LUXURY BEEF MAR­KET LOOK­ING GOOD FOR AACO

The Gold Coast Bulletin - - BUSINESS -

AUS­TRALIAN Agri­cul­tural Com­pany is set to ex­pand the mar­ket for its luxury beef brands in Asia.

Aus­tralia’s lead­ing beef pro­ducer says it will en­ter the Tai­wan mar­ket in June af­ter a suc­cess­ful launch in Sin­ga­pore in Oc­to­ber 2016.

“Off the back of what we’ve learned in Sin­ga­pore, we have started a lit­tle while ago the roll­out plans for other mar­kets, the next one be­ing Tai­wan, which we will go into on June 8,” AACo manag­ing direc­tor Ja­son Strong said. He said the Sin­ga­pore launch of Bris­bane-based AACo’s two flag­ship beef brands, Westholme and Wy­larah, had been very suc­cess­ful.

Sales vol­umes since the launch up to March had grown by 11 per cent and the av­er­age sale price across all prod­ucts had in­creased by 28 per cent. AACo cur­rently sup­plies 27 mar­kets, the key ones be­ing the US, Aus­tralia, South Korea and Ja­pan.

Yes­ter­day, it booked a net profit for the year to March 31 of $71.6 mil­lion, up 5.6 per cent from $67.8 mil­lion in the prior year. Rev­enue from meat and live cat­tle sales fell 8.7 per cent to $446.7 mil­lion as the com­pany fo­cused on the higher-value seg­ments of its busi­ness, but pro­duc­tion costs fell by 27 per cent.

Mr Strong said to­tal beef sales were lower be­cause AACo had ac­quired fewer less-prof­itable short-fed cat­tle, which in other years would have flowed through the sys­tem and con­trib­uted to the com­pany’s rev­enue.

He said AACo did not look at the to­tal meat sales vol­umes as be­ing good or bad and was more in­ter­ested in the mar­gins and profit that could be gen­er­ated.

“Last year, we demon­strated that we can pro­duce a lot more rev­enue off a much smaller cat­tle herd; this year we’ve shown that we can ac­tu­ally pro­duce three times the mar­gin, three times the earn­ings off a smaller rev­enue,” Mr Strong said.

AACo ex­pects to fur­ther im­prove its per­for­mance in fis­cal 2018. The im­proved fi­nan­cial re­sults in FY17 are a re­sult of our fo­cus on in­vest­ing in our brands, open­ing new mar­ket op­por­tu­ni­ties like we have done in Sin­ga­pore, driv­ing mar­gin through our in­te­grated sup­ply chains and en­hanc­ing efficiency and prod­uct qual­ity through in­no­va­tion,” Mr Strong said.

“We see great op­por­tu­nity to con­tinue to lever­age our unique po­si­tion as a luxury branded beef busi­ness.”

Shares in AACo closed 1.5¢ higher at $1.74.

Cat­tle at an Aus­tralian Agri­cul­tural Com­pany feed­lot at Goonoo Sta­tion near Emer­ald. Its luxury beef prod­ucts are per­form­ing strongly.

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