ATM - A2 Milk Corporation Limited

[hilskin]

For anyone still not sure what A2 milk is here is a video from last week shown on the channel 9 Morning show.
Channel 9 Mornings & Dr Joanna McMillan - a2 Milk Segment



https://www.youtube.com/watch?v=LMYg1Hr4A28&feature=c4-overview&list=UUIWTS-Xz1SYZpQBf4O65LLQ

[biker]

For anyone still not sure what A2 milk is here is a video from last week shown on the channel 9 Morning show.
Channel 9 Mornings & Dr Joanna McMillan - a2 Milk Segment





https://www.youtube.com/watch?v=LMYg1Hr4A28&feature=c4-overview&list=UUIWTS-Xz1SYZpQBf4O65LLQ

Thanks hilskin. Well worth a look. A very clear explanation.

[Hoop]

Hoop! Thank you.

In all transparency I invested nickels and dimes. This will be a good learning experience for me.

I did my research on A2 milk and I found it to be a healthy stock to invest in. Evidence suggests I'm helping the world become healthier.


What makes you say that Hoop?

you guys are a bit late coming to this party don't you think...the sharemarket been raging onwards and upwards for 4.5 years now...NZX50 index + nearly 100%.
ATM up over 10x ....plenty left for u guys u reckon?

EDIT: oh yeah I forgot...yep contributing towards a healthier world.......and a warmer world (http://science.howstuffworks.com/zoology/mammals/methane-cow.htm)....so we are going to be healthier, wealthier (ATM rising), and warmer:)

[nextbigthing]

What makes you say that Hoop?

ATM appears to have a good plan ahead, my question was meaning more along the lines of, surely if they're going to be $5.xx longer term then what does it matter if SirPrize bought at 0.74 vs 0.77 or even missing say 0.40 etc if his/her plan is to hold... Therefore do you believe they're not going to make it to $5.xx and why? I appreciate P.E is high but you get my point.

As Moosie said, it's all learning. I don't currently hold ATM or a lot of the stocks I'm following. I'm just trying to learn as much as possible before I start throwing the large sums around :) hence my question

Cheers,

NBT

[SirPrize]

For anyone still not sure what A2 milk is here is a video from last week shown on the channel 9 Morning show.
Channel 9 Mornings & Dr Joanna McMillan - a2 Milk Segment



https://www.youtube.com/watch?v=LMYg1Hr4A28&feature=c4-overview&list=UUIWTS-Xz1SYZpQBf4O65LLQ

Thank you for that Hilskin!

[SirPrize]

you guys are a bit late coming to this party don't you think...the sharemarket been raging onwards and upwards for 4.5 years now...NZX50 index + nearly 100%.
ATM up over 10x ....plenty left for u guys u reckon?

EDIT: oh yeah I forgot...yep contributing towards a healthier world.......and a warmer world (http://science.howstuffworks.com/zoology/mammals/methane-cow.htm)....so we are going to be healthier, wealthier (ATM rising), and warmer:)


I agree with Hoop - I'm a couple of years late. Nevertheless I still think it might prove beneficial.

The warmer world link was very interesting. Thanks for that. This might be good for A2 Milk in the future as perhaps we'll have have to pick which cows are more important than others.

SirPrize

[blakecb]

Not great seeing the Managing Director sell off 40% and another Director sell nearly 30%....I'm not a fan of that at all, especially considering it is just under that resistance line we've talked about. I know people sell for a variety of reasons, but two of them selling up at the same time is not the best look it has to be said. I like to see directors buying, not selling.

[okay]

Latest release below, Babidge and Mair selling down their respective holdings. Babidge still has 6 m but currently is restricted on selling 5.5m of those, not sure how long? The part of interest to me is at the end, "In the interest of alignment with shareholders...waffle.. waffle... conditionally approved the issue of another 5 million partly paid shares to Geoffrey Babidge"


Does this mean 5million issued at no cost? $3.5m bucks worth? Or am I reading this wrong? If so seems more than a bit rich to me.









REL: 1135 HRS A2 Corporation Limited





GENERAL: ATM: Approval of sale of A2C shares





A2 Corporation Limited ("A2C" or the "Company") wishes to advise that it has


approved the sale of A2C shares by trusts associated with Managing Director,


Geoffrey Babidge and Director, David Mair pursuant to A2C's Share Trading


Policy.





David Mair has a relevant interest in 2 million fully paid ordinary shares


held by the DM2 Investment Trust.





Following the sale of those shares by the DM2 Investment Trust, David Mair


will still hold 5 million partly paid ordinary shares with an issue price of


$0.10 which were issued to him in September 2009 under the A2C group's


ownership-based compensation scheme for executives and senior employees, when


he was an Executive Director of A2C. David has indicated that he currently


has no intention to sell any of his remaining 5 million shares in the


foreseeable future.





Geoffrey Babidge was issued with 10 million partly paid ordinary shares with


an issue price of $0.10 in August 2010 under the A2C group's ownership-based


compensation scheme for executives and senior employees. Those shares are


currently held by the GHB Investment Trust.





When Geoffrey Babidge relinquished his role as Chief Executive Officer of


Freedom Foods Group Limited ("FFG") he forewent the benefit of options in


respect of FFG shares. The GHB Investment Trust will use the proceeds of the


sale of 4 million fully paid shares to reduce debt and to meet other


commitments.





Following the sale the GHB Investment Trust will still hold 6 million A2C


shares, of which 5.5 million currently remain subject to transfer


restrictions. The trust has indicated that it currently has no intention to


sell any of its remaining A2C shares in the foreseeable future.





Cliff Cook said "I am personally delighted that key contributors to A2C are


able to benefit from the incentive arrangements that have been put in place


to reward success and align the interests of A2C's senior executives with its


shareholders."





In the interests of maintaining longer term alignment with shareholders, the


A2C board has conditionally approved the issue of a further 5 million partly


paid shares to Geoffrey Babidge, subject to A2C shareholder approval. That


issue will be considered by shareholders at A2C's annual general meeting


which is currently scheduled to take place on 19 November 2013. A notice of


meeting will be sent to shareholders in due course.





For further information contact:





Cliff Cook


Chairman


A2 Corporation Limited


+64 21 932 254


End CA:00240681 For:ATM Type:GENERAL Time:2013-09-04 11:35:01

[Xerof]

And worse, they then want to issue another 5mill partly paid to one of them, who 'sacrificed' some upside at his previous role.

extracting the urine aren't they?

[MAC]

Welcome to the forum Okay,

I don't begrudge Geoff Babidge selling a few shares actually, he's performed a fantastic job for ATM and shareholders alike. Perhaps he'll build himself a nice mansion, well deserved I say.

Not so sure about just issuing another 5 million more shares though, but we all get a vote at the AGM, if you are passionate about this I'll see you there with you're arm raised.

[blakecb]

And worse, they then want to issue another 5mill partly paid to one of them, who 'sacrificed' some upside at his previous role.

extracting the urine aren't they?

Yeah I don't like it, why wouldn't every Managing Director just sell their shares if they will be 'gifted' another 5 mil to 'align their interests with the company'....the interests were aligned until they sold the last lot!!!

What a pain, this company looks to be a really good company that is going places and about to make new highs and the directors go off and sell their shares. What don't directors just do their job and send the right messages to the market rather than the wrong messages.

[okay]

Hi MAC. Thank you for your welcome.
My main issue is the issuing of another 5m shares, $3.5m+. Previous issues were @ 10c quite a big $ compensation difference. If they give him a 10c discount on the 5m that would "align more with shareholders", but even that is 500k worth!

[SirPrize]

So does this mean there'll be a significant dip?

[MAC]

My view is not significantly SirPrize.

There will be some minor dilution in the issuing of the new shares, but 5M shares represents only 0.7% of shares on issue.

We are all entitled to sell shares, even management, and this is the first significant profit for Geoff Babidge, good on him, he's done very well indeed for ATM.

[SirPrize]

Thanks for that MAC - I agree, his efforts should be rewarded - and this is just that.

[muss1]

Insider buying is something to get excited about, insider selling could mean any of the things KW said and more. The recent results were positive, and there is a lot of potential upside to look forward to. As others have pointed out the dilution is a minor inconvenience, but if GB keeps performing then I'm sure it'll be worth it

[waikare]

This is not the first time the board has been underhand regarding the issue of shares, in early Dec. 2013 the directors and their associated companies sold down some of their holdings, then under the heading of Capital Raising they issued $4000 million worth of shares to themselves and other institutional investors at a discounted price of $0.05. If I can recall correctly prior to share placement the shares were trading at the $0.67 - $0.70 range. This resulted the share price dropping to around $0.50.

[blackcap]

This is not the first time the board has been underhand regarding the issue of shares, in early Dec. 2013 the directors and their associated companies sold down some of their holdings, then under the heading of Capital Raising they issued $4000 million worth of shares to themselves and other institutional investors at a discounted price of $0.05. If I can recall correctly prior to share placement the shares were trading at the $0.67 - $0.70 range. This resulted the share price dropping to around $0.50.

I beleive this was the only way they could have gotten the capital they needed into the company A rights issue may not have worked at 50 cents. I was pretty comfortable with that. Raised the profile of A2 and gained them a top 50 spot etc. And gave the much needed $millions for their expansion into markets they are going into now.

Yes it was a shame for the price to drop from the 67 mark but all on very thin volume and if I remember it was on the alternative market as well.

[hilskin]

Another good sign for A2 milk. Below is a list of cafes who are choosing to use a2 milk exclusively. I personally buy A2 milk to make our lattes at home, it makes a better froth and tastes soooo much better. I can see A2 gaining more and more market share in Australia and it will take time but we should see some improvements in the UK next year. Hope they sort out their NZ issues soon as there is no reason it couldn't do well here if properly marketed. Baby formula will be the icing on the cake. Very Happy Holder
From FaceBook Page.
Pssstt…..the good news about A2 is spreading and more cafes are choosing a2 Milk exclusively.
A warm welcome from the A2 family to Café Teena, Café Siyia, Omara Cycles Café, Flock Café, Zoro Espresso Café, Newtown Provedore Café, Taste Food & Wine Café, Tika Café, Café Civic, Stoneground Café, Dundas & Faussett Café, Harold Holt Espresso Lounge, Coffee Rush, and Dolce Espresso Café (Melbourne); and Loaf Shack Café, The Persian Room Café, and Black Mocha Café (Sydney).

[MAC]

It’s pleasing as a long term investor in ATM to see continual ongoing evidence of increasing awareness in the UK market.

http://www.milkintolerance.co.uk/

http://www.thenutritionplace.co.uk/1/post/2013/07/what-is-a2-milk-and-should-i-be-drinking-it.html

http://www.nutrition2me.com/news/product-news/item/108-a2-milk-offers-new-option-for-those-suffering-with-dairy-problems

Of course, it’s also entirely pleasing to see that A2 is now available at Budgens, Booths, Morrisons, Sainsburys, Tesco and Waitrose stores. This covers the entire UK market very well.

ATM have a FY16 market share target for the UK of 1.8%, unless ATM’s expansion into the UK is capital limited or perhaps limited by JV partner Muller Wiseman, this target seems way too conservative to me ?.

[MAC]

I wouldnt think the UK herd is big enough at the moment to cope with large market share. 1.8% of 62 million people is still a heck of a lot of milk.

I agree it makes for a lot of prospective sales and compares favourably with the present Australian market share of 7.4% of a 23M population.

Muller Wiseman have a 30% share of the A1 fresh milk market in the UK, I just wonder if for them, at present at least, A2 remains a novelty product, perhaps that will change with market demand.

Having said that, with Muller Wiseman having access to 30% of UK fresh milk dairy herds, they make a pretty good JV partner, and an equally good proposition for A2 conversion.

[shar187]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11121927 from today's herald. No real new info apart from pricing of Platinum.

I hope they can get their JV in NZ sorted. I've noticed my local Countdown (CBD and the one close to where I live) have stopped selling A2.

[MAC]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11121927 from today's herald. No real new info apart from pricing of Platinum.

I hope they can get their JV in NZ sorted. I've noticed my local Countdown (CBD and the one close to where I live) have stopped selling A2.

It's all good confirmation that the platinum roll out is all on schedule, onwards and upwards to plan.

Agree about the countdown's, my local one is completely sold out of A2 about every second or third time or so I look for it on the shelves.

[shar187]

Agree about the countdown's, my local one is completely sold out of A2 about every second or third time or so I look for it on the shelves.

Hopefully that's the problem - just sold out. I was concerned they had taken it off the shelves/stopped selling. I will ask next time I'm in.

[iceman]

Agree about the countdown's, my local one is completely sold out of A2 about every second or third time or so I look for it on the shelves.

Interesting. Our family has been buying A2 milk from our Countdown for a few months and I don't recall it ever not being on the shelves.For some fun, I got seven 8 year old boys to taste and compare both A2 and standard Homebrand blue top milk a couple of weeks ago, without them knowing what they were tasting. 5 out of the 8 preferred the A2, 1 preferred the standard and 2 were neutral. Our 8 yo son who drinks a lot of milk now wants the A2 milk if possible. Only 1 of the 8 boys had heard about A2 milk ! Not very scientific but a bit of interesting fun :)

[zymwh]

I can always get a2 milk from johnsoviile countdown

[muss1]

It's also at Moore Wilson's in Wellington CBD. I noticed the other day though all the stock was due to expire in the next day or so, so I didn't buy that time.

