A rights issue to shareholders and a potential offer to new investors would raise about $98m by mid-October.
Its after-tax profit in the year to July 31 was $34.4m from $10.5m a year earlier.
Gains were based on selling higher volumes of higher-margin infant formula products, led by a near fourfold lift in consumer packaged sales volumes.
That was where Synlait did virtually everything with the manufactured product except put on its own brand, managing director John Penno said.
The company’s business-to-business model meant it sold only to other companies rather than end-consumers.
The final profit figure included $2.3m in foreign exchange gains, leaving the underlying result at $32.7m, the company’s preferred profit measure.
Synlait forecast a final milk price of $5/kg milksolids for this season, up from last season’s $4.02 and an earlier forecast of $4.50.
The forecast might be conservative on some measures but the directors were taking a cautious approach in case the recent international price gains were not maintained.
“We hope that’s not the case but there’s been no real change in the underlying fundamentals of the industry,” Penno said.
Synlait hoped to secure a second site within the next 12 months and had already evaluated potential areas to move away from “single-site risk” though it could be some years before a new plant was commissioned.
“At this stage all we’re saying is that a second site will be in New Zealand,” Penno said.
“At this stage all we’re saying is that a second site will be in New Zealand.”
John Penno
Synlait
“Development will be customer-driven and we’ll need demand for high-value products but having a site gives us options.”
A fourth dryer ($130m estimate) was among the expansion plans at Dunsandel and pencilled-in for the 2019 year, providing another substantial lift in production capacity.
The first project for this year was a second wet-mix kitchen for mixing dry ingredients into the milk for infant formula. It would cost $34m.
Planned for 2018 was a $30m upgrade for the cream manufacturing facility to make higher-value products and a $35m project to double consumer packaging canning capacity. A sachet packaging facility was also planned.
Total revenues increased by nearly $100m to $546m.
Synlait’s business model had insulated it from the turmoil in the overall dairy market during the year, chairman Graeme Milne said.
