A2 Milk says full-year revenues to rise to over NZ$900M

A2 Milk says full-year revenues to rise to over NZ$900M

Not surprisingly, given the A2 Milk news, the Bellamy's share price has fallen $1.64 or 8.5 per cent to $17.57.

a2 Milk issued guidance for full-year revenues to reach between $NZ900-920 million.

a2's revenues more than tripled in the three years to June 2017 as its infant formula was embraced by Chinese parents, driving its shares up more than 600 percent since the start of 2016. Deutsche Bank had forecast $NZ923 million in sales after A2 unveiled a strong first-half result in February, and reiterated its expectation in March.

"When they don't meet market expectations, they get a caning by the market", he said.

Before today, A2 Milk sported a market capitalisation of nearly $9 billion.

"The fear is with some of these high growth stocks is that once they stop printing these big performance numbers that the show is over", he said.

Harbour is a significant shareholder in a2 Milk.

Revenue in the 12 months ending June 30 is expected to be $900 million-to-$920 million, up from about $550 million past year, when the Auckland-based company reported that profit tripled.

It expects to spend about NZ$82 million to NZ$87 million on marketing for the full year, including a video billboard campaign in Hong Kong and increasing its presence in Chinese stores with "Push Girls", or sales assistants that work on behalf of a brand.

In an global investor presentation released on Wednesday, a2's managing director Geoffrey Babidge said the company's growth reflected "increasing consumer acceptance of our brand and the benefits of dairy-based products free from the A1 beta casein protein type".

a2 Milk's infant dairy formula splits out the A2 protein from cow's milk, which differeniates it from normal cow's milk which has both A1 and A2 proteins.

A2 Milk believes that the A2 beta-casein protein milk is better for people, particularly those who have trouble digesting milk.

The forecast revenue also reflected the impact of seasonal sales in China, which are weighted towards the first half of the financial year.

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