This made me wonder how often they got new stock in or whether this was because it had been a slow week and the old stuff was still at the front..

[bonne vie]

Late last week I wanted to buy some for a friend so rather than go to the stores I went straight to A2 website to see where/who distributed to. But I was only able to find limited information for Australia. Maybe I looked in the wrong place - but surely this information should be able to be found easily on any company's website. Something for A2 marketing team to look into?

[muss1]

Bonnie vie - the issue in nz is that A2 corp only own the rights. These rights are leased to Fresha valley for the next few years so unfortunately it is out of A2s hands for the next wee while unless they renegotiate

[MAC]

Strategic Supply Agreement for Western Australia (https://nzx.com/companies/ATM/announcements/240947)

A2 Corporation Limited (NZX:ATM) has appointed Western Australia’s most experienced dairy company, Brownes Food Operations Pty Limited, to package a range of a2 ™ brand fresh milk products to meet the rising demand from Western Australian consumers.

Brownes Perth-based processing plant will begin producing a2 ™ fresh milk products in November 2013 from locally sourced a2 dairy herds.

A2 Corporation (A2C) Chief Executive Officer Geoffrey Babidge says a number of options have been considered to efficiently supply Western Australian consumers who have discovered the digestive ease of a2 ™ fresh milk products.

“This is a strategic medium term supply agreement that will deliver Western Australians the high quality a2™ fresh milk direct from West Australian farms. Brownes fully supports the a2 proposition and is well positioned to meet the expected increase in consumer demand.”

More fantastic news Turmeric, should go down well tonight with that cold glass of countdown white gold you've been seeking!, although A2 and kahlua sounds good too.

[MAC]

Well this is interesting news given that ATM own the intellectual property that they do, and they do already have a UK joint venture partner already.

Although, I don’t recall during my research reading anywhere that it was an exclusive joint venture that they entered into with Muller Wiseman.

http://www.thegrocer.co.uk/fmcg/raw-milk-champion-stephen-hook-plans-a2-herd/349130.article

[blackcap]

Am very happy to say that I just purchased some A2 milk from Countdown in Paraparaumu. Well done Countdown. Surprised to see it on the shelves but very happy none the same.

disc, not a holder myself but my father is.

[QOH]

Am very happy to say that I just purchased some A2 milk from Countdown in Paraparaumu. Well done Countdown. Surprised to see it on the shelves but very happy none the same.

disc, not a holder myself but my father is.
Blackcap can you tell me what it cost please?

[blackcap]

For a 2L bottle it cost me $4.90

[QOH]

For a 2L bottle it cost me $4.90

Cheers Blackcap, will check it out next time I'm shopping

[blakecb]

Cheers Blackcap, will check it out next time I'm shopping

Yeah I recently purchased some A2 from Countdown for the purposes of 'investment research' and was pleasantly surprised. It has a very creamy aftertaste....almost like you've just had some unsweetened whipped cream or something. I think they need a trim version asap though.

[Ginger_steps_]

For a 2L bottle it cost me $4.90

It costs $5 in Aussie where standard milk costs $2. People seem to be happy paying it too!

[baller18]

Hmmm.. is ATM forming a downtrend??

[blakecb]

Hmmm.. is ATM forming a downtrend??

hey baller, I've tried to reply to your message, but it says your inbox is full.

ATM was really hurt by the Managing Director selling down his 40% stake - it changed sentiment from positive to negative, unfortunately. It's all about timing an entry now when sentiment turns positive again.

As an aside, I purchased some A2 milk for research, and then went back to normal milk....but I will be going back to A2 permanently as the taste is just so much nicer. I think they could do with better packaging though - like they have in Australia - the packaging and labeling here looks and is cheap, which is out of place on a premium product.

[MAC]

hey baller, I've tried to reply to your message, but it says your inbox is full.

ATM was really hurt by the Managing Director selling down his 40% stake - it changed sentiment from positive to negative, unfortunately. It's all about timing an entry now when sentiment turns positive again.

As an aside, I purchased some A2 milk for research, and then went back to normal milk....but I will be going back to A2 permanently as the taste is just so much nicer. I think they could do with better packaging though - like they have in Australia - the packaging and labeling here looks and is cheap, which is out of place on a premium product.

The FY13 report was outstanding, perhaps it's a good entry point at present if the market is down only because Geoff Babbage took some well deserved income after growing the company to what it is for us.

What do the technicals look like at present Blakecb ?

[okay]

I enjoy your positivity MAC, but I also agree with blakecb on this one. This is what you can get when directors are granted millions of partly paids.

[MAC]

I enjoy your positivity MAC, but I also agree with blakecb on this one. This is what you can get when directors are granted millions of partly paids.

I don't disagree either, I'm just teetering on topping up as the fundamentals haven’t changed, might wait until tomorrow for confirmation that the primary trend is all good and intact.

[okay]

I don't disagree either, I'm just teetering on topping up as the fundamentals haven’t changed, might wait until tomorrow for confirmation that the primary trend is all good and intact.

True. Looks like there will be a few of us keeping an eye out including the moose:)

[MAC]

Annual Report be out now :)

Wow, A2 now selling in 1,000 retail outlets in the UK. Good to see confirmation that entering the US and Europe markets is one of the opportunities they plan to dedicate additional resources to also.

[blakecb]

Big sale at 68cps....could this be the bounce off the primary trendline? I'm not sure, waiting and watching. Depth will tell us a lot, we want to see it move to the buyers' side.

[blakecb]

Well for better or worse I am back into ATM, but will have a strict stoploss on this one as I do not want to see it break the primary trendline. I'm hoping for a bounce off the primary trendline and that this is a low entry. To be honest, the technicals and even the depth don't look great, but for whatever reason, I've decided to get back in. I hope the release of the annual report today reminds all the punters of how promising this company is. Now that I am actually choosing to pay more to buy A2 milk on a personal level tells me a lot.

[JohnnyTheHorse]

Lots of things going on technically. Most notably it has broken out downwards from a Bollinger Squeeze (sell signal), however there is lots of support in the 68 area (previous highs and trend lines). There is also an ascending triangle pattern (a continuation pattern) which is getting quite far through so is well worth watching. Some good coin to be made trading this puppy :p. Hoop may kindly give us a pretty chart and his much more informed analysis.

I watch and wait.

[MAC]

The market in China just gets better and better;

http://www.interest.co.nz/rural-news/66548/rabobank-reports-substantial-contraction-local-dairy-chinese-supply-forcing-it-impo

[iceman]

The market in China just gets better and better;

http://www.interest.co.nz/rural-news/66548/rabobank-reports-substantial-contraction-local-dairy-chinese-supply-forcing-it-impo

Yes this is interesting. It will be very interesting to see how A2 infant formula will be marketed and received in China. Could be a biggie for ATM & SML.
I just hope the exclusive distributor China State Farm Holding Shanghai Company is the right partner and comes up with the goods, as they have exclusive rights for the "Greater China", which no doubt includes Hong Kong. A huge and very important market for ATM.

[MAC]

I’m picking that Philip Wohlsen was head hunted by the new Chief Marketing Officer, Susan Massasso, both have previous recent Campbell Arnotts and Unilever experience on their CV’s.

https://www.nzx.com/files/attachments/182682.pdf

There a pretty high spec team forming within this company, it just reinforces my view that ATM will be one to continue to watch over the next few years.

[iceman]

I’m picking that Philip Wohlsen was head hunted by the new Chief Marketing Officer, Susan Massasso, both have previous recent Campbell Arnotts and Unilever experience on their CV’s.

https://www.nzx.com/files/attachments/182682.pdf

There a pretty high spec team forming within this company, it just reinforces my view that ATM will be one to continue to watch over the next few years.

Yes another sturdy brick in the wall. If SP stays at or near current levels I will continue to accumulate as and when finances allow.

[randoman]

I picked up a bottle of A2 at the local Countdown over the weekend. Tastes good but I had to look hard to find the little A2 logo!

[MAC]

And, the growth just keeps going, going and going;

- UK sales set to exceed £1M this week from the now 1,000 UK stores.

- Australian market share now 7.9%, up from 7.4% reported on 29th August 2013.

http://www.thegrocer.co.uk/fmcg/fresh/dairy/a2-milk-now-in-more-than-1000-stores/349894.article

[okay]

And, the growth just keeps going, going and going;

- UK sales set to exceed £1M this week from the now 1,000 UK stores.

- Australian market share now 7.9%, up from 7.4% reported on 29th August 2013.

http://www.thegrocer.co.uk/fmcg/fresh/dairy/a2-milk-now-in-more-than-1000-stores/349894.article

Nice one. Thanks for sharing the link MAC

[hilskin]

Looks like A2 baby formula is now on sale in OZ. The below was posted on Facebook and will probably be a common issue for a lot of parents - toooo expensive. Will hopefully not be a problem in China as they are happy to pay over the top for foreign baby formula anyway.

Nathanand (https://www.facebook.com/nathanand.emmadouglas?hc_location=stream) ********
Just wanted to say
I CANNOT believe how EXPENSIVE your formula is!! It's more expensive then algery (lactose free etc) formula. $36 for ONE tin of stage two formula?!?!? I wanted to buy it for my 9 mo & the toddler one for my two year old but there's no way I could afford it!! I figured its cheaper to buy the normal one for my toddler & my 9 mo will just have to stay on karicare. Very disappointed. I honestly don't know how a average Aussie family could be expected to be able to afford to buy it!

[hilskin]

I don't go around moaning that I can't buy a ferrari!

But I'm sure one day you will, buy a Ferrari that is ;)

[whipit]

Might be repeating a question? But I've had a quick search

what sort of premium are they paying for a2 on top of the normal milk price for their New Zealand sourced product?

[hilskin]

what sort of premium are they paying for a2 on top of the normal milk price for their New Zealand sourced product?

Signature Range $3.99 2L
A2 Fresha Valley $4.90 2L
Homebrand $3.39 2L
Anchor $4.19 2L

[waikare]

But I'm sure one day you will, buy a Ferrari that is ;)

I'm not sure about the Ferrari, but one day I be able to buy a bottle a2 milk

[nextbigthing]

I think Whipit was refering to the price A2 pay for the milk they've sourced, what premium they pay for getting farmers to separate the A2 producing cows.

NBT

[Ginger_steps_]

I think Whipit was refering to the price A2 pay for the milk they've sourced, what premium they pay for getting farmers to separate the A2 producing cows.

NBT

It was a while ago I talked to a farmer in Aussie but from memory (which is a bit sketchy!) it was somewhere in the vicinity of 9-15c more per a litre in the farmers pocket.

[whipit]

It was a while ago I talked to a farmer in Aussie but from memory (which is a bit sketchy!) it was somewhere in the vicinity of 9-15c more per a litre in the farmers pocket.

Cheers,

I was referring to the farm gate price but the retail is also very interesting. It's not that far out of the pack.

I'm just interesting what their agreement is. Are they paying A2 farmers a premium on top of the independent milk price? or whatever?

In that case rising WMP commodity cost might start eating into profits etc if a good portion of it starts to come out of NZ. Mind you this is no different to any other consumer milk.

[MAC]

http://www.betacasein.org/?p=type1-diabetes

That linkage between type 1 diabetes and A1 consumption is quite compelling, looking at the graph, it’s not difficult to see why ATM are targeting Australia, New Zealand and the UK, it would seem entirely logical that the next markets to enter would be the USA and Scandinavia.

With the market share in Australia now at 7.9% it would be interesting to see some research as to if A2 may potentially now be starting to lower the incidence rate of type 1 diabetes.

[hilskin]

Here is a link to Coles in oz for the A2 baby formula which shows it as being temporarily unavailable. I hope this is because they have sold out.

http://shop.coles.com.au/online/national/baby/formula

[hilskin]

Here is a link to the China State Farms website who are selling A2 baby formula in China. If you use chrome you can translate the page into english.
Plenty of advertising about it but it doesn't appear that you can buy it online yet. I have sent an email to them to find out when it will be available but not sure if I will get a response as the email was in English.

http://www.nongken.org/ (http://www.nongken.org/)

[hilskin]

Might be repeating a question? But I've had a quick search

what sort of premium are they paying for a2 on top of the normal milk price for their New Zealand sourced product?

Sorry misinterpreted the question, try this link http://www.ruralnewsgroup.co.nz/dairy-news/dairy-general-news/a2-corp-eyes-more-suppliers

A2 CORPORATION pays a premium for its A2 milk of 8-10% above the farmgate price of standard milk, says managing director Geoff Babidge.

[hilskin]

Here is a link to Coles in oz for the A2 baby formula which shows it as being temporarily unavailable. I hope this is because they have sold out.

http://shop.coles.com.au/online/national/baby/formula

Just thinking a little about why Coles would have the A2 baby formula temp unavailable and you would have to consider that this is because they have sold out. Might be time to top up I be thinking ????????

[Roberto]

Just thinking a little about why Coles would have the A2 baby formula temp unavailable and you would have to consider that this is because they have sold out. Might be time to top up I be thinking ????????

At 67c it's certainly tempting.

[bryndlefly]

I'm no expert, but it's share price seems to have dipped slightly below the support trend line, theres heavy selling pressure at the moment, and as someone said earlier, its in a bollinger squeeze, which all indicate its in for a bit of higher volatility, I would guess downward. Am i right? or just being pessimistic? I've been considering buying into ATM recently, as its had a good long term uptrend, but at the moment I'm guessing it's going to downtrend a bit... before probably carrying on with it's long term uptrend. Well thats my newbie prediction anyway. Will probably be proved completely wrong, he he.

