Goodman Fielder Answers ASX Queries Regarding Profits

Submitted by Share Trading on 13 January, 2009 - 15:01

Goodman Fielder (GFF), a food company based in Australia had a sudden bounce in its price yesterday from $1.27 to $1.495 which made the Australian stock exchange (ASX) to question the company to know the reason for this. In reaction GFF said, at this point the company does not have any information regarding the sudden boom in its share price in recent trading.

Goodman Fielder said in a statement that, “We anticipate the variance in operating profit before abnormal items and income tax for the half year ended December 31, 2008 compared to the previous corresponding period to be in line with the variance in net profit after tax”. The net profit of the company in the first half of the financial year 2007-08 was $94.6 million. “We do not have any reason to believe that the company's first half profit results (NPAT) will vary from this outlook statement” the company revealed. Earnings tumbled 88% to A$27.7 million last year after the company took an impairment charge and contended with rising prices for ingredients such as wheat and canola. Max Ould, chairman of GFF told shareholders the company anticipates a decline in commodity price in the second half, lifting full-year profit to between A$191 million and A$204 million.

Max Ould’s comments to the annual shareholders’ meeting on Nov. 20 when he said first-half profit would be about 15% lower “due to time lags in the recovery of an additional A$100 million of increased commodity costs and the impact of increased private label volumes”. The Australian stock securities senior adviser Michael Heffernan said the sharp movement in Goodman Fielder's share price was due to recent market volatility. He said, “You could say it's been belted down more than it should, just like a lot of other companies that have suffered major movements”. “You get it all the time now. Movements of 10 or 15 per cent in share price in the space of a week is not surprising”.