/or sales growth providing a complimentary increasing interest in online activity also.

http://www.google.co.nz/trends/explore#q=%22a2%20milk%22&geo=GB&date=6%2F2013%2025m&cmpt=date&tz=

[winner69]

Looks like all the excitement and exuberance of last week is all over.

Business as usual by the looks of it, and that's not all that flash.

Good fun while it lasted though

[NT001]

Interest in the A1-A2 issue is growing rapidly in India, the world's biggest dairy-consuming nation, and both national and state governments are under increasing public pressure to pass legislation banning the breeding of cows with the A1 gene.

According to this story from the influential Times of India, Indian scientists are about to launch a major multi-institutional research project to verify claims that milk containing the A1 gene carries health risks while A2 milk does not.

http://timesofindia.indiatimes.com/city/chandigarh/Is-milk-harming-you-PU-scientists-will-find-out/articleshow/46845039.cms

India's native cattle breeds were once all pure A2, but extensive inter-breeding to increase milk yields has resulted in the almost complete disappearance of pure native stock from which herds of traditional A2 cows could be rebuilt.

This research project could raise some interesting issues regarding a2MC's patents on the technology for identifying A2 cattle. But it's all in a good cause - it could produce verfification from independent researchers that A2 milk has multiple medical advantages, and that A1 milk carries medical risks.

Er, did someone say Fonterra exports dairy to India?

[see weed]

Notice when someone sells 100,000 at 54c, it is quickly replaced by another buyer of 100,000 at 54c. Three times in half hour.

[drcjp]

Notice when someone sells 100,000 at 54c, it is quickly replaced by another buyer of 100,000 at 54c. Three times in half hour.

Sorry, I'm a bit slow: what might this mean?:confused:

[mayday]

http://www.hotel-industry.co.uk/2015/04/natural-food-show-previews-its-exhibitor-show-highlights-for-2015/

Glad a2 will be there, not a price-sensitive news but uplifting :)

[see weed]

Sorry, I'm a bit slow: what might this mean?:confused:

If you wanted to buy a 1,000,000 shares as an example at 54c , you would buy them in smaller 100,000 lots at a time. If you plonked 1,000,000 on at 54c it could push the price up too much, and you don't want that to happen if you are still in buying phase. That is my theory anyway.

[blackcap]

Sorry, I'm a bit slow: what might this mean?:confused:

Generally if an insto or individual has a large order they will not "show their hand" to the market and thus drip feed the order into the market. This is what may be happening with the share price at 54 cents. You see this sort of trading pattern often in the larger liquid stocks like SPK etc as well.

[barleeni]

Newbie question for the day.......... can one buy shares on the ASX and trade those same shares at a a later date on the NZX (or vice versa).... if so what is involved (I ask primarily as I see there is quite a price differential for Infratil shares between the ASX / NZX..... ?)

Just curious really.

[winner69]

Newbie question for the day.......... can one buy shares on the ASX and trade those same shares at a a later date on the NZX (or vice versa).... if so what is involved (I ask primarily as I see there is quite a price differential for Infratil shares between the ASX / NZX..... ?)

Just curious really.

Not that easy to do as an individual

Infratil not a good example - hardly ever traded on ASX. That last price shown is the price of the last sale a long time ago

[Harrie]

In Aus at mo. I see that Dairy farmers are still selling milk with "naturally contains A2 protein" splashed all over the milk container.
Initial enthusiasm for A2M being clobbered by the big sellers who have to be more than just AMP.
As predicted the Aussy SP will go to the 0.49 to 0.52 range until success is proven in sales volume in target markets. Success is reflected in current price premium waiting for confirmation. Sellers are either de risking their portfolios or are losing patience/faith. It's quite a difficult concept to grasp for most people so I expect slower progress than what I initially expected. It will take scientific proof and anecdotal evidence in the media to really getting traction.

[MAC]

An interesting summary and read with some good snippets, and a US launch announcement next week;

“A2 milk's UK sales are forecast to double in the second half of this financial year”

“The A2 Milk Company is also promising to expand its Australian market range into ice cream and cheese in the next 12 to 18 months”

"We are talking to Norco and others, said Mr Babidge, who forecast the A2 cheddar cheese launch to follow next year, with other cheese lines being considered, too”

“The A2 Milk Company has been developing a strategy for next week's North American launch for about 18 months, signing on farmers and a contract processor in southern California to release an A2 bottled product of just under two litres in volume”

http://www.farmonline.com.au/news/agriculture/agribusiness/general-news/a2-serves-it-up-to-uncle-sam/2728613.aspx?storypage=0

[NT001]

An interesting summary and read with some good snippets, and a US launch announcement next week;

“A2 milk's UK sales are forecast to double in the second half of this financial year”

“The A2 Milk Company is also promising to expand its Australian market range into ice cream and cheese in the next 12 to 18 months”

"We are talking to Norco and others, said Mr Babidge, who forecast the A2 cheddar cheese launch to follow next year, with other cheese lines being considered, too”

“The A2 Milk Company has been developing a strategy for next week's North American launch for about 18 months, signing on farmers and a contract processor in southern California to release an A2 bottled product of just under two litres in volume”

http://www.farmonline.com.au/news/agriculture/agribusiness/general-news/a2-serves-it-up-to-uncle-sam/2728613.aspx?storypage=0

Thanks MAC, that's a very good read, which gives an excellent overview of where things are at in a2MC's main markets. Pity we're going to have to wait another couple of years for real action in NZ.

Among other things, it's very reassuring that supply of A2 milk by farmers is not a problem.

There've been reports out of Australia recently that mention lactose intolerance is proving a significant marketing issue for fresh milk exports to China. These reports don't mention A2 or the possibility that many consumers would in fact find A2 overcomes that issue, but obviously the word is likely to get around gradually just as it did in Australia, especially with A2 having already moved into a market-leading position.

[MAC]

I'm encouraged most by the FY growth forecast they've provided for the UK, clearly thus the re-launch strategy would be confirmed on that basis, some good traction, and a steepening of the revenue curve. Confirms what we have seen in my UK ‘a2milkometer’ also, nice.

I just have a feel too NT001 that Californians will really take to a2 very well, that's not based on any particular point of market research aside from the notably open health conscious population and the similarities in lifestyle and trends to Australia, more so than to Europe or the UK.

And, although we don't have direct access to the market research a2MC have performed, the vigorous approach they seem to be taking in launching four products at once and directly into three major supermarket chains perhaps shows the potential a2MC see in California.

For an investment of just $20M we could well see another Australian size market develop over time. Three years to break even is enough focus for now though.

I'm interested too in that they have sourced the US CEO, Jeffrey O'Neill, from Pepsi for a couple of reasons;

Most exec appointments over the last couple of years have come from Campbell Arnotts, they could have kept the club going in the US also but they instead took Jeffrey from Pepsi.

Coca Cola are launching a premium milk product also, it is not within the same target market as a2, and thus won't be direct competition, and social media are already calling it "frankenmilk".

I just wonder speculatively though if a Pepsi product may also launch also, where one goes the other tends to follow, and executive connections between companies often spark discussion around opportunities and M&A.

[airedale]

"Frankenmilk"..? That sounds like a competitor's dirty trick.

[MAC]

"Frankenmilk"..? That sounds like a competitor's dirty trick.

Yeah, a2MC and Coca Cola are both getting some exposure,

http://www.fooddive.com/news/new-products-aim-to-milk-the-dairy-industry/380627/

[NT001]

"Frankenmilk"..? That sounds like a competitor's dirty trick.

No, it wasn't a competitor's dirty trick. The label was pinned on the new Coke-milk by the media and nutrition commentators when its launching was announced, because it isn't real milk at all. Coke makes no secret of the fact that it is put through a series of filters that remove parts of the real milk, and then various additives are added that further alter the nature of the original milk.

[Harrie]

None of the cafes I have been to in Brisbane offer coffee with a2 milk. Most have never heard of it. Even in Paddington which is considered to be a little more health conscious/ trendy the barista said they do not use it because it's too much like water! I think basically it's just a question of the more people ask for it the more likely cafes will try and meet the demand. I think it is also a cost factor. As long as people are not walking out because the cafe does not use a2 milk then they will continue to use standard milk.
encouraging articles MAC. USA looks as though it is heading in the right direction. Nothing in those news items to suggest premium built into the SP currently is unjustified.
At Coles in Towoomba this afternoon. A2 selling as much as any other milk, expiry date 20th April. The blue top is so creamy and tastes great on breakfast cereal.

[davflaws]

Head north. We visited Cairns and the Daintree last October, and there was A2 in every supermarket and store. North of Port Douglas there were a couple of places that seemed to stock nothing else.

[skid]

Head north. We visited Cairns and the Daintree last October, and there was A2 in every supermarket and store. North of Port Douglas there were a couple of places that seemed to stock nothing else.

Sounds like it has been well marketed there in OZ---What they need in the States is some book or articles about ''the a2 milk revolution''

they like things with pizzaz and glitter over there from what I can see

[Harrie]

Doing a bit of see weeding in Milton/Auchenflower at local stores. Over a period of around 10mins at an IGA store Sunday night a2 trim was discounted to $2.49 from $4.99 for 2L but expiry 14th April. None went except a 2L a2 full cream at full price expiry 16/04!
Quite surprised to see Paul's zymil 2L exp 16/04 going out at $4.75. Non permeate "organic" at a faster click than a2.

[see weed]

Doing a bit of see weeding in Milton/Auchenflower at local stores. Over a period of around 10mins at an IGA store Sunday night a2 trim was discounted to $2.49 from $4.99 for 2L but expiry 14th April. None went except a 2L a2 full cream at full price expiry 16/04!
Quite surprised to see Paul's zymil 2L exp 16/04 going out at $4.75. Non permeate "organic" at a faster click than a2.

Good on you Harrie! Keep it up, promoting a2. I am thinking of printing out a new flyer as my supermarket handout. If anyone out there has some extra tips or suggestions for my flyer, I would appreciate it. As for that milk expiry date of 14th, only 2 days to go from Sunday, if that was in my shop where I buy it, I would tell them to take it off the shelf as it has been there for nearly 2 weeks. It starts going off in the last 2 days. But still keep up the good work Harrie.

[MAC]

No messing about with the US roll out:

“A2 Milk sends out first shipment to local grocers”

“Once the products have been verified to be in stock, that’s when the advertisement campaigns can begin. That will include television commercials, magazine ads and coupons”

http://www.examiner.com/article/a2-milk-sends-out-first-shipment-to-local-grocers

[blobbles]

No messing about with the US roll out:

“A2 Milk sends out first shipment to local grocers”

“Once the products have been verified to be in stock, that’s when the advertisement campaigns can begin. That will include television commercials, magazine ads and coupons”

http://www.examiner.com/article/a2-milk-sends-out-first-shipment-to-local-grocers

Good info MAC!

Seems there are about 30 Wholefood stores in Southern California... probably about 20 for Northern California where there launch. Ralphs looks to have about 20 too, Albertsons seems to be based in Southern California. So I am guessing about a 50 store rollout in the US. That probably represents about 1/4 of the NZ market or so as an estimation. If they start selling though, that could easily balloon to 500 stores pretty quickly providing they have the supply.

(Although in saying that, Northern Calif has about 14m people, so it puts a hell of a lot more than the population of NZ within reach of A2!).

[iceman]

Thanks for the info MAC.
I will be driving the Pacific Coast Highway from LA to Seattle late June. Look fwd to doing some "market research" on the way and sure the wife will love it too :-)


Good info MAC!

