GOODMAN Fielder has reiterated its support for a $1.3 billion offer from Wilmar International and First Pacific after delivering a flat first-half profit result, with underlying net profit slipping 1 per cent to $29.7 million as cheaper milk and wheat costs countered falling prices in bread and spreads.
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While sales from continuing operations fell 5.8 per cent to $1066.4 billion, earnings before interest and tax were unchanged at $77.3 million and EBIT was up 5 per cent after taking into account recent asset sales.

The result fell short of market expectations. Analysts had forecast an underlying net profit of $34.3 million and earnings before interest and tax of $80.8 million on sales of $1.09 billion.

However, the 5 per cent rise in underlying EBIT suggests that chief executive Chris Delaney’s turnaround plan is finally starting to gain traction.

While earnings fell 54 per cent in baking and 13 per cent in grocery products, EBIT from the New Zealand dairy operations soared 74 per cent and Asia Pacific profits rose 12 per cent.

The result will allay fears that a renewed outbreak of discounting in bread could jeopardise the $1.3 billion offer from Singapore oils processor Wilmar and Hong Kong investment company First Pacific.

Under a material adverse change clause in Wilmar and First Pacific’s 67.5¢ a share offer, the joint bidders have the right to walk away if Goodman Fielder’s recurring earnings before interest and tax fall $30 million this year or the value of net assets falls by $100 million.

Goodman said an independent expert had reviewed the first half results and continued to believe that the scheme of arrangement with Wilmar and First Pacific was in the best interests of shareholders. A scheme meeting will be held on February 26.

As expected, Goodman withheld paying an interim dividend.

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