[macduffy]

The Chairman's other interest.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11137005

[gloworm]

Found this TV3 interview from Sep that doesn't look like it has been posted yet.

http://www.3news.co.nz/A2-launches-infant-formula-range/tabid/421/articleID/313670/Default.aspx

[hilskin]

Found this TV3 interview from Sep that doesn't look like it has been posted yet.

http://www.3news.co.nz/A2-launches-infant-formula-range/tabid/421/articleID/313670/Default.aspx

Thanks for sharing, check out all the those cans.
4901

[hilskin]

Just saw the TV advert for A2 Platinum milk formula - they are certainly putting some bucks behind the launch.

Here's the link

http://www.youtube.com/watch?v=sHYVcPAhLr0

[hilskin]

I have been watching the amount of A2 milk on sale at my local Countdown store for the last month and I kid you not they must be selling 8 bottles every two days. Not huge numbers but not bad considering the price, poor packaging and lack of advertising. Word is slowly getting around here in NZ, imagine what sales would be like if an effort was made to push sales. The quicker Fresha Valley comes to an agreement with A2 corp here in NZ the better.
Check out the amount of selected cafes in NSW and VIC who are now exclusively using a2 Milk

http://www.a2milk.com.au/cafes.php

[clip]

Milford increased their total holdings of A2M from 8.94% to 9.97% - a good indicator of growth/strength? people's thoughts?

Summary of substantial holding to which disclosure relates
Class of listed voting securities: Ordinary Share
Summary for: Milford Asset Management Limited
For this disclosure, --
(a) total number held in class: 64,799,954
(b) total in class: 650,066,979
(c) total percentage held in class: 9.97% (note, relevant interests held by
the manager as follows):
Milford Active Growth Wholesale Fund (3.10%), (Custodian - TEA Custodians),
Milford Dynamic Wholesale Fund (1.52%), (Custodian - TEA Custodians),
NZ Equities Wholesale Fund (1.44%), (Custodian - TEA Custodians),
Trust Investments Sustainable NZ Share Fund (0.25%), (Custodian - TEA
Custodians),
Waikato Community Trust (0.17%), (Custodian - TEA Custodians),
New Zealand Superannuation Fund (2.74%), (Custodian - New Zealand
Superannuation Fund Nominees Limited)
Mercer Trans-Tasman Shares Trust (0.75%), (Custodian - BNP Paribas Securities
Limited).

For the last disclosure,--
(a) total number held in class: 57,903,520
(b) total in class: 647,666,979
(c) total percentage held in class: 8.94% (note, relevant interests held by
the manager as follows):
Milford Active Growth Wholesale Fund (3.86%), (Custodian - TEA Custodians),
NZ Equities Wholesale Fund (1.56%), (Custodian - TEA Custodians),
Trust Investments Sustainable NZ Share Fund (0.28%), (Custodian - TEA
Custodians),
Waikato Community Trust (0.19%), (Custodian - TEA Custodians),
New Zealand Superannuation Fund (3.05%), (Custodian - New Zealand
Superannuation Fund Nominees Limited).

[hilskin]

Statement released from Muller Wiseman Dairies

Müller Wiseman Dairies confirms that all of its employees are accounted for with one member of staff treated on site for a minor head injury, following a fire incident in the low voltage switch room at its Droitwich dairy in the Midlands during the night.
The company is implementing established contingency plans to ensure the continuing supply of fresh milk products to customers, including increasing production elsewhere in its network of dairies.
Müller Wiseman Dairies operates a total of six dairies throughout the country, including its facility in Droitwich.
In co-operation with appropriate authorities, work to assess the cause and impact of the fire will be undertaken as an initial step towards putting plans in place to bring the facility back into operation as soon as is practicable.

[MAC]

The market seems pretty flat and relatively indifferent to this news, and it would be hard to imagine that an electrical room fire would be an impact of more than just a few days. I’d be interested though to know what production priorities Muller Weismann would have in meeting back orders when they are back up and running.

https://www.nzx.com/files/attachments/183431.pdf

[JohnnyTheHorse]

Milford are certainly buying heaps. Pretty much all the off-market trades are likely to be them buying I'd say. Still waiting for my buy signals to get back into this one - I'm sure it will treat me well when they go off.

[blakecb]

Milford are certainly buying heaps. Pretty much all the off-market trades are likely to be them buying I'd say. Still waiting for my buy signals to get back into this one - I'm sure it will treat me well when they go off.

Yeah I think Milford are 'single-handedly' keeping the price up to be honest. It threatened to go into a little downtrend and they turned it around. I like A2's prospects, but like you, am waiting for the right time to properly get back into this one.

[JohnnyTheHorse]

Yeah I think Milford are 'single-handedly' keeping the price up to be honest. It threatened to go into a little downtrend and they turned it around. I like A2's prospects, but like you, am waiting for the right time to properly get back into this one.

I half suspect that maybe Milford are just buying more to keep the price up and in that uptrend. Will be interesting to see if it can break that 75/76 resistance in the near future (long term I'm sure it will). Maybe the market is worried about the major shareholders unloading more of their shares - a real concern.

[okay]

I half suspect that maybe Milford are just buying more to keep the price up and in that uptrend. Will be interesting to see if it can break that 75/76 resistance in the near future (long term I'm sure it will). Maybe the market is worried about the major shareholders unloading more of their shares - a real concern.

Yeah. Have noticed a number of 1m trades

[MAC]

Following the fire it looks like Muller Wiseman are making up production from other facilities. Given they have 30% of the UK milk market, one plant out of service within their fleet probably isn’t a big impact.

Should keep all that good A2 flowing into supermarkets also.

http://www.thegrocer.co.uk/fmcg/fresh/mller-wiseman-vows-to-keep-milk-flowing-after-droitwich-fire/350784.article

[MAC]

I don’t begrudge Geoff Babbage selling some shares and taking a well deserved profit after growing the company to where it is. Although, perhaps it would have been a little more prudent to issue new shares, as a bonus, after meeting a significant goal, perhaps after reaching the $280M in revenues by FY16 target. Then, who knows what is in his contract with ATM and what the goals are.

But, at the end of the day, it’s been as good a reason for short term traders to cycle the SP back to the longer term trend line as any other.

The fundamentals and growth outlook for ATM are not affected whatsoever, and each day that goes by the extraordinary acceleration in growth that ATM is achieving continues.

Consumers in Sydney, Melbourne, Manchester and London continue to buy up A2 milk in ever increasing volumes, new products are coming on stream at a furious rate, we should get an announcement regarding market entry into the US and Canada any time soon. Let alone infant formula selling now in Australia and China.

Disc: Buy

[Captain Dan]

Hi all,

I'm looking at buying into ATM, but i see from some of the recent posts that while everyone seems to have a positive outlook for ATM there is some differing opinions on whether now is a good time to buy at its current SP.

I know its achieved good market penetration in Aus (and still going) and is expanding into China and the UK. It also had good growth in FY13 compared to the previous year. And I'm going to assume (and hopefully not make an ass out of myself) that this growth should continue, based on the expansion and sales plans. From my research so far the management also seem very competent, so no issues there. Taking that into account, and the fact that ATM gets (most of) its income from royalties, what other factors have people taken into consideration when valuing this company? Any help/assistance/guidance would be greatly appreciated.

Also, JonnyTheHorse, I as wondering what you were meaning when you were waiting for your buy signals? Does this mean a lower SP, a change in overall market conditions or awaiting some announcement from the company (I get these are all linked to some extent, just want to get an idea on what others see as being triggers to buy).

Cheers
CD

[JohnnyTheHorse]

Also, JonnyTheHorse, I as wondering what you were meaning when you were waiting for your buy signals? Does this mean a lower SP, a change in overall market conditions or awaiting some announcement from the company (I get these are all linked to some extent, just want to get an idea on what others see as being triggers to buy).

Basically with this company I'm just using the charts (technical analysis) to determine when to buy and sell. It is well worth learning the basics of this (I am nowhere near an expert at it). With that said, I do like the fundamentals of the company and think the long term success should be pretty good. Currently there is nothing that says to me ATM is a buy from a technical perspective - it has broken out of an uptrend an appears to be going nowhere for the time being. My main issue with holding this one is that I reckon that the major shareholders will sell down - that hammered the stock the last time that happened.

[Captain Dan]

Thanks JTH. I've got a couple of books on TA and charts which I hope to make a dent in over the long weekend.

[shar187]

Just saw the TV advert for A2 Platinum milk formula - they are certainly putting some bucks behind the launch.

Might have been advertised for a while but just seen advert for first time in NZ this evening too.

[kiwi_on_OE]

Here in Australia at my local supermarket, A2 has gone from being a niche shelf in the supermarket to taking up about 1/3 of the total milk space. Pretty good really. I am hoping that A2 is one of those companies that Buffet and Lynch talk about - the ones where local investors get to spot the opportunity simply by going about their daily lives, and eventually all the funds and big companies begin to notice it too.

Anyone know anyone in the UK who can do some milk monitoring?

I'm keeping an eye out for it in central London, haven't seen it yet. But according to their website it is in a number of places. Central London supermarkets often aren't much bigger than corner stores, so with competition for shelf space I don't have high hopes of seeing it.

[Scottman]

Is there a link with a rundown on the history of the management team. I don;t doubt they are doing a good job I just want to know more about them. Can't see any info on their website. Only a list of names.

[blobbles]

When and where is their AGM? I know someone here will know...

[Thor]

AGM is on Tuesday 19th November @ 2pm at the offices of Simpson Grierson, Level 27 Lumley Centre, 88 Shortland Street, Auckland.

[MAC]

AGM is on Tuesday 19th November @ 2pm at the offices of Simpson Grierson, Level 27 Lumley Centre, 88 Shortland Street, Auckland.

I may go to this one, first ATM agm for me, it's always an inconvenience to go to Auckland, but I'm interested in gaining some insight and to hear how they will enter and tackle the US and Canada market, it's just such a big continent to conquer. JV's ?, territories ?, licences ?

[iceman]

I may go to this one, first ATM agm for me, it's always an inconvenience to go to Auckland, but I'm interested in gaining some insight and to hear how they will enter and tackle the US and Canada market, it's just such a big continent to conquer. JV's ?, territories ?, licences ?

It would be great and much appreciated by those of us unable to attend if you could give us a brief summary if you go to the AGM MAC or anyone else for that matter !!

[Thor]

'Allergy-free’ milk firm reaches £1m sales
http://www.telegraph.co.uk/finance/businessclub/10410044/Allergy-free-milk-firm-reaches-1m-sales.html (http://www.telegraph.co.uk/finance/businessclub/10410044/Allergy-free-milk-firm-reaches-1m-sales.html)

[MAC]

Sounds like they are doing well. I just have a small holding of ATM so haven't done as much research as I would like. Has anyone got any sales numbers by country over the years to see how these UK numbers compare to the growth they have seen in OZ for example?

ATM have a UK target of 1.8% market share by FY16.

https://www.nzx.com/files/attachments/180768.pdf

My estimate of Australian market share growth from reports and announcements is as below. Presently 7.9% according to the last press coverage.



AUSTRALIAN MARKET SHARE


FY
HY
FY
HY
FY
HY
FY
HY
FY
HY
FY


07/08
08/09
08/09
09/10
09/10
10/11
10/11
11/12
11/12
12/13
12/13


0.01%
0.03%
0.03%
0.04%
0.02%
2.96%
3.29%
4.41%
4.87%
6.90%
7.40%

[MAC]

The official launch of A2 Platinum in China, would have been a nice lunch I'm sure in the 'Great Hall of the People in Tiananmen Square'.

http://a2corporation.com/a2%C2%AE-platinum%E2%84%A2-official-china-launch-held-at-the-great-hall-of-the-people-in-beijing/

"a2 Platinum - will be sold at high end baby maternity outlets in Beijing, Shanghai, Guangzhou, Chongqing and East China before progressively expanding to further major cities plus Hong Kong and Macau".

"The Chairman of CSF Agribusiness Group, Mr. Li Ya Cheng said "a2 Platinum infant formula expands the range of premium agricultural and aquaculture products CSF distributes throughout China. We are confident consumers will recognise the unique benefits of the a2 proposition and CSF will achieve significant distribution throughout China."

[hilskin]

Any one catch the A2 baby formula commercial during one news tonight. Looks like it is now on sale here in NZ also.

http://www.youtube.com/watch?v=sHYVcPAhLr0

[Jasemc]

Yes it's for sale they just keep building up sales. If all goes well then this will be a great investment.

hold shares.

[hilskin]

I have no doubt it will be a great investment and a great company.
Will be watching with interest to see the results of the below study due out in december.

The scientific journal Infant reported last month that studies have linked a digestive product of A1, but not A2, to an increased risk of type 1 diabetes in some infants, adverse immune responses, digestive disorders and respiratory dysfunction.
Sheep and goats also produce A2 milk. “It is considered safe and nutritious and has no known negative effects on human health,” wrote clinical nutritionist Sue McGarrigle in the British Association for Applied Nutrition & Nutritional Therapy newspaper.
The full effects are still being unravelled, with a definitive study to be released before Christmas on whether the A1 protein is harmful.

http://www.telegraph.co.uk/finance/businessclub/10410044/Allergy-free-milk-firm-reaches-1m-sales.html

[Jasemc]

Yes could be interesting report I feel a2 however prefers not to bash a1milk but push a2 as an alternative. Think they are worried about getting into scientific battle with big milk companies.

