Australian Dairy Farms becomes first milk producer to list on ASX
Australian Dairy Farms Group (ADFG) was listed on the Australian Securities Exchange (ASX) on Tuesday 28 October 2014, following a capital raising of $9.3 million at $0.20 security. The group has been issued the code AHF and has strong supply chain links with major milk-processor Fonterra.
ADFG is a stapled group comprising Australian Dairy Farms Limited (the Company), which operates the farms and owns livestock while the farms are owned by Australian Dairy Farms Trust (the Trust). Each AHF listed security comprises one share in the Company and one unit in the Trust. Australian Dairy Farms Limited was previously listed as APA Financial Services Limited (APP).
The Group is assessing further acquisitions and intends to provide investors with regular operational and development updates.
The two initial farms, located near Warrnambool in South-West Victoria, have operated under the same management since early 2013. During this period ADFG said both farms had been progressively upgraded and reconfigured to operate effectively as one combined farm.
Significant work has been done on improving internal laneways and pasture renovation as well as on herd improvement and acquisition of additional milking livestock.
ADFG said the results of that work had already improved milk quality, increased levels of milk production, livestock condition, calving numbers, fertility in re-joined cows and pasture growth.
Future acquisitions of additional farms
ADFG said an important part of the strategy of the Group was to increase milk production volumes and returns from milk sold to processors.
During the extended period in which the Group’s capital raising and relisting has been planned and now successfully completed, the ADFG’s directors maintained an active brief on the availability of additional farms in proximity to the existing farms owned by the Group.
As a result, there are several farms under current review that meet the investment criteria established by the directors. As this process develops the directors expect to make further updates to market.
The Group’s existing farms supply Fonterra milk factories and directors have engaged Fonterra management in developing a mutually beneficial relationship for the future, which will see them actively contribute to the productivity and value growth of Australian Dairy Farms Group. Fonterra, like all other processors Victoria, is actively supporting increased milk production by farmers to supply the continually growing for processed dairy products globally and particularly to strongly developing Asian countries and China.