A2M - The A2 Milk Company

[galumay]

Miner, I think Bell Potter are ridiculously bullish for a cyclical agricultural commodity business like A2M, despite its stonk status, one day value and price will coincide and a lot of capital will go up in smoke IMO. Hopefully I am wrong for the sake of current speculators.

 

[scarlettsmith694]

Is there any stock reference for ASX 200 futures..

 

[bigdog]

The Annual Meeting of The a2 Milk Company Limited will be held at 10:30am New Zealand time (8:30am Australian Eastern Daylight Time) on 19 November 2019.

We encourage shareholders unable to attend the meeting in person, to participate in the Annual Meeting online at www.virtualmeeting.co.nz/a2MC19.

ASX announcements posted this morning

Must be VG as NZ share price at opening today was up $NZ 1.80 or 14%
https://www.nzx.com/instruments/ATM

I hold

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[bigdog]

The Annual Meeting of The a2 Milk Company Limited held today

High today of $14.20 at start today

12 month high was $17.30 July 30 2019

CEO Jayne Hrdlicka revealed that she expects a2 Milk to deliver revenue in the range of NZ$780 million to NZ$800 million during the first half of the financial year. This compares to NZ$613.1 million in the prior corresponding period. Which implies year on year growth of 27.2% to 30.5%

China label infant nutrition sales are forecast to be approximately NZ$135 million, representing a growth rate of ~84%. CBEC infant nutrition sales are forecast to be approximately NZ$155 million, representing a growth rate of ~54%

a2 Milk’s margins are anticipated to be better than expected. In the first half its EBITDA margin is expected to be in the range of 31% to 32%. And while the full year EBITDA margin will be softer than this, it is also expected to be stronger than previously communicated.

Jane said “Overall, for FY20 we anticipate continued strong revenue growth across our key regions supported by brand and marketing investment in China and the US and the development of both capability and infrastructure to support in-market execution.”

I hate to think how much money shorters will lose today, but I bet they had made a lot of money ramming this stock down as well.

I hold

462

 

[Craton]

Thanks to our Chinese friends, interest in our milk companies is elevated.

 

[Miner]

Good morning all!
A2M made an innocent announcement of departure of the CEO almost immediately.
The published reasons work and life balance with increased travel between USA, China and NZ.
No pun and fare call.
But one would question that the CEO is the strategic lead of a company. The CEO must have known and recommended the expansion and organized succession in an orderly manner than announcing an overnight notice.
Two follow ups from a Miner.
1. Has the CEO failed on a negotiated term to compensate for additional travels and Board showed her emergency exit door ?
2. The CEO made some wrong decisions strategically and board asked her to go.
Market will read and punters would take the opportunity. Opportunity for SM1 holders ?
DNH and watching market and fellow ASF .

 

[bigdog]

The A2 Milk share price in New Zealand has dropped $NZ1.01 or 6.7% after today's announcement

She has a long history of selling her shares as they vest, (did that repeatedly with her Qantas shares).

She had added nothing to the company and the board need to accept their share of blame in this appalling fiasco.

Wait for ASX to open - then the real action starts.

Key will be the shorters today imo - do they short more or use the opportunity to cover.

 

[bigdog]

Yes big sell off today

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[bigdog]

Found this New Zealand article

A2 Milk should be 'held to account' over CEO departure - Shareholders Association
https://www.stuff.co.nz/business/farming/118044514/a2-milk-appoints-interim-chief-executive

A2's handling of the sudden departure of its chief executive Jayne Hrdlicka has been blasted by the Shareholders Association, which has described it as "a classic example" of why it opposes "golden handshakes, time-only payments and the like".

Shares in A2 Milk Company tumbled more than 6 per cent on Monday morning in the wake of the company's unexpected announcement that Hrdlicka's would step down immediately, before recovering somewhat to trade down 3.4 per cent in mid-afternoon trading.

Board members rushed to assure analysts and shareholders that Hrdlicka was leaving because of the demands of travel on her personal life.

A2 chairman David Hearn said the main factor was the amount of travel involved in A2's strategic plan, which would place "significant time and increased travel demands on the chief executive, given that our core growth markets are China and the US".


But he said at an investor briefing that he was limited in what he could say because of confidentiality provisions in relation to Hrdlicka's departure.

Shareholders Association chief executive Michael Midgley said it deplored A2's handling of the hiring and stepping down of Hrdlicka.

She knew A2 was a "worldwide company" when she took on the job, he said.

"It should not have come as a surprise that there was going to be a lot of travelling.

"The A2 board must be held to account. If there are any outstanding payments, other than base salary to the resignation date, then the board must use every legal avenue to deny them to Hrdlicka," he said.

"We would expect the A2 board to have had a catch-all 'board discretion' clause in the contract that will allow this. If not, this in itself is a glaring omission."