Seems there are about 30 Wholefood stores in Southern California... probably about 20 for Northern California where there launch. Ralphs looks to have about 20 too, Albertsons seems to be based in Southern California. So I am guessing about a 50 store rollout in the US. That probably represents about 1/4 of the NZ market or so as an estimation. If they start selling though, that could easily balloon to 500 stores pretty quickly providing they have the supply.

[NT001]

No messing about with the US roll out:

“A2 Milk sends out first shipment to local grocers”

“Once the products have been verified to be in stock, that’s when the advertisement campaigns can begin. That will include television commercials, magazine ads and coupons”

http://www.examiner.com/article/a2-milk-sends-out-first-shipment-to-local-grocers

Thanks MAC. After the conflicting dates previously indicated, it's great to know the rollout has actually begun. It'll probably take a few weeks of gently testing the processing, packaging, delivery and retail sales systems before they go full-blast, and I imagine they're still signing up farmers.

The article on the Examiner website is a good one - it explains clearly and correctly (and favourably) what's unique about A2 milk. And presumably it was free - remember, it was media coverage rather than paid advertising that got the Australian market going, although it took time. California is a huge and health-conscious market.

Strange, though, that there's been no corporate announcement in either NZ or Australia of the US launch, which makes me wonder about a2MC's PR policy, or lack of it. It raises the question whether a2MC's bosses have any interest in boosting the SP and generating consumer interest here and in Aussie.

[MAC]

Thanks MAC. After the conflicting dates previously indicated, it's great to know the rollout has actually begun. It'll probably take a few weeks of gently testing the processing, packaging, delivery and retail sales systems before they go full-blast, and I imagine they're still signing up farmers.

The article on the Examiner website is a good one - it explains clearly and correctly (and favourably) what's unique about A2 milk. And presumably it was free - remember, it was media coverage rather than paid advertising that got the Australian market going, although it took time. California is a huge and health-conscious market.

Strange, though, that there's been no corporate announcement in either NZ or Australia of the US launch, which makes me wonder about a2MC's PR policy, or lack of it. It raises the question whether a2MC's bosses have any interest in boosting the SP and generating consumer interest here and in Aussie.

We should then get a couple of months of preliminary US revenues within the FY14 year too, they’ll only be very small of course, but still something to crow about, and rightfully so I reckon, it takes a lot to set up a new geographical operation, and a2MC seem to have done so quicker than many anticipated.

Just needs a health minded Hollywood celeb or two to start banging on about a2 and it’s all up and away.

[drcjp]

We should then get a couple of months of preliminary US revenues within the FY14 year too, they’ll only be very small of course, but still something to crow about, and rightfully so I reckon, it takes a lot to set up a new geographical operation, and a2MC seem to have done so quicker than many anticipated.

Just needs a health minded Hollywood celeb or two to start banging on about a2 and it’s all up and away.

agree, just don't use Gywneth please A2

[kizame]

Thanks MAC. After the conflicting dates previously indicated, it's great to know the rollout has actually begun. It'll probably take a few weeks of gently testing the processing, packaging, delivery and retail sales systems before they go full-blast, and I imagine they're still signing up farmers.

The article on the Examiner website is a good one - it explains clearly and correctly (and favourably) what's unique about A2 milk. And presumably it was free - remember, it was media coverage rather than paid advertising that got the Australian market going, although it took time. California is a huge and health-conscious market.

Strange, though, that there's been no corporate announcement in either NZ or Australia of the US launch, which makes me wonder about a2MC's PR policy, or lack of it. It raises the question whether a2MC's bosses have any interest in boosting the SP and generating consumer interest here and in Aussie.

Mate I hope they are just too busy rolling product into stores and doing instead of talking,I like that.
An announcement(to shareholders) is good,but it only serves the purpose of letting us know where they are at,I'm happy they are doing what they say.
We have you and MAC as excellent posters to keep us in play with this sort of stuff.

[blobbles]

Yeah, come on, Zooey Deschanel and Billy Bob Thornton are both apparently intolerant to dairy! Give 'em a 100k and a years free supply for an advert!

[Lola]

Dead right.
just look what Kate has done for the Trilogy price...up 25 pc in 3 DAYS plus a speeding ticket from NZX.

[Ginger_steps_]

I saw something strange at Coles today but didnt have time to investigate.. a2 had a whole new shelve area seperate from all the other milk, it was about 3 or 4 times the size of their original space (which they still retain) and had only 2 bottles of milk left in the whole new area! At a glance it seemed as if they had a big sale, however its not typical to shift other products around for a once off sale. What really tickled my thinker was - their original spot looked as it normally does and was more or less fully stocked... perhaps i caught them in a transition to a new area such as the "specialty milk area" per the UK strategy... anyroads i will keep y'all in the loop.

[mayday]

"If you are lactose intolerant or have a cow-milk allergy, a2 Milk isn't for you. That's because a2 Milk isn't medicine, it's milk, and it will sell for $4.50 per half gallon (whole, reduced fat, low fat, and fat-free) at Whole Foods and Ralphs stores in California as well as at some independent California grocers. If a2 Milk catches on, the company hopes to go nationwide."

http://www.nbcnews.com/health/diet-fitness/can-new-milk-brand-buoy-dairy-industry-n339586

[Ginger_steps_]

Good article thanks mayday. Good to see the big media providers educating the market before a2's launch. One thing i would like to see a2 push a little more on the education front is the "all mammals including humans produce a2 milk - except some cows". A qr code on the bottle linking to an educational video on a2, explaining the difference in lehmans terms, would be pretty easy eh??? I dont feel theycan pack enough info into a 30sec tv add. Here you go "Everything you need to know about a2 in 3minutes" - maybe i should make a demo and send it through to a2 - see weed can direct it ;)

[Harrie]

Here is one for you see weed. Back from Aussie now and went to find a2 milk at pak n save. They don't have it in Riccarton which is one of the biggest stores in ChCh. I decided to make an email complaint to the store manager saying that as I prefer this milk and can only get it at countdown I am forced to do the rest of my grocery shopping there.(white lie to get some reaction) Got an email back straight back which amazed me. Not only do they not stock it, he was not aware of the product at all and is getting his Dairy Manager to track it down.
Granted , small market not to get obsessed by lack of supply, but just "another brick in the wall" to build awareness.

[winner69]

You guys worked out yet whether share price being driven by NZX or the ASX?

Whatever, both sides of the Tasman don't seem that keen

[kizame]

You guys worked out yet whether share price being driven by NZX or the ASX?

Whatever, both sides of the Tasman don't seem that keen

I think volume has definately risen since the listing,and is probably driven from Aus,otherwise why the lift in vol.
I think to say punters aren't keen is a bit premature don't you think,until there is some traction in new markets why would you go driving the price up. The investment doesn't change just because its listed in Aus as well.

[dingoNZ]

notice the intl crossings pre market, suggests its def driven by the ASX

[Lola]

"If you are lactose intolerant or have a cow-milk allergy, a2 Milk isn't for you. That's because a2 Milk isn't medicine, it's milk, and it will sell for $4.50 per half gallon (whole, reduced fat, low fat, and fat-free) at Whole Foods and Ralphs stores in California as well as at some independent California grocers. If a2 Milk catches on, the company hopes to go nationwide."

http://www.nbcnews.com/health/diet-fitness/can-new-milk-brand-buoy-dairy-industry-n339586

Hey just wait a mo.... what say Hillary swears by the stuff whilst she is on the campaign trail ?? Just like Kate says she like that funny face oil. You never know.

[JohnnyTheHorse]

Big distribution happening at around 54 cents. Only time will tell whether the buyer is bigger than the seller. If they are, we will see another crack at the major 58 resistance.

[NT001]

The word from California is that A2 milk is already on the shelves in over 1500 outlets there including WholeFoods, Ralphs and Albertsons. At the moment a lot of it is being sourced from the midwest, pretty well bang in the middle of the US, which is a long way from California. I guess that's because the company's original unsuccessful foray into the US was centred more in that region and there would be farmers who switched their herds to A2 at that time. Farms in other states are also being lined up.

At present the milk is being processed in New York state (yes!) before being transported to California, although I'm sure that would be just a temporary arrangement for commercial or technical reasons to enable a2MC to speed up its retail launch. No problem about best-before dates, as its shelf life is weeks, not days apparently.

I don't have any info on how sales are going, but A2 is certainly being talked about, including by nutritionists who are concerned that a lot of young Americans are missing out nutritionally because they have problems with supermarket milk containing A1. It sounds all good. Pity the company isn't telling us more - it's already beginning to sound like a real NZ success story in the great US market.

[MAC]

The word from California is that A2 milk is already on the shelves in over 1500 outlets there including WholeFoods, Ralphs and Albertsons. At the moment a lot of it is being sourced from the midwest, pretty well bang in the middle of the US, which is a long way from California. I guess that's because the company's original unsuccessful foray into the US was centred more in that region and there would be farmers who switched their herds to A2 at that time. Farms in other states are also being lined up.

At present the milk is being processed in New York state (yes!) before being transported to California, although I'm sure that would be just a temporary arrangement for commercial or technical reasons to enable a2MC to speed up its retail launch. No problem about best-before dates, as its shelf life is weeks, not days apparently.

I don't have any info on how sales are going, but A2 is certainly being talked about, including by nutritionists who are concerned that a lot of young Americans are missing out nutritionally because they have problems with supermarket milk containing A1. It sounds all good. Pity the company isn't telling us more - it's already beginning to sound like a real NZ success story in the great US market.

That's all good news NT001, well done and thanks for sourcing that info for us all.

Presumably the long run herds will be centred on and around Colorado. Still any early kick start initiative has got to be a good thing, and the early initial startup sales would start from a low base anyway whatever the origin of the milk and location of the farms.

There must be very good and sound market research on California to make the logistics attractive even if it is just short term.

Odd that a first US sales announcement has not been made yet by ATM on the NZX and ASX, perhaps within the next couple of days ?

[blobbles]

The word from California is that A2 milk is already on the shelves in over 1500 outlets there including WholeFoods, Ralphs and Albertsons. At the moment a lot of it is being sourced from the midwest, pretty well bang in the middle of the US, which is a long way from California. I guess that's because the company's original unsuccessful foray into the US was centred more in that region and there would be farmers who switched their herds to A2 at that time. Farms in other states are also being lined up.

At present the milk is being processed in New York state (yes!) before being transported to California, although I'm sure that would be just a temporary arrangement for commercial or technical reasons to enable a2MC to speed up its retail launch. No problem about best-before dates, as its shelf life is weeks, not days apparently.

I don't have any info on how sales are going, but A2 is certainly being talked about, including by nutritionists who are concerned that a lot of young Americans are missing out nutritionally because they have problems with supermarket milk containing A1. It sounds all good. Pity the company isn't telling us more - it's already beginning to sound like a real NZ success story in the great US market.

1500 stores!!!? Are you sure? That seems a bit high...

If they sold 10 a day per store... 165 days to FY reporting... ~2.5m bottles @$2 USD per bottle after COGS... $5m USD or ~$6m NZD FY?

1500 stores seems high though, I thought they were only going into Northern California to start with?

[NT001]

1500 stores!!!? Are you sure? That seems a bit high...

That's what I thought. All I can say is the information came from a friend who knows the scene there and is well informed, and was quite emphatic about the figure when I expressed surprise.

[blobbles]

It does seem a bit high, but entirely possible. Will be nice if its accurate :-)

I remember looking up that in the entire US there was:

Kroger stores = 2640
Safeway stores = 1335
Whole foods stores = ~400

So 1500 stores would mean roughly 1/3 of all possible stores in the US given current supermarkets signed up. Does seem a bit high...

