Goodman Fielder plans further restructuring

Goodman Fielder has signalled further brand writedowns and redundancies are likely as it continues its drive to reverse falling revenues and losses.

The food group has been hit hard by aggressive competition and the switch by consumers to cheaper supermarket brands.

Yesterday, it reported an annual net loss of A$146.9 million (NZ$190.6m) ended June. But this was better than 2011's red ink of $166.7m loss.

Goodman also updated investors on its restructuring programme which aims to strip $100m from its cost base by 2015. Part of that programme involves selling its Integro commercial oils business - expected to be completed by the end of the month - and its NZ Milling business, which employs about 130 staff and includes Champion flour mills in Christchurch and Mt Maunganui.

Goodman said it had made good progress on that sale, and was "in talks with a number of interested parties".

Chief executive Chris Delaney said Goodman had identified a "small list" of other underperforming brands that were "under review", but he declined to identify them.

Earlier this year, it announced the closure of three plants in Australia, affecting about 100 jobs, and it was likely that more would follow, he said.

The $146.9m loss includes $267.2m in pre-tax restructuring charges and writedowns on its Australian and New Zealand baking business and NZ home ingredients arm.

Excluding those charges, the normalised net profit was A$96.5m, about 30 per cent off 2011, while normalised earnings before interest and tax came in at A$233.1m - within guidance.

Goodman Fielder said in "challenging trading" its revenues eased 1.7 per cent to A$2.51 billion, because of margin pressure from increased labour and logistics costs.

The baking division's revenues drop 4.3 per cent to A$979m on the back of a lost baking contract and pricing pressures from supermarket brands.

Hamilton Hindin Greene director Grant Williamson said supermarket brands had made a fair amount of traction in New Zealand and could still wrest more of the market.

Investors would be pleased with the progress made in trimming costs, with A$23m already achieved, and with increased revenue and earnings in the Asia Pacific division. But they would be anxious to see evidence the company could improve its earnings, he said.

Goodman Fielder shares rose 3 cents to 65c on the NZX, and 3 cents to A52c on the ASX. No dividend will be paid. Fairfax NZ

Taranaki Daily News