How do people feel the market respond to tomorrow’s interim...

How do people feel the market respond to tomorrow’s interim results release?


FWIW here is some more news and information from “out there”:

In regards current lacklustre pricing since the guidance update, here’s comment from the December 2018 quarterly commentary report from long term backer, Coopers Investments https://www.cooperinvestors.com/our...ts/quarterly-commentary-report-december-2018/

..... “Portfolio stocks that performed poorly include Bega (BGA) (the highly rated management team disappointed with a profit downgrade for FY19 in addition to a fully geared balance sheet), Adelaide Brighton (ABC) (profit downgrade for FY19), Healius (HLS) (concerns about profit trends in Medical Centres and earnings quality) and Lifestyle Communities (LIC) (concerns about a housing correction).

Bega (BGA) downgraded its guidance for FY19 profit citing first the impact of the drought which reduced milk volumes in NSW and QLD, pulling supply out of Northern Victoria where supply was already under pressure due to increased feed costs. Secondly, the company stated there had been a general increase in competition for milk supply as the milk pool is redistributed amongst the larger players.
The profit downgrade was disappointing as it comes at a time when the business is facing growing pains as it integrates both Bega Foods (which includes Vegemite, Peanut Butter and other brands), and the recent acquisition of Murray Goulbourn’s Koroit processing plant from Saputo.

Despite the stock’s recent poor performance, we remain confident in its medium term outlook. BGA is an ‘everyday needs’ business and sits in our ‘owner-operator culture’ group of companies. Our VoF proposition is based on:

• Redistribution of milk flow within the network to optimise end use (eg for mozzarella, infant formula etc) which might include potential site closures;
• Utilisation of spare capacity at both the Port Melbourne manufacturing plant for Bega Foods and the Koroit dairy plant, which should improve BGA’s unit cost and asset position;
• Over the longer-term the expansion of branded product within the Bega Foods business into adjacent areas;
• Growing the Food Services channel and export markets based on BGA’s ‘farm-to-table’ positioning.


HOWEVER
Since the report
-Bega announced the expansion at Koroit for a high value milk derivative, lactoferrim,
-it is rumoured to be still in the running as a potential buyer regards the Lion dairy sale,
-and dairy prices have contnued to rise;
This February 20, 2019 news story notes softening of supplies-including from Australia -  is one of the reasons https://www.radionz.co.nz/news/country/382973/dairy-prices-continue-to-rise...

This ‘softening’  exampled here in Wisconsin USA :https://www.jsonline.com/in-depth/n...ry-farms-failing-milk-prices-fall/2540796002/ , citing statistics from February 1, 2019
... “This downward cycle has been brutal," said Kevin Schoessow, a University of Wisconsin-Extension agent in Washburn County.
Wisconsin lost almost 700 dairy farms in 2018, an unprecedented rate of nearly two a day. Most were small operations unable to survive farm milk prices that, adjusted for inflation, were among the lowest in a half-century.
As of Feb. 1, Wisconsin had 8,046 dairy herds, down 40 percent from 10 years earlier, according to state Department of Agriculture data. ..”