Halo Food (ASX:HLF) share price leaps 7% on Coles deal

The newly rebranded company is having a great day on the ASX.

| More on:
Woman sits in lotus position on the sand in front of a lake as another woman leapfrogs over her.

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

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.

Motley Fool contributor Brooke Cooper 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 owns shares of and has recommended COLESGROUP DEF SET. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Consumer Staples & Discretionary Shares

Man and woman sitting at casino table playing poker
Earnings Results

Star Entertainment share price jumps 5% on strengthening outlook

ASX 200 investors are bidding up the Star Entertainment share price on Thursday.

Read more »

Happy couple doing online shopping.
Earnings Results

Harvey Norman share price jumps to 52-week high on half-year results

A sharp profit decline isn't putting off investors today.

Read more »

Supermarket trolley with groceries on top of a red pointing arrow.
Consumer Staples & Discretionary Shares

Why the Coles share price could keep rising after the result

An expert has predicted more share price gains for Coles.

Read more »

Woman customer and grocery shopping cart in supermarket store, retail outlet or mall shop. Female shopper pushing trolley in shelf aisle to buy discount groceries, sale goods and brand offers.
Consumer Staples & Discretionary Shares

Is the Woolworths share price too good to pass on?

The supermarket chain has had a shocker this month. So is it time to pounce?

Read more »

A young woman wearing a silver bracelet raises her sunglasses in amazement, indicating positive share price movement in jewellery shares.
Consumer Staples & Discretionary Shares

I'd use the Warren Buffett method and buy this ASX stock

This investment is sparkling.

Read more »

Rocket powering up and symbolising a rising share price.
Earnings Results

Guess which ASX 300 stock is surging 14% amid mounting profits

This ASX 300 stock reported a 53% increase in full year profits.

Read more »

shopping trolley filled with coins representing asx retail share price.ce
Consumer Staples & Discretionary Shares

Everything you need to know about the new Coles dividend

Coles has just revealed its first dividend of 2024.

Read more »

Woman customer and grocery shopping cart in supermarket store, retail outlet or mall shop. Female shopper pushing trolley in shelf aisle to buy discount groceries, sale goods and brand offers.
Earnings Results

Coles share price jumps 6% on strong half-year sales growth

The supermarket giant has released its half-year results. How did it do?

Read more »