AACO DRIVES LUXURY BEEF STRATEGY AS PROFIT DIPS

Written on the 23 November 2016

AACO DRIVES LUXURY BEEF STRATEGY AS PROFIT DIPS

AUSTRALIAN Agricultural Company (ASX:AAC) has posted a dip in half-year profits to $47.9 million, as it shifts towards the global luxury beef segment.

The result is an almost 4 per cent decline for the six months to September 30 compared to a year earlier.

The Brisbane-based business reported a 20 per cent lift in operating EBITDA of $13.9 million, driven by branded beef sales.

Net operating cash outflows of $34.5 million include a $41.5 million investment in live cattle inventory, which is expected to be monetised over the next 12 months.

AACo managing director Jason Strong (pictured) says the strategy will ensure the company maintains its title as Australia's leading beef producer.

The company launched its flagship luxury brands Westholme and Wylarah in Singapore last month, with plans to tackle other key markets in the next 18 months.

"This represents our initial drive towards changing the global luxury beef segment," Strong says.

"As our vertical integration strategy takes shape, we are fundamentally changing the way we sell and deliver our products to consumers. This strategy will lead to increased sales prices."

Production costs were reduced by 25 per cent by capitalising on strong seasonal conditions, as well as a reduction in operational costs from its decision to own cattle right through the supply chain.

Investment in technology and innovation will continue to be a key focus, with AACo co-founding Nucleus Biologics in San Diego. The biopharmaceutical supply company produces products based largely on raw material supply from AACo.

The company also formed a Scientific Advisory Board under the chairmanship of former CSIRO CEO Dr Megan Clark to review technological advancements.

"We are pleased with our progress but we are far from finished," Strong says.

 


Latest News

CROMWELL TRADES STEADILY IN FIRST HALF

CROMWELL Property Group has maintained a steady operating profit at $0.045 per security in the first half of FY17,...

WHY NEXTDC'S STOCK IS SOARING

AFTER posting its interim result, NEXTDC (ASX: NXT) gained more than 12 per cent on the stock market before noon.
...

PWR PROFIT CRASHES AS DOLLAR RISES AND COSTS MOUNT

A RISING Aussie dollar has offset PWR Holdings Limited's (ASX:PWH) overseas growth in the last half, forcing a...

SUPER RETAIL GROUP RESULTS SHINE ACROSS THE BOARD

A WELL-planned and executed half has paid off for Super Retail Group (ASX:SUL) as it posts a net profit result up ...

Related News

EVERYTHING YOU NEED TO KNOW ABOUT THE NATIONAL BROADBAND NETWORK

THE National Broadband Network (NBN) is more than an internet connection, it is an opportunity to transform your b...

WHY EMPLOYEE-OWNED COMPANIES ARE BEATING ASX200 SHARE PRICES

EMPLOYEE-owned companies command a higher share price than their publicly listed peers, reaping a 17 per cent prem...

RISE OF THE MACHINES HAS WORKERS SWEATING

UP TO 3.8 million Australian workers are fearful their job may soon be terminated by a robot, a new survey has shown....

LESS TALK, MORE SMALL BUSINESS ACTION IN 2017

THE future growth and prosperity of Australian SMEs could be undermined if governments lose sight of the sector...

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter