Synlait Milk has released its FY21 guidance, as the company continues to work with its banking syndicate to ensure it has appropriate funding for FY22. It follows on from the resignation of the CEO and CFO since mid-April.
Synlait CEO Leon Clement announced his resignation in April, with Synlait co-founder, former CEO and current director John Penno assuming the role of interim CEO since 1 May.
Also this month (14 May), CFO Angela Dixon resigned from her position. She had helped to deliver a “successful $200 million capital raise,” Penno said. Synlait general manager supply chain Rob Stowell is now acting as interim CFO.
The company’s updated FY21 guidance expects to see a net profit after tax loss between $20 million and $30 million, as Synlait’s banking syndicate grants a waiver “of relevant covenants” for FY21. It says it does not intend to undertake a capital raising.
“I am disappointed to share this news with our investor base,” said Penno.
“As a team we are focused on closing out this year as sell as we can, then resetting, and delivering a much-improved financial performance in FY22.”
Synlait has cited the expectation of ongoing shipping delays, which will result in the sale of some ingredient products after the FY21 balance date, as well as lower than expected prices for ingredient products, and the adoption of a “more conservative approach to year-end volumes and valuation” as the reasons for its altered FY21 forecast.
In December, Synlait had indicated its overall FY21 NPAT result would be “approximately half that of the FY20 NPAT result”, due to consumer-packaged infant formula volumes dropping by 35 per cent compared to FY20.
In November, the company sought to raise NZ$200 million and secured its new manufacturing supply agreement with an undisclosed customer. It also sold ice cream brand Deep South to New Zealand agribusiness Talley’s.
