Australian Dairy Nutritionals (ASX: AHF) has reported continued growth in nutritional powder sales as distribution of its Future brand expands in China through the online-to-offline channel.
The group recorded consolidated revenue of $1.4 million for the March quarter, including $880,000 from nutritional powders.
Nutritional powder sales were 20% higher than the previous corresponding period, supported by further pipeline and replenishment orders for increased Future brand distribution in China and contract pack sales to key customers.
Total revenue was 13% lower than the previous corresponding period due to significantly lower milk and livestock sales following the group’s exit from the North Brucknell farm lease.
China Channel Remains Core Focus
Australian Dairy Nutritionals is focusing on consumer engagement for the Future brand in China through the M2C global shopping app.
Repeat consumer purchases reached record levels in the latest month, with the company describing retention rates as very pleasing.
Further distribution and province penetration expansion is planned during the June quarter as additional sales headcount resources are added.
The group still expects Future brand distribution to reach 1,000 active stores by the end of FY26.
Distribution Build Set to Accelerate
Nutritional powder sales during the quarter were affected by a slower-than-forecast distribution build in China.
That delay was linked to distribution partner Mutree taking longer to secure additional sales headcount.
Australian Dairy Nutritionals expects growth to accelerate strongly in the June quarter as Mutree adds resources and implements a strong incentive plan.
Year-to-date total revenue is 5% ahead of the previous corresponding period, despite the weaker quarterly comparison caused by lower milk and livestock sales.
Vietnam Timing Moves out to FY27
The company’s Vietnam opportunity has also taken longer than expected because of an extended re-registration process.
Shipments to Vietnam using revised packaging and formulation are now expected to begin at the start of the first quarter of FY27.
The timing shift leaves China as the more immediate growth driver for the Future brand during the final quarter of FY26.
Contract pack sales to key customers also contributed to the March quarter nutritional powders result.
Cash Position Remains Under Review
Net operating cash outflow was $613,000 for the quarter, in line with expectations.
Customer receipts totalled $1.714m, while product manufacturing and operating costs were $1.395m.
Australian Dairy Nutritionals ended the quarter with $457,000 in cash, down from $809,000 at the end of the December quarter.
The board is continuing to assess capital raising opportunities and remains confident it can raise capital or access debt funding.
