Luxury beef branding drives AACo forward

AACo's luxury beef branding helps drive results


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IMPROVED RESULT: Australian Agricultural Company's focus on positioning itself as a luxury branded beef business is beginning to show results.

IMPROVED RESULT: Australian Agricultural Company's focus on positioning itself as a luxury branded beef business is beginning to show results.

Aa

Australian Agricultural Company's focus on positioning itself as a luxury branded beef business is beginning to show results.

Aa

ASSET rich Australian Agricultural Company (AACo) says its increased focus on positioning itself as a luxury branded beef business is beginning to show results.

In a major improvement on 2016, the company announced an operating EBITDA (earnings before interest, tax, depreciation and amortisation) for the 12 months to March 31 of $45 million and statutory EBITDA of $133.2m. That’s a 202 per cent or $30.1m increase on the previous year.

The improvement in the EBITDA can be attributed in part to a $50.6m increase in the assessed value of AACo’s property, plant and equipment to $792.4m. The value of the herd also increased by $99.3m to $662.5m.  

However, total sales revenues were down $42.7m to $446.8m. Branded beef sale were down $45.3m to $383m. Cattle sales were up $2.6m to $63.7m. The decline in revenue was also offset by a reduction in the cost of beef production from $2.93/kg to $2.14/kg LW.

The average sale price of Wagyu and short fed product had also increased from $10.02/kg to $11.26/kg carcase weight. Wagyu cattle now make up 18.5pc of the 180,000 head AACo breeding herd.

AACo managing director Jason Strong said AACo’s path of growth was a result of a focus on executing on the strategic plan set out three years ago. “The improved financial results are a result of our focus on investing in our brands, opening new market opportunities like we have done in Singapore, driving margin through our integrated supply chains and enhancing efficiency and product quality through innovation,” Mr Strong said.

“We see great opportunity to continue to leverage our unique position as a luxury branded beef business, and expect further improvements in company performance.”

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