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Tough retail conditions contribute to profits drop at Goodman Fielder

Goodman Fielder suffered a four percent drop in profits in its half yearly results, and challenging retail conditions are partly to blame, says Australasia's largest food manufacturer.

Normalised net profit after tax for the half year is at $41.2m, down four percent, and CEO Chris Delaney said "Retail trading conditions in Australia continue to be very challenging, resulting in lower volume and pricing which impacted our first half performance. However, the progress we are making, particularly in securing price increases in our Baking and Grocery divisions, is expected to result in improved performance in the second half of the year."

Overall, the company is pleased with its results, with its net debt reduced by 35 percent and an improved alignment with retail partners resulting in price increases and a continued commitment to the company's "key strategic milestones."

"This includes the necessary reinvestment in our brands and our people to grow our revenue and support our medium term growth objectives.  That has resulted in a 38 percent increase in direct marketing expenditure (DME) and also a provision for staff incentives in the first half," said Delaney.

"While this increase in DME has impacted our earnings result relative to the previous corresponding period, we believe this is a prudent reinvestment of the cost savings we are generating across the business to support our strategic planning agenda."

 

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