[hilskin]

If you're bored and have a spare few hours to kill here is a VERY in depth article written by Sue McGarrigle about A2 & A1 for BANT which is the professional body for Nutritional Therapists in UK

http://www.bant.org.uk/bant/pdf/BANTnews/articles/WHY_A2_MILK_HAS_ENTERED_BRITAIN_BANT_NEWS_JUL2013_ ISSUE_50.pdf

[hilskin]

You still got shares KW? I topped up a bit the pother day, felt like we may have hit a bit of a short term turning point in the SP at 66cps.
I topped up also. Expecting some movement in the share price today, may even get to .75cps today or tomorrow??????????

[MAC]

I’m trying to get a feel for potential US margins as ATM enters the market in earnest.

Has anyone any information on the A2 milk price points within the US mid-west HyVee supermarkets that have been selling A2 for a while now ?

[MAC]

So Freedom Foods share price has gone ballistic on the back of its ownership in A2, yet A2 share price has hardly moved.

http://www.theage.com.au/money/investing/freedom-foods-share-price-defies-logic-20131028-2waoz.html (http://www.theage.com.au/money/investing/freedom-foods-share-price-defies-logic-20131028-2waoz.html)

That’s the ASX isn’t it, greater extremes and extents. I do hope ATM resists the urge to dual list, I’m a happy holder more content with a nice boring steady up trend,.… pass the readers digest.

[mcdongle]

Just back from our local New world and spotted a2 Platinum on the shelf :)

[MAC]

All good exposure in 'The Telegraph'.

"Milk producer a2 has chalked up £1m of sales in Britain and Ireland since its launch a year ago, despite a fire that razed its Droitwich dairy earlier this month."

"The Anglo-New Zealand business – a collaboration between the British company Müller Wiseman Dairies and Auckland – has disrupted the traditional dairy market, claiming to produce a type of milk that does not create lactose intolerances."

http://www.telegraph.co.uk/finance/businessclub/10410044/Allergy-free-milk-firm-reaches-1m-sales.html (http://www.telegraph.co.uk/finance/businessclub/10410044/Allergy-free-milk-firm-reaches-1m-sales.html)

[kiwi_on_OE]

A bit more info from the UK. I found A2 in a couple of local supermarkets in South London, links to a couple of photo's: -

https://www.dropbox.com/s/3am5cc10eoe9lgf/2013-11-01%2017.14.43.jpg

https://www.dropbox.com/s/ae9o3ksgsera5z0/2013-11-01%2017.40.41.jpg

A2 in the top left corner of the first photo, some of it was out of date. And top middle of the second. You'll see there's plenty of standard milk, plus there's also various organic, posh, and non-cow milk varieties.

Price at a 1.99 for 2 litres, which is comparable to the other expensive brands. The normal stuff I buy is about 90p for 2 pints (1.1 litres), so I don't think it's got anywhere near the markup that it does in Aus.

One thing the out of date milk got me thinking is who pays for that, A2 or the supermarket?

2/11: Have just checked the price of larger volumes of normal milk, 1.39 for 2.2 litres, 1.99 for 4.4 litres.

[goldfish]

Well im in for a small holding, been watching for a while now, enough sitting on the side with this one.

[Scottman]

I'm in as well.

[Scottman]

Forsyth Barr rate it an 82 cent stock.

[Scottman]

From memory & I could be wrong here but just thinking back to what I read at the weekend they are hoping for around 280 million in sales in 2016.

[silverblizzard888]

Nice. I only have access to Craigs...but they got nothing on ATM

How do you guys get access to the vaulations? Do you have to be signed up with them?

[MAC]

From memory & I could be wrong here but just thinking back to what I read at the weekend they are hoping for around 280 million in sales in 2016.

My FA gives me a valuation of $110 based on that $280M revenue by FY16 target.

The challenge in valuing ATM, as I see it, is in assessing where gross margins will ultimately plateau in the medium to long term. There is not really a precedent within the sector for a company like this, I believe this may well be why not many brokers cover ATM, it's too much effort for them to drill the detail.

If as in Australia and the UK across the counter sales provide a price premium of 50% over A1 bulk brands, and ex gate farm supply is only 8 to 10% over A1 supply (conversion recoupment), then forward margins should be looking pretty good a couple of years out.

Quite happy though for ATM to keep ploughing profits back into JV establishment for now.

Looking forward to the AGM on 19th November, is anyone else going ?

[Scottman]

Yes you have to be doing business with them to get the information.

[Scottman]

Anyone get the felling the market is due for a good correction ?

[forest]

My FA gives me a valuation of $110 based on that $280M revenue by FY16 target.

The challenge in valuing ATM, as I see it, is in assessing where gross margins will ultimately plateau in the medium to long term. There is not really a precedent within the sector for a company like this, I believe this may well be why not many brokers cover ATM, it's too much effort for them to drill the detail.

If as in Australia and the UK across the counter sales provide a price premium of 50% over A1 bulk brands, and ex gate farm supply is only 8 to 10% over A1 supply (conversion recoupment), then forward margins should be looking pretty good a couple of years out.

Quite happy though for ATM to keep ploughing profits back into JV establishment for now.

Looking forward to the AGM on 19th November, is anyone else going ?

Yes Mac I plan to be at the AGM, if you want we can meet up just sent me a PM if that is the case.

[Scottman]

No I actually don't think ATM would get much of a correction if any Moosie as it's undervalued, but just that it was mooted in this weeks FB weekly stock market report. So was wondering what others might think.

[iceman]

No I actually don't think ATM would get much of a correction if any Moosie as it's undervalued, but just that it was mooted in this weeks FB weekly stock market report. So was wondering what others might think.

Agree Scottman. I don't think general market sentiment will be a driver of ATMs share price one way or another. Upward movement in SP will be reliant on runs on the board from Management, the obvious ones to watch being successful market penetration and growth in the UK and then China. On the negative would be some unforeseen (non-)events such as the Fonterra's botulism scare and/or disappointment or failure in the UK.
Discl: A happy holder

[iceman]

sold put todat $4.65 after the market refused to continue the uptrend. bought even more SNK from profits, thanks traders for the 7%!

Wow that's a good price moosie ! Or did you mean to post this on the DIL thread ?

[MAC]

It's an impressive plot already and it's still early for ATM, I think we will see further margin growth yet.

Interested in the thoughts of others on forward margin analysis and outturn ?

4990

[muss1]

We've just hit an all time high and no one has said anything! What's happening team?

[hilskin]

ATM at an all time high.
Looking forward to the AGM next week and interested in what they have to say with regard to America and how far away they are from entering that market. It will be nice if they can update us on how the baby formula sales are going. Anyone else going next week?

[Scottman]

Good to see the price moving up a bit. Not going to AGM. Yes the US / Canada side of things must be happening soon. 2014 I suspect. Hope someone can give us a rundown from the AGM.

[iceman]

I received the comments and intentions for proxies at the AGM from the SA.

They are complementary and supportive of re-election of Cliff Cook and David Mair and supportive of Julia Hoare as an Independent Director.

SA supports changing the constitution to allow Directors to be increased from 7 to 8 to "recruit appropriate skills as the company grows internationally".

The company propose to increase the non-executive directors fees from $ 34,000 to $ 50,000 and the Chairman from $ 71,000 to $ 100,000. Total pool of director's fees to increase from $ 250,000 to $ 600,000 (+140%).

The SA says the directors have kept the fees down while the company was in this early stages, until 2011 and agree it is fair to increase fees again this year. But they think the proposed increases are hefty and are recommending $ 50,000 and $ 90,000 respectively.

SA intends to vote in favour of the agreement with Pactum in Australia.

I think the SA is fair in its assessment and will be giving them my proxy as I am unable to attend in person.

[stoploss]

Might be bullish at the AGM ...

http://www.bloomberg.com/news/2013-11-18/baby-product-makers-gain-on-child-policy-change-hong-kong-mover.html

[Captain Dan]

Anyone else thinking we'll see 80 by the end of the week. Currently not many sellers left at 78.

[Roberto]

Anyone else thinking we'll see 80 by the end of the week. Currently not many sellers left at 78.

I'm pretty confident we will, Captain. Possibly today if the AGM is positive.

[westcoaster]

80c now, some exciting news this afternoon I think.

[Captain Dan]

I'm pretty confident we will, Captain. Possibly today if the AGM is positive.

And we've made it! Not much buyer support at the moment, but if there's good news from the AGM and the SP is able to break through 80 and 81, its clear sailing from there.

[muss1]

Probably will get an update later today, but does the UK announcement suggest significantly better than expected traction in the UK?

[clip]

^that would be this one i presume muss?

as at 13:08:22, Tuesday 19 November, 2013 (NZDT)
GENERAL: ATM: A2 Corporation accelerates UK market development
ATM
19/11/2013 13:08
GENERAL

REL: 1308 HRS A2 Corporation Limited

GENERAL: ATM: A2 Corporation accelerates UK market development

19 November 2013

A2 Corporation accelerates UK market development

A2 Corporation (A2C) will accelerate investment in the United Kingdom to take
advantage of the significant opportunity for a2 branded milk products there
and in Europe.

To provide for the increase in market activity A2C and Muller Wiseman Dairies
(MWD) have agreed to a change in structure of the A2 Milk (UK) joint venture.
The marketing and sales of a2(TM) fresh milk products will be assumed by A2C
and MWD will continue to procure, process and distribute a2(TM)milk, but on a
cost plus basis to A2C.

A2C Managing Director Geoff Babidge says that recent events have created the
opportunity to evolve the commercial relationship with MWD to best align with
the current strategic priorities of each party.

"We have built a strong relationship with MWD through which both companies
see benefits in extending the initial arrangements agreed with Robert Wiseman
Dairies in 2011.

"The change in structure will enable A2C to move in a more focused way on
building sales of a2(TM) fresh milk in the UK whilst leveraging the scale and
operational capabilities of MWD. Initial consumer reaction to the a2(TM)
proposition has been favourable and confirms our view that a viable premium
niche position can be created for a2(TM) branded dairy products".

The new arrangement will take effect from 1 January 2014 and will provide for
the on-going supply of a2(TM) fresh milk products to existing retail outlets
across the UK. A2C will acquire MWD's shareholding interest in A2 Milk (UK)
for a nominal amount and MWD will supply product to the company on a cost
plus basis. Milk supply from local a2(TM)milk accredited suppliers of MWD
will continue unchanged.

Consequential changes to the UK board of directors will see the appointment
of William (Billy) Keane, the former Managing Director of Robert Wiseman
Dairies and current Chairman of Dairy UK as a second Non-Executive Director.
David Hearn, a highly experienced former FMCG executive and director will
continue as Non- executive Chairman and Geoff Babidge as Chief Executive
Officer of A2C will be the third Director.

As a result of these changes, the UK business has appointed a senior sales
executive with seasoned experience in the UK grocery trade as an additional
resource and the A2C Chief Marketing Officer will oversee future marketing
strategy.

Geoffrey Babidge
Managing Director
A2 Corporation Limited
+61 2 96977008

About A2 Corporation Limited
A2C is a differentiated, premium-priced dairy company which is building a
global business based on unique intellectual property relating to a2(TM)
brand dairy products.
A2C has operations in Australia, New Zealand, the UK and China and is
pursuing growth opportunities in Asia, North America & Europe. A2C is listed
on the NZX market and trades under the code ATM.
End CA:00244005 For:ATM Type:GENERAL Time:2013-11-19 13:08:22

[muss1]

Yes, that's the one. Thanks clip

[Jasemc]

Not such a good agm report i think?What do you think?

[Roberto]

Not such a good agm report i think?What do you think?

I haven't looked at it properly yet, but the market certainly seems disappointed. Not as much uptake in the UK as people were expecting maybe?

[muss1]

I thought it was very much a business as usual presentation. I was hoping for a bit more, but I don't think it was disappointing. A lot of reinvestment again which will make the financials look like they haven't gone anywhere. I think the bullish ramp up in UK has to be positive - the initial slowness of UK sales was already announced in annual report (correct me if I'm wrong?)

[janner]

market doesn't like the report, 80 cent resistance repulsing the sp. albeit, the buy up was on pretty loe volume...

Is the " market " always correct moosie ??

[MAC]

That was largely a steady as she goes AGM I thought, well presented also.

If you believe as I do that ATM will prosper in the UK then the buyout of the Muller Wiseman holding is probably exceptionally good news. Not only have ATM benefited to date by leveraging off Wisemans existing business to enter the UK market and to initiate herd conversions, they will now reap a full share of the net profits going forward. I would though be interested to know what the negotiated margin is within the new ‘cost plus margin’ agreement and also the nominal value expended for the 50% stake.

There was no specific information provided in regard to entering the US market aside from ATM considering options for the ‘near future’.

I didn’t vote against the increase in directors fee’s and thought a reasonable case was presented. Whilst I agree the increase was a little larger than I was initially comfortable with, I do agree that a company on such a big international growth curve like this does need to be both forward looking, and, capable of rotating in top quality offshore directors who come with market and country specific experience, and notably at a price premium. I believe it’s essential to have good directors and good management if ATM are to grow internationally at the rate their strategic plan proposes.

