The share price of Bega Cheese Ltd (ASX: BGA) has popped around 2% higher today after the manufacturer and distributor of dairy products reported a pleasing interim profit result.

With the share price slumping over 20% since the beginning of January primarily in response to a decision by Coles to not renew its supplier arrangement with Bega for its “own brand” cheese, now could be the right time to take a closer look at this leading brand owner.

Here are the result highlights on a normalised basis for the six months to December 31:

  • Revenue increased 2% to $561 million
  • Earnings before interest, tax, depreciation and amortisation (EBITDA) increased 5% to $33 million
  • Net profit after tax increased 10% to $15 million
  • Earnings per share increased to 10% to 9.7 cents per share (cps)
  • A fully franked interim dividend of 4.5 cps was declared which is an increase of 0.5 cps on the prior corresponding period
  • Net debt increased to $75 million

What’s next for Bega

Given the outstanding success a2 Milk Company Ltd (Australia) (ASX: A2M) and Bellamy’s Australia Ltd (ASX: BAL) have been enjoying with their infant formula products there would certainly appear to be plenty of opportunity for competitors to snare a share of this lucrative market.

Bega, as a contract manufacturer for Bellamy’s has already been benefiting from higher volumes. However it’s the group’s recent announcement that it has formed a partnership with trusted health and vitamin brand owner Blackmores Limited (ASX: BKL) that is a particularly exciting potential future growth driver for the group.

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Motley Fool contributor Tim McArthur has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.