Why the Keytone Dairy share price opened 9% higher this morning

The Keytone Dairy Corporation Ltd (ASX: KTD) share price opened 9.09% higher this morning on the back of a sales update.

| More on:
Glass of milk

Image Source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Keytone Dairy Corporation Ltd (ASX: KTD) share price is racing higher this morning on the back of a sales update.

Keytone Dairy is a manufacturer and exporter of formulated dairy products in Australia and New Zealand.

The company manufacturers its own products under its KeyDairy, KeyHealth and FaceClear brands. These products include premium milk and nutrition powders and health supplement capsules for the treatment of acne. 

Additionally, Keytone is a production partner for leading retailers and supermarket chains, undertaking contract packing operations for brands around the world.

Headquartered in the heart of New Zealand's South Island, Keytone Dairy floated on the ASX in July 2018 at an offer price of 20 cents. With a share price of 29 cents at the time of writing, the company's market capitalisation currently sits at around $74 million.

Why is the Keytone Dairy share price surging?

This morning, Keytone Dairy revealed that it has received its largest follow-on order from Chinese customer, Nouriz to date.

Nouriz is a related party of China Animal Husbandry Group, a China state-owned enterprise, that orders whole and skim milk powders from Keytone for its Nouriz private label.

The large purchase order announced today is priced at $1.39 million and is significantly higher than Nouriz's recent orders and forecasts. More specifically, this latest order is around 11.3 times and 1.6 times greater than Nouriz's first and second orders, respectively.

The order will be manufactured in Keytone's New Zealand facilities in August 2020.

Commenting on today's update, Keytone CEO Danny Rotman said:

"These significant follow-on orders from strategic clients of the business are increasing in both frequency and size. With the New Zealand second manufacturing facility online, Keytone is well equipped to service these growing orders from Nouriz and other key strategic clients of the business and will continue to work closely with these clients, growing the product offering and volumes."

Recent developments

Today's announcement follows another positive update in late May regarding a new licensing agreement. The agreement gives Keytone a distribution license for a range of Baileys ready-to-drink dairy products products in Australia, New Zealand, Hong Kong and Taiwan.

Additionally, the next day, Keytone announced its full-year financial results for the 12 months ending 31 March 2020.

Headline results include total sales revenue of $22.53 million, up 799% from $2.51 million in the prior year, and cash receipts of $24.68 million. However, the company reported a full-year statutory loss of $7.45 million, up from a loss of $3.29 million in the prior year.

Motley Fool contributor Cathryn Goh has no position in any of the stocks mentioned. 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 Scott Phillips.

More on Share Market News

A young woman lifts her red glasses with one hand as she takes a closer look at news about interest rates rising and one expert's surprising recommendation as to which ASX shares to buy
Broker Notes

Up 20% in 2 days, are Codan shares a buy, hold or sell?

Bell Potter has given its verdict on this high-flying stock.

Read more »

Two male ASX 200 analysts stand in an office looking at various computer screens showing share prices.
Broker Notes

What's Macquarie's price target on Goodman Group shares after its FY25 result?

Here's what the broker thinks of this industrial property giant.

Read more »

6 mugs with days of the week and moods
Share Gainers

Here are the top 10 ASX 200 shares today

It was a negative finish to a big trading week for the ASX today.

Read more »

A man sits in casual clothes in front of a computer amid graphic images of data superimposed on the image, as though he is engaged in IT or hacking activities.
Technology Shares

ASX 200 tech shares: Experts rate 2 to sell and 1 to buy

We review some expert analysis of 3 popular stocks within the ASX 200 tech sector.

Read more »

a man leans back in his chair with his arms supporting his head as he smiles a satisfied smile while sitting at his desk with his laptop computer open in front of him.
Broker Notes

Brokers name 3 ASX shares to buy today

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A young woman holds an open book over her head with a round mouthed expression as if to say oops as she looks at her computer screen in a home office setting with a plant on the desk and shelves of books in the background.
Share Fallers

Why Guzman Y Gomez, Inghams, Monash IVF, and Skycity shares are sinking today

These shares are ending the week deep in the red. What's happening?

Read more »

A man and woman in an office look at a laptop and discuss investing, budget strategies or other financial concepts
Share Gainers

Why Clinuvel, Cuscal, EOS, and Zip shares are storming higher today

These shares are ending the week with a bang. But why?

Read more »

Burger bun around two wads of cash to symbolise food dividend shares
Share Market News

Everything you need to know about Guzman y Gomez's maiden dividend

Guzman's first dividend is about to be served up.

Read more »