Bega out with guidance “at the low end” of a wide range ($160-190m FY23)…

…with the market already anchored to the low end.

Not enough milk, too many milk product processors, is the main message.

Selling down property via leaseback (not referenced in the above) is a good monetisation strategy given demand for industrial assets

You would think given all of the throat clearing about farm gate pricing disconnects, and the cost cutting program that initially costs money, + restructuring, that the market is still too bullish on FY24 onwards, or at least needs a wider variance.

BGA is a divisive stock. It has some very good assets, in a difficult industry. The share price has been crunched over the years, and if BGA can execute some of the cost-out that it thinks it can, alongside some moderation in commodity prices (e.g. milk) there is a good prospective opportunity to be had.

But it is a very uncertain, risky path. Fine for higher risk higher return seeking portfolios, not one for our core equity portfolio, just yet.

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