Goodman Fielder's earnings at lower end of guidance

BUSINESSDESK: Goodman Fielder, the food ingredients manufacturer whose brands include Edmonds baking products and Vogel’s bread, says 2012 earnings will be at the lower end of its guidance.

The Sydney-based company says its full-year normalised earnings before interest and tax will be at the lower end of the $A230 million to $A245 million guidance it gave in February, subject to trading conditions.

It expects to book an impairment of about $A110 million against its Australian/NZ baking and home ingredients NZ businesses, and $A80 million to $A90 million against business under review.

The company announced in June it was consolidating its Australian baking operations to improve its manufacturing efficiencies after its home ingredients division’s earnings before interest tax depreciation amortisation fell 20% to $A42.2 million in February.

It also announced in February that its net profit sank to $A21.5 million in the six months ended December 31, from $A93.1 million, a year earlier. Revenue fell 3.7% to $A1.29 billion.

The company says it has started the second phase of Project Renaissance, designed to optimise manufacturing and supply chain efficiencies to deliver $A25 million in ongoing savings by 2012.

Restructuring costs are expected to be $A70 million to $A75 million, the majority of which is related to Project Renaissance.

Goodman Fielder will release its full-year results on August 14.

Shares fell 4.6% to 62 cents on the NZX.

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