1500 stores @10 bottles per day @$4 makes for a nice revenue figure per year of ~$22m. Get that marketing out there! Zooey, where are you???

[Nasi Goreng]

Sounds like we are off to a great start then. I would expect US Facebook page to be set up pretty quickly similar to what they have done in UK. It's interesting to look at posts from time to time to get customer feedback. Have to say, ATMs announcements have been pretty lame with contradicting stuff around launch dates. At least they are ahead of the curve.

10 bottles per day per store sounds optimistic for launch, would be nice to get up to that level by the end of the year. I think my local countdown sells about 2-3 bottles a day.

[NT001]

1500 stores would mean roughly 1/3 of all possible stores in the US given current supermarkets signed up. Does seem a bit high...

1500 stores @10 bottles per day @$4 makes for a nice revenue figure per year of ~$22m.

I seem to remember reading that quite a few outlets are independent stores, not just supermarkets. And I'd be surprised if any will be selling anything like ten a day at the start. It'll be a gradual buildup. But it sounds to me as though a2MC is planning to expand to other parts of the US quite rapidly. Its US CEO is highly regarded and has the experience and contacts to grow the operation pretty quickly. And since the milk is already being processed in New York, the populous and wealthy Northeast would seem like a logical target.

[NT001]

This story about the California launch has just hit my inbox. It doesn't say how many stores, but does say stocks were distributed as of just over a week ago. Media promotion should start pretty soon.

http://www.perishablenews.com/index.php?article=0043853

[Snow Leopard]

Mud West to New Yurk to Cali-forn-i-a ?

Either that milk flies more than I do or it is sold as yoghurt.

7284

Best Wishes
Paper Tiger

[Harrie]

http://zeenews.india.com/news/health...s_1572910.html

My have been posted before by NT001 but interesting.

[NT001]

Either that milk flies more than I do or it is sold as yoghurt.


Dunno how it gets from Nebraska to New York but I gather it goes from New York to California by train. Those distances are nothing in the States, where transport systems are very efficient. Of course in winter time it may end up as ice cream. Yum.

[iceman]

Dunno how it gets from Nebraska to New York but I gather it goes from New York to California by train. Those distances are nothing in the States, where transport systems are very efficient. Of course in winter time it may end up as ice cream. Yum.

We might get a quicker return from ATM's inroads into USA by buying into Berkshire Hathaway or Burlington Northern Santa Fe Railroad :(

[Ginger_steps_]

Some major discreptancies going on here between posters, media and a2! North California or South, would be a great starting point to getting the facts right (posters and media). I think Ill wait for the official communications before throwing wild assumptions out there (i do appreciate your tip off tho NT0001). However i also wonder whether there will be an official communication? a2 have previously stated when and where the launch will take place.

[winner69]

notice the intl crossings pre market, suggests its def driven by the ASX

Does that suggest that punters on the ASX know more and are better informed than those on the NZX?

[skid]

Does anyone know anything about handling costs and wastage in the supermarket business?

[NT001]

Does anyone know anything about handling costs and wastage in the supermarket business?

I don't, but my guess is that this is probably not a big issue in the overall scheme of things. It seems that a2MC wanted to get the California launch under way quickly, and a bit of temporary extra cost to achieve this (New York-California transport) wouldn't be a big problem. I'm assuming it won't be long before the processing/packaging is done in California as larger volumes are required, at which point the New York plant's output could be re-directed to the Northeastern US. California's a big dairying state with plenty of milk processing plants, but it could be that none were quite ready to take on the A2 job, which requires strict care in handling the A2 milk completely separately from other milk. Just my speculation but it seems logical.

In this present stage a2MC wouldn't have big volumes to transport and put into stores, and given that the product has a long shelf life, wastage shouldn't be an issue for the stores or the supermarket chains. They would just order new supplies when initial deliveries have gone out the door.

A little while ago the company was talking about launching later in the year, and it seems this schedule has been advanced for some reason, which may have required a bit of innovative thinking. Speculating again, it could be that the recently-appointed CEO, being an ex-Pepsi chief with heaps of beverage experience, doesn't want to muck around with "small and gradual". My guess is that he wouldn't have wanted this job if it was going to consist of just introducing a minor niche product into a single state. So we could see things move quite fast. Hope I'm right.

[Bjauck]

A2 milk is still being advertised on Channel 4 in the UK. Are there any UK based forum posters who know if people are discussing it or are seeing a greater presence in shops?

[winner69]

Rugby World Cup this year

The English team have O2 emblazoned on the front of their jerseys

Surely Danny can organise big A2 logos on the back

Wow, great sponsorship

[NT001]

A2 milk is still being advertised on Channel 4 in the UK. Are there any UK based forum posters who know if people are discussing it or are seeing a greater presence in shops?

This item in the mass circulation Daily Express may partly answer your question, Bjauck. It seems to indicate A2 Milk must be selling, otherwise the Waitrose chain would be lowering the number of stores stocking it, not increasing it. And the Express regards it as worth a mention.

http://www.express.co.uk/finance/city/567061/Waitrose-adds-more-A2-stores

[MAC]

This item in the mass circulation Daily Express may partly answer your question, Bjauck. It seems to indicate A2 Milk must be selling, otherwise the Waitrose chain would be lowering the number of stores stocking it, not increasing it. And the Express regards it as worth a mention.

http://www.express.co.uk/finance/city/567061/Waitrose-adds-more-A2-stores

Well yes, not to mention the anticipated doubling of sales in the UK as reported just last week.

UK sales in Q3 must have been strong for a2MC to confidently release that estimate for the FY.

“Already available in major supermarket chains Tesco, Waitrose, Sainsbury, Morrisons and via other specialist outlets, A2 milk's UK sales are forecast to double in the second half of this financial year”

http://www.farmonline.com.au/news/ag...px?storypage=0 (http://www.farmonline.com.au/news/agriculture/agribusiness/general-news/a2-serves-it-up-to-uncle-sam/2728613.aspx?storypage=0)

[skid]

I don't, but my guess is that this is probably not a big issue in the overall scheme of things. It seems that a2MC wanted to get the California launch under way quickly, and a bit of temporary extra cost to achieve this (New York-California transport) wouldn't be a big problem. I'm assuming it won't be long before the processing/packaging is done in California as larger volumes are required, at which point the New York plant's output could be re-directed to the Northeastern US. California's a big dairying state with plenty of milk processing plants, but it could be that none were quite ready to take on the A2 job, which requires strict care in handling the A2 milk completely separately from other milk. Just my speculation but it seems logical.

In this present stage a2MC wouldn't have big volumes to transport and put into stores, and given that the product has a long shelf life, wastage shouldn't be an issue for the stores or the supermarket chains. They would just order new supplies when initial deliveries have gone out the door.

A little while ago the company was talking about launching later in the year, and it seems this schedule has been advanced for some reason, which may have required a bit of innovative thinking. Speculating again, it could be that the recently-appointed CEO, being an ex-Pepsi chief with heaps of beverage experience, doesn't want to muck around with "small and gradual". My guess is that he wouldn't have wanted this job if it was going to consist of just introducing a minor niche product into a single state. So we could see things move quite fast. Hope I'm right.

The reason I asked is that I have heard how difficult the supermarket industry can be with costs,product ''real estate''(on shelves)-(obviously this would be cold storage) and how products make very small profit margins --hopefully the ex Pepsi chief can help in these matters (it would have been a real windfall if they were associated with Pepsi)
Meanwhile if it got a mention in one of those ''revolutionary new diet books'' it would be a real boost--(they like those ''monumental breakthrough'' sort of things.)

[Nasi Goreng]

A2 Milks UK sales are forecast to double in the second half of this FY.

Is this really that impressive? It seems like a very conservative forecast. From the info document released in March, it shows UK sales in FY14 as NZ$1.1M. So if they double sales in the second half of this year, what does that mean? Will UK sales be NZ$2.2M for the year or were they already growing in H1 and therefore we will see a higher result for the year... hopefully this.

In contrast, they got NZ$2.3M in sales from China in FY14 which would have included all of the restrictions etc.

So what will they deliver in FY15? Looking beyond Aus, I'm guessing they deliver $6M from China, $4M from UK, $5M from US. This would be growth of about $10M.

[MAC]

You may well perhaps be pessimistic on what was perhaps an expectation beyond what ATM has ever offered as guidance.

One has to put the relative market sizes into perspective, the a2MC goal for the UK was to achieve a 0.2% market share by FY16. This doubling of revenues in the second half means the reported FY segment revenues should be;

HY ($892k) + (2 x $892k) = FY15 UK revenues = $2.7M

The significance of the this is twofold;

Firstly, it would demonstrate that the company is now at the foot of a revenue growth curve for the UK segment, after an 12 to 18 month business establishment period, the hard yards are done, it's about ramping up sales now.

Secondly, UK segment revenues at $2.7M puts the company back on track for probably breaking even in the UK at FY16, which was the anticipation prior to the establishment delays caused by Muller Wiseman.

All very good in the UK.

No, there may be a couple of US accounting cycles that fall within the FY15 year, but it's unlikely ATM will report any revenue contribution for the US within the FY15 report.

Agree though about the China segment, the fresh milk revenues were forecast to double each year for the next couple of years, add a small UHT contribution, and perhaps some revenues from infant formula, and $5M in segment revenues may well be feasible.

It's the push toward the 10% market share in Australia that has provided the revenue growth for FY15, and this will largely be the case for HY16 and FY16 also.

But, with the UK and China segments likely to be profitable at FY16, maybe HY16 for China, watch for forward earnings growth now, as much of what has been sucked out of Australia to fund the UK and China will begin to be reported as NPAT.

The $20M required for the US expansion is not great within that bigger picture, much of which may be funded from the UK and China segments in FY17 and FY18.

Mac

[Ginger_steps_]

I saw something strange at Coles today but didnt have time to investigate.. a2 had a whole new shelve area seperate from all the other milk, it was about 3 or 4 times the size of their original space (which they still retain) and had only 2 bottles of milk left in the whole new area! At a glance it seemed as if they had a big sale, however its not typical to shift other products around for a once off sale. What really tickled my thinker was - their original spot looked as it normally does and was more or less fully stocked... perhaps i caught them in a transition to a new area such as the "specialty milk area" per the UK strategy... anyroads i will keep y'all in the loop. As promised i will report back. The new a2 milk section came and went within a day. I couldn't locate the milk section guy to quiz him, but it appeared to just be a once off sale - and they managed to clear the shelf if so. I did notice around the time all the a2 milk was approaching its use-by date, around 5 days out. Perhaps they had a bad couple of weeks for a2 sales and needed to clear stock... again this is not normal practice so it will remain a mystery (unless i see the milk section guy).

[Harrie]

As predicted, A2M will settle into the 49c to 52c range until sales data from target markets is released. Hopefully we will be pleasantly surprised to the upside!
Until then I don't expect much movement outside that range. ATM range therefore 0.50 to 0.53

[Nasi Goreng]

Volumes are back to relatively normal levels. This suggests Aussie demand has dried up and there still remains plenty of sellers out there. SP needs a fund or two to start buying or some good news re growth markets... I suspect slow and steady for the next 6 months.

[sb9]

Yep, unless something significant announcement come through, it'll be a patient and painful (for some) wait until Aug 2015 when full year results are announced.

[Harrie]

If they don't hit their targets by FY15, it will be a problem. There is a lot of expectation built into the current price.

[mayday]

Pleased they referred to A2 milk in dairy section.

http://www.foodmag.com.au/features/tapping-into-value-adding-for-the-chinese-market

[winner69]

If they don't hit their targets by FY15, it will be a problem. There is a lot of expectation built into the current price.

