Tom Park, chief executive of Australia's largest food company, Goodman Fielder, has reported this week that its business is performing in line with expectations, according to a report on IndustrySearch.
"We finished with some momentum last year and we seem to be on plan so far this year," Park told journalists on Tuesday. "We still have some pressures, economic pressures, in some of our Pacific markets where the economies are not yet recovered to where they used to be, but fundamentally across the rest of our businesses they're tracking according to plan."
Park told the Merrill Lynch Australasia investment conference in New York that Goodman Fielder probably had around A$500 million (€275m) in debt capacity. He said the company had three options - to make investments in growth in its existing businesses, to make small bolt on acquisitions or to make a further return to shareholders - it has already completed A$120 million of its current A$200 million share buyback programme.
"During the course of the next several months we'll be looking at whether we intend to make any further returns to shareholders," Park said.
He confirmed that Goodman Fielder will complete the sale of its flour milling and mixing business, sold to GrainCorp and US commodities giant Cargill for A$200 million, later this week, and that next week the company planned to release an information memorandum for the sale of two gelatin plants, in Argentina and Iowa, which would substantially complete the divestment of non-core assets.
The two plants were on the books for A$100-110 million, Park said, adding that he expected them to sell for more than that.
Park said Goodman Fielder, which has undertaken a major restructuring programme in recent years, was already seeing benefits in terms of increased productivity savings and core brand growth. "As a result I'm growing in confidence about the future organic growth potential for the company.
"As we finalise our transition in fiscal 2003 to a more retail branded food company, we look to see the real benefits of our model emerge as top line growth, EBIT (earnings before interest and tax) and economic profit improve in a sustainable manner."