Goodman Fielder Limited (GFF)



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General Information
Company Name: Goodman Fielder Limited
Stock Code: GFF
Website: www.goodmanfielder.com.au
GICS Sub-Industry: Packaged Foods & Meats
Market Cap ($M): 1,232
Equiv. Shares (M): 1,956

Current Price Data+
Current Price Open High Low Last Close Volume Price Movement
$ 0.630 $ 0.625 $ 0.630 $ 0.625 $ 0.630 4,734,158 0%

Current Broker Consensus Recommendation more
Recommendation: Sell (4)
Recommendation Date: 22nd Oct 2014
Brokers Surveyed: 3

Company Overview

Business Description:
Goodman Fielder Limited (GFF) manufactures and distributes food ingredients, consumer branded food, beverage, packaged bread, dairy products, small goods, flour, edible oils, meal components and other related goods to over 30,000 outlets every day including supermarkets, route outlets and food service customers. GFF manufactures its products in plants in Australia, New Zealand, Papua New Guinea, Fiji and New Caledonia.

Strategy Analysis:
GFF says its 'guiding principles´ are: branded consumer products generate higher returns; brands provide effective insulation against commodity cost volatility; complex product and brand portfolios dilute the investment required to protect or grow market positions; and attractive returns are achievable in mature categories only where there is significant brand strength and/or a material delivered cost advantage, and where market conditions are stable. Within the focus on retail brands, the growth strategies are product innovation, bolt-on acquisitions, internal efficiencies and price recovery of commodity cost increases. GFF aims to be the lowest-cost producer in its categories. CEO Chris Delaney has initiated a strategic review focused on improving performance through Project Renaissance. He sees significant opportunities for innovation in the product portfolio, increased efficiency and supply chain improvements. While there appears room for significant improvement, the fact is that GFF is in a cyclical industry with some major structural challenges. Goodman Fielder reported NPAT of $51m for the half-year ended 31 December 2012. Reported net profit included significant items of $9.8m (after tax), comprising the gain on sale of non-core businesses including Integro, less restructuring costs and provisions for asset sale costs. Revenues from ordinary activities were $1.17bn, down 9% from the same period last year. Basic and Diluted EPS was 2.6 cents compared to 1.4 cents last year. Net operating cash flow was $113.3m compared to $11.5m last year. No dividend was declared. Retail market conditions in the company's core markets of Australia and NZ are expected to remain challenging for the remainder of FY13, with competitive pressures continuing to put pressure on product volumes. In response, the company will continue its strong focus on operational cost control and disciplined capital management.


Financial Summary
Year to Jun NPAT EPS EPS chg (%) PER DPS Yield (%) Franking (%)
2016  F 106.7 5.5 15.7 11.5 3.0 4.8 50.0
2015  F 92.3 4.7 46.2 13.3 2.5 4.0 50.0
2014  A 63.1 3.2 -26.5 21.0 2.0 2.9 100.0
Source: Morningstar analyst estimates.

Peer Comparison
EPS Growth (%) P/E (%) Dividend Yield (%)
Company Mkt Cap 2014 A 2015 F 2016 F 2014 A 2015 F 2016 F 2014 A 2015 F 2016 F
Australian Agricultural Co (AAC) $764 M -- -- -- -- 12.8125 -- 0.00 2.79 --
Bega Cheese (BGA) $772 M 1.5917 -0.4999 0.1698 11.7048 23.4043 20.0079 1.68 1.87 2.11
Goodman Fielder (GFF) $1,232 M 0.2113 -0.1029 0.2145 14.0940 15.7107 12.9363 3.17 3.97 5.37
Tassal Group (TGR) $519 M 0.2255 0.0830 0.1978 12.6887 11.7159 9.7811 3.26 4.03 5.11

Market Comparison
Earnings P/E Ratio P/B Ratio P/E Growth P/S Ratio
GFF 0.85 14.6 1.09 3.33 0.56
Market 0.90 15.3 1.23 1.72 1.52
Sector 0.67 14.3 1.26 2.62 0.94

Directors
Name Position Start Date
Mr Chris Delaney Chief Executive Officer 04 July 2011
Mr Steven Gregg Non-Executive Chairman 26 February 2010
Mr Ian David Johnston Non-Executive Director 26 May 2008
Mr Clive Anthony Hooke Non-Executive Director 19 April 2007
Ms Christine Joanne Froggatt Non-Executive Director 27 August 2009
Mr Peter Roland Hearl Non-Executive Director 26 February 2010
Ms Janice (Jan) Amelia Dawson Non-Executive Director 01 October 2012
Mr Ian Cornell Non-Executive Director 15 February 2014

Management
Name Position
Shane Gannon Chief Financial Officer
Sara Goldstein Company Secretary
Peter Foyston Managing Director, Asia Pacific
Andrew Hipperson Managing Director, Goodman Fielder Australia
Peter Reidie Managing Director, Goodman Fielder New Zealand

Substantial Shareholders
Holding Name
213,927,018 (10.94%) Ellerston Capital Limited and its associates
69,263,564 (3.54%) DFA Group
113,292,275 (5.79%) Letko, Brosseau & Associates Inc
140,029,933 (7.16%) Harris Associates L P
97,809,809 (5.00%) Lazard Asset Management Pacific Co
113,612,156 (5.81%) Maple Brown Abbott Limited
197,436,381 (10.10%) Wilmar International Ltd
197,436,381 (10.10%) Kuok Brothers Sdn. Berhad

Calendar of Events
Date Event
15 October 2015 Report (Annual)
12 August 2015 Report (Prelim)
11 February 2015 Report (Interim)
© 2011 Morningstar, Inc. All rights reserved. The data and content contained herein are not guaranteed to be accurate, complete or timely. Neither Morningstar, nor its affiliates nor their content providers will have any liability for use or distribution of any of this information. To the extent that any of the content above constitutes advice, it is general advice that has been prepared by Morningstar Australasia Pty Ltd ABN: 95 090 665 544, AFSL: 240892 (a subsidiary of Morningstar, Inc.), without reference to your objectives, financial situation or needs. Before acting on any advice, you should consider the appropriateness of the advice and we recommend you obtain financial, legal and taxation advice before making any financial investment decision. If applicable investors should obtain the relevant product disclosure statement and consider it before making any decision to invest. Some material is copyright and published under licence from ASX Operations Pty Limited ACN 004 523 782 ("ASXO"). DISCLOSURE: Employees may have an interest in the securities discussed in this report. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/fsg.asp.

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