Bega (ASX:BGA) share price advances following 39% revenue growth

How did the company perform for the FY21 period?

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The Bega Cheese Ltd (ASX: BGA) share price is in positive territory on Friday morning. This comes after the company released its FY21 full-year results before market open.

At the time of writing, Bega shares are trading at $5.57 apiece, up 1.09% after touching an intraday high of $5.75 in opening trade.

Let's take a closer look to see how the diversified food company performed during the period.

Bega share price lifts on growth across key metrics

The Bega share price is moving forward following the company's robust result for the 12 months ending 30 June 2021. Here are some of the key highlights:

  • Revenue of $2,703.4 million, up 39% year on year (FY20 $1,493.2 million);
  • Earnings before interest and tax (EBIT) of $182.7 million, up 108% (FY20 $87.8 million);
  • Net profit after tax of $72.2 million, up 239% (FY20 $21.3 million);
  • Earnings per share (EPS) of 27.3 cents, up 176% (FY20 9.9 cents per share); and
  • Fully-franked final dividend of 5 cents per share, bringing total FY21 dividend to 10 cents per share.

What happened in FY21 for Bega?

Investors are buying up the Bega share price as the company announced it completed a transformational acquisition during FY21.

This saw Bega expand its branded foods portfolio, gain new market share in growth categories, and significantly strengthen its consumer goods supply chain and organisational capability.

The $528 million takeover of Lion Dairy and Drinks resulted in the company doubling its annualised revenue to $3 billion. In addition, its cold chain distribution network is now one of Australia's largest with the proportion of sales from branded products in excess of 80%.

Bega did note it experienced a softening in demand for infant formula milk due to changes in the Chinese market. This was created by shifts in customer preferences and a weakened Diagou channel.

What did management say?

Bega executive chair Barry Irvin touched on the result, saying:

The importance of consistent strategy and strong values is never more evident than in times of uncertainty. Our capacity to be agile and change, while remaining confident in the core direction and strategy was again tested and on display in FY2021 as we executed the acquisition of Lion Dairy and Drinks.

We continue to adapt our business to operate in a COVID-19 safe manner and respond to changing customer and supplier requirements.

What's the outlook for Bega in FY22?

Moving into FY22, Bega advised it would continue to focus on boosting its presence in both domestic and international markets.

Furthermore, it aims to achieve costs synergy benefits from the Lion Dairy and Drinks acquisition, as well as manage the supply of milk. The latter is expected to remain competitive throughout FY22.

No revenue or profit guidance was given by the company.

Bega share price snapshot

Over the past 12 months, the Bega share price is marginally higher, up 7%. Year to date, the company shares have climbed, up by almost 8%.

Based on the current Bega share price, the company has a market capitalisation of around $1.6 billion.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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