I suspect that short term traders just went to the outlook page of the presentation and saw the words ‘modest first half NPAT’ expected. I personally don’t place much importance on bottom line growth over the next couple of years while ATM are re-investing every buck straight back into capital and growth. Provided revenue growth continues at 50% pa, and gross margins remain above 30% or possible increase further, than I’m a happy holder.

Disc: Watching exchange rates but no change to my HY14 valuation of $1.10 at this juncture.

[Scottman]

Yes Mac I've just read the report and certainly agree with the aspects you have covered. I was hoping for some insight into the USA / Canada situation but that will arrive all in good time. Overall they are doing a great job and I'm also a happy holder. Saw the A2 Platinum add on TV this week.

[iceman]

I have just been looking at some population numbers in China in the 1980s following the introduction of the one child policy. Taking the first decade of the policy, there were around 223m live births in China. A rough estimate is that the ratio of males vs females was 120/100. So it could be assumed around 101 million females were born in China in that decade. These are now women of 23-33 years old and are and will be the young mothers in the next few years.
A majority of these women, according to a Chinese guy that I work with, will not have any siblings so will fall into the recently announced relaxation of the one child policy. No doubt a fair percentage of them will want to have more than one child. I am not going to guess what percentage but whatever it will be, it is clear the numbers are huge.
This can only be a positive for infant formula manufacturers, including ATM.

Discl: Happy holder and accumulator

[Scottman]

thanks for that insight iceman. Most interesting.

[blobbles]

I have just been looking at some population numbers in China in the 1980s following the introduction of the one child policy. Taking the first decade of the policy, there were around 223m live births in China. A rough estimate is that the ratio of males vs females was 120/100. So it could be assumed around 101 million females were born in China in that decade. These are now women of 23-33 years old and are and will be the young mothers in the next few years.
A majority of these women, according to a Chinese guy that I work with, will not have any siblings so will fall into the recently announced relaxation of the one child policy. No doubt a fair percentage of them will want to have more than one child. I am not going to guess what percentage but whatever it will be, it is clear the numbers are huge.
This can only be a positive for infant formula manufacturers, including ATM.

Discl: Happy holder and accumulator

Don't be so sure, though it is a traditional/cultural drive to reproduce in China, there are plenty of other factors in today's society that may make that difficult. For a start, the pollution of everything from food to air to water to dust etc etc is likely to drive down reproduction rates. If you include lifestyle/health factors it will likely drop as well. For instance did you know that over 11% of the adult population of China now has diabetes? Environmental/lifestyle related reproductive disorders (like PCOS or others) are growing at alarming rates, far exceeding healthy population statistics. On top of this education in China is now horrifically expensive for your average person, sometimes consuming 50% of their disposable income or more, for an education that is great on the basics (reading/writing/arithmetic) but short on quality above this. The two very strong ideas in Chinese minds (reproducing and educating their offspring to the highest level) are likely to crash into one another as more babies means higher costs.

[Scottman]

thanks Blobbles. Certainly lots of factors to consider.

[MAC]

ATM are offering free milk voucher trials in the UK, nice marketing, be even nicer if the link worked.

https://www.cloudfreebies.co.uk/2013/03/free-a2-milk-voucher-download/

[clip]

link works for me, it runs through facebook maybe you need to have a/be logged in to facebook?

[Ginger_steps_]

A2 formula now on our shelves in tiny South West Rocks, NSW - terribly presented by the staff however. Price was $26 where the competition sells anywhere from $13 - $23. Anyway I take it as a good sign just being on our shelves. The A2 milk also seems to be selling more these days - I couldnt even buy my full cream the other day as it was sold out :t_up:. Hoping to see a FNP like rise sometime in 2014.

[blackcap]

A2 formula now on our shelves in tiny South West Rocks, NSW - terribly presented by the staff however. Price was $26 where the competition sells anywhere from $13 - $23. Anyway I take it as a good sign just being on our shelves. The A2 milk also seems to be selling more these days - I couldnt even buy my full cream the other day as it was sold out :t_up:. Hoping to see a FNP like rise sometime in 2014.

Just anecdotally off course but my local countdown sells the stuff too. It happens that when I go to buy it it is often not on the shelf because it has run out. So I ask the staff if they can get me some. They do but I have to remind them to please re-stock the shelves. With a bit of grumbling they then do this. There was only one slot for A2, but recently I have seen that staff have "squashed in" another row of A2. I take this as a good sign. I do feel they get let down by their partners "supermarkets" but that is probably across the board.

[MAC]

Just anecdotally off course but my local countdown sells the stuff too. It happens that when I go to buy it it is often not on the shelf because it has run out. So I ask the staff if they can get me some. They do but I have to remind them to please re-stock the shelves. With a bit of grumbling they then do this. There was only one slot for A2, but recently I have seen that staff have "squashed in" another row of A2. I take this as a good sign. I do feel they get let down by their partners "supermarkets" but that is probably across the board.

Have had the same problem here in Christchurch with it being sold out quite frequently, but perhaps it's a good thing if all the local A2 production goes into Chinese export platinum, the Synlait factory is nearby too perhaps sucking us dry.

[Ginger_steps_]

Just anecdotally off course but my local countdown sells the stuff too. It happens that when I go to buy it it is often not on the shelf because it has run out. So I ask the staff if they can get me some. They do but I have to remind them to please re-stock the shelves. With a bit of grumbling they then do this. There was only one slot for A2, but recently I have seen that staff have "squashed in" another row of A2. I take this as a good sign. I do feel they get let down by their partners "supermarkets" but that is probably across the board.

I will test them out and ask for some next time they are empty. They do only seem to stock the shelves at night. I might have a grumble at how the infant formula was hidden out of sight behind the follow on formula....

[clip]

Nice to see A2 mentioned today in Forsyth Barr's seven stocks to watch for 2014
http://www.stuff.co.nz/business/money/9498921/Look-for-earnings-growth-investors-told

[MAC]

Nice to see A2 mentioned today in Forsyth Barr's seven stocks to watch for 2014
http://www.stuff.co.nz/business/money/9498921/Look-for-earnings-growth-investors-told

It's always interesting too when the brokers start to talk about a company as being a potential merger and acquisition target.

It would be easy to imagine that at some point they may gain the attention of the big players like Nestle etc, but I hope not, I'd rather be a long term holder, lots of steady growth yet to come over the next few years.

[blobbles]

I am in China in Kunming - a city pretty much considered the back blocks of China.

What did I see yesterday? A2 Platinum milk brand in a small local baby shop. I would say market penetration is going pretty well into China if these guys are stocking it...

Most certainly a buy for me, even considering the recent rise. They are getting their product on a hell of a lot of shelves over here if these small sellers are stocking it, not saying it is selling yet, but it is there.

[MAC]

I am in China in Kunming - a city pretty much considered the back blocks of China.

What did I see yesterday? A2 Platinum milk brand in a small local baby shop. I would say market penetration is going pretty well into China if these guys are stocking it...

Most certainly a buy for me, even considering the recent rise. They are getting their product on a hell of a lot of shelves over here if these small sellers are stocking it, not saying it is selling yet, but it is there.

That's good news Blobbles, are you able to tell us what they might be retailing at ?

[Casino]

Thanks for sharing this, Blobbles.

[blobbles]

That's good news Blobbles, are you able to tell us what they might be retailing at ?

Next time I will go have a look. I was on a run and saw it from a distance :)

[MAC]

Let’s hear it for the A2 girls, they’ve given us all 6.7% today.

http://www.homegrownfarming.com/a2-milk-cows-clapping

https://www.nzx.com/files/attachments/187462.pdf

[ratkin]

Nice to see A2 mentioned today in Forsyth Barr's seven stocks to watch for 2014
http://www.stuff.co.nz/business/money/9498921/Look-for-earnings-growth-investors-told


Thats a worry , they usually worth avoiding

[blackcap]

Thats a worry , they usually worth avoiding

Haha couldn't agree more :P :)

[clip]

Oh really? good to know, thought that was just morningstar. Are there any others whos recommendations you guys generally avoid?

[blobbles]

I just went into 2 baby supply shops here in Kunming China and saw A2 in both. Prices ranged from 458–488 kuai or approx $90 per container. Although the owner said if I buy 2,I get one free, so maybe $60 odd full retail.

They were also grouped with the organic and high end powders, not with others from Singapore (that is where they told me but I didn't see too many cows there last time I visited!) Holland and America priced around 250 kuai or just under $50 NZD (I assume the buy 2 free one also applies here). So they are top shelf stuff.

Again, getting into these small neighbourhood shops in a 2nd tier city is a big coup for the company, I expect substantial sales as a result.

[Joshuatree]

Thanks for the update blobbles .I like the sound of the "high end powders".

[airedale]

What surprises me at these retail prices is the high cost of feeding a baby in China. How do those prices compare to baby formula in NZ or OZ.?

[blobbles]

What surprises me at these retail prices is the high cost of feeding a baby in China. How do those prices compare to baby formula in NZ or OZ.?

My father bought over some milk powder from NZ last time he visited, cost in NZ was $30 NZD, but we saw them in HK for $500 HKD - about 2 and a half times the price. Pretty shabby really. But you don't use that much, a 900 gram container lasted my sister in law 6 months already as she mixes it up with breastfeeding too, which is what most women here do, I have heard.

[Ginger_steps_]

Hmmm I asked a staff member at bi- lo last night for the price of the A2 baby and follow on formula- she scanned them and told me they were both $33 - have they priced the follow on formula wrongly? I only asked cos I could see she was a manager and used it to point out that they had no price tags on the shelves and that they are two seperate products (presented as 1 and terribly at that). Hopefully its better moving forward. On the bright side A2 milk completely sold out (aling with a few others) as all the city folk & tourists arrived for the holidays!

[hilskin]

Announcement from A2 on FaceBook UK: Milk is now available to buy in all Morrisons, Booths & Budgens stores, plus major Tescos & Waitrose outlets.
Does anyone know which of the above is the new stores they are now selling in, I can't seem to find out. Below is some basic info for each store from wikipedia.

Morrisons = 500 stores UK wide - Wm Morrison Supermarkets plc is the fourth largest chain of supermarkets (http://en.wikipedia.org/wiki/Supermarkets) in the United Kingdom,[2] (http://en.wikipedia.org/wiki/Morrisons#cite_note-co-op-2) headquartered in Bradford (http://en.wikipedia.org/wiki/Bradford), West Yorkshire, England.[3] (http://en.wikipedia.org/wiki/Morrisons#cite_note-3) The company is usually referred to and is branded as Morrisons, and it is part of the FTSE 100 Index (http://en.wikipedia.org/wiki/FTSE_100_Index) of companies. Morrisons's market share as of August 2013 was 11.3%, making it the smallest of the "Big Four" supermarkets, behind Tesco (http://en.wikipedia.org/wiki/Tesco) (30.1%), Sainsbury's (http://en.wikipedia.org/wiki/Sainsbury%27s) (16.6%) and Asda (http://en.wikipedia.org/wiki/Asda)(16.4%), but ahead of the fifth place Co-operative Group (http://en.wikipedia.org/wiki/The_Co-operative_Group), which had a share of 4.4%
Booths = it boasted 28 stores across the region in 2011 - Booths is a chain of supermarkets in Northern England (http://en.wikipedia.org/wiki/Northern_England). Most of its branches are located in Lancashire (http://en.wikipedia.org/wiki/Lancashire), but there are also branches inCheshire (http://en.wikipedia.org/wiki/Cheshire), Cumbria (http://en.wikipedia.org/wiki/Cumbria), Greater Manchester (http://en.wikipedia.org/wiki/Greater_Manchester), North Yorkshire (http://en.wikipedia.org/wiki/North_Yorkshire) and West Yorkshire (http://en.wikipedia.org/wiki/West_Yorkshire). Booths attempt to compete on quality as opposed to just price. It has been developed on the motto "to sell the best quality goods in shops staffed by first class assistants".

Budgens = The stores range in size from around 140m² to around 900m²[citation needed (http://en.wikipedia.org/wiki/Wikipedia:Citation_needed)], and therefore fall into the convenience store (http://en.wikipedia.org/wiki/Convenience_store) size range and the bottom end of the supermarket (http://en.wikipedia.org/wiki/Supermarket) size range, as these two terms are used in the United Kingdom. According to retail analysts TNS Worldpanel (http://en.wikipedia.org/wiki/TNS_Worldpanel), Budgens ranked 13th in the United Kingdom grocery sector in December 2004, with a market share of 0.4%

Tescos = Over 3000 stores Uk wide and 30% market share

Waitrose = is an upmarket chain of British supermarkets, forming the food retail division of Britain's largest employee-owned retailer, the John Lewis Partnership (http://en.wikipedia.org/wiki/John_Lewis_Partnership). As of October 2013, Waitrose has 300 branches across the United Kingdom,[3] (http://en.wikipedia.org/wiki/Waitrose#cite_note-About-3)including 30 "little Waitrose" convenience stores, and a 4.9% share of the market, making it the sixth-largest grocery retailer in the UK

Latest grocers' market shares (November 2013 and 2012)Tesco 29.8% 30.5%
Asda 17.2% 17.6%
Sainsbury's 16.8% 16.9%
Morrisons 11.5% 11.7%
The Co-operative 6.3% 6.5%
Waitrose 4.8% 4.6%
Aldi 3.9% 3.0%
Lidl 3.0% 2.7%
Iceland 2.0% 2.0%

[MAC]

It is pleasing isn’t it Hilskin that ATM seem to be growing right across the retail market, as I understand they’ve been selling in all those stores since early to mid 2013.

