An agreement over a licencing dispute, a positive financial year, and consolidation of two class actions is moving Noumi, formally Freedom Foods Group (FFG), further from its annus horribilis in 2020.
Freedom Foods reported more than $590 million in write-downs and almost $175 million loss for FY20, after the board uncovered internal abuse of its equity incentive plan, inventory write-downs and capital expenses not recorded as such.
US$35m settlement with Blue Diamond Growers
A dispute over a licencing agreement to manufacture and distribution Almond Breeze products has been resolved in US Arbitration, with FFG agreeing to pay Blue Diamond US$35 million.
The agreement stipulated FFG pay Blue Diamond US$17 million within 20 days of the agreement being signed and future payments totalling US$18 million paid in US$4.5 million instalments over four years, from 1 September 2022.
It also laid out a wind-down and termination of the licence agreement by 20 June 2022, with a 12-month packing by FFG option for Blue Diamond and payment of its Australian court costs. FFG would then be free to sell nut-based beverages including MilkLab without restriction.
Chair Genevieve Gregor said it limited by the terms of the settlement in what FFG could say, but it meant a major legacy issue was resolved.
“While the settlement amount maybe greater than we would have hoped, importantly it provides us with the certainty we need to pursue our ambitions in nut-based beverages in Australia and elsewhere through our key brands, such as Milklab and Australia’s own, and it saves us from a lengthy and costly arbitration process in the US,” Gregor said.
Two class actions combined
The two class actions brought against FFG have been consolidated into one proceeding,
The claims allege the company and its auditor Deloitte Touche Tomatsu breached the Corporations Act, the Australian Securities and Investments Commission Act, and the Australian Consumer Law Act.
The Victorian Supreme Court ordered the two proceedings be consolidated into a single proceeding.
Slater & Gordon and Phi Finney McDonald will act as joint solicitors.
FY21 results
Total revenue rose 8.2 per cent for Freedom Foods Group (now Noumi) in FY21, with a $76.4 million earnings turnaround.
Snapshot
- net revenue up 8% to $559m
- adjusted operating EBIDTA up 141% to $22.4m
- daily UHT sales up 5% to 256mL
- lactoferrin sales up 170% to 28t
- plant-based sales up 6% to 87mL
The company reported an adjusted operating EBITDA of $22.4 million, up 141 per cent on the restated FY20 loss of $54 million.
The group’s statutory net loss after tax was $38.8 million, a 72 per cent improvement on the restated FY20 loss of $136.4 million.
Milklab continued to be the strong performer for the group, with domestic sales increasing 50 per cent and export up 46 per cent. The Plant Based Beverages unit increased revenue by 15.6 per cent to $152.9 million.
In Dairy & Nutritional revenue rose 6.8 per cent to $394.3 million. There have been operational improvements at its Shepparton plant in Victoria, with sales of its lactoferrin brand PUREnFERRIN rising 215 per cent. Sales of nutritionals were slow due to Covid closures of gyms and specialty stores but rose five per cent all up.
CEO Michael Perich made special mention of the Shepparton improvements, saying, “The focus on quality right first time, reducing milk wastage, increasing line efficiencies and complexity, has resulted in progress on key metrics of productivity.
At the AGM the name change was also approved.
Gregor said it provided a “clean break” from the past 18 months, describing the period as “the greatest challenges its history”.
“This has been a defining year for the company. We have been pursuing a three-phase ‘Reset, Transform, Grow’ transformation strategy. In addition to the financial reset, we have undertaken an enormous amount of work to improve the operations, culture and governance of the group,” Gregor said.
The entire leadership team was reset, with new CEO, CFO, COO, CMO, CCO, chief people and culture officer, group general counsel and company secretary, and general manager, internal audit.
