Percentage of sales is immaterial - and I don't know.
However - (from memory) at last FY 80% of their revenue came from A2 infant formula, and this is obviously all going through A2.
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Might also be worth noting that back in January SML dropped their milk forecast piece 50 cents to $6.25 a kg which was still on top of Fonterras range. But after recent increases in milk prices Fonterra could now be looking at a range from $6.30 - $6.60
Just touched $10 in ASX... looks oversold...
It is being held for forecast increased sales in H2 ("Finished goods inventories at $188.1m (44,344 MT) have increased significantly from comparative periods (January 2018:$142.7m,35,040 MT; July 2018: $122.6m, 26,726 MT). The increase is primarily due to increased volumes of canned infant formula forecast tobe sold in the second half of FY19, and a strong milk production season which has exceeded expectations."
While I understand this, I am uncomfortable with the holding. Essentially SML is carrying all the inventory risk. ATM (as an example of a customer) does not have to carry the risk of holding inventory which is a great move by ATM.
Also finished goods has a limited shelf life. The burden of a slower future market falls on SML. I would have been looking for more effort put into shifting inventory onto the distribution network.
Worked out okay mate but I want to shift gears towards stocks that will pay me a regular dividend. $37m is just plain ugly no matter how you slice and dice this and margin compression from the ATM contract they just told us about 8 months after the fact, (disingenuous concealment), will affect profitability going forward.
EBITDA F18 ~$138m and I reckon ~$280m in F21
Doubling EBITDA in next three years is tremendous stuff
Will see share price get to $15 to $20
yes these are the real concerns aren't they, as well there probably should've been an update prior to the actual announcement which kind of points to a lack of management trustworthiness
I'm pondering exiting...... would be good to break even (average price 10.67 though - will we get there? )
i was very late to this party