Investors savage Goodman fielder as market heads south

JANE HARPER
APRIL 02, 2014
HERALD SUN
Investors punish the breads and spreads maker on the back of a profit warning.
It was the group’s biggest one-day market rout since it listed in 2005, with its shares closing at a 19-month low of 47.5c.
It came as Goodman, whose brands include Vogel’s bread and Meadowlea margarine, said it would speed up plans to cut costs and axe jobs in light of weak market conditions.
Goodman management warned that pre-tax earnings for the year to June were likely to clock in 10 per cent to 15 per cent below analysts’ expectations of $180 million.
In February, the group posted a first-half loss of $64.8 million, but said at the time it expected full-year earnings to be in line with last year’s result of $185.6 million.
“Trading conditions in Australia and New Zealand have deteriorated and manufacturing and supply chain cost savings have been delayed,’’ Goodman said on Wednesday.
As a consequence, Goodman had to “revise its earnings expectations for the fourth quarter”.
The company said it had accelerated its cost-cutting measures, which would save an extra $25 million in annual expenses by June 2015 mainly through job cuts.
Goodman said average selling prices for its bakery products had fallen, while earnings in the grocery division were hit by increased competition.
The group has been undergoing a restructure over the past three years, including selling assets in a move to focus on its core brands and reduce debt.
Helga’s, Mighty Soft and Wonder White breads, Praise dressings and Paradise biscuits are also among Goodman’s brands.
The company this week announced it had completed the sale of its New Zealand meats business to Christchurch-based meats producer Hellers.