We’re on the way up but still in the red, Beston Global says

The dairy and meats company has cut its sales forecasts for the financial year, but is reporting improving margins.

Roger Sexton is the chairman of Beston Global Foods. Picture: Aaron Francis

Beston Global Foods, the South Australia-based dairy and meat company, says its operating margins will double in the last three months of the financial year – but a rise in earnings will not be enough to offset earlier negative results.

The company, in an ASX update, said it had “recorded significant operational improvements at its factories in the first half of (the financial year) which have continued into the second half”. Beston was experiencing strong sales performance “across all areas of our business, and especially in our dairy foods division,” it said.

In updated guidance, Beston said it expected sales to be between $140m and $150m compared to $160m and $185m previously forecast as a result of reduced lactoferrin sales.

In August, the company reported its second-worst loss since listing – $21.8m in the red for the 2021 financial year.

Beston, which is focusing on mozzarella and lactoferrin production, has not made a profit since listing in 2015.

In December, the company chalked up its third strike in a row against its remuneration report and a large protest vote against the re-election of its chairman and three directors.

Three of the four directors seeking election to the board only retained their seats due to the chairman Roger Sexton voting discretionary votes in their favour.

On Thursday, however, Beston told shareholders that its “order book for our mozzarella and hard cheese products, whey powder and cream portfolios are at record levels for FY23, which is a testament to our product quality, customer focus and market reach”. “The high forward demand and scarcity of supply is enabling (Beston) to implement the objectives in the third phase of its 10-year business plan and shift the focus of the business from volume to value,” the update reads.

“The company has reached a point in its maturity where the hard work of the past, aided by some strong economic tailwinds, is now showing positive bottom line results.

Beston shares rose 2.7 per cent to 7.6c.