You sound a bit down and out recently Harrie. ATM getting to you?

You always seemed so positive in the past

[NT001]

Pleased they referred to A2 milk in dairy section.

http://www.foodmag.com.au/features/tapping-into-value-adding-for-the-chinese-market

Yes that was good, although I'm a little puzzled by the article's statement that:

"The company [a2MC] also offers a range suitable for those suffering lactose intolerance and also claims to provide superior calcium content which Chinese manufacturers are yet able to replicate."

a2MC actually makes clear its product is not for those suffering lactose intolerance (since it does contain lactose), even though it may be a good option for those who think they are lactose intolerant but actually are not.

And I wasn't aware that A2 is offering "superior calcium content", but of course we don't see what it's saying in its Chinese-language promotional material. It usually stresses that its product is pure natural milk with no additives.

It's interesting to read that China is forecast to become a major force in the dairy world. It already is of course, in terms of volume production, but its per capita dairy consumption in 2012 was only one-eighth that of Australia and it has a long way to go to catch up. If it's going to satisfy its own consumer demand from domestic sources it'll have to address some big issues with regard to land and water utilisation, environment, food safety, technology and farm practice.

While a2MC is doing nicely in China as an external supplier right now, it seems more interested longterm in developing the UK, EU and US markets where it is able to take advantage of existing A2 herds, high farm practice standards and consumer sophistication. It would be a lot harder and riskier to set up a local production operation in China, I would think.

It's also keen to move into Asian countries other than China. The ASEAN region would be an excellent niche market. I heard the other day that an Australian export company is already buying up A2 Milk in Victoria and flying it (under the "a2" label) to Southeast Asia to supply retailers there, apparently without any deal with a2MC. Presumably a2MC makes a profit from the sale in Australia and as far as I'm aware the company concerned is not infringing a2MC's IP or branding. But a2MC would have to keep a close eye on it to make sure the retailers in SE Asia don't get into trouble making unproven health claims. That could really bugger up the market, not only there but also elsewhere.

[bull....]

china is considering a ban on infant formula advertising in a bid to tackle low levels of breast feeding.

[Harrie]

You sound a bit down and out recently Harrie. ATM getting to you?

You always seemed so positive in the past

Just being realistic W69. I'm not saying that their targets will not be reached either. The price only reflects the balance of opinion which is why the SP will remain within the 50 to 53c range until sales volumes data is released from target markets either officially or anecdotally . That data will change the balance of opinion either way

[iceman]

Investment presentation just released to the market. Can't see anything unexpected at first glance. Suspect we will need to see some real progress numbers from UK and USA before we can expect more from the sp !


Just being realistic W69. I'm not saying that their targets will not be reached either. The price only reflects the balance of opinion which is why the SP will remain within the 50 to 53c range until sales volumes data is released from target markets either officially or anecdotally . That data will change the balance of opinion either way

[winner69]

Investment presentation just released to the market. Can't see anything unexpected at first glance. Suspect we will need to see some real progress numbers from UK and USA before we can expect more from the sp !

Slide 18 will likely confuse the Aussies

[Nasi Goreng]

ATM stating for the 2nd time that they don't currently intend to raise capital but will consider this as growth opportunities arise.

I guess the reason why they have not yet done this is that they don't actually know how much they will need. We know minimum of USD$20M but if it takes off and hopefully it will, will they may need another USD$100M to go nationwide?

It makes sense that they are doing these investor presentations and I would expect more presentations and comms on their progress.

[NT001]

Interesting piece in today's DomPost which covers a number of aspects of the NZ share investment outlook, based on comments by two senior executives of AMP Capital Investors which has been shedding its ATM stake. It says the recent sharp fall in commodity prices now looks "overdone" and growth lies ahead, although a sharp fall in the Auckland housing market, as tipped by the Reserve Bank, could hit both shares and bonds here.

http://www.stuff.co.nz/business/industries/67900601/high-returns-unsustainable-after-solid-march-quarter

[NT001]

Another interesting story, this time from London's Independent newspaper, analysing the anti-milk argument and giving quite a bit of mention to A2. It's a sensibly balanced story which basically ends up saying some of the criticisms of cow's milk are misguided.

http://www.independent.co.uk/life-style/food-and-drink/should-we-be-drinking-milk-arguments-for-and-against-dairy-10192238.html

[GizyGold]

http://www.healthyfoodhouse.com/harvard-scientist-urges-people-to-stop-drinking-low-fat-milk-immediately/

another interesting read too. Be good if the harvard scientist mentioned A2

[sb9]

Well can't believe this, its 525c on ASX and 52c on NZX with fx rate being 99c.

[NT001]

And yet another very interesting article, this time giving details of the campaign that has taken A2 Milk to 9% of the Australian market. Some of this I haven't seen anywhere before. It's great to see A2 featuring in news articles like this.

https://www.marketingmag.com.au/hubs-c/a2-milk-stands-herd/

[Ginger_steps_]

And yet another very interesting article, this time giving details of the campaign that has taken A2 Milk to 9% of the Australian market. Some of this I haven't seen anywhere before. It's great to see A2 featuring in news articles like this.

https://www.marketingmag.com.au/hubs-c/a2-milk-stands-herd/
yes very interesting aricle that seems to have done the trick. The question i have is why have they now in 2014 and 2015 started advertising using all the cues that they "steered clear of" in the fisrt place - which was so successful? The a2 ads on tv now basically have an irish lady using a cow diagram saying we only use specially selected a2 cows and "many people say they can feel the diference" quote...... they seem to have gone backwards.

[bull....]

a2 has spent some big money on a protein mapping contract - check out piq in aus

[belted galloway]

a2 has spent some big money on a protein mapping contract - check out piq in aus


http://www.proactiveinvestors.com.au/companies/news/61933/proteomics-international-wins-contract-with-a2-milk-company-61933.html

[Nasi Goreng]

A2 Milk Company USA is now on Facebook. Nothing on there yet but nice to see their marketing team are getting into gear and it will be interesting to follow progress on there.

[Ginger_steps_]

a2 has spent some big money on a protein mapping contract - check out piq in aus
Big money? where does this reference the spend? or have you got info from elsewhere? Considering the size of the company they are dealing with - i can't see this agreement being "big money" - however I do think this is another step in the right direction to proving the a2 theory.

[sb9]

Flip??? what happened there, just came back from lunch and noticed sp dropped 2c. Haven't seen any news...aussies must be shorting!!!

[Tony Two Gloves]

I'm now a shareholder, tried to get onto this prior to Aussie listing and missed the spike. Just forgot to cancel my buy order at .50 which has been filled today........what to do??

[bull....]

I'm now a shareholder, tried to get onto this prior to Aussie listing and missed the spike. Just forgot to cancel my buy order at .50 which has been filled today........what to do??

start drinking a2 milk

[dingoNZ]

start drinking a2 milk

This, you own atm now...

[bull....]

This, you own atm now...

of course not, but if you own it shouldn't you support it

[babymonster]

I'm now a shareholder, tried to get onto this prior to Aussie listing and missed the spike. Just forgot to cancel my buy order at .50 which has been filled today........what to do??
i would like to buy them from you at 0.49c..

[babymonster]

seems someone try to keep it low.. each time go up to 51c, there is 50c sell accepted.. or just me have nothing better to do and speculating?? :)

[mayday]

http://agrihq.co.nz/article/a2-woos-australian-investors-with-growth-strategy?p=7

has anyone here been to last meeting in OZ? This article starts "A2 Milk Company might be signalling to investors that capital-raising is a possibility in the next year or so.".

Perhaps it is the reason why some insto's (who forsee it may happen one day) want to offload some before sp gets deluded.

[MAC]

a2mc have told us Mayday that they intend to fund US east coast growth from internal cashflow and retentions, however Geoff qualified the present strategy by saying;

"We are intending to invest $US20 million in the US over the next three years. If we see an opportunity to ramp that up more quickly we may do something in a capital sense. But that is not our intent presently."

http://www.smh.com.au/business/markets/a2-milk-shuns-asia-rush-as-shares-hit-asx-boards-20150330-1m6td3.html

The funds and insto's, as long term investors, would be inclined to look at such an opportunity, favourably, particularly so whilst the SP is so absolutely undervalued as at present.

Aside, no shareholder gets diluted in a capital raise if they take up the offer.

[MAC]

Good to see First NZ Capital backing their own analysis, research and valuation effort in taking an initial 5% holding. I wouldn’t be at all surprised to see several similar Australian investments made over the coming months.

https://www.nzx.com/files/attachments/211923.pdf

Recently within the NBR (27/02/2015);

“First NZ Capital has an “outperform” rating on the stock, noting yesterday that the result exceeded its expectations. Leveraging the company’s successful Australia model globally remains key. If A2 can successfully execute that strategy in the UK, China and US it could justify a “spot” valuation of $1.24, the brokerage says in its research note”.

“Based on our previous ‘what-if’ analysis for A2, if it were to successfully enter and execute its plans in the Californian liquid milk market, there is clearly significant value that could accrue to the company,” First NZ says, adding that it estimates the upside at 23c a share”.

[see weed]

I'm now a shareholder, tried to get onto this prior to Aussie listing and missed the spike. Just forgot to cancel my buy order at .50 which has been filled today........what to do??

Welcome to the...a2 Share Trader Milk Club. I too have been collecting shares for 9 months now. Do you think we should have a club meeting at a milk bar somewhere for ideas on a2 promotion,eg tee shirt with a2 milk written on the back, and some flyers, which I already have. We will probably have to take our own milk. Or maybe open a milk bar..... The a2 Milk bar:t_up:.

[nextbigthing]

Aside, no shareholder gets diluted in a capital raise if they take up the offer.

But the cash in their bank account will MAC. Minor detail aye.

[MAC]

And they get an even bigger investment in an undervalued growth company with great fundamental prospects, minor detail there too aye, more of a good thing is a good thing NBT.

[drcjp]

Yes please, this is what our markets might need. http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11437565
I would suspect A2 would be one target the Chinese would look at.

[skid]

Just be aware that the 20mil could be really good or really bad depending on how well they execute their strategy.(as NZ capital stated)
If it brings recognition and sales it will be time for celebrations --if not ,it will be cash burn.
We all hope the SP is undervalued but to assume can be dangerous-best to stay balanced- meanwhile..heres hoping-- DYOR

[ziggy415]

Good to see First NZ Capital backing their own analysis, research and valuation effort in taking an initial 5% holding. I wouldn’t be at all surprised to see several similar Australian investments made over the coming months.

https://www.nzx.com/files/attachments/211923.pdf

Recently within the NBR (27/02/2015);

“First NZ Capital has an “outperform” rating on the stock, noting yesterday that the result exceeded its expectations. Leveraging the company’s successful Australia model globally remains key. If A2 can successfully execute that strategy in the UK, China and US it could justify a “spot” valuation of $1.24, the brokerage says in its research note”.

“Based on our previous ‘what-if’ analysis for A2, if it were to successfully enter and execute its plans in the Californian liquid milk market, there is clearly significant value that could accrue to the company,” First NZ says, adding that it estimates the upside at 23c a share”.
still doesn,t explain the downward trajectory of the share price.....can Amp be still off loading

[skid]

Yes please, this is what our markets might need. http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11437565
I would suspect A2 would be one target the Chinese would look at.

Wow-that is certainly something to keep an eye on--Its exciting and scarey at the same time (in terms of property)

The Chinese certainly like their milk, and milk products--whether A2 particularly rings their bell remains to be seen but I guess it doesnt take a huge percentage of their population to come on board.
Thats one place I would ship the product rather than having the actual cows there as they have been known to steal things in the past--The States is a safer bet in that regard.

