a2 Milk Company Ltd

A2M Details
Loss to profit turnaround and international growth: a2 Milk Company Ltd (ASX: A2M) has reported for revenue growth of 127.4% to $352.8 million in FY 16 over the prior corresponding period (pcp). The net profit after tax is $30.4 million, as compared to the net loss after tax of $2.1 million in pcp. Operating EBITDA before non-recurring items is $54.6 million, which grew from $4.8 million on the pcp. In addition, there is an exceptional growth in sales of a2 Platinum infant formula in Australia & New Zealand (ANZ) and China, with the total revenue reaching $214.4 million, up 414% on pcp. A2M is progressing well with its plans for the New Zealand liquid milk market after the expiry of the last remaining non-exclusive license with Fresha Valley in May 2017. A2M is well placed to meet any changes to regulations in China.
 

FY 16 Financial Performance (Source: Company Reports)
 
In addition, A2M has increased its overall investment in the international growth and brand development from $15.2 million in FY15 to $20.5 million, which is in line with the strategy of expansion into target markets and product categories with significant growth potential. We maintain a “Hold” recommendation on the stock at the current price of – $1.84 
 

A2M Daily Chart (Source: Thomson Reuters)

Australian Agricultural Company Ltd

AAC Details
Business performance is improving: Australian Agricultural Company Ltd (ASX: AAC) has reported the net profit after tax of $67.8 million in FY 16, which is a $58.2 million increase on the FY 15. AAC’s total kilograms of beef sales was up by 96 per cent and therefore the total sales revenue increased by 44.7 per cent to $489 million.

 

Financial Performance of FY 16 (Source: Company Reports)
 
Moreover, AAC’s business performance is improving due to increasing total revenue and margin by owning cattle through the supply chain and maintaining a stable breeding herd. Meanwhile, AAC stock rose over 46.64% in the last six months (as of October 05, 2016). We give a “Hold” recommendation on the stock at the current price of – $1.86

 
AAC Daily Chart (Source: Thomson Reuters)

Webster Limited

WBA Details
Set to leverage strong and sustainable asset base: Webster Limited (ASX: WBA) reported the underlying profit before tax of $14.9 million in FY16. However, on the statutory basis, WBA reported the loss after tax of $80.7 million during the period as compared to the net profit after tax of $5.8 million in FY 15 due to the impairment of goodwill of $96.5 million recorded in the half year accounts due to the acquisitions. The successful integration of the acquired assets would help in leveraging the growth opportunities in walnuts and cotton, and livestock like cattle and sheep. WBA has entered into an unconditional contract to sell water entitlements for $21 million, which resulted in the profit of sale of $5.5 million. In addition, WBA has established a $250 million banking facility with NAB to offer additional financial flexibility for the group. The acquisitions of Kooba, Bengerang and Tanduo have been consolidated well in FY16 and the company now intends to leverage this strong asset base in FY17. We believe that WBA stock has the ability to recover in the coming months given possible recovery in commodity prices. We give a “Buy” recommendation on the stock at the current price of – $1.15

 
WBA Daily Chart (Source: Thomson Reuters)

---

Disclaimer
 
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376).The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd currently hold positions in:  BHP, BKY, KCN, PDN, and RIO. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.