Some of Australia's top 100 companies battled adverse conditions in 2019 or restructured, and as a result lost ground in this year's Top 100 Food & Drink Companies report, produced by Food & Drink Business in collaboration with IBISWorld.
Grower, packer and marketer of fresh fruit and vegetables, Costa Group’s dramatic drop – 18 places from #27 to #45 and a 54.46 per cent revenue drop – was in part due to its current reporting period being six months. But in a trading update on 18 October, it said “previously foreshadowed challenges facing the company had continued to crystallise”.
On 28 October, it revised its May earnings guidance, from estimating its 2019 earnings before interest, tax, depreciation and amortisation margin-self-generating and regenerating assets (EBITDA-SL) was likely to be $140 million to $153 million to $98 million.
It also launched a pro-rata entitlement offer to shareholders in a bit to raise $176 million to repay debt. Costa offered $2.20 a share via a one-for-four entitlement offer to existing investors.
Bellamy’s Organic had a 14-place tumble from #63 to #77. Its revenue growth was -18.59 per cent.
CEO Andrew Cohen said Bellamy’s FY19 was a “challenging period” due to regulatory changes, a lower birth rate and increased competition for Chinese demand. The company was waiting more than a year for State Administration of Markets Regulations (SAMR) registration from Beijing and Cohen said the company would defer its medium-term target of $500 million revenue by 2021 due to the ongoing regulations process.
The challenges saw Bellamy’s full-year profit almost halve to $21.7 million in FY19, down from $42.8 million in FY18. Net revenue was $266 million and normalised EBITDA was $47 million (17.6 per cent).
Two weeks later, in September, the company announced it had entered a Scheme Implementation Deed which will see China's Mengniu Dairy Company acquire 100 per cent of Bellamy's issued shares. The cash amount valued Bellamy's equity at approximately $1.5 billion and represented an enterprise value 30 times reported normalised FY19 EBITDA.
The Foreign Investment Review Board approved the scheme in November.
Huon Aquaculture Group had the second largest fall, 13 places from #61 to #74. It recorded an 11.39 per cent revenue drop.
At the company’s AGM on 23 October, chair Neil Kearney told investors: “In FY2019 a combination of warm water temperatures, that extended through to April, and the secondary impacts on the health and growth rates of our fish that came into contact with a moon jellyfish bloom in late 2018 negatively affected our sales and earnings.
“Operating EBITDA of $47.3 million was 34 per cent below 2018, as a result of lower sales and the higher costs of managing the business arising from the challenging environmental conditions. Statutory net profit after tax (NPAT) fell 64 per cent to $9.5 million.”
Other companies that fell places were: beef company Australian Agricultural Company (AACo) #46 to #51, -22.09 per cent revenue; Western Australian Meat Marketing Company (WAMMCO) #57 to #62, -12.90 per cent; General Mills Holding (Australia) #54 to #59, -10.36 per cent; and Mackay Sugar from #49 to #53, -10.21 per cent.
MORE COVERAGE:
TOP 100: The Top Ten companies and how they fared>>
TOP 100: The fastest movers of 2019>>
TOP 100: The stellar sectors>>
TOP 100: Arrivals and departures>>
Editorial by Food & Drink Business. All data sourced from IBISWorld.