[skid]

still doesn,t explain the downward trajectory of the share price.....can Amp be still off loading

which goes to show how difficult it is to 2nd guess what instos are up to

[MAC]

It's just an ongoing transfer of wealth from the fickle to the wise.

Aside from AMP who had to sell for policy reasons, the others Milford, ACC and First NZ Capital et al, have been accumulating the dip from 97c. Now Australian funds also have the opportunity and we may also see several jump on board over the next few months.

IMO there was no fundamental reason for the SP to drop below 80c, look at it as a gift, I am.

[NT001]

Welcome to the...a2 Share Trader Milk Club. ... Do you think we should have a club meeting at a milk bar somewhere for ideas on a2 promotion,eg tee shirt with a2 milk written on the back, and some flyers, ... Or maybe open a milk bar..... The a2 Milk bar.

That's not such a silly idea, and I've been tossing it in my mind for some time. There is at least one A2 coffee shop in Melbourne. I think coffee shops would be better than milk bars, going up-market a bit. If any of us have a favourite coffee shop run by an intelligent health-conscious owner looking for a special angle, we should try to encourage them to offer A2 milk at least as a special option, if not as the only kind of milk on offer. It should cost a little extra, to make the point that it's not just ordinary milk, but something special with higher value.This would be an excellent way of making people ask "what's with this A2 milk?" - and make some flyers available, and maybe a wall poster explaining what it's about.

We'd have to get approval from a2MC, I think, because we wouldn't want to run any kind of campaign using the name a2 that might cause the company any difficulty. I'd be quite happy to take up the idea with them. But first we have to find a sympathetic barista. Where? I think Wellington would be a good place to start, partly because it's got quite a slew of CBD coffee shops and also because it might attract a bit of political and official attention.

Tee shirts are not such a bad idea either. This would involve using trademarked design, so there again we'd have to have company approval. It could be something the company is already looking at, not only here but in other markets - or perhaps should be. A tee shirt would need more than just an "a2 milk" logo, with also some brief statement of the benefits of a2. And it would need to be stylish.

[barleeni]

MAC you seem very bullish on this one of late, perhaps you should use a stronger disclaimer against your comments like some others..... there must be very many fickle people amongst us and very few wise to explain the now 12 month / 45% slide in share price (which I admit looks like it ** may ** be nearing the bottom).

Surely if all these insto's and now ozzie instos included have such faith in ATM/A2M we wouldn't see this downward pressure? The market says that there was a fundamental reason for the SP to drop below the 80's.. Mr Market is always right isn't he?


It's just an ongoing transfer of wealth from the fickle to the wise.

Aside from AMP who had to sell for policy reasons, the others Milford, ACC and First NZ Capital et al, have been accumulating the dip from 97c. Now Australian funds also have the opportunity and we may also see several jump on board over the next few months.

IMO there was no fundamental reason for the SP to drop below 80c, look at it as a gift, I am.

[MAC]

We all talk to different timeframes Barleeni, remenber Ben Graham,

“In the short run, the market is a voting machine but in the long run, it is a weighing machine”

The market doesn’t need a fundamental reason to do irrational things within a short timeframe, illiquid stocks like ATM can swing about over a year or so, but over the longer term, fundamentals come into play.

A large holder selling over a one year timeframe can affect and depress a market, as we have seen, for that same duration, but a long term trend it does not make.

IMO this dip from 97c has been absolutely over cooked, you will not see a better long term entry point for ATM within the next couple of years.

With an SP at 51c, ATM is;

49% from analyst consensus price targets at 76c,

88% from the level when AMP started to heavily sell down,

116% from my own humble valuation of $1.10,

143% from the First NZ spot valuation of $1.24, and they have just walked the talk,

And, the growth strategy for the company is sound, so, yes you could say I’m either bullish or have well researched the risk/reward position, I don’t mind either.

Buy when others are fearful and those stocks are undervalued.

Research reaps rewards.

[see weed]

That's not such a silly idea, and I've been tossing it in my mind for some time. There is at least one A2 coffee shop in Melbourne. I think coffee shops would be better than milk bars, going up-market a bit. If any of us have a favourite coffee shop run by an intelligent health-conscious owner looking for a special angle, we should try to encourage them to offer A2 milk at least as a special option, if not as the only kind of milk on offer. It should cost a little extra, to make the point that it's not just ordinary milk, but something special with higher value.This would be an excellent way of making people ask "what's with this A2 milk?" - and make some flyers available, and maybe a wall poster explaining what it's about.

We'd have to get approval from a2MC, I think, because we wouldn't want to run any kind of campaign using the name a2 that might cause the company any difficulty. I'd be quite happy to take up the idea with them. But first we have to find a sympathetic barista. Where? I think Wellington would be a good place to start, partly because it's got quite a slew of CBD coffee shops and also because it might attract a bit of political and official attention.

Tee shirts are not such a bad idea either. This would involve using trademarked design, so there again we'd have to have company approval. It could be something the company is already looking at, not only here but in other markets - or perhaps should be. A tee shirt would need more than just an "a2 milk" logo, with also some brief statement of the benefits of a2. And it would need to be stylish.

Something simple on back of tee shirt. Big writing a2 Milk, and much much smaller print above that a2 milk would be the words 'What Is'. Everyone will start tapping you on the shoulder if you haven't got a ponytail to pull, asking you what is a2 Milk:). Then you can hand them a flyer.

[Snoopy]

remenber Ben Graham,

“In the short run, the market is a voting machine but in the long run, it is a weighing machine”

The market doesn’t need a fundamental reason to do irrational things within a short timeframe, illiquid stocks like ATM can swing about over a year or so, but over the longer term, fundamentals come into play.

A large holder selling over a one year timeframe can affect and depress a market, as we have seen, for that same duration, but a long term trend it does not make.

IMO this dip from 97c has been absolutely over cooked, you will not see a better long term entry point for ATM within the next couple of years.

With an SP at 51c, ATM is;

49% from analyst consensus price targets at 76c,

88% from the level when AMP started to heavily sell down,

116% from my own humble valuation of $1.10,

143% from the First NZ spot valuation of $1.24, and they have just walked the talk,

And, the growth strategy for the company is sound, so, yes you could say I’m either bullish or have well researched the risk/reward position, I don’t mind either.

Buy when others are fearful and those stocks are undervalued.

Research reaps rewards.

Mac, I invite you to consider the financial position of another fast growing NZ company eyeing up the USA market called Xero.

At the last reporting date Xero had $254.9m in shareholders equity. There were 127.6m shares on issue. Yes I know there have been more shares issued and lots more cash burn since then. But to get a rough measure of things I will carry on. NTA for Xero at balance date was:

$254.9m/127.6m = $2.00

Last week's closing share price was $20.85. The share is trading at something in the region of ten times asset backing. The actual figure should be less than that today because of the amount of capital raised since.

As detailed in my post 3309, the asset backing of ATM was around 1.5c at last balance date. At 51c , ATM is trading at 34 times asset backing. So by the measuring stick of asset backing, ATM is trading at a price nearly three and one half times more expensive than Xero.

No investor would consider that the likes of Xero is cheap. So I put it to you that ATM is even by the standards of a growth company the most expensive company being quoted on the NZX today.

Now another yardstick, PE ratio. Another way of looking at PE is a number in years before you get your investment capital back, assuming alll earnings going forwards were paid back to you in dividends.

When a company trades on a PE of 50, and you are in your early twenties, you might expect your unborn grandchildren will eventually come of age. At that point, you will start to get a return on your original invested capital. ATM, however, takes this whole argument to another level.

I have explained to you in my post 2335, that the PE ratio for ATM was 36 million at balance date. To give that some historical perspective, an amount of time half way back to the age of the dinosaurs would have to elapse before you got any return on your investment!

Looking forwards your descendents who might benefit from such an investment going forward would very likely no longer be homo sapiens. More likely they will be part humanoid cyborgs who have long since left earth and are living on another planet. As for getting a return on your A2 investment, it is very likely cows will be extinct by then.

Faced with such overwhelming evidence of expense, I find it increduluous that you still believe ATM is 'cheap'. Not only is it the most expensive share on the NZ market. It is a likely candidate for the most highly valued share listed on any market in any country.

You blame the decline in share price on one large seller and tight liquidity, yet you fail to acknowledge exactly the same factors were present in reverse when the share price was bid up to 97c. 97c was a Ben Graham 'vote', caused by an index fund having to buy at any price.

A2 milk is a great product. But ATM as a company is an extreme value stretch at 51c. IMO 51c is so far above fair value, the weighing machine effect, when it comes into play, will cause a significant price correction downwards.

SNOOPY

[winner69]

Snoops, you seem to using 'cash' as a proxy for 'NTA' - what about the other tangible assets?

ATM NTA last balance date was 6 cents. XRO said there's was $2.07 the other day.

Just for clarification. Both outrageously overvalued still

[Snoopy]

Snoops, you seem to using 'cash' as a proxy for 'NTA' - what about the other tangible assets?

ATM NTA last balance date was 6 cents. XRO said there's was $2.07 the other day.

Just for clarification. Both outrageously overvalued still

I accept your corrections Winner. So reworking those price to asset ratios:

ATM: 51c/ 6c = 8.5

XRO: $20.85/ $2.07 = 10.1

ATM is only the second most highly valued share on the planet. Apologies to any of the faithful I have offended with my miscalculation.

SNOOPY

[winner69]

I accept your corrections Winner. So reworking those price to asset ratios:

ATM: 51c/ 6c = 8.5

XRO: $20.85/ $2.07 = 10.1

ATM is only the second most highly valued share on the planet. Apologies to any of the faithful I have offended with my miscalculation.

SNOOPY

Snoops .....both quite respectable relative to say Spark which is 12 times NTA

Suppose we better stick to PE ratios. Did you notice that XRO's PE has reduced with their latest result ?

[Snoopy]

Snoops .....both quite respectable relative to say Spark which is 12 times NTA


Winner, Spark is not a growth company. They make a profit!



Suppose we better stick to PE ratios. Did you notice that XRO's PE has reduced with their latest result ?


Last time I mentioned earnings on the XRO thread, and suggested there weren't any, I got bombarded with negative reputation points. I hope you weren't trying to wind me up! ATM are a very respectable company compared to those other guys.

SNOOPY

[winner69]

Winner, Spark is not a growth company. They make a profit!



Last time I mentioned earnings on the XRO thread, and suggested there weren't any, I got bombarded with negative reputation points. I hope you weren't trying to wind me up! ATM are a very respectable company compared to those other guys.

SNOOPY

Just thought you might like to know that XRO has a PE of -61 according to ANZ site ...after Friday it's reduced to -38

[NT001]

Something simple on back of tee shirt. Big writing a2 Milk, and much much smaller print above that a2 milk would be the words 'What Is'. Everyone will start tapping you on the shoulder if you haven't got a ponytail to pull, asking you what is a2 Milk:). Then you can hand them a flyer.

See weed, I think the chances of a total stranger tapping me on the shoulder to ask such a question would be about zero, and the chances of my happening to have a bunch of flyers in my hand at that moment would be even less. No, there would need to be a succinct informational message rather than a question. And that will have to be carefully nutted out. Plus probably the a2MC site URL. Anyway, we're getting a bit ahead of ourselves here, I think.

[skid]

There is certainly nothing wrong with a company bringing a new and exciting product to market--But you guys have IMO given some pretty good facts to back up the idea that it may not be the investment of the century and investors should keep their feet on the ground.

