Business
Australia’s A2 Milk Shares Jump 7% on China Approval and Special Dividend Plans
Australia’s A2 Milk shares rose more than 7% after receiving China SAMR approval for infant formula registrations and confirming plans for a fully franked $300 million special dividend. The company expects to launch the new products later this year.
Shares of The a2 Milk Company Ltd surged more than 7% on Monday morning as the company revealed both significant Chinese regulatory approval, and intentions for a $300 million special dividend. In morning trading, the stock rose to $7.20 as investors cheered the updates and the market broadly outperformed.
Approval by China Moves New Products One Step Closer
This will be the last step to allow the registrations acquired under the a2 Pokeno facility acquisition to be used with an a2 brand, a spokesman for the company said. The New Zealand-based company had received all regulatory clearances and no longer has the option to reverse the acquisition of the a2 Pokeno facility.
The company plans to debut the new products later this year. It also said the timing and expected financial returns offered to the market at that time were unchanged.
Managing Director and CEO David Bortolussi said the approval represented a key development in the Chinese growth strategy for the company, as well as its transformation towards sustainable supply chains.
A2 Milk Targets $300 Million Special Dividend
The company also gave an update on its special dividend plans. Earlier, it would contemplate a special dividend once its new China label registrations received necessary regulatory approvals.
After getting the go-ahead from the SAMR, the company was re-programming its board to meet as soon as possible with a view to declaring a special $300 million fully franked and un-imputed dividend. The full details of the payment date and other information will be provided independently after the board formally approves the dividend.
FAQs
Why did A2 Milk shares rise?
This comes after shares soared on key China regulatory approval and a $300 million special dividend.
A2 Milk Approval Which one did A2 Milk get?
Two of the registrations for infant milk formula to be transferred to a2-branded products were given the go-ahead from SAMR for raising standards.
What Is The A2 Pokeno Facility?
The facility was acquired as a strategic component of A2 Milk's supply chain and China growth strategy.
What is the amount you intend to pay in special dividend?
The company plans to announce a fully franked and unimpounded special dividend of $300 million.
Source: Motley Fools
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