ATM - A2 Milk Corporation Limited

[t.rexjr]

Interestingly, I was at a Fonterra presentation yesterday.
I asked where they sat with the whole A2 milk thing.
After recently getting their fingers somewhat burnt over the "organic milk" fad they are sitting on their hands being cautious with the A2 fad.
Currently they believe it is and will remain a niche market. No doubt time will tell.

They have to say that though don't they...

[Filthy]

I'd drink A2 if it was cheaper than other milk

in London, A2 was about twice the price as normal milk BUT they regularly ran 2-for-1 or half-price specials.
A2 was always stocked in the larger supermarkets i.e. waitrose, morrisons, tescos (but not in the smaller city metros) and because it was only allocated a comparatively-small shelf space, it would often sell out before we could get any.

we did find a way around that though, by buying it with our bulk groceries online ('as you do' when living in such a big-city). this was done through Ocado (which ran a great online system OCDO:LON) and because it was part of our standard default order, we would often end up buying it even if it was not running a special. I would say they haven't even scratched the surface of the UK market yet, and that's before they even start moving into different products lines..... I could not find any IF being stocked anywhere while I was living there (assume they weren't producing any). I bought into the A2 story as soon as it starting turning up on shelves in the UK - hopefully A2 can continue to leverage other markets and products rather than being overly dependent on the China IF scene.

the missus is back to using almond milk now we have returned to NZ...

[Beagle]

They have to say that though don't they...

Exactly !!

[dobby41]

in London, A2 was about twice the price as normal milk BUT they regularly ran 2-for-1 or half-price specials.
A2 was always stocked in the larger supermarkets i.e. waitrose, morrisons, tescos (but not in the smaller city metros) and because it was only allocated a comparatively-small shelf space, it would often sell out before we could get any.

we did find a way around that though, by buying it with our bulk groceries online ('as you do' when living in such a big-city). this was done through Ocado (which ran a great online system OCDO:LON) and because it was part of our standard default order, we would often end up buying it even if it was not running a special. I would say they haven't even scratched the surface of the UK market yet, and that's before they even start moving into different products lines..... I could not find any IF being stocked anywhere while I was living there (assume they weren't producing any). I bought into the A2 story as soon as it starting turning up on shelves in the UK - hopefully A2 can continue to leverage other markets and products rather than being overly dependent on the China IF scene.

the missus is back to using almond milk now we have returned to NZ...

None of what you have said indicates that it is more than a niche market.
If people don't see a value in it they won't pay more.
Sure, they run out but I suspect the volumes would still be far less than 'normal' milk - a fraction really.

It's been suggested that in the not to distant future A2 protein milk will predominate (due to type of cows etc) - if and when that happens ATMs edge will go out the window.

[Filthy]

None of what you have said indicates that it is more than a niche market.
If people don't see a value in it they won't pay more.
Sure, they run out but I suspect the volumes would still be far less than 'normal' milk - a fraction really.

It's been suggested that in the not to distant future A2 protein milk will predominate (due to type of cows etc) - if and when that happens ATMs edge will go out the window.

just giving you the benefit of what I saw and experienced overseas, nothing more. make of it what you will.

[winner69]

FWIW anything greater than a 10% variance from forecast is generally something that is considered to be "material" but to confuse things one could easily take one of two views regarding the full year forecast of $900 - $920m. Is that 10% variance around the annual forecast, i.e. a variance one way or the other of $90m plus or a 10% variance around the current quarter forecast seeing as we already know what the nine months sales are ? I think its the latter but the strict interpretation of NZX rules could be the former so I think that's all about as clear as mud. We'll all know soon enough late next month.

I reckon they only need to disclose anything (material) if FY earnings are likely to come in more than 10% higher or lower than consensus $190m.

Past guidance has been a revenue number, comment on margin and an idea what marketing expenses are likely to be - they’ve left it up to analysts to come up with a earnings number and by not making any comment about the $190m they have sort of signaled they are happy with that

Anyway ...that’s what this ‘reasonable’ person reckons what material or not.

But then they might want to give the share price a boost and come out and say something like revenues will be $950m plus ......

[winner69]

If it hadn't been for this news, you would have got some around the low $11 mark, this stock needs regular news to prop the price up.

No news today.couts ....and share price down.

A bit ominious

[Timesurfer]

They have to say that though don't they...

For the record I am not holding shares in any milk producers so not trying to influence anyone either way.

The Fonterra rep did say that they are keeping an eye on F2 and should they see a market worth exploiting they are in a position to do so - even if that is just supplying other companies with their A2 compliant herds.

[Chanchay]

No news today.couts ....and share price down.

A bit ominious

The news was the price of dairy dropped 5pc at the last auction. Although A2 is premium, I think the drop in solids is still indicative of the demand for milk protein in general.

[Beagle]

No news today.couts ....and share price down.

A bit ominious

Its interesting that Synlait and ATM have been pacing each others SP in recent times and yet have a look at Synlait's chart and ATM's chart and you tell me which one from a TA perspective looks dramatically better...and then there's the much lower PE for Synlait as well. I know their fortunes are inextricably related but nonetheless there are considerable differences. That said I now own more ATM than Synlait although I am presently scratching my head wondering if this is really all that clever...

Then one looks at how Ballamies SP has been absolutely smashed in recent months on the ASX and the picture gets even murkier...but no worries I'll probably have some new insight overnight and everything will be alright in the morning...