Here’s how Freedom Foods (ASX:FNP) performed in the first half

The Freedom Foods Group Ltd (ASX: FNP) share price may have been suspended since June but that doesn’t mean everything stops.

This morning the diversified food company released its half year results for FY 2021.

How is Freedom Foods performing?

For the six months ended 31 December, Freedom Foods reported a 15% increase in revenue from continuing operations to $291.4 million.

This was driven by a 17% increase in Plant-based Beverage revenue to $75.2 million and a 15% lift in Dairy and Nutritionals revenue to $209.8 million. Their positive performances more than offset a 5% decline in Specialty Seafood revenue.

In respect to earnings, the company reported a 21% lift in earnings before interest, tax, depreciation and amortisation (EBITDA) to $15.2 million.

Things weren’t quite as positive on the bottom line, though. Freedom Foods posted a loss after tax from continuing operations of $15.2 million. However, this was an improvement from a (restated) loss of $50.2 million a year earlier.

Management commentary

Freedom Foods’ Interim Chief Executive Officer, Michael Perich, said: “These results demonstrate the potential of the businesses within Freedom Foods Group, with both our Dairy and Nutritionals and Plant-based Beverages operations delivering solid growth and positive operating earnings in a challenging period.”

“Most importantly, the results show the financial and operational turnaround strategy underway across the Company is beginning to gain traction. By working hard to remove complexity across the business – as well as improving our culture, governance and accountability – we are able to focus our attention on the brands and products with the greatest potential.”

“Despite the ongoing impact of COVID-19 and associated lockdowns on our key markets, particularly the out-of-home channel, our flagship brands, including MILKLAB, Australia’s Own and PUREnFERRIN lactoferrin continue to deliver strong growth. We will look to continue growing sales, with further penetration of MILKLAB in the out-of-home market, growth of Vital Strength and other nutritionals brands and increasing inroads in Asian export markets.”

Outlook

Mr Perich appears optimistic on the future.

He commented: “While there remains a lot of work to be done to ensure Freedom Foods Group can meet its full potential, these results validate our decision to focus on building a world-class business around our market-leading Dairy and Nutritionals and Plant-based Beverages brands.”

“Once the recapitalisation is complete, we will have a capital structure that allows us to continue to focus on delivering on our turnaround strategy and restore the Group to sustainable and long-term profitable growth.”

The company revealed that progress on recapitalisation continues to be made, with an update to be provided mid-March. Until then, the Freedom Foods share price will remain in voluntary suspension.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Freedom Foods Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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