Synlait on target to achieve growth targets
Synlait Milk says it is on target to achieve growth targets for the 2014 financial year.
In September, the NZX-listed milk products processor and exporter gave a profit forecast of $19.67 million for the year to July 31, 2014.
At that time it reported a profit of $11.5m for the year to July 31, 2013, 6.5 per cent ahead of its prospectus forecast of $10.8m.
Today, in notes for the company's annual meeting presentation in Christchurch, Synlait Milk said the focus for the 2014 financial year would be on growth initiatives.
There would be capital spending of about $180m to support volume and value growth.
Key strategies were "migrating" milk powder and cream to higher-value products for its markets and building the company's infant formula and nutritional product volumes.
Growth initiatives included a January 2014 date for a lactoferrin plant, a March date for a 22,500-square-metre drystore and a June target for blending and canning programmes.
Other key target dates included November-December for a quality-testing laboratory combined with administration facilities, May 2015 for a butter plant and August 2015 for the dryer 3 facility.
In 2014, first-half sales of infant nutritionals were likely to be affected by the announcement of new Chinese regulations and New Zealand food-safety issues that had arisen this year.
"However, we still expect to achieve forecast sales of infant nutritionals this year," the company notes said.
"[We are] now forecasting to take a significant allocation of DIRA (Dairy Industry Restructuring Act) milk."
The act allows for the allocation of milk from Fonterra, which the dairy giant is required to supply under legislation designed to prevent a monopoly.
Synlait Milk shares were this afternoon trading 1 cent higher at $3.84.
The company's manufacturing bases is near Dunsandel, about 30 kilometres south of Christchurch.