Freedom Foods Group Limited (ASX: FNP) is mainly involved in providing a range of high value added dairy based protein ingredient solutions. The company extracts high value protein ingredients directly from milk and uses those ingredients to make high quality products.
On 3 April 2019, the company provided an update on the progress of its nutritionals activities at its Shepparton site. In the update, the company has informed that it has completed a key commissioning step with regard to Lactoferrin production at its new Nutritionals capability at Shepparton.
Lactoferrin is a protein found in both cow’s milk and human milk which is very helpful in the functioning of the immune system.
Currently, the company is having an initial installed annual capacity of 16 tonnes of Lactoferrin. With this important commissioning step, the company is expecting the sales of Lactoferrin to start late in the fourth quarter of FY 2019.
Freedom Foods has received a strong market inquiry for its Lactoferrin capacity. It is expecting to sell its available capacity into FY 2020.
After the start-up of Micellar Casein production in February 2019, the Company has also started the production of Native Whey Protein Isolate. For these products, the company has received a strong inquiry from domestic and export markets. The company is expecting the facility to move to full capacity during the FY 2020 financial year.
The Company is expecting strong demand for these ingredients as well as use within its own product range. It is expected that the Nutritionals capability will deliver a material earnings contribution in FY 2020.
Recently in March 2019, the company responded to a recent speculation with regards to the Company’s potential involvement in the acquisition of the Lion Dairy and Drinks Portfolio (LDD)in which it confirmed that it is not pursuing a bid for the LDD Portfolio as part of any current sale process.
On 28 February 2019, the company announced its half-year results for FY 2019. For the half-year period, the company reported Net Sales of $209.0 million which was 31% higher than the previous corresponding period. During the half year period, the company experienced strong demand across its business activities in Australia, China and SE Asia.
During the half year period, the company’s Operating EBDITA increased by 31.2% to $21.0 million and its operating net profit increased by 27.6% to $6.4 million.
It is expected that new product revenue streams from major capital expenditure projects including the Nutritionals capability will positively impact the sales and earnings into FY 2020 which will help the company in becoming a leading innovator in plant-based beverages.
Now, let’s have a glance at the company’s stock performance and the return it has posted over the past few months. At the time of writing, i.e., on 2nd April 2019, the stock of the company traded at a price of A$4.800, up 2.345% during the day’s trade with the market capitalisation of ~A$1.15 Bn.
The counter opened the day at $4.700 and reached the day’s high of $4.910 and touched a day’s low of $4.700 with a daily volume of ~358,907. The stock has provided a year till date return of 1.30% & also posted returns of -24.35%, 1.30% & -6.20% over the past six months, three & one-month period respectively. It had a 52-week high price of $7.00 and touched 52 weeks low of $4.150, with an average volume of ~ 254,899.
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