It was disappointing there were confidentiality provisions in relation to her departure, he said.

"'Confidentiality' is a very convenient excuse in these situations and may obscure other problems that shareholders have a right to know. As it stands shareholders will have every right to wonder if their money is disappearing into a confidential black hole."

Midgley described A2's board as "naive and excessively generous".

Hearn said A2's board had recruited Hrdlicka for her "experience and ability to develop and implement strategy" and her resignation was done by agreement.

She will be replaced by former managing director Geoffrey Babidge, while the company looks for a permanent replacement.

A2 reaffirmed its previous guidance for the year. First half revenue was expected to be between $780 million and $800m, and all other key financial metrics remained "strong and within our expectations", the company said.

Analyst Nick Dravitzki of Devon Funds Management said the resignation was "clearly an unusual and surprising turn of events for a CEO to leave in such a relatively short space of time".

However, Hrdlicka had been a "polarising" figure and it was notable that the company had replaced her temporarily with its very popular former chief executive.

Chelsea Leadbetter, senior equity analyst at Forsyth Barr, said it was difficult to know the fulls ins and outs, "but having Geoff [Babidge] back is obviously a good thing".Analysts had struggled to understand some of the strategic comments coming out of the company. But A2 had given good guidance at its annual meeting, abating some of those concerns.

"It's a business that is clearly moving really fast and there's a lot changing quite quickly, so I appreciate it's probably hard for them too."In a statement, Hrdlicka said she was delighted with the progress A2 had made, but the next phase of the company's strategy was going to be "too difficult to manage alongside my other commitments whilst also managing the health and wellness priorities of my family and me".

Hrdlicka provoked controversy when she sold off $4.36m worth of her shares after only two months in the job last year. The sale was granted by the A2 board as compensation for forgoing certain benefits when she left Qantas

She made another trade of more than half her shares last month, cashing up over $2m worth of shares to meet tax obligations "arising from the vesting of her time-based rights," also with the board's approval.

Her earnings last year totalled A$2.08m ($2.19m) in a fixed remuneration payment of A$1.5m and a "transition benefit" of A$586,666.

She was also owed a "potential short term incentive" payment of A$1.8m for the year, which would be paid after the publication of the audited results. If received, that would take her total pay to A$3.88m.

Prior to joining the company, Hrdlicka was chief executive at Australian budget airline Jetstar for five years, having previously led the business transformation at Qantas from 2010 to 2012.

She also served as a non-executive director of Woolworths from 2010 to 2016.

In her earlier career, Hrdlicka was a partner at Bain & Company, where she was focused on consumer orientated businesses. She is also the current non-executive president of Tennis Australia.

Federated Farmers dairy chairman Chris Lewis said Hrdlicka's abrupt resignation would raise questions for farmers.

However, it was unlikely to impact them directly as the company collected its milk from Fonterra and Synlait.

"A lot of farmers have been curious about A2 because it's been a bit of a superstar in the last few years and some have started breeding to build A2 herds," he said.

"This will make them wonder, is it just a business issue or is there something else? Is there new science?"

A2 milk comes from cows that naturally produce milk with the A2 version of beta-casein, rather than the A1 version of the protein, which can impact the digestive system and has been linked to ailments including irritable bowel syndrome, eczema and diabetes.

The milk's popularity had soared in recent years, taking the The A2 Milk Company's share price with it.

At the end of December 2009, its shares were trading for 0.05 cents each. By the end of this November, they were changing hands for $15.52.

That's a growth rate of 18159 per cent.

Mark Lister, of Craigs Investment Partners, said A2 "took the cake" on a decade of great returns for stocks in general. "A $100 investment in A2 back then would today be worth a spectacular $18,082."

 

[bigdog]

Great having Geoff Babidge back is obviously a good thing

I pretty much doubt if the decision to hire Jayne was entirely up to Geoff. He probably liked her credentials and endorsed her based on what she offered at the time of interview and further discussions.

Nice package for Geoff - interesting that the STI bonus is entirely at discretion of Board.

ASX announcement yesterday
9/12/2019 2:41:47 PM Interim CEO - Material terms of employment

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[Boggo]

Seems that nothing has changed with Jayne.

My concerns over a year ago based on her past performance...
https://www.aussiestockforums.com/posts/998066/
and
https://www.aussiestockforums.com/posts/998202/

 

[bigdog]

ASX announcement today13/02/2020 7:30:46 AM Response to Synlait's earnings and outlook announcement

Synlait made a profit of $82m last year and were forecasting similar growth to previous year. Now downgraded to $70 to 85m as a a result of increased costs and reduction in purchases from non a2 customers. a2 still continuing to grow.

Synlait reported Coronavirus is not impacting demand or distribution channels.

