The Keytone Dairy Corporation Ltd (ASX: KTD) share price is near the same level it started at when the company first debuted on the ASX in July 2018. However, the Kiwi dairy producer has continued to develop its operational and financial performance despite its underwhelming share price performance to date.
The company today announced record sales for the 6 months ending 30 September 2020. The Keytone Dairy share price is currently trading 6% higher at 26.5 cents at the time of writing.
First half FY21 highlights
Keytone Dairy continued record sales growth across all divisions, with sales totalling more than $24.5 million for the first six months of FY21. This exceeds the 12-month full year FY20 result of $22.5 million.
Keytone's proprietary product grow increased 141% to $2.3 million. Significant retail ranging was delayed due to COVID-19 and implemented only after 30 September 2020 and is not reflected in the results to date.
The company continues to experience strong growth in its private label business with substantial increased forecasts received from existing clients for 2021 and new contract wins across Australia and New Zealand.
Along with an increase in revenue, its Australian and New Zealand operational business units all recorded underlying earnings before interest, tax, depreciation and amortisation (EBITDA) profitability. The group's consolidate normalised EBITDA loss decreased 57% to $900,000, compared with prior corresponding period loss of $2.1 million.
Its EBITDA has been negatively impacted by initial retail rebates, promotions and marketing to establish brand awareness and achieve market penetration in key retail channels. The company expects these costs to normalise over time.
Commenting on the results, Keytone Dairy CEO Danny Rotman said: "The company has continued to grow sales at an impressive rate, significantly reduce operational cash burn and gain important distribution in key retail channels for our proprietary brands".
As at 30 September 2020, Keyone Dairy had a cash balance of $9.0 million, this includes a $12.5 million capital raising back in May. During the half, the company also spent $2.25 million to acquire AusConfec assets, consisting of state-of-the-art equipment for the manufacturing of protein bars with contracts with Woolworths and Coles.