[NT001]

There is certainly nothing wrong with a company bringing a new and exciting product to market--But you guys have IMO given some pretty good facts to back up the idea that it may not be the investment of the century and investors should keep their feet on the ground.

No one is suggesting it's the investment of the century, Skid. And it may not be the investment of the week either, as it's not ideal for those focusing on short term TA and seeking quick returns. But let's say it could be one of the investments of the decade. That's the way I view it, and I think some others do too. Our feet are on the ground but our perspective is longer term, based on the company's fundamental scientific underpinning and IP which are still not widely appreciated, plus the growing world consumer interest in safer food. Our view is shared by some big players despite the present volatility of the market.

[Harrie]

You blame the decline in share price on one large seller and tight liquidity, yet you fail to acknowledge exactly the same factors were present in reverse when the share price was bid up to 97c. 97c was a Ben Graham 'vote', caused by an index fund having to buy at any price.

Snoopy...You are pushing that barrow a bit hard mate. Firstly Milford is not an index follower, most of its funds operate as absolute return funds. In other words the index has nothing to do with how they manage their funds despite the fact that they may compare their performance to a recognised index.

Secondly Milfords holdings in ATM were far above the % ATM represented in the NZX 50 in fact at around 60c ATM only just made it into that index. At 97c ATM would have represented around 6% of the total market and around 9% of the NZX50 so you could hardly say that they needed to continue to buy as the price increased on that basis given that they already held around 15%. That is more than twice what they needed to be if they were following that index.
Following mandates, that can change as market conditions change, is quite different to following indices. Selling pressure is more of a mandate change in strategy which is more often than not caused by risk minimisation, and that's where IMO where the selling pressure is coming from. Its nothing to do with NTA's and P/E's, its simply a reassessment of the risks involved with the possibility that ATM's growth strategy will pay off. That's why I think that the 49 to 53 range will be maintained until sales volumes in target markets either meets expectations or disappoints.

[kizame]

Really well put Harrie, if it's one thing I really like about Snoopy it is the fact that he brings out the best in the companies' followers,not only this company either.
It is great to read very knowledgable shareholders justifying their stance on a company and of course Snoopy for nudging them to the keyboard.
It is this sort of cross examination if you like,that educates the rest of us.

[winner69]

You blame the decline in share price on one large seller and tight liquidity, yet you fail to acknowledge exactly the same factors were present in reverse when the share price was bid up to 97c. 97c was a Ben Graham 'vote', caused by an index fund having to buy at any price.

Snoopy...You are pushing that barrow a bit hard mate. Firstly Milford is not an index follower, most of its funds operate as absolute return funds. In other words the index has nothing to do with how they manage their funds despite the fact that they may compare their performance to a recognised index.

Secondly Milfords holdings in ATM were far above the % ATM represented in the NZX 50 in fact at around 60c ATM only just made it into that index. At 97c ATM would have represented around 6% of the total market and around 9% of the NZX50 so you could hardly say that they needed to continue to buy as the price increased on that basis given that they already held around 15%. That is more than twice what they needed to be if they were following that index.
Following mandates, that can change as market conditions change, is quite different to following indices. Selling pressure is more of a mandate change in strategy which is more often than not caused by risk minimisation, and that's where IMO where the selling pressure is coming from. Its nothing to do with NTA's and P/E's, its simply a reassessment of the risks involved with the possibility that ATM's growth strategy will pay off. That's why I think that the 49 to 53 range will be maintained until sales volumes in target markets either meets expectations or disappoints.

I'm sure Snoopy used the word 'index' in a general sense rather than a specific one in describing Milford et al. If he had not used that word I'm sure your reply would be different.

The way Milford and others pushed the ATM shareprice to 90 cents was behaviour of a 'voting machine' in action. This happened not only with ATM but with many other stocks

The price being 'voted' up to 90 cents should be seen as the 'true worth' of ATM.

As you say harrie circumstances (you mentioned risk /reassessment) and maybe 50 cents odd is a fair realistic valuation of ATM assuming the big plan works.

(Note: Even though Milford is nt an index hugger per se there s that mantra of beating the 'index' as well as beating others, meaning they do to some extent jump on 'bandwagons' in case they miss out)

[MAC]

Not at all Harrie, there are as many reasons for short term moves in share price as there are short termers, although when a large holder must sell for policy reasons into an illiquid market it can have a large effect as we have seen over the last year or so.

I’m a long term investor and not particularly interested in the short term, I research businesses, I buy sound growth oriented business plans, monitor their progress, and hold them whilst they remain on track.

The fundamental position of ATM has been ever increasing over the last three years extraordinarily well, and largely to the plan laid down in 2012, and that is a matter not one bit altered by short term volatility in share price or transient swings in short term sentiment.

Gross margins are the highest within the sector and every skerrick of free cashflow generated from those margins has been re-invested into expanding the product line and in opening large new markets. Elements that offer cash cow levels of forward free cash flow.

Watch as that free cash flow becomes greater than the re-investment rate over the next few years.

Analyst price target consensus: $0.76
My humble DCF base case: $1.10
First NZ Capital spot valuation: $1.24

https://www.nzx.com/files/attachments/211923.pdf

The FA’s recognise the value Harrie, and grossly undervalued stocks with exceptional fundamentals such as ATM always return to fair value over time.

kind regards, Mac

[winner69]

harrie (part of)
Secondly Milfords holdings in ATM were far above the % ATM represented in the NZX 50 in fact at around 60c ATM only just made it into that index. At 97c ATM would have represented around 6% of the total market and around 9% of the NZX50 so you could hardly say that they needed to continue to buy as the price increased on that basis given that they already held around 15%. That is more than twice what they needed to be if they were following that index.

Some big numbers you quote.

Doubt if ATM ever represented 9% of the NZX50 ......probably well under 1%

ATM Active Fund has ATM as 1.8% of that total fund

Just to keep record straight

And I understand that AMP weren't compelled / forced to sell down as much of ATM as they did. ATM was a great investment for them over the years with a decent proportion of hem acquired at 10 cents or less

[skid]

So are we all on the same page when trying to evaluate this share ? Is it sitting about where it should be or is it still overvalued--or is it grossly undervalued? And are we talking about now, or are we talking about in 5 years time?
In the last year we have seen the SP decrease by roughly 50%--Is that a short term fluctuation (1 year)? (and is someone who has a 1 year window of investment any less commendable in terms of worth?)
If in fact the market has valued this share at this point,(while it waits to see if opening up new markets brings large profits or turns into cash burn), is logical,then IMO trying to predict what will happen in 5 yrs time and according to that prediction, labeling it grossly undervalued,(or overvalued) is not going to help those who would like to see an increase ,instead of decrease in the next year.
It took a year to get from roughly where it is now to almost $1 and a year to get back to where it is now.
In terms of FM,they have put all their free cash flow into opening large new markets-that may or may not work--It is not a given(how many companies have we seen that have seen their demise by vigorously expanding into foreign markets)
Have you ever tried counting the number of products in the dairy section alone in an American supermarket?--Its an outlet where you can go get your product that has been brought to your attention and you are impressed with(so how is the marketing going?)(what kind of ''shelf real estate'' is it getting?)
Those who have done research and provided their reasons ,I applaud, and it all helps with our education of where do we go from here.

In terms of absolute statements as to the value of this company,the jury is still out as to whether they are ''on track'' --lets hope so.

[NT001]

So are we all on the same page when trying to evaluate this share ? Is it sitting about where it should be or is it still overvalued--or is it grossly undervalued? And are we talking about now, or are we talking about in 5 years time?


Valid questions, Skid. All shares, including blue chips, are a bit of a punt. They can all go wrong because of unexpected commercial setbacks (such as Fonterra has had), strategic decisions by big shareholders, investor fickleness...you name it. And we're all aware that innovative new companies placing their bets on new markets are especially vulnerable. Anyone investing in ATM must have their eyes open. It's not enough to compare its annual results with the financial risks attached to market expansion. That stuff is all beside the point.

I've said it before and will say it again, anyone who has bought shares in ATM without reading Prof Woodford's book "Devil in the Milk" (and also looking at the scientific research listed on <http://www.betacasein.org/disclaimer.php?prevpage=> if you want the science) is buying a pig in a poke. Not a wise investment. Like, I wouldn't buy shares in a gold mining company because I know zilch about gold mining.

There's no such thing as saying ATM is currently over-valued or under-valued. Its "value" is impossible to estimate at this time. To answer your question, I'd see it as a good five-year investment, but that's not based on any recognised method of analysis of its present financial performance. It's based on an informed assessment of its future. Not a blind punt, but with a speculative element just the same. One of the main things to watch is whether its management team is acting smartly and responsibly. I think it is.

[klid]

It's about right, because the market is never wrong. :)

Or is it.

[couta1]

It's about right, because the market is never wrong. :)

Or is it.
A schizophrenic market suffering from paranoid delusions couldnt be wrong now could it:eek2:

[skid]

Valid questions, Skid. All shares, including blue chips, are a bit of a punt. They can all go wrong because of unexpected commercial setbacks (such as Fonterra has had), strategic decisions by big shareholders, investor fickleness...you name it. And we're all aware that innovative new companies placing their bets on new markets are especially vulnerable. Anyone investing in ATM must have their eyes open. It's not enough to compare its annual results with the financial risks attached to market expansion. That stuff is all beside the point.

I've said it before and will say it again, anyone who has bought shares in ATM without reading Prof Woodford's book "Devil in the Milk" (and also looking at the scientific research listed on <http://www.betacasein.org/disclaimer.php?prevpage=> if you want the science) is buying a pig in a poke. Not a wise investment. Like, I wouldn't buy shares in a gold mining company because I know zilch about gold mining.

There's no such thing as saying ATM is currently over-valued or under-valued. Its "value" is impossible to estimate at this time. To answer your question, I'd see it as a good five-year investment, but that's not based on any recognised method of analysis of its present financial performance. It's based on an informed assessment of its future. Not a blind punt, but with a speculative element just the same. One of the main things to watch is whether its management team is acting smartly and responsibly. I think it is.

A fair and balanced post----(I do believe in the product,by the way) Just tend to take blanket statements with a grain of salt(not directed at you)--cheers

[bull....]

look at the bids at 46 and 41 someone thinks its going down

also cant fnzc lend there new holding out for shorting?

[skid]

It's about right, because the market is never wrong. :)

Or is it.

If you are trying to buy or sell shares on the day--No its not:)

Otherwise its a bit of a grey area--actually its an ''us'' rather than an ''it''

whether its right or wrong--its a dangerous thing to dismiss (you could probably do a doctorate on ''the collective psychological value of ''worth''

[MAC]

I’m pretty sure that nearly every FA and analyst in the world may disagree with you when you say that stocks cannot be valued NT001, many make a precise science and a professional career of it.

But, yes the company is on track and management have proven they are both capable and can deliver.

Australia:
The strategic plan target (2012) was for a market share of 10% by 2016, they are presently at 9.7%, slightly ahead of that schedule and ATM in addition have launched further products outside of that plan within that timeframe.

UK:
They had a temporary delay created by their joint venture partner, but bought them out and moved on, and now ATM have 100% of the UK business, the plan was 50% going forward. ATM have just advised second half revenues will be double first half suggesting the start of the growth curve. That leaves an expectation of profitability in 2016 which is in keeping with the original strategic plan.

China:
Fresh milk sales will be the mainstay and will more than compensate for the temporary regulatory delays, now passed, affecting infant formula sales. ATM have advised that they, in conjunction with retailer feedback, expect fresh milk sales to double this year and again next year. Then there are the UHT sales and the prospective SE Asia fresh milk market to kick in shortly.

