"The appreciation of the $NZ to the $A reduced operating rev by re $14 mill and EBITDA by approx $2.7 mill on the pcp"
This will almost certainly reverse in the 2015 year.
Printable View
"The appreciation of the $NZ to the $A reduced operating rev by re $14 mill and EBITDA by approx $2.7 mill on the pcp"
This will almost certainly reverse in the 2015 year.
Yep as I said yesterday next year is the big result I believe. Will be interesting to see how market reacts.
It does take a few years to build a business and to make it profitable, whether you start one yourself, or a2MC do it in the UK or US. If all the new markets can be funded from cashflow, great, that’s full margin re-investment.
The day that a2MC announce a dividend will be the day I sell, but today the forward growths looks dammed good.
They’ve adjusted the 2016 goal from NZ$280 to NZ$230 for currency movements, fair enough, it’s always been an NZD estimate and was made back in 2012, will need to run and adjust the DCF on that.
New markets on the horizon, US next year, fresh milk into China, UHT into Asia.
It is really satisfying to be a shareholder of a company that is in such a competitive position that it can just pick the next market set each year and expand at will, that’s a rare thing.
Sales revenue up 24% ($107.4m up $20.9) while expenses up 28.6% ($106.7m up $23.8m)
It would be interesting to have a breakdown of expenses - expensed in Australian dollars (having a natural FX hedge) and those expensed in NZD affected by FX. Such a breakdown I thinkwould give us a better understanding of the expenditure on growth (unless my quick look at financials has missed where this is stated) and how well the Australian market expenses are under control. Is the price at the maximum the OZ market will accept or can/do ATM adjust price to supply increases?
Also noted increase in stock held end of year from 0.7m to $5.5m? Possibly some in China milk powder stock pile?
Overall very happy with my investment and company's continued investment in growth
Base Case Valuation: FY15 $1.10
It’s always a complex work up for ATM, if anyone with a genuine interest wishes to share research notes and analysis, happy to do so also offline.
ATM have adjusted their 2016 revenue goal from NZ$280 to NZ$230 to reflect currency movements, but have noted that this target does not include revenue contribution from the proposed US market. My last valuation was FY14 $1.09, effectively thus a ‘no change’ result.
Sensitivity Analysis:
Base Case (as below) $1.10
ATM Revenue Target Six Months Early (HY15 NZ$230M) $1.25
ATM Revenue Target Six Months Late (HY17 NZ$230M) $0.85
Base Case Basis:
DCF, WACC 11.0%, 30yr PG 3.0%, NZ$230M in revenues at FY16 as estimated by the A2 Milk Company, a continuation of 50% price point premiums, a continuation of gross margins at 35%.
This base case is prepared by applying numerical goals as provided by the A2 Milk Company as below in NZD. As such the applied long run exchange rates are those as assumed by the A2 Milk Company.
Revenue goal of NZ$230M by 2016
UK fresh milk market share of 1.8% by FY16
Australian market share of 10% by FY15
China infant formula revenues of NZ$60M by June 2016 representing a 1% market share
These acquisitions come amid a government-led push to raise food standards and strengthen the supply chains in the industry. China is also seeking to consolidate the infant formula industry and aims to form three to five companies with annual sales of more than 5 billion yuan each by the end of 2018, according to a plan released in June by the State Council, the country’s cabinet.
good or bad for atm
If the above is correct that would eliminate ATM, as by June 2016, they would only encompass 1% of market share in China.
Also..
http://www.nbr.co.nz/article/a2-milk...sion-bd-161515
"Moose verdict: buy the dips" ;)...he he ..thought they only made milk.....
Quiet day at the office, eh?