The a2 Milk Company (ASX:A2M) has revised its FY25 revenue guidance upward and introduced its first dividend policy, marking a milestone in the company’s history.
Year-to-date trading has exceeded expectations, driven by higher external ingredient sales at the company’s MVM facility. This performance was attributed to elevated Global Dairy Trade prices, currency fluctuations, and a favorable product mix. As a result, a2 Milk now anticipates mid-to-high single-digit revenue growth for FY25 compared to previous guidance of mid single-digit growth. However, the EBITDA margin is expected to remain broadly in line with FY24, with a dip in the first half and improvement in the second half of the year.
The newly introduced dividend policy targets a payout ratio of 60% to 80% of normalised 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 The 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 refreshed 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 impute and frank dividends to the maximum extent possible within the limits of available credits.
On Friday, shares closed 13.31% higher at $5.45 on the back of the news.