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MELBOURNE - Australasian grocery giant Goodman Fielder Ltd says it remains on track to achieve its full year net profit pro-forma forecast of A$223.9 million ($253 million).
The bread and spreads group today reported a first half net profit A$128.2 million and declared an interim dividend of six cents per share.
Goodman Fielder said it had made good progress in the half, with three recent acquisitions all integrated and performing at or above expectations.
Goodman Fielder also announced that it had entered into an agreement to acquire the majority share in the Arnott's biscuits business in Papua New Guinea.
Australia's biggest publicly listed food company, the owner of brands like Meadow Lea and Wonder White bread, reported revenue of A$1.216 billion for the first half of 2006/07.
It said no meaningful comparisons could be given for the results as it was not publicly listed during the previous corresponding period.
"The company remains focused on delivering the full financial year net profit after tax pro forma forecast of A$223.9 million, as contained in the company's initial public offering prospectus," Goodman Fielder said.
It added that the figure had been normalised to remove the impact of restructuring costs and currency fluctuations.
Goodman Fielder chief executive officer Peter Margin said the risks ahead for the company include managing the commodity cost movements and ensuring that its New Zealand business delivers.
He said that over the full year, the company expects commodity costs to rise by between A$70 million and A$80 million, mainly in wheat and oils.
Mr Margin said that the group also remains on the lookout for further acquisitions in the Pacific under A$100 million.
"The acquisitions we will look at will be around A$100 million and possibly up to A$500 million in the future, but at this point in time, we think the multiples are too steep," he told journalists.
Mr Margin also said that he is not unhappy with the group's share price, and believes that the market is still looking at the company and judging its ability to manage its way through the commodity cost issues.
"It will be a tough year to work through the commodities but we have to improve ourselves," he said.
Food brand investor Burns Philp & Co Ltd spun off the Goodman Fielder business in a A$2.1 billion float in December 2005, returning the spreads and bakery group to the ASX after a two-year absence.
Goodman Fielder said the group performed well in the first half of 2006/07 with the Australian businesses delivering at or above expectations.
"The Australian baking business continued its strong momentum from the prior year despite emerging pressure from increased commodity costs," Mr Margin said in a statement.
"The commercial and home ingredients businesses also performed well in the face of commodity cost pressures which were managed effectively.
"Returns from the Pacific Islands also increased and the company is looking to further develop this business.
"However the company's trading performance in New Zealand did not meet expectations and the company is responding to this challenge."
Goodman Fielder's recent acquisitions include the La Famiglia chilled bakery business and the Country Life health and organic bakery business in Australia, the Northern Bakeries operations in New Zealand, and New Caledonia baking business La Biscuitiere.
Mr Margin said the acquisition of the majority share in the Arnott's biscuits business in PNG would further strengthen Goodman Fielder's presence in that country.
- AAP
