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Tag: profitable

  • Danone Boosts Australian Footprint with Profitable Made Group Takeover

    Danone Boosts Australian Footprint with Profitable Made Group Takeover

    Global food corporation Danone is extending its foothold in Australia by acquiring Made Group, the parent company of Cocobella and Rokeby. This transaction is an element of a two-part acquisition designed to increase Danone’s influence in the Asia Pacific region. In addition to this, Danone has also announced the full ownership of its fresh dairy joint venture with Saputo Dairy Australia by acquiring the remaining 49% stake.

    Made Group’s consistent performance with “appealing profit margins”, backed by its sales of $490.7 million in the last fiscal year, was a driving factor behind the acquisition. Made’s portfolio includes popular brands such as The Collective, Nutrient Water, and Impressed.

    Mutual Values and Profitable Growth

    According to Antoine de Saint-Affrique, CEO of Danone SA, Made Group has had a remarkable history of fast and profitable growth, thanks to its robust brand portfolio and health-focused nutritional products. He notes that both companies share a belief in promoting health through food and expressed excitement about welcoming Made into the Danone family.

    Made Group was sold by US-based TPG Capital in a transaction that earned TPG approximately $2 billion, a mere five years after it had purchased the beverage business.

    Shared Commitment to Health and Innovation

    Amanda Butler, CEO of Made, views this as an exciting new phase for the company. She acknowledged Danone’s shared commitment to health and enthusiasm for innovation, expressing optimism about future prospects. Butler anticipates that their joint efforts will unlock new infrastructure, capabilities, and research and development expertise, spurring growth across the region.

    Questions & Answers

    What companies has Danone recently acquired in Australia?
    Danone has recently acquired Made Group, the parent company of Cocobella and Rokeby.

    What motivated Danone’s acquisition of Made Group?
    Made Group’s consistent “attractive profit margins” and sales performance, coupled with its strong brand portfolio and focus on health-focused nutritional products, influenced Danone’s decision to acquire the company.

    What are the anticipated benefits of this acquisition for Made Group?
    Following the acquisition, Made Group expects to access new infrastructure, capabilities, and research and development expertise to accelerate growth in the region.

  • Aussie Beverage Sector Toasts to a Profitable Summer Despite Economic Hurdles

    Aussie Beverage Sector Toasts to a Profitable Summer Despite Economic Hurdles

    Despite global economic instability and the strain of domestic living costs, Australia’s food and beverage manufacturers experienced a surge in revenue during last summer, according to the most recent Manufacturing Health Index published by Unleashed Software. This upturn in profits, especially during the holiday season, highlights the continued demand for premium Australian-made consumer goods.

    Boost in Manufacturing Sector

    The survey, which compiled data from over 500 local manufacturing companies spanning various sectors, including food and beverage, clothing and fashion, and construction, revealed a significant increase in average earnings for beverage manufacturers. The final quarter of the year saw an average revenue of $627,000, marking an almost $200,000 rise from the previous quarter. This peak in earnings is the highest ever reported since Unleashed Software began its data collection. Simultaneously, the gross profit margin also experienced a surge, climbing to 35.9% from 31.9% in the previous quarter and 27.8% in the same period of the prior year.

    In the food sector, the average revenue reached $709,831, slightly lower than the $733,000 recorded in the third quarter but significantly higher than the $546,229 reported in the same quarter of the previous year.

    Shifting Inventory Strategies

    The report also indicates that Australian manufacturers are modifying their inventory strategies to accommodate tightening supply cycles. While businesses in Australia are fine-tuning inventory levels, their counterparts in the UK and New Zealand are boosting restocking.

    Jarrod Adam, the head of product at Unleashed Software, explains that there is a noticeable shift towards just-in-time replenishment in Australia. Companies are not hoarding cash in inventory but are buying precisely what they need to meet immediate demand. The construction sector, in particular, shows a marked shift towards this inventory model.

    Adam further highlights the critical role of technology in enhancing productivity and managing these tighter cycles to prevent stock shortages during periods of heightened demand without compromising efficiency.

