a2 Milk Company FY25 financial update and dividend policy

The a2 Milk Company (ASX:A2M) has revised its FY25 revenue guidance and announced the introduction of a dividend policy, a first in its history. The company now expects mid to high single-digit revenue growth for FY25, an increase from its previous mid single-digit projection. This adjustment follows stronger than anticipated sales performances. Additionally, the company will implement a new dividend policy with a payout ratio of 60% to 80% of net profit after tax, excluding non-recurring items.

Key takeaways from a2 Milk Company's announcement

The a2 Milk Company (ASX:A2M) has updated its FY25 revenue guidance to mid to high single-digit growth, following strong sales in MVM external ingredients, English Label Infant Milk Formula, and Liquid Milk. The company also introduced a new dividend policy, marking a significant step in its financial strategy, with a payout ratio between 60% and 80% of normalised net profit after tax. The first dividend is scheduled for February 2025. The company plans to use its strong cash reserves for supply chain transformation and growth opportunities, while considering special dividends for capital returns. The declaration of dividends will depend on various factors including market conditions, earnings, and capital needs.

Executive insights on a2 Milk Company's strategic developments

Chair Pip Greenwood highlighted the company's progress in developing a resilient business model and the appropriateness of introducing a dividend policy. CEO David Bortolussi expressed satisfaction with the introduction of the dividend policy, acknowledging shareholder support and the company's strategic advancements.