It's a good day on the ASX for the Halo Food Co Ltd (ASX: HLF) share price after the company announced it had secured a second contract with supermarket giant, Coles Group Ltd (ASX: COL).
The company won the private label tender and expects to begin producing multiple products for Coles from early next year. Those products should be hitting supermarket shelves from the second quarter of 2022.
At the time of writing, the Halo Food share price is 14.5 cents, 7.4% higher than its previous close.
Let's take a closer look at the latest news from the manufacturer and exporter of dairy, health, and wellness products.
Halo Food share price surges on contract win
Halo Food's stock is taking off after the company bagged a contract expected to produce up to $3.3 million of sales each year.
So far, the term of the contract hasn't been specified. Halo believes it will be longer than an initial 12-month period.
Thus, the company — formerly Keytone Dairy — states the contract implies a gross sales value multiples higher than the annual value.
While Halo hasn't specified what kind of products it will be making under the new contract, it did say it will be making them in various packs, flavours, and sizes.
Halo's CEO Danny Rotman commented on the win, saying:
Halo will continue to work on further new product development and increase the value and scope the company offers to Coles and all clients.
This win caps off an incredibly huge week for Halo following the successful change of name and rebrand, the US$40m strategic partnership with Theland China, and the second Coles contract win in under a year.
Indeed, Halo previously won a $5 million contract with Coles.
In July, the company updated the market on the first contract, saying it had begun ahead of both time and volume forecasts.
Right now, the Halo share price is about 40% lower than it was at the start of 2021. However, it has gained 7% over the last 30 days.
