Goodman Fielder has paved the way for an earnings downgrade due to a heavy squeeze on margins in New Zealand, by telling shareholders yesterday that earnings will be "weighted significantly to the second half" of the 2014 financial year.
When releasing its 2013 results earlier in the year, it was less concerned about a deterioration in trading in the December half, telling shareholders only that earnings would be "weighted towards the second half".
Since then, pressures on its domestic bread baking arm, along with a higher milk price have pressured its performance. In particular, its New Zealand dairy division has been hit by a rise of more than 40 per cent in farmgate prices for milk from the fourth quarter of fiscal 2013.
"Aggressive competitor wholesale pricing" has meant that Goodman Fielder has not been able to make up lost ground, shareholders were told at yesterday's annual general meeting.
Also weighing on performance is a decision to double marketing spending in the baking, dairy and grocery divisions, it said.