A2 Milk New Zealand is currently down 1.3%

SM1 announcement today "Synlait updates full year 2020 guidance outlook"
13/02/2020 7:30:26 AM Synlait updates full year 2020 guidance outlook

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[bigdog]

ASX Announcements today

27/02/2020 7:30:26 AM 10 Half Year Results Commentary (uploaded below)

For the six months ended December 31, a2 Milk Company delivered revenue of NZ$806.7 million and EBITDA of NZ$263.2 million. This was an increase of 31.6% and 20.5%, respectively, over the corresponding period. The latter equates to an EBITDA margin of 32.6%.

This compares favourably to management’s guidance of revenue in the range of NZ$780 million to NZ$800 million with an EBITDA margin of 31% to 32%. Management advised that its stronger EBITDA margin was driven by an improved gross margin, which is benefiting from a continued mix shift to infant formula, as well as improved price yield.

Net profit after tax came in 21.1% higher than the prior corresponding period to NZ$184.9 million and earnings per share rose 20.6% to 25.15 NZ cents.

Operating cash flow was solid at NZ$160.6 million, leaving the company with a closing cash balance of NZ$618.4 million.

A2M expects strong revenue growth across its key regions in the second half. This is expected to be supported by its increased marketing investment in China and the USA as well as the ongoing development of organisational capability to support the execution of its strategy.

A2M acknowledges that there is uncertainty around the potential impact to supply chains and consumer demand in China resulting from coronavirus outbreak.

Management continues to forecast a full year EBITDA margin in the range of 29% to 30% due to its higher marketing spend and increased cost of goods sold.

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[bigdog]

UBS have retained their buy rating and lifted the price target on this infant formula company’s shares to NZ$18.50 (A$17.69).

UBS were impressed with a2 Milk Company’s half year results.

Stronger than forecast margins, despite the U.S. fresh milk business posting a larger than expected loss.

 

[bigdog]

ASX announcement today

a2 Milk brand expands into Canadian market under licence

496

 

[Dona Ferentes]

A2M hasn't suffered, during the recent sell-off (plotting 12 month price action versus the XJO, below). But you'd need a strong stomach to want to stay onboard, seeing how the shareprice reacts to every bit of news.

 

[Dona Ferentes]

what downturn? A2M at all-time high

 

[bigdog]

ASX Announcement today
22/04/2020 7:30:06 AM Trading update & FY20 Outlook (file uploaded below)

A2M has provided guidance for the full year. It currently expects revenue in the range of NZ$1,700 million to NZ$1,750 million and an EBITDA margin in the range of 31% to 32%. This assumes that planned marketing activity for FY 2020 of NZ$200 million, weighted to the second half, will be fully expended prior to the year-end.

This compares to its February guidance for “strong revenue growth” in the second half and a full year EBITDA margin in the range of 29% to 30%. It will also be a big lift on the revenue of NZ$1,304.5 million and EBITDA of NZ$413.6 million it achieved in FY 2019.

The top end of its guidance range implies revenue of NZ$1,750 million and EBITDA of NZ$560 million. This would be a 34.1% and 35.4% increase, respectively, on the prior corresponding period.

The A2M share price this morning in New Zealand (ATM) is currently up 3.34% (about 10:25 AM NZ time)

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[Boggo]

I sold out of A2M on the 20th as it came off it's high.
When I saw the report (above) I thought I had stuffed up and jumped too early.

I have been waiting for a cross above $19.00 to re-enter but I think at the moment anyway that I may have just been lucky to escape.
Just waiting now for it's next move ??

 

[makteb]

G'day all,

I am new to Aussie Forum. I have been trading over 15 years and this is my first forum. I have deliberately not joined forums to avoid noise and derailing thoughts allowing me to focus on information provided by text books on how to trade. I have now joined Aussie stocks to seek further enlightenment beyond what i have self taught and learnt. There are more mistakes for me to learn to become a better investor/trader.

The beginning of this thread to when i write this, I would be interested if anyone has gone back who has traded this stock and analysed what they have done wrong or right. More importantly what they have learnt from the experience to benefit their trading into the future. Particularly their emotional or disciplinary approach.

A2M has performed well like many other companies.

I will share with you my experience from 2015 on A2M.

1. Read up on the company, it was a small cap stock.
2. I tried to understand its product(s), its niche and what the company wanted to do.
3. This was a long term hold.
4. No activity directly related to A2M until 2019 where I sold a third.

I learnt from small cap stocks and IPO, one strategy is to hold. Any company requires time to grow and penetrate the market. Yes A2M could have flopped. I have had losses, all traders do.
By avoiding the fixation on price and long term hold, it has been a fruitful strategy. But not always.

With the remaining holdings, I will use it for options strategy. Options has been my focus for the last 5 years, however the Australian market lacks liquidity.

At the start of the thread, I was hoping for a boring thread where everyone just bought and held. Quite a colourful thread.

How am i better today than last week?