Boom NZ based dairy group, a2 Milk (A2M) has again lifted its full-year profit guidance because of strong demand in China.
a2 Milk has now revised its full-year forecasts higher three times in the past six months as it continues to benefit from strong demand from China.
The company yesterday boosted its 2015-16 profit guidance to $NZ350 million to $NZ360 million, up from the $NZ335 million to $350 million it forecast in February.
The latest upgrade for the current financial year will see pre-tax earnings of $52 million to $54 million. This compared with February’s expectation of pre-tax earnings of $45 million -$49 million.
In yesterday’s weak market, investors loved the news and sent the shares up more than 12% to $1.68.
A2 says it successfully adapted its manufacturing and distribution model in response to recent regulatory change to the Chinese infant formula market and and added that it is is well-placed to respond to changes there.
“The company continues to adjust and evolve its manufacturing and distribution model in response to such changes,” the group said.
“As a result, the company continues to perform strongly compared to its plan in the second half of FY16.
“Based on a review of its unaudited financial results to May 31, continuation of recent trading performance and no material change in market conditions in June, the company has determined it appropriate to further revise its full year outlook upward.”
A2 Milk also raised its guidance in December, with its latest revisions driving expectations for earnings to more than twice the $22 million forecast at its AGM in November on a $70 million rise in sales compared to initial forecasts.