US:
Product launched on time, three supermarket chains on board, similar gross margins to Australia, similar demographic, the correct recipe for success, will be an interesting watch over the next three years also.

[Snoopy]

US:
Product launched on time, three supermarket chains on board, similar gross margins to Australia, similar demographic, the correct recipe for success, will be an interesting watch over the next three years also.

Mac if A2 milk in the USA had similar gross margins to Australia, it wouldn't need to be funded from Australia! You will have noticed that the $A has declined significantly against the USD in recent months. That means less USD to fund the US expansion. Couple this with a big talking ex Pepsi manager driving things in the US and a softening of ATMs intention to not raise new capital, I would guess the book build is happening as we speak. That would expain why the ATM share price is weak.

SNOOPY

[Harrie]

Some big numbers you quote.

Doubt if ATM ever represented 9% of the NZX50 ......probably well under 1%

ATM Active Fund has ATM as 1.8% of that total fund

Just to keep record straight

And I understand that AMP weren't compelled / forced to sell down as much of ATM as they did. ATM was a great investment for them over the years with a decent proportion of hem acquired at 10 cents or less

Just using market cap rates for NZX50 and total market. These numbers are readily available. Naturally at 97c ATM's cap would have represented a higher % of market cap than at 60c.
When I talk about what Milford held I'm talking about TOTAL percentage. The share of ATM held in specific portfolios is allocated on risk profile so some funds will hold more than others within the array of funds available managed by Milford.
The 15% held by Milford has been known for some time. Not sure what they own now.

Good investment from AMP if they purchased at 10c, but what investor looks at selling irrespective of the profits that can be made by selling now, if they can see future upside. Something has happened to their risk assessment hasn't it, or were they a forced seller?

[NT001]

I’m pretty sure that nearly every FA and analyst in the world may disagree with you when you say that stocks cannot be valued NT001, many make a precise science and a professional career of it.

But, yes the company is on track and management have proven they are both capable and can deliver.

Well as you know, MAC, I'm not one of the stock analysts you mention, and I rather take the view that they - and I know that includes you - are a bit like the scientists who understand what causes earthquakes and can tell you the mathematical chances of having a magnitude 9 quake once in the next 300 years, but can't tell you whether it'll be tomorrow, or even if it will happen at all. Fat lot of use that is, in my opinion, except that it's worth knowing you should DYOR and get a LIM report if buying an old brick house built on quicksand.

Heaps of things can go wrong. My ATM shares will go to my heirs and successors probably, but I've already told them "don't sell in the short term", and I don't mind admitting I've also told them of your DCF estimate and some of the others out there. They're comforting up to a point, but who's to say they won't be revised downwards in a few months? And what does that say about the "precise science" they're based on? You once told me you'd never invest as I do without doing FA calculations, and that's the difference between us I guess. I prefer the precise science underlying the A2 proposition, which is now so strong it can only be strengthened, not overturned.

Everything you say about the company implementing a well thought-out market strategy is correct and in my view probably a little under-stated, but translating that into investment value at this stage seems to me, well, speculative.

[MAC]

Each to their own I guess at the end of the day, if everyone had the same investment approach markets would go in straight lines. Although, I’m not sure Warren would have become an oracle without fundamental analysis.

One thing that I think we can agree on I think is that a2MC have a reasonable track record now of success.

Whilst it takes two to three years to open up new geographic markets in the UK and US, it is done so by a company with well sourced management, ex Campbell Arnott’s and now Pepsi, and an FMCG business model which has been proven.

The China market is a bit more immediate though as the a2 milk is source from already existing production facilities in Australia and New Zealand and just retailed within market. IMO it’s this market that holds the best growth prospects over the next 6 to 12 months, particularly in fresh milk and UHT, perhaps with the Bangkok, Jakarta and Singapore markets coming on stream in that time frame also.

Analyst revenue estimates were exceeded at HY15, they are presently FY15 $154M (+38%), although I would not be surprised to see on the day, that that estimate is also proved to be a little conservative.

regards, Mac

[mayday]

look at the bids at 46 and 41 someone thinks its going down

also cant fnzc lend there new holding out for shorting?

No sign of shorting by far
http://www.asx.com.au/data/shortsell.txt

not a wise movement to short A2MC (after reading MAC&NT's comments) :D

[bull....]

No sign of shorting by far
http://www.asx.com.au/data/shortsell.txt

not a wise movement to short A2MC (after reading MAC&NT's comments) :D

im happy being on the other side

[skid]

look at the bids at 46 and 41 someone thinks its going down

also cant fnzc lend there new holding out for shorting?

I think its more or less business as usual...Some maybe feeling uneasy or profit taking and some on the other side looking for a bargain--couple big numbers on each side

[drcjp]

Sorry, but this is total B***S***
https://nzx.com/companies/ATM/announcements/263640
What kind of financial co. CAN'T COUNT?

I smell more shenanigans....

[skid]

Havnt seen a basic cock up like that since PEB had to retract one of their announcements--Makes you wonder how seriously to take a performance valuation from a company that cant count:eek2:

[MAC]

Two months away from the end of the FY15 reporting period, and I’ve a revenue estimate of $161M (+45%), happy to share and compare analysis offline as always;



AUS Fresh Milk
$114.4M


AUS Infant Formula
$37.5M


AUS UHT/Cream/Yogurt
$1.0M


China Segment
$5.5M


UK & US Segment
$2.7M


TOTAL
$161M (+45%)


Such a result would also satisfyingly place a2MC on track for achieving their stated FY16 goal of $230M in revenues.

Also of interest is a start of the planned diversification away from Australian fresh milk sales, which IMO may peak sometime in the next couple of years.

Base case:

Australian fresh milk market share 9.6%, mean period NZD/AUD exchange rate 0.95, double second half UK revenues as advised by a2MC, continued momentum in Australian infant formula sales growth. Fresh milk and infant formula sales traction in China.

Sensitivities:



Australian Fresh Milk Market Share 10%
$166M (+49%)


Australian Fresh Milk Market Share 9%
$154M (+38%)


Mean Period NZD/AUD Exchange Rate 0.96
$160M (+44%)


Mean Period NZD/AUD Exchange Rate 0.94
$162M (+46%)

[winner69]

Suppose FNZC / Harbour have a had a sizeable chunk of ATM shares for some time and its just now they have or may not have crept over the 5% mark

[NT001]

If A2 milk in the USA had similar gross margins to Australia, it wouldn't need to be funded from Australia! You will have noticed that the $A has declined significantly against the USD in recent months. That means less USD to fund the US expansion. Couple this with a big talking ex Pepsi manager driving things in the US and a softening of ATMs intention to not raise new capital, I would guess the book build is happening as we speak. That would expain why the ATM share price is weak.

Not sure that the first statement follows. It seems to indicate a continuing preoccupation with accounting minutiae which obscure the larger picture. Yes, you can argue that the US operation is being initially "funded from Australia", but that's really just saying it's being funded from company profits. There are obviously setup and other costs such as staffing, promotion etc that don't get repaid out of sales revenue from day one, whatever margins are charged, and if a2MC didn't have that initial cash provided for we'd have a solid basis for complaining.

I haven't seen much "big talking" from the new US CEO (ex-Pepsi), but people who know him think highly of him as a savvy operator (and he knows that A2 Milk is not Pepsi).

As for "a softening of ATM's intention to not raise new capital", I haven't really detected this. It has been the company's stated position for quite a while that there is no present intention to raise fresh capital but such an option is not ruled out if circumstances warrant. The model being used for developing the US, UK and China markets is capital-light, but of course if the US operation is speeded up there could be some need, not huge. I wouldn't see it as being enough to weigh down the share price significantly, given that it would be based on the prospect of an accelerated increase in revenues. And it could probably be borrowed.

[NT001]

If A2 milk in the USA had similar gross margins to Australia, it wouldn't need to be funded from Australia! You will have noticed that the $A has declined significantly against the USD in recent months. That means less USD to fund the US expansion. Couple this with a big talking ex Pepsi manager driving things in the US and a softening of ATMs intention to not raise new capital, I would guess the book build is happening as we speak. That would expain why the ATM share price is weak.

Not sure that the first statement follows. Yes, you can argue that the US operation is being initially "funded from Australia", but that's really just saying it's being funded from company revenues. There are obviously setup and other costs in the US such as staffing, product promotion etc that don't get repaid out of sales revenue from day one, regardless of margins, and if a2MC didn't have that initial cash budgeted for we'd all be complaining.

I haven't seen much "big talking" from the new US CEO (ex-Pepsi), but people who know him think highly of him as a savvy operator, and he knows that A2 Milk is not Pepsi.

As for "a softening of ATM's intention to not raise new capital", it has been the company's stated position for quite a while that there is no present intention to raise fresh capital but such an option is not ruled out if and when circumstances warrant. The model being used for developing the US, UK and China markets is capital-light, but if the US operation is ramped up there could obviously be some need, not huge. I wouldn't see it as being enough to weigh down the share price unduly, given that it would be based on the prospect of substantial boost in revenues. It could even be borrowed.

[Snoopy]

As for "a softening of ATM's intention to not raise new capital", I haven't really detected this. It has been the company's stated position for quite a while that there is no present intention to raise fresh capital but such an option is not ruled out if circumstances warrant. The model being used for developing the US, UK and China markets is capital-light, but of course if the US operation is speeded up there could be some need, not huge. I wouldn't see it as being enough to weigh down the share price significantly, given that it would be based on the prospect of an accelerated increase in revenues. And it could probably be borrowed.

You can't pay an interest bill out of revenues. You need profits. ATM has engineered their growth so they make no profits. I conclude that if they need more capital over and above what is being generated in Australia, the only option is to issue more shares.

SNOOPY

[winner69]

You guys made out the ASX listing as the bees knees and Aussies would be falling over themselves to buy the shares the NZ brokers had been hoarding for this and the share price would rocket to 70 cents (or was it 80 cents) and appreciate from there because Aussie investors valued growth (more than stupid New Zealand investors) and would like what this Aussie company is doing. (Long sentence but seems to cover what you were saying)

What's happened guys and girls ......price seems less than it was. Your hype was just that.

Your next trick to boost the share price is?

I am getting bored ......want another trade from mid 40s to 70 or 80 or maybe 80 ....who knows where it might go

ATM cheap as at the moment .....goodness gracious its even 17% below my DCF valuation of 59 cents (the scenario of some success in global markets)

[MAC]

Well, it’s possible Harbour’s model may yet be proven correct given the RBNZ announcement this morning;

http://www.harbourasset.co.nz/wp-content/uploads/2015/02/Harbour-Navigator-NZDAUD-Parity-Question-2.pdf

http://www.scoop.co.nz/stories/BU1504/S00810/nz-central-bank-says-cut-to-ocr-may-be-needed.htm

[skid]

You guys made out the ASX listing as the bees knees and Aussies would be falling over themselves to buy the shares the NZ brokers had been hoarding for this and the share price would rocket to 70 cents (or was it 80 cents) and appreciate from there because Aussie investors valued growth (more than stupid New Zealand investors) and would like what this Aussie company is doing. (Long sentence but seems to cover what you were saying)

What's happened guys and girls ......price seems less than it was. Your hype was just that.

Your next trick to boost the share price is?

I am getting bored ......want another trade from mid 40s to 70 or 80 or maybe 80 ....who knows where it might go

ATM cheap as at the moment .....goodness gracious its even 17% below my DCF valuation of 59 cents (the scenario of some success in global markets)

Bit of a Deja vu is'nt it? Have you noticed how this thread has bumped another popular thread?(dont think Ive ever seen PEB so quiet for so long)--Both have potential but....just sayin..