    The Continued Impact of Interest Rates and Energy Costs

    The manufacturing sector’s performance in the coming year is expected to be influenced significantly by interest rates. In February, the Reserve Bank of Australia (RBA) hiked the cash rate to 3.85%, marking the first increase since a period of consistent rate holding or reduction in 2025. The RBA anticipates inflation to top out at about 4.2% mid-year before settling back down to the 2.5% midpoint target by mid-2028.

    Rising energy costs might also lead to higher material and transportation expenses, exerting additional pressure on company margins. Modifications to shipping operations could potentially impact lead times. Despite these challenges, manufacturers are shifting their focus from cost management to the expansion of operations. Firms are increasingly employing automation and real-time data systems to manage purchasing cycles. While smaller companies may be more susceptible to global economic fluctuations, they may also be better positioned to adapt their operations swiftly.

    Questions & Answers

    What caused the rise in revenue for Australia’s food and beverage manufacturers during the previous summer?
    The increase in revenue for Australia’s food and beverage manufacturers during the previous summer was primarily due to the continued demand for high-quality, Australian-made consumer goods, despite global economic instability and domestic cost-of-living pressures.

    How are Australian manufacturers adjusting their inventory strategies?
    Australian manufacturers are modifying their inventory strategies to cope with tightening supply cycles. The shift towards just-in-time replenishment allows companies to avoid keeping cash tied up in inventory by purchasing precisely what they need to meet immediate demand.

    What factors are expected to influence the performance of the manufacturing sector in the future?
    The future performance of the manufacturing sector is expected to be significantly influenced by interest and energy rates. Rising energy costs might lead to higher material and transportation expenses, exerting additional pressure on company margins. Interest rates are also expected to remain a key factor, with the Reserve Bank of Australia recently increasing the cash rate.

  • StanChart still profitable in Singapore

    StanChart still profitable in Singapore

    Singapore remained one of the few bright spots for Standard Chartered last year amid huge losses elsewhere.

    Profit before tax in Singapore was US$567 million (S$796 million) in the 12 months to Dec 31, down 33.4 per cent year-on-year but still the second best country performance.

    Hong Kong’s profit contribution was top, at US$1.49 billion, but still down 17.9 per cent compared with a year ago. In China, profit pared 45.3 per cent year-on-year to US$88 million, according to the group’s results released overnight.

    Elsewhere, signs that StanChart was struggling amid global headwinds were more apparent.

    In India, it suffered a loss before tax of US$981 million, a huge reversal from 2014’s profit of US$561 million. Its losses in Britain widened from 2014’s US$154 million to US$1.41 billion last year.

    The banking group reported a total loss before tax of US$1.52 billion, down from a US$4.24 billion profit in 2014.

    Group chief executive Bill Winters warned of a choppy outlook, noting in the annual report: “The economic and geopolitical backdrop for the group clearly deteriorated over 2015 and has not improved into 2016.”

    But StanChart’s business in Singapore, where it employs about 7,000 people, presents a rosier picture.

    “The bank in Singapore remained profitable in 2015. We saw a double-digit year-on-year growth in retail deposits and bancassurance, achieved a substantial increase in wealth management market penetration and grew our priority banking client base,” Singapore chief executive Judy Hsu said in a statement yesterday.

    She added: “We also maintained positive business momentum in financial markets, driven by a significant increase in foreign currency volume and revenues, and improved on the quality and interest margins of transaction banking’s cash income business.

    “Singapore is a core market for the bank and plays a significant role as a hub for our global business and as a gateway to Asean… and we will continue to invest in the growth of our Singapore franchise across retail, private banking, commercial and institutional clients.”

    Ms Hsu’s comments came amid concerns about how global banks are faring in Singapore. In November, StanChart moved to cut 15,000 jobs globally, including an unspecified number of positions here.

    Uncertainty yet looms at the bank, which is undergoing “accountability reviews” targeting around 150 current and former employees globally. The reviews have led to some layoffs and the move to claw back past year bonuses.

    A Singapore spokesman declined to comment on whether any staff here was affected by the reviews, adding: “The accountability reviews are still ongoing and more actions, including the reduction or cancellation of prior year incentive awards, are likely.”

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