ATM-A2 MILK

[winner (n)]

Morningstar love A2, so do shorters as media reports short positioning lifted from 2.90% of shares on issue in early January to 4.55% in early April

Bit of good news and share price will rocket back to 7 bucks plus

[Teitei]

Morningstar love A2, so do shorters as media reports short positioning lifted from 2.90% of shares on issue in early January to 4.55% in early April

Bit of good news and share price will rocket back to 7 bucks plus

Takeover talk must be overdue in the Australian?

[Left Field]

Seems UBS reiterates its Buy call on a2 Milk Co, expecting a 140% rise in net profit after tax by FY26, thanks to strong infant formula demand and a daigou channel recovery. Data suggest the company is enjoying growing brand recognition, that daigou retail margins are on the rise and that exports into China are growing. UBS believes consensus forecasts appear underdone and expects EPS to return to pre-covid levels by FY26 (30% ahead of consensus). Buy rating and NZ$8.90 target price retained.

Mind you they are talking FY26...... and it's a long way away.

[Left Field]

Interesting response from ATM re the SML announcement today

https://www.nzx.com/announcements/410403

" In response to Synlait's announcement, which indirectly refers to a2MC, the
Company is surprised at the extent of the reduction in Synlait's guidance
range and notes the following:

o In the two forecasts provided to Synlait by a2MC since Synlait's previous
guidance update on 17 March 2023, a2MC has lowered its total forecast
production volume needs for English label consumer-packaged infant milk
formula (IMF) in respect of March, April, May and June 2023 production months
by ~1,650 metric tonnes in aggregate (equating to less than 5% of Synlait's
reported Advanced Nutritional sales volumes over the 12 months ending 31
January 2023). This is mainly due to:
o continued weakness in the ANZ Daigou / reseller market which is down 49% in
the most recently reported quarter from Kantar ;
o the impact of significant cumulative delays in English label
consumer-packaged IMF deliveries from Synlait to a2MC over an extended period
expected to be fulfilled in 4Q23 resulting in a material amount of
inventory arriving within a relatively short period which needs to be
managed; and
o ongoing refinement of the Company's English label distribution model
resulting in more customers and distributors being supplied directly out of
Hong Kong and China leading to lower future a2MC and channel inventory
requirements.

o a2MC has recently confirmed its forecast demand based on commencement of
China label consumer-packaged IMF production in line with previously
anticipated timing to receive SAMR re-registration and commencement of
production in Synlait's 4Q23, subject to SAMR approval, as previously
announced by Synlait on 17 March 2023 and reconfirmed today. a2MC is pleased
with this progress; and

o a2MC is in discussions with Synlait regarding the allocation of certain
one-off production/supply chain and other related costs between the two
companies.

Taking all of the above factors noted by the Company into account, a2MC
confirms that there is no material change to its FY23 outlook as confirmed at
the time of the announcement of its 1H23 results on 20 February 2023.........."

[Minimoke]

...Interesting response from ATM re the SML announcement today


o a2MC is in discussions with Synlait regarding the allocation of certain
one-off production/supply chain and other related costs between the two
companies.

.....

So can we read into this that there is a dispute due to SML failing to meet some contracted requirement and A2 are looking for compo of some kind.

[winner (n)]

A2 did a subtle downgrade today ......anybody notice?

[Minimoke]

A2 did a subtle downgrade today ......anybody notice?

"As a result, the Company expects revenue growth to be at the low end of its previous expectations (ie approximately
10%). The Company continues to expect an EBITDA margin (% of sales) similar to FY22.

[KW]

A2 did a subtle downgrade today ......anybody notice?

Yes.  

[winner (n)]

Yes.   

From revenues 'low double digit growth' and ebitda margin 'slightly higher' (FY23 v FY 22) to 'approx 10%' and 'similar' I reckon is a $20m/$25m downgrade in FY23 ebitda from previous guidance .....but still about 10% higher than last year

Market doesn't seem to have liked this downgrade

[Left Field]

From revenues 'low double digit growth' and ebitda margin 'slightly higher' (FY23 v FY 22) to 'approx 10%' and 'similar' I reckon is a $20m/$25m downgrade in FY23 ebitda from previous guidance .....but still about 10% higher than last year

Market doesn't seem to have liked this downgrade

ATM need at least 3 things to begin to outperform again IMO
1.) SAMR re registration completed
2.) MVM upgrade complete and performing well
3.) Less reliance on China via growth in the US market

Not going to happen overnight.

[Left Field]

Personnel changes.....healthy promotions from within ATM while the USA move bodes well.

https://www.nzx.com/announcements/411090

While some will say 'mere musical chairs'

[winner (n)]

Possibly the MVM man thought job well done ...it's up and running ....time for me to move on

[KW]

Maybe everyone was too quick to judge ... 

Back in Dec 2019 Jayne Hrdlicka said "she had not anticipated the amount of travel involved when she took up the role 18 months ago... The Board and I agreed that this next phase is going to be too difficult to manage alongside my other commitments whilst also managing the health and wellness priorities of my family and me."

Turns out her husband was given a terminal cancer diagnosis in Nov 2019.  He has now passed.
https://www.afr.com/markets/equity-markets/virgin-boss-hrdlicka-to-take-personal-leave-20230508-p5d6t2

[Left Field]

Maybe everyone was too quick to judge ... 

Back in Dec 2019 Jayne Hrdlicka said "she had not anticipated the amount of travel involved when she took up the role 18 months ago... The Board and I agreed that this next phase is going to be too difficult to manage alongside my other commitments whilst also managing the health and wellness priorities of my family and me."

Turns out her husband was given a terminal cancer diagnosis in Nov 2019.  He has now passed.
https://www.afr.com/markets/equity-markets/virgin-boss-hrdlicka-to-take-personal-leave-20230508-p5d6t2

Sorry to hear....... and yes sad she was judged v harshly by some on these forums.

[BlackPeter]

Maybe everyone was too quick to judge ... 

Back in Dec 2019 Jayne Hrdlicka said "she had not anticipated the amount of travel involved when she took up the role 18 months ago... The Board and I agreed that this next phase is going to be too difficult to manage alongside my other commitments whilst also managing the health and wellness priorities of my family and me."

Turns out her husband was given a terminal cancer diagnosis in Nov 2019.  He has now passed.
https://www.afr.com/markets/equity-markets/virgin-boss-hrdlicka-to-take-personal-leave-20230508-p5d6t2

You are right ... we probably forget too often that Senior Managers, Board Members, Politicians and even fellow posters    are human as well ... and not protected from the uncertainties of life.

We probably should treat them accordingly. A bit more respect and empathy for everybody might help.

Anyway - Thanks for rising that.