a2 Milk sales jump again, its shares surge

Mark Ralston/AFP/Getty Images

Shares in a2 Milk jumped after the infant formula maker released a trading update showing strong sales for the first four months of the financial year.

A short time ago, the shares were up 4.5% to $A7.39.

At the company’s AGM, a2 Milk told shareholders revenue was up 68.9% to $NZ262.2 million ($A236 million) compared to the same four months the year before.

Profit after tax was 22% higher at $NZ52.3 million ($A47 million).

The results came on the back of strong growth in Australia and China.

The company has been expanding distribution in China, with 65 distributors displaying a2 products in 5,800 stores.

Changes in regulations last year hit producers of infant formula, including Tasmania-based Bellamy’s, stalling sales in China. All infant formula brands must be registered by January 2018.

a2 has won China Food and Drug Administration registration for its China label infant formula.

The company plans increased marketing with a new advertising campaign planned from December within a key China region.

a2 also recently launched Australian fresh milk into Singapore.

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.