New Zealand Professional Investment Services Firm

Forsyth Barr

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

<ul><li>The a2 Milk Company's (ATM) FY24 result provided little new information to change our view on the medium/long-term earnings outlook, but did affirm: (1) the solid market share growth, consistent with our data tracking (positively led by early stage products), and (2) the challenging market backdrop (competition and industry volumes), which will continue to be a headwind to margin expansion over the medium-term.</li><li>The canary in the coal mine, where investors may feel uneasy following the FY24 result, is ATM calling out supply issues from its key supplier Synlait Milk (SML.NZ).</li><li>FY25 EBITDA is set to be adversely impacted by at least -NZ$15m as a result, but more importantly it raises questions: (1) that similar issues could occur in the future, and (2) if it will impact new customer acquisition (the timing of which is particularly unfortunate, given CY24 births growth). </li></ul>

The a2 Milk Company's (ATM) FY24 result provided little new information to change our view on the medium/long-term earnings outlook, but did affirm: (1) the solid market share growth, consistent with our data tracking (positively led by early stage products), and (2) the challenging market backdrop (competition and industry volumes), which will continue to be a headwind to margin expansion over the medium-term.The canary in the coal mine, where investors may feel uneasy following the FY24 result, is ATM calling out supply issues from its key supplier Synlait Milk (SML.NZ).FY25 EBITDA is set to be adversely impacted by at least -NZ$15m as a result, but more importantly it raises questions: (1) that similar issues could occur in the future, and (2) if it will impact new customer acquisition (the timing of which is particularly unfortunate, given CY24 births growth). 

The A2 Milk Company - FY24 Result — Canary in the Coal Mine?

A2 Milk Co Ltd

The A2 Milk Company - FY24 Result — Canary in the Coal Mine?