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China's Singles Day boosts A2 Milk sales

AAP logoAAP 22/11/2016 Trevor Chappell

Good sales during China's biggest online shopping day have given The A2 Milk Company a bumper start to 2016/17.

New Zealand-based A2 Milk says revenue for the four months to October is up 96 per cent on last year at $NZ155.2 million ($A148.5 million), as sales of infant formula and milk products continue to grow.

Earnings for the period rocketed from $NZ6.2 million a year ago to $NZ35.5 million.

A2 Milk Managing director Geoff Babidge told shareholders at the company's annual general meeting in Sydney on Tuesday that revenue growth over the four months reflected the major seasonal build-up for China's Singles Day.

The November 11 Singles Day is China's biggest online shopping event, and many consumers buy infant formula as gifts.

"The year-to-date revenue does reflect quite a significant seasonal build of infant formula for the key China sales event: 11/11 Singles Day, which is an important selling event in the year," Mr Babidge said.

"It's important that we call that out for you to be aware when reflecting on what is, obviously, a very strong financial performance for the four months to October of this year."

Mr Babidge said the rate of growth in sales of A2 Platinum infant formula on Singles Day had more than doubled, compared to last year.

"We are going well in China," Mr Babidge said.

A2 Milk also hopes to adopt a dividend policy after the end of the current financial year, provided the positive trends in its business continue and there is no need for substantial additional capital expenditure.

"We will pay a dividend on the 2017 results, if that's appropriate," chairman David Hearn said, adding that the company was confident of another strong year.

Mr Hearn described 2016 as transformational, with quantum shifts in market presence, consumer awareness, revenues and earnings.

A2 Milk had started the year with its focus predominantly on the liquid milk market in Australia, an underdeveloped position in the infant formula market and small footprints in China, the UK and US.

"One year later, I am pleased to say the picture is dramatically different," Mr Hearn said.

A2 Milk sells milk and infant formula that contains only the A2 protein rather than both the A1 and A2 protein found in conventional milk.

The company says the exclusion of the A1 protein makes milk easier to digest.

A2 Milk has undergone rapid growth since listing on the Australian share market in March, 2015.

Its biggest market is still Australia and New Zealand but it is progressively building its markets in China, the UK and the US through increased marketing and better distribution, especially through a multitude of channels in China.

A2 Milk shares gained 14 cents on Tuesday, a 7.1 per cent rise, to close at $2.11.

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