Business Description:
Goodman Fielder Limited (GFF) owns the major grocery brands Wonder White, White Wings, Helga's, Meadow Lea, Praise, Quality Bakers and Nature's Fresh. Its product range includes staples such as bread, milk, margarine, dressings, mayonnaise and flour. GFF is the largest or second-largest supplier in most of the categories in which it competes and its distribution network delivers products to over 30,000 outlets including supermarkets, convenience stores and food service customers.

Strategy Analysis:
GFF says its 'guiding principles´ are: branded consumer products generate higher returns; brands provide effective insulation against commodity cost volatility; complex product and brand portfolios dilute the investment required to protect or grow market positions; and attractive returns are achievable in mature categories only where there is significant brand strength and/or a material delivered cost advantage, and where market conditions are stable. Within the focus on retail brands, the growth strategies are product innovation, bolt-on acquisitions, internal efficiencies and price recovery of commodity cost increases. GFF aims to be the lowest-cost producer in its categories. New CEO Chris Delaney has initiated a strategic review focused on improving performance. He sees significant opportunities for innovation in the product portfolio, increased efficiency and supply chain improvements. While there appears room for significant improvement, the fact is that GFF is in a cyclical industry with some major structural challenges. Goodman Fielder reported a net loss of $166.7m for the year ended 30 June 2011, attributable to a non-cash impairment charge of $300.0m announced on 19 August 2011. Underlying NPAT was $133.3m, down 17.3% from $161.1m for the prior year. Revenues from ordinary activities were $2.56bn, down 3.9% from last year. Basic and Diluted EPS was (12.1) cents compared to 11.7 cents last year. Net operating cash flow was $207.6m compared to $319.7m last year. The final dividend declared was 2.5 cents, taking the full year dividend to 7.75 cents compared with 10.75 cents last year. An update on FY2012 guidance will be given at the company's AGM on 24 November 2011.