How Is Noumi Balancing Growth and Legal Costs in FY25?
Noumi Limited reported a nearly flat Q4 FY25 revenue with mixed segment performances and flagged a net loss for the year amid legacy legal expenses. The company highlights growth in its Milklab brand and export sales while managing significant convertible note obligations.
- Q4 FY25 revenue steady at $155.2 million, down 0.3% year-on-year
- Plant-based milks revenue declined 2.9%, dairy and nutritionals up 0.9%
- Negative Q4 operating cash flow of $2.2 million due to legal expenses
- Full-year operating cash flow positive at $32.5 million
- Convertible notes fair value rising, with $601.3 million redemption value at June 2025
Steady Revenue Amidst Market Challenges
Noumi Limited, a prominent player in Australia's FMCG sector focusing on dairy and plant-based milks, reported consolidated revenue of $155.2 million for the fourth quarter of FY25. This figure represents a marginal decline of 0.3% compared to the same period last year, reflecting a stable yet cautious market environment.
The plant-based milks segment experienced a 2.9% revenue dip to $46 million, impacted by softer sales in out-of-home and private label channels despite growth in retail sales and a strong performance from the Milklab brand. Conversely, the dairy and nutritionals segment saw a modest increase of 0.9%, reaching $109.2 million, buoyed by improved bulk commodity pricing and growth in domestic retail long-life milk sales.
Cash Flow and Legal Expenses Shape Financials
Operating cash flow for the quarter was negative $2.2 million, primarily due to $2.4 million in legal and other expenses related to closing legacy matters, including a shareholder class action settlement recently approved by the Victorian Supreme Court. These costs were partially offset by $1.8 million in proceeds from the release of a term deposit tied to US litigation obligations. Despite the quarterly setback, Noumi achieved a positive operating cash flow of $32.5 million for the full fiscal year, signaling underlying operational resilience.
Capital expenditure during Q4 amounted to $2.2 million, focused on property, plant, and equipment investments, while the company also repaid $7.1 million in equipment leases. Financing activities included $4.6 million in cash payments on convertible notes, which are carried at fair value and expected to increase to a redemption value of $610.4 million by their 2027 maturity.
Outlook and Strategic Highlights
Looking ahead, Noumi plans to announce its FY25 earnings before the end of August 2025, anticipating continued improvement in adjusted operating EBITDA despite expecting a net loss after tax. This loss is attributed to depreciation, financing costs, including non-cash fair value adjustments on convertible notes, and impairment charges taken earlier in the year.
The company remains focused on expanding its plant-based milks footprint, with Milklab's first full year in retail showing promising growth, particularly in oat milk and export markets. However, competitive pressures and rising farmgate milk prices continue to challenge margins in the dairy long-life segment.
Noumi's management continues to navigate legacy legal issues while maintaining a solid liquidity position, with unrestricted cash of $16.2 million and undrawn facilities of $10 million, providing a combined buffer of $26.2 million to support ongoing operations.
Bottom Line?
Noumi’s FY25 performance underscores steady operational progress tempered by legacy legal costs and significant debt obligations, setting the stage for a critical FY26.
Questions in the middle?
- How will Noumi manage the increasing redemption value of its convertible notes through 2027?
- What strategies will Noumi deploy to counter margin pressures in the competitive dairy long-life market?
- Can growth in the Milklab brand and export sales offset declines in plant-based milks and nutritional ingredients?
