Freedom Foods Group has recorded a return to profit, with CEO Michael Perich declaring the company’s financial, structural, operational, and cultural reset largely complete. Adjusted operating EBITDA was $22.4 million, which officially returns the company to profit with a $76.4 million – or 141 per cent – turnaround from its $54 million loss in FY20.
Quite a turnaround from its $174 million loss in FY20 and restated FY19 results from a $11.3 million profit to $145.8 million loss.
Snapshot
- Net revenue $449.1m, up 8%;
- Adjusted operating EBITDA - $22.4m up 141%, a $76.4m turnaround;
- Net loss after tax $33.8m down 78%;
- Plant-based Beverages revenue up 16% to $152.9m; and
- Milklab sales up 49%.
Revenue grew eight per cent to $559.1 million, largely off the back of Milklab and lactoferrin sales.
Sales through ecommerce were up 38 per cent and exports rose 31 per cent. Overseas sales now account for almost a quarter (24 per cent) of group revenue, up from 20 per cent in FY20. China and South-East Asia are still particularly strong markets.
Perich said the performance and continued consumer trends towards better-for-you foods points to the potential for FFG to keep delivering better returns, but full benefits won’t flow through until FY23.
The business underwent recapitalisation in May, with $265 million issued in secured convertible notes to majority shareholder Arrovest, existing and new investors. ASX-listed options were also available, with $27 million taken up.
Plant-Based Beverages revenue increased 16 per cent to $152.9 million. Adjusted operating EBITDA rose 194 per cent to $25.7 million. Sales of Milklab grew 49 per cent.
Dairy and Nutritional grew seven per cent to $394.3 million. Adjusted operating EBITDA loss was $4.1 million, a 93 per cent improvement on the $56.7 million loss in FY20.
Perich said Diary and Nutritional has been the focus of FFG’s operational turnaround strategy to reduce waste, improve production efficiencies, remove or reduce unprofitable products, optimise milk supply and curtail losses from the sale of surplus milk. Reducing milk wastage, increasing line efficiencies and reducing complexity have been the priority with major gains, he said.
Sales of PUREnFERRIN lactoferrin products rose 215 per cent in FY21 with expansion into Europe and the US.
Sales of its consumer nutritional – Vital Strength, UpProtein, CranktProtein – rose five per cent despite COVID-19 impacts on gyms and specialty fitness stores.
Specialty Seafood revenue fell 22 per cent to $11.8 million due to COVID-19 disruptions to global supply chains, which caused stock shortages and cancelled promotions. The company is now reviewing the business to either be “retained and improved” or divested.
Perich also said the company was monitoring the latest COVID-19 lockdown, particularly in the Shepparton region where some of FFG’s facilities are located. Currently one third of the region’s population is in quarantine.
The company has also flagged it will be changing its name at the next AGM. It will release the proposed new name in the coming weeks.
The company is still facing two class actions and legal action in the US.
