A2 making progress in developing US operation

A2 Corp has reported a smaller annual loss as it continues to plan for a capital raising of about $4 million this year to develop its United States business.

The company yesterday announced a pre-tax loss of $926,000 for the year to March. That compares with a $9 million loss the previous year.

Operating revenue was 173 per cent higher at $1.2 million.

A2 gains royalties from sales of A2 milk in New Zealand and Australia, where it also produces and sells the milk.

A2 milk contains a milk protein variant with potential health benefits.

Chairman Cliff Cook said the capital raising - expected to be announced in three to five months - was to help develop A2's US operations, as Australian operations were fully funded.

A company statement said A2 was now at a point where it was benefiting from "significant and ongoing revenue streams" and that it had confidence that Australian and US operations would put it on a "firm path to profitability in the near term".

Cook would not speculate on when the first annual profit would come. "We need to sheet home the work we're doing now before we start forecasting that."

* A2 CORP

2005 Year to March 31
Revenue: $0.44m
Tax: Nil
Net surplus: ($9.01m)

2006 Year to March 31
Revenue: $1.22m
Tax: Nil
Net surplus: ($0.92)