The more I reflect on the buyout of the Weismann JV the more I reflect on just how much ATM benefited at market entry from all the Weismann retail contacts, access and the clout that their 30% A1 fresh milk market share provided.

Now ATM have a foot in the UK door, and as you point out, some depth to build on, it’s looking like a pretty good opportunity to reap a full share of forward growth, onward and upward toward the $280M revenues by 2016 target!.

[hilskin]

It is pleasing isn’t it Hilskin that ATM seem to be growing right across the retail market, as I understand they’ve been selling in all those stores since early to mid 2013.

Thanks Mac, thought I'd come across some good news and spent the morning trying to work out which of the listed stores was a new stockist. Oh well learnt a bit more about ATM today so time not wasted. LOL :)
DISC - holding tightly

[iceman]

Announcement from A2 on FaceBook UK: Milk is now available to buy in all Morrisons, Booths & Budgens stores, plus major Tescos & Waitrose outlets.
Does anyone know which of the above is the new stores they are now selling in, I can't seem to find out. Below is some basic info for each store from wikipedia.

Morrisons = 500 stores UK wide - Wm Morrison Supermarkets plc is the fourth largest chain of supermarkets (http://en.wikipedia.org/wiki/Supermarkets) in the United Kingdom,[2] (http://en.wikipedia.org/wiki/Morrisons#cite_note-co-op-2) headquartered in Bradford (http://en.wikipedia.org/wiki/Bradford), West Yorkshire, England.[3] (http://en.wikipedia.org/wiki/Morrisons#cite_note-3) The company is usually referred to and is branded as Morrisons, and it is part of the FTSE 100 Index (http://en.wikipedia.org/wiki/FTSE_100_Index) of companies. Morrisons's market share as of August 2013 was 11.3%, making it the smallest of the "Big Four" supermarkets, behind Tesco (http://en.wikipedia.org/wiki/Tesco) (30.1%), Sainsbury's (http://en.wikipedia.org/wiki/Sainsbury%27s) (16.6%) and Asda (http://en.wikipedia.org/wiki/Asda)(16.4%), but ahead of the fifth place Co-operative Group (http://en.wikipedia.org/wiki/The_Co-operative_Group), which had a share of 4.4%
Booths = it boasted 28 stores across the region in 2011 - Booths is a chain of supermarkets in Northern England (http://en.wikipedia.org/wiki/Northern_England). Most of its branches are located in Lancashire (http://en.wikipedia.org/wiki/Lancashire), but there are also branches inCheshire (http://en.wikipedia.org/wiki/Cheshire), Cumbria (http://en.wikipedia.org/wiki/Cumbria), Greater Manchester (http://en.wikipedia.org/wiki/Greater_Manchester), North Yorkshire (http://en.wikipedia.org/wiki/North_Yorkshire) and West Yorkshire (http://en.wikipedia.org/wiki/West_Yorkshire). Booths attempt to compete on quality as opposed to just price. It has been developed on the motto "to sell the best quality goods in shops staffed by first class assistants".

Budgens = The stores range in size from around 140m² to around 900m²[citation needed (http://en.wikipedia.org/wiki/Wikipedia:Citation_needed)], and therefore fall into the convenience store (http://en.wikipedia.org/wiki/Convenience_store) size range and the bottom end of the supermarket (http://en.wikipedia.org/wiki/Supermarket) size range, as these two terms are used in the United Kingdom. According to retail analysts TNS Worldpanel (http://en.wikipedia.org/wiki/TNS_Worldpanel), Budgens ranked 13th in the United Kingdom grocery sector in December 2004, with a market share of 0.4%

Tescos = Over 3000 stores Uk wide and 30% market share

Waitrose = is an upmarket chain of British supermarkets, forming the food retail division of Britain's largest employee-owned retailer, the John Lewis Partnership (http://en.wikipedia.org/wiki/John_Lewis_Partnership). As of October 2013, Waitrose has 300 branches across the United Kingdom,[3] (http://en.wikipedia.org/wiki/Waitrose#cite_note-About-3)including 30 "little Waitrose" convenience stores, and a 4.9% share of the market, making it the sixth-largest grocery retailer in the UK

Latest grocers' market shares (November 2013 and 2012)Tesco 29.8% 30.5%
Asda 17.2% 17.6%
Sainsbury's 16.8% 16.9%
Morrisons 11.5% 11.7%
The Co-operative 6.3% 6.5%
Waitrose 4.8% 4.6%
Aldi 3.9% 3.0%
Lidl 3.0% 2.7%
Iceland 2.0% 2.0%


Hillskin I checked 3 outlets in South Wales last week, including Sainsbury´s and ASDA. I found no ATM milk in any of the 3 !

[MAC]

Hillskin I checked 3 outlets in South Wales last week, including Sainsbury´s and ASDA. I found no ATM milk in any of the 3 !

Iceman, there is a 'find a store' feature on the UK website.

http://www.a2milk.co.uk/a2-store-finder

There are thousands of supermarkets, it's early days yet but A2 is in around a 1,000 stores or so thus far, not sure about South Wales ?.

[iceman]

Iceman, there is a 'find a store' feature on the UK website.

http://www.a2milk.co.uk/a2-store-finder

There are thousands of supermarkets, it's early days yet but A2 is in around a 1,000 stores or so thus far, not sure about South Wales ?.

Thanks for that website MAC. This was just a quick glance from me at supermarkets that I happened to pass. Gave me a good excuse to get away from wife and daughters doing Christmas shopping. They looked for clothes and I looked for A2 milk :)

I am a very content long term holder of ATM and very pleased with their progress in the UK.

[MAC]

Thanks for that website MAC. This was just a quick glance from me at supermarkets that I happened to pass. Gave me a good excuse to get away from wife and daughters doing Christmas shopping. They looked for clothes and I looked for A2 milk :)

I am a very content long term holder of ATM and very pleased with their progress in the UK.

I know just how that is this time of year, "I'm just popping out on an urgent mission for ST". Do please keep us all informed Iceman, ...., are you seeing much in the way of mainstream advertising ?

Mac

[kiwi_on_OE]

I previously posted a couple of 'milk' photos from South London Tescos and Morrisons stores. I had a further look about a month later, there wasn't any change. Their pricing is similar to the non-cow and premium cows milk offerings. Perhaps I'll have a look at those two supermarkets again today. The two I went to were medium/large supermarkets. I have about 10 supermarkets from the big chains within 15 min walk, they are small and don't have A2 milk, but do have some of the other non-cow or premium choices. So I keep an eye out for them getting A2, that will be an indicator that they are having some success.

[hilskin]

I previously posted a couple of 'milk' photos from South London Tescos and Morrisons stores. I had a further look about a month later, there wasn't any change. Their pricing is similar to the non-cow and premium cows milk offerings. Perhaps I'll have a look at those two supermarkets again today. The two I went to were medium/large supermarkets. I have about 10 supermarkets from the big chains within 15 min walk, they are small and don't have A2 milk, but do have some of the other non-cow or premium choices. So I keep an eye out for them getting A2, that will be an indicator that they are having some success.

Thanks kiwi on OE, that will be very helpful. Hope it's not to cold over there for you.

[BobbyMorocco]

A friend of mine in London told me A2 Milk is stocked in her local Tesco's in the Clapham area. She also sent a photo from Charing Cross tube station when she spotted some A2 advertising.5273

[MAC]

We’ve not heard much over the last six months on progress toward entering the US market, aside from the AGM where Geoff mentioned they were working on options, they must though be getting close to something soon, perhaps at HY14 reporting in February ?

http://www.sharetrader.co.nz/showthread.php?2318-ATM-A2-Corporation-Limited&p=415079&highlight=us+and+canada#post415079

[iceman]

Say something else MAC - that post just got us 3c ;)

No please stay quiet MAC. I've still got a remaining order lower. Have been happily accumulating recently and dont need you to interfere :)

[MAC]

By the way MAC have you done a DCF valuation of ATM? Or anyone else for that matter?

EDIT: I still haven't had the time to go through the stuff you sent me MAC. Hopefully soon!

Cheers

Hi Tumeric, I have ATM valued at HY14 $1.10, presumptuous on a continuation of present gross margins at circa 35% and net margins steadily improving to 10% by FY16 concurrent with the ATM goal of achieving FY16 $280M in revenues.

They've been looking a bit undervalued to me for a while, although since I first posted that valuation a few months ago the aussie exchange rate has come back a little further and ATM have incurred costs associated with the buy out of Wiseman which I've not yet resolved. Will revalue again after the announcement in Feb.

[iceman]

Nice to see that 85c sell order of 100k+ shares get mopped up today - nice gap to 90c if people are keen to buy! Iceman did you take some of the 85c on offer?

No too busy enjoying Paris. Hope I haven't missed the boat at the undervalued prices on offer recently.
I will see what it looks like next week and where it settles. I intend to accumulate a bit more and am happy to do so around current price range. ATM will be one of the stars of 2014

[False Profit]

Are we going to see a hit on the shareprice due to Danone's OUTRAGEOUS lawsuit antics with Fonterra?

Milk is thicker than blood.

[iceman]

If anything ATM and SML will gain from FSF outflows. this is a company specific issue, not general sector like the scare.
Totally agree moosie. I dont think this is negative at all for ATM. Possibly the contrary

[In4a$]

Still on the volume thing, can someone point me to the place where you can look at historical daily volumes in NZX stocks? The DB charts don't seem to be much use, but maybe I'm missing something. Cheers.


this ones good http://www.stocknessmonster.com/

[In4a$]

Thanks mate, although I can't seem to see much detail on volume other than for example looking at the 1 year chart. Is there something more specific on volume on that site I am not seeing? Cheers.

O,oops only shows today,

[MAC]

Can anyone add any insight as to why the sudden increase in volume and SP over the last few days? I'm guessing there must have been one or two brokering reports that have come out recently or something?

ATM are well overdue for a re-rating IMO, not sure what the catalyst is/was, but I’m still a bit intrigued by those potential takeover comments by Forsyth Barr, perhaps just that alone was enough for folk returning to the market in the new year.

Between the A2 loving Australian’s and their dairy industry consolidation raging on, the Chinese wanting all our formula, and ATM going international with all those patents and IP, perhaps there is something kicking about out there ?. Though I would not be a supporter of a takeover.

http://www.stuff.co.nz/business/money/9498921/Look-for-earnings-growth-investors-told

[gv1]

bought heaps at 91. hope it pays off.

[baller18]

Damn as soon as I changed my buy order from 90 cents to 91, then to 92, a big seller sells down to 90 cents, oh well... Holding it long term, used the profit from WYN to diversify and got into ATM...

[In4a$]

Damn as soon as I changed my buy order from 90 cents to 91, then to 92, a big seller sells down to 90 cents, oh well... Holding it long term, used the profit from WYN to diversify and got into ATM...
Dont ya hate it when that happens !. I got topped up at .89c waiting for the magical $ sign to appear then we can relax a bit

[blackcap]

If enough of us holders hold out (in the event of a takeover) it will not be successful. So its a matter of voting no if and when it does happen.

[gv1]

gv1, best of luck, here's hoping we see more upside in ATM soon. From the trading today it looks to me as if we are well on the way to $1+ big chunks of asks at 90c and 91c all eaten up pretty quick which may well have thinned that ask side for us to make that jump to $1 quickly!![/QUOTE]

Thanks mate, hope so.

[gv1]

Damn as soon as I changed my buy order from 90 cents to 91, then to 92, a big seller sells down to 90 cents, oh well... Holding it long term, used the profit from WYN to diversify and got into ATM...
Yes, I know I waited at 90 but gave up and bought at 91c then I see it drop to 90c. Must be brokers doing that.

[karen1]

[QUOTE=turmeric;453539]Still on the volume thing, can someone point me to the place where you can look at historical daily volumes in NZX stocks? The DB charts don't seem to be much use, but maybe I'm missing something. Cheers.QUOTE]

Is this any use to you? http://nz.finance.yahoo.com/q/hp?s=ATM.NZ

[janner]

Some big buyers coming in at the end of the day, so looks like you both should be feeling pretty good about your purchase come 5pm, finger crossed anyway. Bigger picture being that 90c or so will hopefully be looking like a steal in 3 to 6 months :t_up:

Maybe they have already been stolen. !!..

[couta1]

Excuse my ignorance on this stock but is it in competition with SML directly or indirectly or neither,I'm interested in taking a position in this stock where does it rate on the risk scale,any help would be appreciated, I held SML briefly last year but sold without making anything and after that it took off

[In4a$]

Excuse my ignorance on this stock but is it in competition with SML directly or indirectly or neither,I'm interested in taking a position in this stock where does it rate on the risk scale,any help would be appreciated, I held SML briefly last year but sold without making anything and after that it took off
I am no expert Couta, and didnt think ATM would go anywhere in the beginning, but basically they market their A2 gene milk from selected cows globally, SML is basically a milk powder plant in canterbury, selling NZ produced milk powder. Its not a Co-op like Fonterra so I feel has a better potential to return profits to investors, so I dont hold FSF.
Disc : Hold both, SML, ATM, will be getting more ATM

[couta1]

I am no expert Couta, and didnt think ATM would go anywhere in the beginning, but basically they market their A2 gene milk from selected cows globally, SML is basically a milk powder plant in canterbury, selling NZ produced milk powder. Its not a Co-op like Fonterra so I feel has a better potential to return profits to investors, so I dont hold FSF.
Disc : Hold both, SML, ATM, will be getting more ATM
Thanks In4a$ for help, wouldn't buy sml now at their current price but ATM looks promising I guess possibly more risky as sounds a more selective market?

