Tuesday, 19 March 2024

Announcement

FORECAST: GFF: Successful Private Label Baking Contract and Trading Update

25 Jun 2013 09:37NZX
Goodman Fielder today announced the successful negotiation of a private label
bread contract and also provided an update on trading conditions for the
financial year ending 30 June 2013 ("FY13").

Private Label Bread Contract

Goodman Fielder has successfully negotiated a private label bread contract
within its Australian Baking division. The contract is effective from 1 July
2013.

"The contract represents the achievement of another strategic milestone in
the continued turnaround of our Baking business," said Goodman Fielder CEO,
Chris Delaney.

No financial details of the contract will be disclosed.

Update on trading conditions

While retail trading conditions, particularly in the Australian supermarket
channel, remain challenging, Goodman Fielder continues to make steady
progress on the key initiatives under the company''s three-year strategic plan
to restore sustainable earnings growth.

Goodman Fielder expects an increase in second half earnings before interest
and tax (EBIT) from continuing operations*  (before significant items) of
around 15-20 per cent compared to the first half as the turnaround in the
Baking division continues, together with stable to positive earnings growth
in its Grocery and Dairy divisions.

Second half earnings in the Asia Pacific division have been impacted
primarily from a one-off capacity issue which affected the company''s poultry
business in Fiji.

A higher than expected livestock mortality rate reduced the company''s ability
to supply poultry to the market. Resulting lower volumes, together with
higher costs associated with remediating the issue, impacted earnings in the
second half.  The performance of the poultry business has stabilised over the
past two months as corrective measures were implemented.

While Goodman Fielder is confident that this one-off capacity issue is being
appropriately addressed to restore earnings growth into FY14, EBIT (before
significant items) for the Asia Pacific division in FY13 is now expected to
be lower than the previous year.

At a Group level, EBIT from continuing and discontinued operations (before
significant items) for FY13 is expected to be in the range of A$195-200
million.   This result includes a significant increase in direct marketing
expenditure on the prior year as the company reinvests to support branded
innovation across its core categories.

The company''s financial position continues to strengthen as the proceeds from
divestments are used to lower net debt while operational cash flow remains
strong.

Goodman Fielder expects to announce its full year results for FY13 on 14
August 2013.

* Continuing operations exclude the Integro business which was sold on 2
October 2012 and the New Zealand Milling business which was sold on 22
February 2013

* * * * * * *

For further information contact:
Martin Cole
Director, Corporate Affairs
+61 2 8899 7272
End CA:00237759 For:GFF    Type:FORECAST   Time:2013-06-25 09:37:03
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