Freedom Foods’ turnaround strategy is underway

Freedom Foods Group has reported its 2021 half year financial results, reporting total revenue from continuing operations of $291.4m, an increase of 15 per cent on the previous corresponding period.

The Group’s three key focus areas, Dairy, Nutritionals, and Plant-based Beverages, all delivered positive growth and demonstrated the potential of the business to recover from the challenges of 2020.

Dairy and Nutritionals revenue has increased by 15 per cent to $209.8m, with positive adjusted EBITDA of $8.5m. Plant-based Beverages revenue is up 17 per cent to $75.2m, with adjusted EBITDA up 21 per cent to $15.2m.

The Group made a statutory net loss after tax for H1 FY21 of $23.9m, an improvement on a loss of $63.5m in the previous corresponding period. Net sales increased 10 per cent to $317.3m. However, sales from continuing operations, excluding the loss-making Cereal and Snacks business now under a binding sale agreement to Arnott’s Group, rose 15 per cent to $291.4m.

The sale of the Cereal and Snacks business is on target to be completed in March and will deliver estimated net proceeds of $11 million after deducting costs associated with the transaction and associated equipment leases.

Export revenue is up 36 per cent to $65.5m, now 21 per cent of overall revenue.

Freedom Foods Group Limited Interim Chief Executive Officer Michael Perich said: “These results demonstrate the potential of the businesses within Freedom Foods Group, with both our Dairy and Nutritionals and Plant-based Beverages operations delivering solid growth and positive operating earnings in a challenging period.

“Most importantly, the results show the financial and operational turnaround strategy underway across the Company is beginning to gain traction. By working hard to remove complexity across the business – as well as improving our culture, governance and accountability – we are able to focus our attention on the brands and products with the greatest potential.

“Despite the ongoing impact of COVID-19 and associated lockdowns on our key markets, particularly the out-of-home channel, our flagship brands, including MILKLAB, Australia’s Own and PUREnFERRIN lactoferrin continue to deliver strong growth.

“We will look to continue growing sales, with further penetration of MILKLAB in the out-of-home market, growth of Vital Strength and other nutritionals brands and increasing inroads in Asian export markets.

“While there remains a lot of work to be done to ensure Freedom Foods Group can meet its full potential, these results validate our decision to focus on building a world-class business around our market-leading Dairy and Nutritionals and Plant-based Beverages brands.

“Once the recapitalisation is complete, we will have a capital structure that allows us to continue to focus on delivering on our turnaround strategy and restore the Group to sustainable and long-term profitable growth.”

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