Freedom Foods has successfully completed the sale of its Cereal and Snacks operations to The Arnott’s Group and has reported its third quarter results.
The Group’s total sales revenue for the quarter was $141.6m, which was down 10.7 per cent quarter-on-quarter (QoQ), and broadly in line with company expectations.
Michael Perich, Freedom Foods Group CEO, said that the sale of the Cereal and Snacks operations are part of the Group’s turnaround strategy, which will see it focus on the key areas of Dairy and Nutritionals, and Plant-based Beverages.
The sale includes the Cereal and Snacks businesses located in Leeton and Darlington Point in NSW and in Dandenong in Victoria, as well as brands associated with the business, including Freedom, Messy Monkeys, Heritage Mill, Arnold’s Farm and Barley+.
“We wish The Arnott’s Group the very best for what we hope will be a successful future for the business,” said Perich.
The sale does not include the Crankt Protein brand, which has been retained by Freedom Foods and is now consolidated in the Dairy and Nutritionals business.
“The sale of the Cereal and Snacks Business is part of our simplified business strategy focused on the brands and products with the greatest potential in our Dairy and Nutritionals and Plant-based Beverages Businesses,” said Perich.
Dairy and Nutritionals third quarter revenue decreased 15.4 per cent to $91.5m, which was slightly down on company expectations.
Freedom Foods said: “UHT dairy sales in the domestic market were down QoQ driven by private label milk run rates softer than the prior quarter. Bulk Cream sales rose, with the increasing butterfat content of milk off-farm resulting in higher cream production.
“Consumer Nutritionals, mainly Crankt, delivered solid Q3 sales, in line with the December quarter and above company expectations. Sales of nutritional ingredients, mainly lactoferrin, although down on prior quarter were in line with company projections.
“The business continues its transformation journey and operational turnaround strategy, which is focused on a number of areas including reducing wastage, improving production efficiencies, removing or reducing unprofitable products, optimizing milk supply and curtailing losses from the sale of surplus milk as experienced in previous periods.”
The company’s other core category of Plant-based Beverages saw a better than expected seven per cent increase in revenue to $37.3m.
Freedom Foods said: “The plant-based trend continues, with strong category growth rates as health-conscious consumers add more plant-based beverages to their diets.
“MILKLAB sales are up QoQ as demand for our high-quality range continues in the Australian out-of-home channel and export markets, increasing points of distribution.”
Freedom Foods and its advisors are continuing to review strategic options for the Specialty Seafoods business, including divestment.