A2 shares rise on AGM earnings update

Geoff Babidge, chief executive of a2 Milk. Picture/Supplied.

Shares in alternative milk company a2 Milk have jumped almost four per cent on a strong earnings update at the AGM this morning.

The company said that in the four months to October net profit was $52.4 million - up 137.7 per cent on the same period last year.

In August, a2 Milk reported a $90.6 million net profit for the June year, up 198 per cent on the previous year's.

Chief executive Geoff Babidge told the annual meeting in Auckland that the company had made significant progress in the past decade.

The stock has been the star performer on the NZX so far year, at its peak hitting a record high of $8.75 on October 30, up $6.62 or 310 per cent since the start of the year.

A2, which markets an alternative A1 beta-casein-free milk, this year surpassed Fletcher Building and a handful of other market heavyweights in terms of its market capitalisation.

Fund managers said the company has remained well regarded, particularly because of its success in negotiating the tricky unofficial "daigou" trade channels into the lucrative Chinese market. A2 has also enjoyed a series of earnings upgrades throughout the year.

The company is the best performing stock on the benchmark S&P/NZX 50 Index this year as it benefits from increased global demand for its infant formula.