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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 principlesÂ´ 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.
Nick Swales, Regional Director, Newcastle Office, Rathbones 27/10/2014 |
â€śIf you want to have a better performance than the crowd, you must do things differently from the crowd.â€ť Sir John Templeton.
Ric Spooner (Chief Market Analyst, CMC Markets) 20/10/2014 |
Today, Australian investors will not have to go it alone buying stocks as they did for much of last week. Bargain hunters this morning will be supported by the morale boosting encouragement of a 3% turnaround in the German Dax and a 264 point rally in the Dow Jones.
Carl Richards, director of investor education at the BAM Alliance 17/10/2014 |
â€śAs odd as it may sound, the sooner you start treating your investments like you treat life, the happier youâ€™ll be with the outcome.â€ť
William H. Gross, Janus Capital Group 16/10/2014 |
â€śFinancial markets are artificially priced. In the bond market, there is nothing normal about a three year German Bund yielding â€śminusâ€ť 10 basis points.â€ť
CMC Markets 8/10/2014 |
Share market indices around the globe are breaking down. While analysts cast around for reasons, itâ€™s clear that a time factor is in play. Simply put, many investors â€śfeelâ€ť a correction is overdue. How low could it go?
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