14 Feb 2013

Goodman Fielder to resume paying dividend as profit rises

6:04 am on 14 February 2013

Goodman Fielder is expecting trading conditions to remain challenging in the first half of 2013, though it signalled it will resume paying a dividend.

The company has more than doubled its half year profit due to lower debt costs.

Goodman Fielder made $A51 million dollars in the six months to December compared with $A21.5 million in the same period a year earlier.

Net debt decreased by 35% to $498 million.

Revenue also fell, dropping 9% to $1.1 billion.

The Australasian food company's brands include Meadowlea, Vogels and Edmonds.

It has sold businesses, including its New Zealand flour milling and Integro edible oil and fats unit, axed jobs and closed plants, in an effort to combat falling sales and greater competition from private labels for its baking, home ingredients and dairy products.

Goodman Fielder chief executive Chris Delaney admits securing and maintaining higher prices with customers like the supermarket giants, particularly for its grocery products, will determine how successfully the turnaround plan is progressing.

He says the company has been very encouraged by retail pricing of baking goods, as well as the merchandising or promotion price points, which have also moved up.

Mr Delaney says it's as much about winning share back as about keeping those price increases.

"But I think if the plan works we'll get the benefit of both and then we'll see that come back. But yes, we need to do more on our grocery brands, and we admit that."

Net debt decreased by 35% to $498 million.