The Freedom Foods Group Ltd (ASX: FNP) share price is trading lower on the day of its annual general meeting.
In morning trade the food company's shares are down 1.5% to $5.73.
Why are Freedom Foods shares trading lower?
Ahead of the event, Freedom Foods released its annual general meeting presentation.
This provided investors with a breakdown on its strong performance in FY 2019 and also its expectations for the future.
In FY 2019 Freedom Foods delivered a 34.9% increase in sales to $476.2 million and a 40.9% lift in operating EBITDA to $55.2 million. This was driven by an increase in demand for its diverse range of products both at home and in export markets.
The good news is that management believes its strong form can continue.
It believes Freedom Foods is "well positioned to build into a major global food and beverage business with scale in key food and beverage platforms, providing diversification in sales, together with earnings growth, from key markets and channels in Australia, China and SE Asia."
Furthermore, it expects "revenues and operating profits will increase as the Company moves out of the investment cycle, balanced against a requirement to invest in people, systems and process to manage a scaled and diversified business platform."
However, no concrete guidance was provided at the meeting. Which appears to have disappointing investors today.
Acquisition news.
In addition to its AGM update, this morning Freedom Food advised that Australian Fresh Milk Holdings (AFMH) has acquired the Torrumbarry Aggregation in Northern Victoria. Freedom Foods has a 10% equity shareholding in AFMH.
The Torrumbarry Aggregation comprises 3,500 hectares on the Murray River, 100km north of Shepparton. The Aggregation acquisition includes significant water rights.
With this acquisition, AFMH is the largest dairy producer in Australia with current operations forecasting over 190 million litres of production into 2021. Freedom Foods intends to utilise a growing proportion of the dairy milk output from AFMH for its milk supply needs, supporting a range of UHT and value added product opportunities.
As part of the acquisition, Freedom Foods contributed $4 million in equity funding, based on its 10% equity shareholding.
