A2 Milk debuts on ASX, announces mid-April US launch
A2 Milk Co, the milk marketing company, will launch into the United States from mid-April, with a range of half-gallon fresh milk cartons in supermarkets and natural products grocers in California.
The announcement on the launch timing in mid-April comes as the company commenced trading on the Australian Securities Exchange today. The ASX debut comes after seven years in the Australian market, which Managing Director Geoffrey Babidge called "A2's big cash generator", and will bankroll the Auckland-based company's push into new markets.
The company has budgeted a cash investment of US$20 million over three years for its US launch which will be funded by cashflow and internal sources.
Market reception from pre-launch activity in the US has been positive, Babidge said, with a successful showing in March at the world's largest natural, organic and healthy product expo in Anaheim, California.
Jeffrey O'Neill has been appointed chief executive of A2's wholly owned business in the US. He has over 30 years' experience in brand marketing and sales with prior roles at Pepsi-Cola and Priszm/Yum brands and more recently as head of American restaurant chain The Einstein Noah Restaurant Group.
Babidge said the ASX listing, which didn't include a capital raising, was another step in the company's journey to making its premium milk products available in a number of attractive international markets.
"Our Australian operations are the most significant component of our current business, continuing to deliver strong profit and revenue growth. The ASX listing, in conjunction with the listing on the main board of the NZX, provides a closer alignment between our capital markets profile and our current business," he said.
A2 says it is one of the fastest-growing dairy brands in Australia, and claims a 9 percent share of milk sales by grocery value. The single biggest shareholder in the company is Australian-based Freedom Food Group with just under 18 per cent. Future plans in Australia include pushing further sales of A2 Platinum infant formula and extending into other branded dairy products such as cheese and ice-cream.
As previously announced, the ASX listing kicks off a number of board changes including Cliff Cook and David Mair stepping down as directors with David Hearn becoming chair and Julia Hoare appointed deputy.
In line with a constitutional change approved earlier this year, the company is only required to have two rather than three directors who are New Zealand residents, in line with the NZX's main listing rules.
The stock debuted on the ASX at 55.5 Australian cents, and recently traded at 54 Australian cents, with A$1.2 million worth of shares changing hands. Meanwhile, on the NZX, A2 rose 10 percent to 55 cents, paring an intraday gain to as high as 56 cents.