Bread and butter spread thin

Neil Wilson
Herald Sun
February 17, 2012

STRUGGLING breads and spreads maker Goodman Fielder has sliced hundreds of jobs and will cut more as it tries to arrest a dramatic slide in profitability.

It has also scrapped its interim dividend to “maintain financial flexibility” in trading conditions, described by chief Chris Delaney as the toughest in his career.

The group’s shares tumbled almost 6 per cent to 48c yesterday in the wake of the revelation. Management revealed that profit in the six months to December had collapsed, falling by 77 per cent.

Goodman Fielder, which cut 300 jobs during the period, yesterday posted a first-half net profit of $21.5 million, down from $93.1 million for the same period a year ago. Goodman paid an interim dividend last year of 5.25c a share.

Mr Delaney, who has been in the top job for less than a year, described the results as weak and unacceptable for the maker of products including White Wings, Meadow Lea and Helga’s bread.

But he emphasised the changes taking place at the business would see it rebound in the second half.

Goodman Fielder had now stabilised and was poised to start growing again.

The company cut the 300 jobs from its diverse Australian and New Zealand operations.

More cuts were planned, mainly across the Tasman. Further redundancies would take place in the second half, it said.
Last financial year the company reported a net loss of $166 million, largely on its baking business.

Mr Delaney, who has developed a restructure plan, said the company also had to deal with intense discounting by warring supermarkets.