Westland Milk drops 201718 forecast payout 5c to $6.05 after meeting

WESTLAND Milk Products has lowered its predicted payout range another 5c after a board meeting last week.

Shareholders were advised after the meeting on Tuesday last week the bottom line had dropped to $6.05 a kilo of milk solids for the 201718 forecast payout range. It was previously forecast to be $6.10 to $6.30.

The final payout minus dairy company retentions for 201718 is expected to be announced on September 25 after the next board meeting, in line with previous years’ announcements.

The cooperative is predicting a payout range of $6.75 to $7.20 for the 201819 season.

It has cited several key factors spurring its prediction of an improved performance after a few years of difficult trading. These include improved sales and a better sales outlook; much improved performance from Westland’s infant and tod dler nutrition (ITN) and UHT plants; and the star performance of consumer butter.

A wellinformed source close to Westland Milk Products this week said the revised bottom line at this late stage did not bode well for the cooperative and farmers.

‘‘I’m feeling that the balance sheet is going to take a hammering,’’ the source said.

In light of this, the cost to shareholders on a monthtomonth basis of consultants undertaking a major capital structure review for Macquarie Capital and DG Advisory, on behalf of the board, was questionable and the board should be transparent about cost, the source said.

The fees were reportedly in the realm of $500,000 a month plus extras, although the urgent need to reexamine how Westland operated was undis puted, the source said.

A Westland spokesman said the company would not answer a commercially sensitive question such as what the board was paying Macquarie.

If shareholders felt they were not privy to that information, even if they had asked, then the cooperative would communicate that directly to them, the spokesman said. — Greymouth Star