[In4a$]

Thanks In4a$ for help, wouldn't buy sml now at their current price but ATM looks promising I guess possibly more risky as sounds a more selective market?
I agree, I saw ATM as risky, got in late with 2k at .83 then another 2k at .90, ( I like to dip my toes in then buy more as price climbs, rather than risk my cash with one buy) many seem to be confident its valued at around $1.10 so I might get more. I saw WYN as a better choice and thats paying off now.
SML I saw as a safe bet, They have a factory, they make milk powder which seems to be a hot product at the momement and they are a good size for a potential takeover. Had 8k sold 3k when it topped $4

[Citizen Erased]

Noob question: Would you expect a slight pull-back in ATM after the recent spike? I'm looking for an entry point for a small investment.

[baller18]

Noob question: Would you expect a slight pull-back in ATM after the recent spike? I'm looking for an entry point for a small investment.
I'm no TA expert, but on the charts it is outside the bollinger band, but buyiing pressure is still high, very similar pattern to PEB where buyers are piling up. It might retrace one to two cents then and there, but then once again it can shoot up.

[warthog]

Hi couta I have been involved, in the past, in the supermarket business.
It is extremely hard, for a new brand, to get space on the supermarket shelve's.
For ATM to have achieved this with a premium biotech product means the supermarkets think it is a winner. So it's market is not that selective if it was it would not have been given space on supermarket shelve's.

It's "supermarket shelves" (plural, not possessive).

Yes, the supermarkets think its a winner not in and of itself, but they (supermarkets) think that in the context of similar products it can still grow *their* revenue so bodes well for ATM in larger markets.

[warthog]

I'm no TA expert, but on the charts it is outside the bollinger band, but buyiing pressure is still high, very similar pattern to PEB where buyers are piling up. It might retrace one to two cents then and there, but then once again it can shoot up.

"might" ... "it can".

Yes indeed. It can go up, down (potentially to zero), or just bump along doing not very much.

[Snoopy]

"might" ... "it can".

Yes indeed. It can go up, down (potentially to zero), or just bump along doing not very much.


No ATM can't go down to zero. As long as there are projected profits and or positive cashflow the share will always retain some value. If you really think it could go down to zero, you don't understand how the sharemarket works.

SNOOPY

[Snoopy]

I'm interested in taking a position in this stock where does it rate on the risk scale, any help would be appreciated,


Couta, ATM has one outstanding achievement. They have broken into the very tough Australian supermarket duopoly, with a premium product that is gaining market share depute heavy discounting in conventional milk. IMO the rise in ATM's share price is almost entirely because of this Australian market achievement.

In NZ they have been far less successful. Some would say this is because of the partnership arrangement that A2 adopted in NZ, whereas in OZ they took complete control of their own destiny. They are also in the formative stages of breaking into the UK market, again in a partnership arrangement. If they can crack the UK and Australia, then it must be looking good for other markets too. So there is a brief outline of what you get with A2. The other side of any investment is what you pay to be part of the action.

A2 is currently trading on an historic PE of 100. Another way of looking at PE is that it measures the amount of time an investor must wait to get their capital back if all profits are paid out as dividends. If you are 25 years old now and invest in A2, you will be 125 years old before you get your share capital invested back, and only at that point will you start to see a return. Of course this assumes a steady state business performance, which all current shareholders would dismiss. Nevertheless it does highlight how extremely expensive ATM is. I would go so far as to say it would be one of the ten most expensive shares ever traded in the entire history of the NZX, and that includes the 1987 boom. You would have to assume that major success in the UK has already been built into the ATM share price, and anything short of breakthrough growth in that market will see the ATM share price severely punished.

In a nutshell with ATM you have a very high investment potential at a very high price. From an investment perspective this equates to very average prospects going forwards for those buying in at 90c.

There are two scenarios I see going forwards. ATM is able to replicate its success in Australia in other markets. This probably means going it alone, as per the Australian model, and that means a lot more capital will be needed. So shareholders should expect either a large cash issue or placement that will significantly dilute their equity position in the next few years. This will mean new shares available at significantly lower prices than today.

The alternative is to expect a much slower expansion program with partners in new markets. In this scenario I would see growth slowing to the extent that a PE of 100 is totally unjustifiable. In this scenario I see ATM succeeding even as existing shareholders get caned - conservatively I would see the share price halving.

Given the two most likely scenarios will see the share price significantly lower going forwards, the best strategy going forwards looks like hanging out for any upcoming capital raising. I can't imagine why you would take the risk of paying 90c for this.

SNOOPY

[MAC]

I never recommend basing investments on an evaluation of single metric like PE, we really need to look at the full business model and the forward discounted cashflows to see the big picture of a going concern.

ATM have a high PE for a very positive reason;

They sell A2 products that demand a price point premium 50% above their A1 competition yet the farm gate sale price of A2 milk is only 8% higher than A1. This provides for consistently higher gross margins than the A1 industry, as per comparison with SML and FSF below.

5302

Over the last 2-3 years the company has grown both very quickly and at a relatively uniform rate, they have pumped all that cash generated from those high gross margins straight back into growth and this is why net margins and NPAT have been consistently subdued and thus why the PE consistently high.

Think of it as an extremely high rate of re-investment that will show as an even greater return downstream. Perhaps to your point, one of the highest re-investment rates in the NZX.

Recommend a look at forward free cashflows and a DCF valuation for a clearer picture.

[muss1]

Agree with MAC. A quick look at the financial statements would show that the PE is only high because of one off costs. Granted these one off costs might reoccur while ATM continue their growth aspirations in new markets

[warthog]

No ATM can't go down to zero. As long as there are projected profits and or positive cashflow the share will always retain some value. If you really think it could go down to zero, you don't understand how the sharemarket works.

SNOOPY

Why thanks Snoopy.

And if there are no projected profits and/or positive cashflows?

Potentially all investments can become worthless.

[couta1]

Thanks Snoopy for your helpful reply above, seems paying over 90c for the stock at the moment is a premium price to pay.

[westcoaster]

http://keithwoodford.wordpress.com/category/a1-and-a2-milk/ The science is what I believe gives this stock its value.

[muss1]

Thanks Snoopy for your helpful reply above, seems paying over 90c for the stock at the moment is a premium price to pay.

I wouldn't dismiss ATM as too expensive just because of what snoopy has said (all due respect). Consider what others have said also and have a bit of a dog below the surface yourself. The reported PE is deceptive in this case. When I calculated it for myself a few months ago ignoring establishment costs etc it painted a much better picture and was more inline with expected growth. Not as expensive as it first may seem. The SP has risen substantially since then, but half a year of sales has passed as well

[mrjeems]

I wonder if the Cabana bar uses A2 milk for their white russians...

[Snoopy]

I wouldn't dismiss ATM as too expensive just because of what snoopy has said (all due respect). Consider what others have said also and have a bit of a dog below the surface yourself. The reported PE is deceptive in this case. When I calculated it for myself a few months ago ignoring establishment costs etc it painted a much better picture and was more inline with expected growth. Not as expensive as it first may seem. The SP has risen substantially since then, but half a year of sales has passed as well


Thanks for the challenge Muss. I have decided to look at the AT2 annual report for the year ended 30th September as you suggested. Particularly the income statement on page 10.

Removing the one off exchange rate loss we are looking at a normalized after tax profit of $4.12m. There is a joint venture loss of $3.719m to contend with. That seems to be related to the 50% owned joint venture A2 milk UK limited that according to KW has now been dissolved. But if A2 want to progress in the UK they will now have to spend their own money instead. So I don't think you can call the $3.719m lost a one off, when the market is clearly not yet profitable.

All the other expenses seem to be ongoing. I had thoughts of taking out the strategic review. But it looks like ATM have a strategic review every year! So we are back to a normalized profit of $4.12m.

With 617.2m share on issue I get 'eps' of :

$4.12m / 617.2m = 0.6675cps

With the share price at 90c, I get an historic PE of 135.

So ATM looks to be even more expensive than I thought.

SNOOPY

[MAC]

Thanks for the challenge Muss. I have decided to look at the AT2 annual report for the year ended 30th September as you suggested. Particularly the income statement on page 10.

Removing the one off exchange rate loss we are looking at a normalized after tax profit of $4.12m. There is a joint venture loss of $3.719m to contend with. That seems to be related to the 50% owned joint venture A2 milk UK limited that according to KW has now been dissolved. But if A2 want to progress in the UK they will now have to spend their own money instead. So I don't think you can call the $3.719m lost a one off, when the market is clearly not yet profitable.

All the other expenses seem to be ongoing. I had thoughts of taking out the strategic review. But it looks like ATM have a strategic review every year! So we are back to a normalized profit of $4.12m.

With 617.2m share on issue I get 'eps' of :

$4.12m / 617.2m = 0.6675cps

With the share price at 90c, I get an historic PE of 135.

So ATM looks to be even more expensive than I thought.

SNOOPY

I think you may find that those costs are for JV establishment, and as the company grows we should look forward to many more joint ventures costs in Europe and the US as ultimately these investments will generate rather enormous cashflows.

Snoopy, valuations are based on forward free cashflows, do have a go at a DCF, based on the ATM goal of achieving $280M in FY16 revenues and growth ambitions beyond, you may find like many others that ATM is looking satisfyingly quite undervalued at $0.90

Investigation research and analysis reaps rewards.

[muss1]

Thanks for the challenge Muss. I have decided to look at the AT2 annual report for the year ended 30th September as you suggested. Particularly the income statement on page 10.

Removing the one off exchange rate loss we are looking at a normalized after tax profit of $4.12m. There is a joint venture loss of $3.719m to contend with. That seems to be related to the 50% owned joint venture A2 milk UK limited that according to KW has now been dissolved. But if A2 want to progress in the UK they will now have to spend their own money instead. So I don't think you can call the $3.719m lost a one off, when the market is clearly not yet profitable.

All the other expenses seem to be ongoing. I had thoughts of taking out the strategic review. But it looks like ATM have a strategic review every year! So we are back to a normalized profit of $4.12m.

With 617.2m share on issue I get 'eps' of :

$4.12m / 617.2m = 0.6675cps

With the share price at 90c, I get an historic PE of 135.

So ATM looks to be even more expensive than I thought.

SNOOPY

Yes I think it was an establishment cost rather than a reoccurring cost of operating in the UK as MAC has said below. So I still think you can almost double the EPS. Granted that still gives a high PE, but there are great prospects as well. If you use the peter lynch PE=growth it looks scary but this one deserves more investigation.

[MAC]

Yes I think it was an establishment cost rather than a reoccurring cost of operating in the UK as MAC has said below. So I still think you can almost double the EPS. Granted that still gives a high PE, but there are great prospects as well. If you use the peter lynch PE=growth it looks scary but this one deserves more investigation.

I think Snoopy is enjoying winding you up Muss, last year he reckoned 60c was grossly overpriced and 20c was fair, I’m not sure that worked out too well for him either, I’d also be buying quite a lot at 20c actually, but alas dreams and unbridled optimism may be free but don't make you money. Post 600 or thereabouts for the pilot to this sequel.

[muss1]

I think Snoopy is enjoying winding you up Muss, last year he reckoned 60c was grossly overpriced and 20c was fair, I’m not sure that worked out too well for him either, I’d also be buying quite a lot at 20c actually, but alas dreams and unbridled optimism may be free but don't make you money. Post 600 or thereabouts for the pilot to this sequel.

i remember that... Didn't realise it was him though. I can't be wound up here, very happy with how things are playing out with ATM. I just hope couta gives it the consideration that others have and he might be pleasantly surprised

[couta1]

i remember that... Didn't realise it was him though. I can't be wound up here, very happy with how things are playing out with ATM. I just hope couta gives it the consideration that others have and he might be pleasantly surprised
Hi Muss, Thinking about it and have read article on lab test results of product in the mice experiment etc,will their next financial be a half yearly one in may? I noticed they made a loss in the November report last year, currently selling at 90c having hit 93c, is 90c a reasonable entry price, not sure if it will go much lower.cheers

[couta1]

Whoops that was the last Reuters report I was reading which was updated in November showing losses

[Snoopy]

I think you may find that those costs are for JV establishment, and as the company grows we should look forward to many more joint ventures costs in Europe and the US as ultimately these investments will generate rather enormous cashflows.

Snoopy, valuations are based on forward free cashflows, do have a go at a DCF, based on the ATM goal of achieving $280M in FY16 revenues and growth ambitions beyond, you may find like many others that ATM is looking satisfyingly quite undervalued at $0.90

Investigation research and analysis reaps rewards.

The key phrase is not 'cashflows' MAC, but 'net positive cashflows'. Last year ATM generated $3,647m of positive operating cashflows. But they also used up $5.830m in investment cashflows. So the net cashflow position of ATM for FY2013 was actually strongly negative. No surprise there for a company in its establishment phase.

The goal of $280m in sales by December 2016 is exactly that. The current strategy of realigning their partnership in the UK, such that A2 takes full control of marketing is probably the correct one. But short term I expect that to be strongly cashflow negative for ATM. It is hard to get direct parallels. But look at Fonterra's annual report, and in particular the segmented result on Asia.

