Changes are happening - please bear with us while we update our site.

Changes are happening - please bear with us while we update our site. Click here to give us your advice and feedback.

Freedom Foods (ASX:FNP) share price sinks on FY21 result

Shares in Freedom Foods Group Ltd (ASX: FNP) finished nearly 8% lower today after releasing its FY21 results. Here are the details.

Shares in Freedom Foods Group Ltd (ASX: FNP) finished the day nearly 8% lower today after releasing its FY21 results.

The last 12 months have been challenging for the company and its shareholders. Freedom Food’s shares came out of a 9-month long trading halt in March this year following a forensic accounting investigation.

More recently, Freedom Foods lost its appeal against one of its manufacturers, Blue Diamond Growers. This disputed licensing agreement is ongoing.

Source: Rask Media FNP 2-year share price chart

FY21 results

Freedom Foods reported total revenue from continuing operations of $559.1 million, an 8.2% increase on FY20.

Adjusted EBITDA, which excludes items such as restructuring costs came in at $22.4 million, well up from its $54 million loss last year.

Freedom’s statutory net loss after tax was $38.8 million, a 72% improvement on its restated FY20 loss of $136.4 million.

The company ended the period with a $31.7 million cash balance and $265 million of debt in the form of convertible notes. This capital was raised earlier this year to pay down its debt at the time and fund its turnaround strategy.

Segment breakdown

Plant Based Beverages which include brands such as MilkLab were a key growth driver over FY21. MilkLab’s domestic sales increased by 50% and export sales were up by 46%, with the brand now available in over 20 countries.

Net revenue for the segment was up 15.6% to $152.9 million and adjusted EBITDA surged nearly 200% to $25.7 million.

Freedom’s largest segment, Dairy & Nutritionals also improved during the year with revenue and adjusted EBITDA up 6.8% and 92.8%, respectively.

Freedom’s seafood segment didn’t fare as well, with revenue down 21.7% during FY21 due to disrupted supply chains and stock shortages. Management is currently reviewing the segment and could potentially divest it in the future.

Restructure plans

Freedom Foods is in the process of simplifying its portfolio of brands and directing investment into stronger performing parts of the business.

It expects that a large portion of EBITDA growth will come from MilkLab and plant-based Australia’s Own.

Since its recent accounting scandal, the company has also had its management team and board renewed with additional changes to its committees including Finance & Audit, and Risk & Compliance.

Summary

If MilkLab really is Freedom Food’s crown jewel, it’s somewhat worrying that it could lose its right to sell the brand if the current court case doesn’t go to plan.

With this sort of risk, I struggle to see the appeal of becoming a shareholder at the moment without more clarity into the business’s long-term prospects.

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

At the time of publishing, the author of this article does not have a financial or commercial interest in any of the companies mentioned.
Skip to content