Restructuring helps A2 cut its losses

A2 Corporation yesterday posted an audited group loss of $3,528,057 - after tax and including abnormals - for the 15 months to June 30.

This was just over half the loss of $6,298,221 for the 12 months ended March 31, 2008, company chairman Cliff Cook said.

This improved operational performance had been achieved by restructuring its management team and a focus on procedures and accountability "that has seen previous losses reduced dramatically", said Cook.

"There has also been a deliberate strategy of focusing on key markets and making them profitable while maintaining a watching brief on other areas," he said in a statement to the NZX.

A2 started up after medical researcher Bob Elliott argued over a decade ago that A1 beta casein in milk could be triggering type-1 diabetes in children, and also linked to some countries' relatively high death rates from heart disease.

The company launched a milk without A1 proteins and claimed that consumers could drink this to avoid ordinary milk containing A1 proteins.

New placements of shares left A2 with net cash of $8,919,302 at September 30, 2008, reducing to $7,165,108 at June 30, 2009 - which the company said showed its operations had stabilised and should not require further capital unless an acquisition was to be considered.

In 2009, the loss, excluding $788,054 abnormal cashflows, was $2,740,003. In the first six months of the year, the group post-tax loss was $1,992,822, and the loss for the second nine months was $747,181.

The company's focus in the past six months had been on helping Australia become profitable. A joint venture, A2DPA, became profitable in December 2008 and has traded profitably since, apart from April 2009, when a small loss was registered after a one-off cost.

It finished the full year significantly ahead of the previously announced expected A$1 million profit.

Gross sales increased 60 per cent for the full year to June 30 to A$18 million, compared with A$11.5 million in the previous year.

- NZPA