Ramping up on the OZ exchange does seem to provide a temporary boost (like XRO) but then the dust settles..

Ive come to appreciate 2 words more and more as time goes on---Succesful Marketing---IMO ,that will be the key.

[MAC]

At HY15 reporting a2MC told us;

“A further standout for the period was the growth in sales of a2 Platinum™ infant formula in Australia in both grocery and pharmacy channels, and also in New Zealand where sales grew from a low base. Total sales of infant formula in Australia and New Zealand for the half year were $16.07 million”

That was an extraordinary leap in sales and that $16M represented 21.4% of total revenues.

My calculator tells me that $16M in sales represents around 1M tins sold within a six month period, yet in Australia and New Zealand only around 270,000 babies are born each year. We may be correct then in thinking that something doesn’t quite stack up ?

That’s either an extraordinary and spontaneous leap in Australian infant formula market share, or, more likely IMO much or even most of that infant formula is travelling on the black market to China.

With Australian and NZ based punters like these below selling a2 infant formula on Alibaba with minimum container sized orders, it would seem to be a lucrative and prolific play for them.

http://www.alibaba.com/product-detail/A2-Platinum-Premium-Infant-Formula-900g_175949829.html

http://www.alibaba.com/product-detail/A2-Platinum-Premium-Toddler-Milk-900g_175949070.html

http://www.alibaba.com/product-detail/A2-Infant-formula-stage-1-3_163035828.html

ATM China segment revenues at HY15 were only $1M, thus, one may also conclude that at that time way more infant formula sales were presently being made on the black market than are going through ATM’s own distribution channels.

Still though it shows the potential for the China market, and now that the regulatory and distribution channel changes are done and dusted, we may well see China segment revenues get a boost at FY15.

I’m looking for a continuation of this momentum at FY15 with Australian infant formula sales of $37.5M and China segment revenues of $5.5M.

Mac

[drcjp]

At HY15 reporting a2MC told us;

“A further standout for the period was the growth in sales of a2 Platinum™ infant formula in Australia in both grocery and pharmacy channels, and also in New Zealand where sales grew from a low base. Total sales of infant formula in Australia and New Zealand for the half year were $16.07 million”

That was an extraordinary leap in sales and that $16M represented 21.4% of total revenues.

My calculator tells me that $16M in sales represents around 1M tins sold within a six month period, yet in Australia and New Zealand only around 270,000 babies are born each year. We may be correct then in thinking that something doesn’t quite stack up ?

That’s either an extraordinary and spontaneous leap in Australian infant formula market share, or, more likely IMO much or even most of that infant formula is travelling on the black market to China.

With Australian and NZ based punters like these below selling a2 infant formula on Alibaba with minimum container sized orders, it would seem to be a lucrative and prolific play for them.

http://www.alibaba.com/product-detail/A2-Platinum-Premium-Infant-Formula-900g_175949829.html

http://www.alibaba.com/product-detail/A2-Platinum-Premium-Toddler-Milk-900g_175949070.html

http://www.alibaba.com/product-detail/A2-Infant-formula-stage-1-3_163035828.html

ATM China segment revenues at HY15 were only $1M, thus, one may also conclude that at that time way more infant formula sales were presently being made on the black market than are going through ATM’s own distribution channels.

Still though it shows the potential for the China market, and now that the regulatory and distribution channel changes are done and dusted, we may well see China segment revenues get a boost at FY15.

I’m looking for a continuation of this momentum at FY15 with Australian infant formula sales of $37.5M and China segment revenues of $5.5M.

Mac

Sales of infant formula: stuff is well priced at $30 a tin. Easy to use 6 tins in 6 months. At that rate you are looking at 90,000 babies. Its possible, but one wouldn't expect 1/3 of all births to use it? Maybe....

[sb9]

Wow, another big volume day...almost 4mln shares traded so far. Something is up, I think. At least price is up couple of cents...

[drcjp]

Wow, another big volume day...almost 4mln shares traded so far. Something is up, I think. At least price is up couple of cents...

Maybe those interested in investing in milk (and its IP) have seen Fonterra's continuing ability to annoy farmers, the Govt. and humanity in general for what it is, and now see A2M as a viable alternative?

Or, are NZFC still practicing their counting?

[JohnnyTheHorse]

Just like clockwork, a bounce off 49 cent support. It's range bound from 49-58, so play to it (that's a 20% move!). Some aggressive buying today, largely dominated by the NZX side of things. Where will it go tomorrow?

[Harrie]

ABC "The checkout" program last night rubbishes a2 Milk. We have all heard it before but to the uninitiated its pretty negative. Plays heavily on the fact that there is no conclusive scientific evidence. More debate = more sales? Satirical presentations like this are very powerful, unfortunately most will take it at face value.
Be interested to see if a2mc responds to it

https://www.youtube.com/watch?v=tP1XGmr26Mo

[skid]

Apparently milk solid sales are only bringing in half what they were last year so must be tough on farmers and Fonterra--Im not sure how this all plays out for A2 but its something to think about

[NT001]

ABC "The checkout" program last night rubbishes a2 Milk. We have all heard it before but to the uninitiated its pretty negative. Plays heavily on the fact that there is no conclusive scientific evidence. More debate = more sales? Satirical presentations like this are very powerful, unfortunately most will take it at face value.
Be interested to see if a2mc responds to it

https://www.youtube.com/watch?v=tP1XGmr26Mo

I agree with Harrie that this programme will be damaging. But it is not a fact that "there is no conclusive scientific evidence" for the A2 proposition. Some guy made that statement in this program and it's been taken as correct. That's the Dairy Australia line and I think he was a spokesman for Big Dairy - the clip looks familiar.

There is now plenty of conclusive scientific evidence, fully backed up by peer-reviewed research round the world, that A1 milk generates a dangerous peptide (BCM-7) in the digestive system. And that BCM-7 can escape through the gut wall and get into the bloodstream of some consumers, and get from there into the brain where it plays havoc in a variety of ways.

There are also dozens of recent studies that link BCM-7 with conditions such as autism, SIDS, schizophrenia and of course digestive discomfort. Some are based on the observed and measured results of A1 consumption involvingy human subjects. They are not studies that have been paid for or supported by a2MC. They have been published in reputable scientific journals, whose review panels require very high standards of proof. The presenter of this programme does not dispute them, she simply mocks them as if they're unbelievable. She uses inference and BS rather than fact.

The research showing that A1 milk is hazardous to some consumers is rock solid. There is no research that disputes it. Big Dairy, with its own armies of highly qualified scientists, doesn't dispute it, which it obviously would if it could. The Australian Dietitians Society which is quoted in the programme is not a scientific research organisation. It is an organisation of dietitians who understandably do not want the A2 controversy to scare people away from drinking cows' milk altogether and switching to less nutritious alternatives such as soy.

There will be new clinical trial results before long (including trials using human subjects) that will further answer the doubts that are often raised. But it'll be a slow process. And unfortunately I think a2MC will have to continue supporting some research, even though critics who can't actually dispute the science itself use this fact to debunk it . The reason for a2MC support is that governments and universities in Australia and NZ are scared by the power of Big Dairy and they do not want to commit funding for such research. They also do not want to create doubts about the safety of their huge dairy export industries. But the review panels of science journals have very adequate protocols for ensuring that the financial or personal involvement of interested parties in research projects has not influenced the findings.

As Fonterra is aware, there is potential that it could be sued in due course for knowingly selling a potentially hazardous product. It actually held patents at one stage based on the links between A1 and certain medical conditions, but such a position could obviously be self incriminating and it now has a policy of trying to maintain a position of plausible ignorance.

I would say a2MC very likely has a good case for suing the makers and broadcasters of this programme for defamation. It is damaging and it contains numerous untruths and examples of insult by inference. It is undoubtedly malicious, and the defence argument that it's supposed to be "funny" wouldn't work in court. We'll see. Maybe the company will decide to leave it alone, and not divert resources from market-building to lining the pockets of lawyers.

[MAC]

Makes for good TV don't you think NT001, dramatizing and summarising all the perceived negatives and avoiding and ignoring all the pertinent perceived positives. Agree though it may have some temporary influence on the market as a sound bite segment can do.

Although, I'm not sure all those mum's using a2 infant formula because it's the closest thing one can buy to a2 human milk will be swayed. Offering the best and as close as you can get is very powerful psychology and marketing when it comes to putting products inside one's baby.

And I suspect all those facebook posting folk who have tried the product and convinced themselves of the benefits, regardless of which scientific camp said what and when, won't be swayed much either.

The company is very close to achieving their goal of a 10% market share.

Some of the other 90% of folk may well be swayed by entertaining checkout TV, but a2 milk seems to have a very high customer retention and loyalty level indeed, with some even regarding it as a medicinal necessity, it’s not just another brand of milk to them to chop and change about.

And there’s still very many folk amongst that 90% yet to try Australia’s fasted growing milk product for themselves.

[sb9]

In the meantime, almost another 2mln shares traded through...

[MAC]

Here you go NT001;

"What is The a2 Milk Company’s response to The Checkout episode which aired on April 30 on the ABC?"

“The a2 Milk Company was asked by the program’s producers to answer some specific questions before the episode went to air. We did so, and were disappointed that the producers have offered their viewers a less balanced view of the facts than were presented”

http://a2milk.com.au/wp-content/uploads/2015/05/23042015173331-0001.pdf

http://www.a2milk.com.au/qna/what-is-the-a2-milk-companys-response-to-the-checkout-episode-which-aired-on-april-30-on-the-abc/

[MAC]

Oh yeah, and here is the ABC response;

http://www.abc.net.au/tv/thecheckout/about/a2_milk_response.pdf

I'm just considering whether it would be advantageous, from entirely and purely a marketing perspective, for a2MC to seek some form of legal action for defamation.

It would inflame and lubricate the debate somewhat, and there are still 90% of Australians yet to experience all that is good about a2 milk.

Certainly the Pura/Lion debacle benefited ATM's market share, perhaps this would also.

"Small innovative milk company singled out from dozens, beaten up and slandered by global TV network"

Debate ---> Awareness ---> Sales

[NT001]

Firstly I think the a2MC position has been pathetic right from the start. In its initial reply to questions from the Checkout researcher it should have taken a far more positive stance. It adopted a kind of cautionary stance as if it had something to hide and was on the defensive. It should for example have cited anecdotal reports, and also pointed out that there is quite a lot it would like to say about the science on behalf of A2 (and aganst A1) but it is quite restricted by the law in what it can say.

Nevertheless, it looks to have been ambushed, and the programme is clearly unbalanced, defamatory and commercially damaging. It is not sufficient as a defence to say "we wrote and asked some questions". I assume that if a2MC had known in advance that the intent of the programme was to openly brand A2 Milk as "bull****" it would have worded its responses somewhat differently.

I really can't see how a2MC can do other than sue. The problem is that if it doesn't, the branding of its product as "bull****" stands uncontested, not only in Australia but all round the world. The YouTube version will be constantly referred to everywhere. And if a2MC doesn't sue, its critics will note that it did not do so, presumably because didn't have a case for disputing the "bull****" tag . That in itself is very damaging to its reputation. There are times when you have to sue, even though the company's policy has been (quite sensibly) to try to avoid litigation.

It'll be interesting to see how sales in Australia are affected.

Meanwhile the Daily Mail's website, which I understand is the most widely read in the world or close to it, recommends to runners preparing for the London Marathon that they use A2 milk.

http://www.dailymail.co.uk/femail/food/article-3046744/What-runners-eating-seven-days-prepare-London-Marathon.html