The Milk Company a2 (ASX:A2M) revised upward its revenue guidance for fiscal 2025 and introduced its first dividend policy, marking a milestone in the company’s history.
Year-to-date trading has exceeded expectations, driven by higher sales of external ingredients at the company’s MVM plant. This performance was attributed to high global dairy trade prices, currency fluctuations and a favorable product mix. As a result, a2 Milk now expects mid-to-high single-digit revenue growth for FY25 compared to previous guidance of mid-single-digit growth. However, EBITDA margin is expected to remain broadly in line with FY24, with a decline in the first half and an improvement in the second half of the year.
The recently introduced dividend policy targets a payout ratio of between 60% and 80% of normalized net profit after tax. The first interim dividend, expected in February 2025, will likely reflect the lower end of this range.
Managing Director and CEO David Bortolussi said: “I am pleased to introduce a2 Milk Company’s first dividend policy to reward our shareholders for their support over many years and to reflect the significant progress made since we announced our renewed growth strategy in 2021.”
Subsequent dividends are expected to be declared semi-annually, in February and August, subject to Board approval and market conditions. The company also intends to allocate and register dividends to the maximum extent possible within the limits of available credits.
On Friday, on the back of the news, shares closed 13.31% higher at $5.45.