ATM - A2 Milk Corporation Limited

[skid]

Healthwise I think goats milk is at the top,but as you say ,the economics dont make it to much of a threat for A2

[MAC]

Goldman Sachs Adds A2 Milk Co to Conviction Buy List

[Ginger_steps_]

Goldman Sachs Adds A2 Milk Co to Conviction Buy List

That sounds promising. Do you have a link? I looked up the conviction list, but it was behind a paywall....

[silu]

Just got my order filled at 50c. That's the bottom right?

[MAC]

Cripes !,

That's some good confidence after just a couple of months of selling in California, things must have either gotten off to a really good start, or alternatively not off to a bad start at all.

“The sharemarket-listed premium milk company backed by the billionaire Perich family believes its fledgling US business could grow to generate more than half its revenues after its a2 milk brand rapidly secured shelf space with leading retailers in southern California”

“Managing director Geoff Babbage said the increasing health-conscious focus of US consumers, especially in the major cities, provided a big growth opportunity. “Our plans would assume that the revenue opportunity in the US market should be bigger than the Australian business, which at the moment is worth between $140 million and $150m in turnover and that is growing. So that gives you a sense of the size of the opportunity’’

http://www.theaustralian.com.au/busi...-1227359496246

[skid]

Goldman Sachs Adds A2 Milk Co to Conviction Buy List

Im not saying thats a bad thing ,but when GS got involved with NAN the SP really suffered--Some believed they were shorting it --It happened several times (Goldman Sachs change of interest buying...sellling...buying..etc)
It got so that some were selling their shares immediately upon hearing GS was making another move---They really seemed to be playing the market in that share.

If you see change of interest and its Goldman Sachs --just beware and keep a close eye---they are not a nice outfit.(even though it seems like great news at the time like it did for me)

[MAC]

Cripes !,

That's some good confidence after just a couple of months of selling in California, things must have either gotten off to a really good start, or alternatively not off to a bad start at all.

“The sharemarket-listed premium milk company backed by the billionaire Perich family believes its fledgling US business could grow to generate more than half its revenues after its a2 milk brand rapidly secured shelf space with leading retailers in southern California”

“Managing director Geoff Babbage said the increasing health-conscious focus of US consumers, especially in the major cities, provided a big growth opportunity. “Our plans would assume that the revenue opportunity in the US market should be bigger than the Australian business, which at the moment is worth between $140 million and $150m in turnover and that is growing. So that gives you a sense of the size of the opportunity’’

http://www.theaustralian.com.au/busi...-1227359496246

Ooops, sorry about that link, full text below;

The sharemarket-listedpremium milk company backed by the billionaire Perich family believes its fledglingUS business could grow to generate more than half its revenues after its a2milk brand rapidly secured shelf space with leading retailers in southernCalifornia.

After launching a2 in the US market two months ago, the group’sUS boss, Jeffrey O’Neill, said the brand was on track to be in retail storesthat represented 70 per cent of the groceries dollar volume spent in southernCalifornia by the start of July.
The a2 Milk Company also has commitments from retailers innorthern California and is *optimistic of achieving a similar market positionthere from *August.

“We have a very specific roll-out plan over the next two tothree years. Once we have California established, the goal would be to get tothe northeast. We have a plan to roll out across the country,’’ said MrO’Neill, who is the former chief executive of Pepsi Cola Canada.
While regular cows milk contains a blend of the A1 and A2 betacasein proteins, a2 claims it is the only company that processes milkexclusively containing the A2 protein, which many *people say is easier todigest than regular milk.

Managing director Geoff Babbage said the increasinghealth-conscious focus of US consumers, especially in the major cities,provided a big growth opportunity. “Our plans would assume that the revenueopportunity in the US market should be bigger than the Australian business,which at the moment is worth between $140 million and $150m in turnoverand that is growing. So that gives you a sense of the size of theopportunity,’’ Mr Babbage said.

“I would like to think that in a number of years’ time the US opportunityis strong and a significant contributor to our overall business.’’
The company told investors early last month that it intended toinvest $US20m ($25m) in the US over the next three years.
Its product is sold in half-gallon cartons and it has a localpartner to manage the milk supply and processing.

The a2 Milk Company, which is dual-listed on the New Zealand andAustralian sharemarkets, is 17 per cent-owned by the Perich-family controlledhealth food company Freedom Foods. The Auckland-based group now has 9 per centof the Australian fresh milk grocery channel by value.

[NT001]

...The sharemarket-listed premium milk company backed by the billionaire Perich family believes its fledgling US business could grow to generate more than half its revenues after its a2 milk brand rapidly secured shelf space with leading retailers in southern California.

That extract from today's report in The Australian strikes me as interesting because of the emphasis put on the Perich family connection rather than the connection with Freedom Foods, which is based in Melbourne where the story originated from.

Sure, Perich has 60% control of Freedom Foods, but it is Freedom Foods that is still the listed owner of a 17% stake in a2MC. And yet if you look at the Freedom Foods website I think you'll search in vain for any mention whatever of a2 milk - in fact what you find is constant reference to the health risks of dairy and the allergies and intolerances it causes.

Which is a bit odd because Freedom and Perich, as separate entities, have recently formed a massive joint venture with a Chinese corporation to export dairy into China. Have they warned their Chinese consumers?

To quote a paragraph from Freedom’s website (http://www.freedomfoods.com.au:

Those with a dairy allergy are allergic to the proteins in cow’s milk, and their immune system reacts badly as a result. Symptoms can include vomiting, wheezing, skin rashes and abdominal pain, among others. Unfortunately, the only solution to a dairy allergy is to eliminate products containing cow’s milk from your diet.

Really? You’d think that as the 17% owner of a2MC it might point out that in most cases the simple answer to the milk protein problem is to try a2 milk. Instead, it avoids even mentioning a2 milk and recommends ditching dairy altogether and switching to Freedom’s branded almond milk (and eating broccoli for calcium).

At least the head of the Perich family, which is Australia’s biggest dairying outfit, is on public record as saying a2 milk solves some consumers’ dairy allergy problems. I wonder if they’ve looked at Freedom’s website.

I also wonder why Freedom is shipping milk (containing A1) to China and yet retains its as yet unprofitable 17% stake in a2MC. The whole thing seems to me to be riddled with inconsistencies.

[Harrie]

Very positive news MAC, but not trying to be negative, too many Should's Could's and maybe's to influence much price movement in the short term. Until actual revenue numbers are confirmed in the UK and USA markets its unlikely to move outside the 49c to 53c range. Not a problem for long term investors...still on track.

Very confusing messages coming out of Freedom NT. I agree, shipping milk to China then telling everyone how bad it is? You would also think that with a 17% holding the marketing people at freedom would use every opportunity to promote a2 milk to try if there were digestive problems with regular milk.

[MAC]

I’m not really interested in the short term to be honest Harrie as you know.

I’ve always held that the Californian market may well offer great potential, and this is the first advice we have had from a2MC offering a prospective market size, greater than Australia, excellent.

Certainly that paints the picture behind all the market research the company has done and provides some whom may otherwise have thought that the US market might just be a small nice to have on top of the Australian business with a whole new perspective.

Certainly plugging those prospective revenues and forward free cashflows into ones DCF will make every shareholder smile.

I would like to get a bit more from the company, I think though it’s probably around a five year plan to get to those estimated US revenue levels, first two years to break even, another three years of revenue growth, all good.

But for now it’s satisfying just to hear that the launch has gone well, the US supermarkets are flocking to the four products on offer, and the company is confident enough from the first two months of market feedback to make a bold forward prediction.

All good, up and away in the US.