Long synonymous with struggling dairy farmers and perpetual milk glut, Australia’s dairy market is rapidly tightening as the producers compete more aggressively for supply that has been eroded because of drought.
Freedom Foods Group ((FNP)) is a diversified food company producing a number of branded and unbranded products across its three main divisions: Freedom Foods, Specialty Seafood and Pactum. The company’s main products are cereals and beverages, salmon and herring and UHT long-life milk via brands that are perceived as being of higher quality.
Citi analysts have updated with the view that a deal between Freedom Foods Group and Lion is now unlikely, removing a potential overhang from its share price. The analysts remain of the view this company's outlook is all about margin expansion medium-term.
First half results were below expectations. Morgans forgives some of the miss, given the strategic decision to exit a large number of low-margin contract manufacturing arrangements, because it will build a better business over the medium term.