Goodman's profits rise as costs fall

Breads and spreads supplier Goodman Fielder's first half net profit has soared to $51 million but the company expects retail market conditions to remain challenging.

Goodman, which axed hundreds of jobs in 2012 as part of a major restructure, lifted its net profit for the six months to December 31 from $21.5 million in the previous corresponding period.

The profit result was boosted by $9.8 million in significant items related to the sale of Goodman's non-core businesses including Integro.

Revenue from continuing operations was $1.08 billion compared to $1.135 billion.

Chief executive Chris Delaney said earnings had improved at Goodman's Asia Pacific business, while its dairy operations had enjoyed a strong rise.

However, retail trading conditions in Australia had remained challenging and resulted in lower volumes and prices.

"However, the progress we are making, particularly in securing price increases in our baking and grocery divisions, is expected to result in improved performance in the second half of the year," Mr Delaney said in a statement on Wednesday.

Mr Delaney said retail market conditions in Australia and New Zealand were expected to remain challenging for the remainder of this financial year, with competitive pressures continuing on product volumes.

He said Goodman was ahead on its Project Renaissance target to achieve $100 million in annualised savings by the 2015 financial year.

The company expects to reap an extra $16 million in savings this financial year, bringing the cumulative savings to about $56 million by the end of the 12-month period.

Goodman did not declare an interim dividend but said it did expect to resume payments at the full year, subject to trading conditions and market outlook.

Goodman Fielder's brands include White Wings, Meadow Lea, Praise and Helga's.

Last August, Goodman said its full year underlying net profit would come in around the upper end of its previous forecast of $185-$205 million.

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