It has been the talk of fund managers investing in and following sharemarket darling a2 Milk: the staggering amount of money the company spent on consultants over the past 12 months.
Chief executive Jayne Hrdlicka dropped into her conference call with analysts and investors on Wednesday that a2 spent about $NZ20 million ($18.9m) on consultants last year.
That contributed to a2’s marketing costs nearly doubling to $NZ135m and they will likely approach $NZ200m in FY20.
Long-time a2 believer Andrew Mitchell from Ophir Asset Management wrote in an online blog that “maybe the money spent on consultants could be better spent internally”.
“Given the sharemarket’s reaction today some investors have taken a dimmer view as to whether these investments will drive an uptick in top-line growth. We believe that this has been further exacerbated by management giving scant details on its strategy justifying this is necessary to protect its competitive position,’’ he added, before noting Hrdlicka’s “intent to invest for the future was clear”.
The a2 company’s shares fell 14 per cent on Wednesday before recovering yesterday to close up 1.5c to $1.755.
China energy bid switched off
Aspirations by China’s State Grid to buy Jemena are understood to have put an end to a possible sale of the energy business.
Healthscope firmly in the sights of Bain
Bain Capital is closing in on its next big target struggling with too much debt – the country’s second-largest hospital operator Healthscope.