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Bega Cheese reports impressive growth with top brands leading the way

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By Imelda Cotton - 
Bega ASX BGA half yearly results

Australian food company Bega Cheese (ASX: BGA) has reported strong performance across all its brands for the first half of the financial year 2024.

The company reported revenue growth of 3.2% to $1.73 billion — including growth of 8% in its branded division — demonstrating continued demand for its products across the board.

Normalised earnings before interest, taxation, depreciation and amortisation (EBITDA) hit $76.5 million, representing an increase of $1.9m on the previous corresponding period.

Normalised items included gains on the sale of property in Canberra, the December acquisition of Betta Milk and Meander Valley Dairy and costs related to restructuring.

Net profit after tax for the group was $26.5m and normalised at $13.3m.

Best performers

Bega’s top eight brands — Daily Juice, Vegemite, Bega, Yoplait, Farmers Union, Pura, Dare and Dairy Farmers — were cited as the biggest performers for the period, contributing 72% to total branded revenue.

Profitability in the segment significantly increased on the previous corresponding period with statutory EBITDA up $66.6m, or 153%.

Bulk segment statutory EBITDA decreased on the previous year by $55.1m as prices for global dairy commodities remained disconnected from Australian farm gate milk prices.

The result is believed to have reflected the importance of product diversity, with strong performance in the branded division offsetting a decline in the bulk segment.

Balance sheet items

During the reporting period, Bega spent $40.3m on a capital works program which included automating distribution centre processes, developing a new customer service portal, technology enhancements to simplify orders and the implementation of safety initiatives across the group.

Bega’s statutory net cash outflow from operating activities during the first half of the financial year 2024 was $3m, compared to $10.5m in the previous period.

Net working capital at the end of December was $263.8m, representing an increase from $224.8m at 30 June.

The group had net debt of $250.9m at the end of the half-year compared to $321.4m in the previous corresponding period.

The reduction was attributed to cash inflows from the sale of property in Port Melbourne and Canberra and the sale of Bega’s 49% interest in Vitasoy Australia Products to Vitasoy International for $51m.

It was partially offset by an increase in working capital arising from an increase in trade receivables with higher sales leading into December and price increases on branded products.