After gaining nearly 8% in the 2015 financial year, the share price of allergen-free, health food manufacturer Freedom Foods Group Ltd (ASX: FNP) continued to shoot higher in the first few weeks of the current financial year, reaching an all-time high of $3.51 in early August.
Increased market volatility and tough operating conditions across the industry from Bega Cheese Ltd (ASX: BGA) to Woolworths Limited (ASX: WOW) have presumably played their part in pulling Freedom's share price back towards the $3 level.
Yesterday – the last day for reporting to the ASX – investors finally got an opportunity to review Freedom's full year results.
Here are some key takeaways from Freedom's full year results:
- Net sales revenue increased 6.2% to $111.1 million
- Underlying operating EBITA fell 25.5% to $9.1 million
- Operating net profit after tax slumped 60.3% to $4.97 million
- Operating earnings per share down 61.4% to 3.17 cents
- An interim ordinary dividend of 1.5 cents per share (cps) was paid (in line with the prior interim dividend)
- A final dividend of 1.5 cps was declared
- Net debt to Equity increased to 27%
Freedom operates across multiple divisions which are experiencing growth and increased sales into Asia and North America:
Beverage Group – Non Dairy: Brands include Australia's Own and Blue Diamond with Almond Milk a key item. Dairy: Brands include VitaLife and So Natural
Cereal and Snacks Group – Sold under the Freedom brand this division offers a range of products including porridge, corn flakes and muesli bars.
Specialty Foods – Brands include Brunswick canned seafood
Investments – Freedom has a strategic 17.8% shareholding in A2 MILK FPO NZ (ASX: A2M) and also a 10% shareholding in Australian Fresh Milk Holdings consortium which recently acquired Australia's largest single-site dairy operation Moxey Farms.
Management was upbeat about the group's outlook but failed to give any concrete guidance. Investors were told that "the benefits of (a) multi stage capital investment programme is expected to accelerate increased group profits and returns from FY 2016 and beyond."
With a diversified range of niche products, recently acquired assets which are set to add to the bottom line in future periods, and an established distribution path into Asia and Northern America, Freedom Foods could offer investors a clever way to play the global food and beverage thematic.
