A2 Milk Co's chief executive and chair have sold down their stakes in the milk marketing firm, less than a week after reporting first-half profit more than tripled as demand for its A2 Platinum infant formula surged in its key Australia, New Zealand and China businesses.
Chair David Hearn sold 1 million shares for about $2.5 million, or $2.48 a share, on Friday, while chief executive Geoffrey Babidge sold 900,000 shares for $2.2m, or an average price of $2.49, yesterday. Hearn gained the shares by exercising 1 million of his 5 million options, for which he paid $630,000, with the sale to facilitate a property transaction in the UK to move his personal residence, according to documents published to the NZX.
Last week, the milk marketer reported net profit soared to $39.4m in the six months ended December 31, 2016, from $10.1m in the year-earlier period, while revenue rose 84 per cent to $256.1m.
The shares, which are notoriously volatile, had rallied to a record $2.60 in the lead-up to earnings being reported, slipped 1 cent to $2.57 after the results, and have continued to decline since. They traded at $2.51 on Friday, when Hearn sold his shares, $2.44 yesterday, and are down 4.1 per cent to $2.34 today.
A2's shares have bounced around in the past quarter, dragged down from a then-record $2.58 in December when ASX-listed rival Bellamy's was put in a trading halt, causing investors concern that there might be sector-wide issues. It continued to struggle until mid-January when A2 quelled concerns about its earnings outlook and Bellamy's cut its profit forecast for the second time and announced its chief executive's exit. Bellamy's ran into trouble after China moved to tighten regulations in a bid to crack down on the grey market - or 'daigou' - sales and allay concerns about food safety.