I picked Asia because that is also a growth market for A2, and despite the establishment of farms in China the Asian operations of Fonterra are largely a marketing division, as per the A2 model. External revenue is $2,057m. Selling and marketing expenses of $324m, which equates to 15% of turnover. So we could use a bit of ratio analysis to suggest that on $280m of sales ATM might need to spend $280m x 0.15 = $42m annually just to maintain their market position. Establishing a new product is likely to be more expensive than that.

I put it to you that A2 can in no way afford these kinds of costs and if $280m in gross sales is indeed the plan they are still desperately short of capital. That means another heavy issue of shares to new investors, diluting existing investor returns or a large rights issue. Remember when they tried this exercise a few months ago the most the institutional investors would pay was 50c per share. Why just a few months later do you expect those same investors would be looking to pay nearly twice that for new shares?

I put it to you that your cashflow analysis has not properly considered the realistic marketing and establishment costs that A2 will face.

SNOOPY

[MAC]

You know the forward market for ATM is huge, Europe, Scandinavia, Canada and the US are yet to be tapped. They are only just beginning with China too. One could be forgiven for appreciating that there may well be 10 years or more of continuous forward growth for ATM.

Their revenue goals look fine to me at FY16 $280M and as the prospective market seemingly appears almost infinite from this point, in all probability, heaven forbid a takeover, this is just the beginning of something that could be big.

That forward goal represents a revenue growth rate of around 43%pa, and I see no reason why that growth rate is not sustainable well beyond FY16.

Add to that equation the established 50% price point premium, the 35% gross margins, and ATM’s high reinvestment rate, ……, we will see a lot of forward cashflows.

The more cash ambitiously reinvested now by ATM the greater those cashflows will be.

I’m also impressed actually with ATM management in consistently maintaining a positive balance sheet whilst investing so heavily in growth, that takes very good fiscal control and restraint and not all companies do this well. No capital raising's or dilution required here.

5323

[Snoopy]

You know the forward market for ATM is huge, Europe, Scandinavia, Canada and the US are yet to be tapped. They are only just beginning with China too. One could be forgiven for appreciating that there may well be 10 years or more of continuous forward growth for ATM.

Their revenue goals look fine to me at FY16 $280M and as the prospective market seemingly appears almost infinite from this point


Mac, I can now see where you are coming from. If you believe there really are no limits to ATMs growth then you can justify any share price, and what you pay doesn't matter. For you, there is no need to bother with any fundamental analysis from this point. From my point of view ATM is in a bubble, from an investment perspective. Note this is not the same as saying I don't believe that ATM will be able to execute their operational plans. Unfortunately for you, because you are on inside of that bubble, you cannot see it.



That forward goal represents a revenue growth rate of around 43%pa, and I see no reason why that growth rate is not sustainable well beyond FY16.


The reason is that almost all of this growth will be coming from new markets. Granted, given their record in Australia ATM has the best possible chance of success. But other markets have different dynamic and bureaucratic hurdles. The idea that ATM can simply roll out their Australian machine in all markets globally is naive.



Add to that equation the established 50% price point premium,


The price point premium must be earned by growth prospects. It is not an automatic right as you believe.



the 35% gross margins, and ATM’s high reinvestment rate, ……, we will see a lot of forward cashflows.


Mac, the 35% gross margins provide the fuel for the growth engine, true. But the high reinvestment rate consumes all of the cashflow. So you have contradicted your own argument. Net cashflow is negative and will continue to remain so for a long time.



The more cash ambitiously reinvested now by ATM the greater those cashflows will be.


No it has to be 'effectively invested', not 'ambitiously invested'. Ambition on its own is insufficient for success.



I’m also impressed actually with ATM management in consistently maintaining a positive balance sheet whilst investing so heavily in growth,


They are maintaining their balance sheet by organizing large capital raisings! Have you forgotten the capital raising of late last year already?



that takes very good fiscal control and restraint and not all companies do this well.


I do give ATM top marks for their ability to grow their funding base. That doesn't mean I would be keen to pay twice the price the big boys agreed to for future funding though.



No capital raising's or dilution required here.


You are kidding right? ATM will fail without more capital.. Add on the head office costs and it doesn't even make a profit in Australia yet.

SNOOPY

[goldfish]

Break through the 90c resistant, maybe going on another run to the 100c mark?

[Jasemc]

must be some news that we don't know about perhaps ?

[Dale]

World Dairy prices rose 1.5 per cent overnight http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11190135

[Jasemc]

might help but someone is buying today and i doubt that is the reason.

[gv1]

There half yearly report due in feb, probably the figures are looking good...

[Jasemc]

lets hope. I always pay close attention before reports are due as I think information has a way of leaking out should i say. Maybe I am wrong.

[MAC]

Seems to be looking ok to me too with five weeks until reporting.

The Aussie exchange rate has moved 9.1% unfavourably during the HY14 reporting period. However, market share at FY13 was 7.4% and we know from more recent media releases in September that growth was continuing and that market share was 7.9% with three months remaining within the reporting period. We have also now expansion into Western Australia to allow for.

The first shipment of formula to China, in June, was invoiced within the FY13 period, but I recall Geoff saying during the AGM that the third shipment would just fall within HY14. Add to that formula sales now also from within New Zealand and Australia.

Let’s hope we see progress in A2 sales in the UK and Ireland from the now 1,000 sales outlets, there may have been some impact though from the Droitwich plant fire. It’s been good to see the ‘tube’ and internet advertising, although I’m looking for some news in regard to ATM overcoming the European Union advertising content hurdles as mentioned during the AGM.

We should expect NPAT to be quite humble as some quite large investments in growth have been made, however I see this investment in growth as a big positive, and shareholders will reap the rewards from the forward cashflows they will generate.

There is the buyout costs of the Muller Wiseman JV, there will be costs associated with the Western Australian supply agreement with Browns, there will be increased transport costs as sales to China ramp up, and possibly costs associated with the UHY Pactum agreement.

I’m looking for revenues in the $56M to $64M (+26% to +45%) as being a good result. NPAT in the range of $0.75M to $1.0M (+39% to +85%) as being a good result.

IMO the above would see ATM steadily continuing on track toward their announced humble FY16 goals. These being $280M in total revenues, 1.8% market share in the UK, 1% infant formula market share in China representing $60M in revenues.

And of course we may or may not receive an update on progress on plans for the US and Canada market.

[MAC]

All looking pretty good aye Mac!!

Also just add that there were some unexpectedly high inflation figures coming out of OZ today which sent the NZD about 1% down on the OZ so a little short term relief maybe in that respect....



Well yes actually, exchange rates are there for the market to see in real time and tend to get priced in. Overall I see exchange rates impacting overall revenues by up to $5M for HY14, keep in mind that there's lot's of growth though to consider too!

[janner]

Seems to be looking ok to me too with five weeks until reporting.


And of course we may or may not receive an update on progress on plans for the US and Canada market.

To many intangibles at present..

Just wait.. :-)

Disc. Holding.

[benjitara]

Just wondering what everyone thinks in regard to these guys having a "moat" type feel on limitations to entry on their genetic cow herds. Obviously entry into their competition space isn't regulated by anyone but is protected to some degree by their own specialisation of product?

[MAC]

Just wondering what everyone thinks in regard to these guys having a "moat" type feel on limitations to entry on their genetic cow herds. Obviously entry into their competition space isn't regulated by anyone but is protected to some degree by their own specialisation of product?

Probably so I think Benjitara, their IP provides for “exclusivity to the manufacture and sale of a2 branded products” which may allow for a wide moat.

That’s not say that any old farmer can’t still produce milk from a jersey cow, they just can’t brand it as A2 without issue. As I understand, A2 corp also have patents on the test process for determining if that cow is A2 or not.

It’s not a metric I collate, perhaps you can have a go for us, would be interested in your outcome ?

https://www.nzx.com/files/attachments/185472.pdf

https://www.nzx.com/files/attachments/156043.pdf

[iceman]

A couple of big parcels traded in the last hour. Very interesting to see and hopefully it will put a floor under SP at 93c

[Jasemc]

yes someone buying big today hopefully a good sign.

[iceman]

A new CEO for the UK business. https://www.anzshareandbondtrading.co.nz/dynamic/announcement.aspx?id=3538509

On the face of it, he looks like he has the right experience.

[MAC]

A new CEO for the UK business. https://www.anzshareandbondtrading.co.nz/dynamic/announcement.aspx?id=3538509

On the face of it, he looks like he has the right experience.

So Scott Wotherspoon becomes the third recent senior new appointment with both prior Unilever and Campbell experience along with Susan Massasso, Chief Marketing Officer and Philip Wohlsen, General Manager Asia. Hopefully good things travel in packs.

It’s starting to look like a pretty experienced team though, and A2 being a marketing dream must help attract and hopefully retain good talent further within the org chart also.

Let’s see what he can do.

[Bjauck]

Has ATM become a defensive stock? In a sea of red this morning on the NZX50 ATM is one of only two stocks to show positive movement - the other being VHP.

[MAC]

Has ATM become a defensive stock? In a sea of red this morning on the NZX50 ATM is one of only two stocks to show positive movement - the other being VHP.

A year on now, perhaps the market is starting to take confidence in ATM walking the talk on their strategic plan. Undervalued too at $0.91 with less than four weeks to HY14 reporting.

http://a2corporation.com/wp-content/uploads/2012/10/A2-Strategic-Review-2012.pdf

[iceman]

Equity Markets rebounding over night (http://blogs.marketwatch.com/thetell/2014/02/04/stock-market-live-blog-stocks-bounce-off-june-lows-pfizer-kors-jump/)

Global Dairy prices rise for a second straight auction overnight (http://www.sharechat.co.nz/article/bec195c0/dairy-product-prices-gain-0-5-percent-in-gdt-auction-led-by-butter-whole-milk-powder.html?utm_medium=email&utm_campaign=Dairy+product+prices+gain+05+percent+ in+GDT+auction+led+by+butter+whole+milk+powder&utm_content=Dairy+product+prices+gain+05+percent+i n+GDT+auction+led+by+butter+whole+milk+powder+CID_ 4ba1c305d234770463273f0b5edec0ed&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticlebec195c0dairy-product-prices-gain-0-5-percent-in-gdt-auction-led-by-butter-whole-milk-powderhtml)

Exchange rates down off their recent highs (http://www.anz.co.nz/commercial-institutional/economic-markets-research/exchange-rate-graphs/nzd-aud/)

and lots of articles floating around such as this (http://www.stuff.co.nz/business/industries/9685594/Strong-dollar-stems-rich-return-on-food)

All bodes well for ATM and it's SP (and SML & FSF for that matter) particularly given ATM has held up remarkably well during this recent pull back!!

Yes we are well positioned. It has been interesting to see the SP hold up well in the last couple of weeks, against general market sentiment. Also a positive that the Great Britain economy is picking up and gathering pace with the GBP forecast to hold up or strengthen against the NZ$. Also looking similar for the AUS economy and AUD.
I look forward to seeing the HY14 report in a few weeks

[iceman]

And another positive announcement with continued strong focus on Great Britain !
https://www.anzshareandbondtrading.co.nz/dynamic/announcement.aspx?id=3543286

[iceman]

I am hoping there will be no effect on ATM. The milk they sell in OZ is all locally produced milk as far as I understand it.

[airedale]

OZ cows and OZ farmers. Shouldn't be a problem I think.

[iceman]

If I am understanding this issue correctly (news reporting has been poor on detail) then the only issue here is that the Coles and Woolworths have decided to use only Australia made produce for their Homebrands. It isn't exactly a mass "Kiwi goods off the shelves" like one could be forgiven for thinking after watching the media reports. So not only is ATM locally produced but also it has never been Homebrand so this issue should in no way affect ATM

[MAC]

With such a big support base I suspect too that most Australians regard A2 milk as their very own.

Several years ago when I lived in Queensland there was no way that I could convince anyone that Fisher & Paykel was not an Australian company.

[Bjauck]

With such a big support base I suspect too that most Australians regard A2 milk as their very own.

Several years ago when I lived in Queensland there was no way that I could convince anyone that Fisher & Paykel was not an Australian company.
...and now it is Chinese?
It is the old story...successful Kiwis are adopted very quickly by Aussies as their own. It happens in the UK too...look at the surprised faces in Britain when you mention that the likes of Ed Hillary and Ernie Rutherford were NZers.

[iceman]

A 4M share trade at 94c just gone through. It would be interesting to see who is buying & selling !

[Jasemc]

A 4M share trade at 94c just gone through. It would be interesting to see who is buying & selling !
Nz super fund buying.

[airedale]

ah yes, but who sold nearly 4 million shares?

[biker]

ah yes, but who sold nearly 4 million shares?

Peter Masfen?

[baller18]

Peter Masfen?

The masfen family have shares in just about every company on the nzx! lol!

[biker]

The masfen family have shares in just about every company on the nzx! lol!

Yes, I think we all know that. I was just putting it out there. I bought my ATM from him at 50c when he began selling down and ended up with an interest in 1/2 mill shares back then.

[baller18]

Yes, I think we all know that. I was just putting it out there. I bought my ATM from him at 50c when he began selling down and ended up with an interest in 1/2 mill shares back then.

Didn't mean to be cheeky or anything, I was just thinking to myself, man the masfen family have a stake in about everything, that's all :)

[gv1]

Another big order gone through.. something bigger to come.

[baller18]

Another big order gone through.. something bigger to come.
Big order?