A2 Milk Company: Products, Financial Performance and Investment Analysis

2.1
A2 Milk Company is one of the Australian listed companies that is used to commercialize the
intellectual property relating to A1 protein free milk which is sold under A2 and A2 milk brands
as well as milk and milk related products like infant formula. The products that are sold by A2
milk are ghee, milk, full cream milk, skim milk powder and smart nutrition. The products are
useful products and important not only for the youngsters but also for infants (A2 milk, 2019).
The infant formula and the fresh milk is one of the classic products that can create the
competitive advantage as the quality infant formula is hardly in the market to cater the needs of
the infant. As per the results of the financial year of the year 2019, it can be inferred that the
sales of the company in terms of the fresh milk grew to 22.9% and revenue of $174.9 million
across the group. This figure has driven the entire company as the gross margins remained stable
at 54.7% and this improvement was driven by the changes in the share prices, partially offset by
the currency movements. The balance sheet of A2 Milk Company is strong and robust without
having any kind of the debt and the cash in hand is enough so that expenses can be dealt without
any hassle.

It can be observed from image that the liquid milk excels and the revenue reached to $133704
whereas the infant nutrition was higher than the normal milk at $652864. These figures are for
Australia and New Zealand whereas the Greater china and other Asia are also selling the infant
nutrition. Hence, it has been proved that the infant nutrition is in much more demand and the
competitive advantage can be gained through the selling of infant nutrition (Rao, 2016).
2.5
In the present case the number of the shares of A2 milk Company has been raised by 2929
numbers in comparison to the previous years. The cost to issue such shares is 41 and the
information of the investment is available on page number 79 of A2 milk Company. In the
month of August 2018, there was further investment made by the company in Synlait acquiring
14840527 shares for $162335000 increasing its total holding in Synlait to 17.39%. The fair value
of $6239000 was recognized for the respective year. As it can be observed from the annual