A2 Milk Share Gains 8% As the Firm Regains Money-Making Charm

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  • Investors bid up A2 Milk stock price, currently 8.35% high at $5.32.
  • Growth return has enhanced market confidence.
  • Management conveys business optimism following a NZ$150M share buyback.

Time to open bottles from A2 Milk Company (ASX: A2M). The share price has something to entice stakeholders today. The infant formula firm’s shares appear rosy, while the ASX/S&P 200 Index remained 2.14% underwater.

What’s behind the varying performances? Well, the market has well-received A2Milk’s FY22 results. Early afternoon trade saw A2M stock witnessing an 8.35% hike to $5.32. The move has the company’s stock at its highest mark since March 30 this year.

Back on Track

Market players who have been in the game for a while might remember days when A2 Milk Company was an ASX gemstone. Nevertheless, COVID-19 saw New Zealand form deteriorating in performance.

The firm saw its twelve-month profits plunging to a mare NZ$20.2M from June 2022 to December 2021. As you may anticipate, the A2M share price plummeted amid the dwindling earnings.

Fortunately, today’s FY22 numbers show the difficult days for the company could be long gone. Reposts from Motley Fool Australia revealed a bounce back for the milk business in the recent financial period.

Profits and revenue returned to upsides, surging 42.3% and 19.8%, respectively. Attractively, NPAT stood at NZ$114.7M, over 5X December 2021 paltry profits. That would indicate that most of the growth uptick happened during the financial year’s second half.

Boosting A2M Share Price

A2 Milk shares will likely experience a positive catalyst following today’s buyback news. The management announced a buyback program after reporting an $816.5M net cash balance plus more returns on the horizon. Meantime, stakeholders will enjoy a $150M capital return. That means 3.7% of the firm’s market cap at the current A2M share price.

A2 Milk stock remains under pressure within the previous year before rebounding over the past few weeks. The shares gained 12% within the past month. Meanwhile, Monday’s financial results saw the daily producer flouring.

Net profits over the past year (to June 30) soared 52% to hit NZ$122.6M. EBITDA noted a 59% hike to NZD$196.2M. Meanwhile, improved business performance in the US and Asia saw its revenue surging 19.8% to NZD1.5B.

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