Sharemarket darling a2 Milk has released an upbeat 2019 forecast, with sales expected to top more than $1 billion as it lifts the tempo on global marketing of its nutritional products.

Unaudited group revenue for its year ended June rose 68% on the previous year to $922 million, at the top end of guidance, while its earnings before interest, tax, depreciation and amortisation (ebitda) against sales was expected to be around 30%.

a2 Milk is expected to file its completed full year result next month.

a2 Milk chief executive Geoffrey Babidge said in a market update yesterday its planning for 2019 was completed and it expected further growth in revenue, particularly in respect of nutritional products.


a2 shares are up 198% on a year ago, but following yesterday's announcement declined almost 2% to trade around $11.54.

Mr Babidge outlined several areas of rising costs, including marketing expenditure in 2019 given the company's continuing investment in Australia, re-phasing of activities in China and elevated investment to support the US market expansion.

Overhead costs would be higher than 2018, primarily due to increasing staff numbers in China, corporate office costs and the one-off costs from the transition to a new chief executive.

While Mr Babidge did not put a specific number on 2019 sales expectations, Craigs Investment Partners broker Peter McIntyre predicted sales would reach $1.4 billion.

He expected a2 Milk's 2019 ebitda level to be about 31% of sales, or around $275 million.

"In opening up new regions they are creating opportunities for growth," Mr McIntyre said.

However, Mr McIntyre said expansion into China, South East Asia and in the US would also see a rise in marketing costs.

Forsyth Barr broker Damian Foster said a2's updated revenue guidance for 2018 included ebitda guidance for the first time.

The 2018 revenue of $922 million was at the upper end of previous guidance of between $900 million to $920 million, he said.

With ebitda margins at around 30% of sales, Mr Foster said it was a "stellar uplift" on the previous year, probably underpinned by strong growth in higher-margin international sales.

The implied $276.6 million ebitda was ahead of Forsyth Barr's expectations and slightly ahead of market consensus by around 2%, he said.

Mr Foster noted a2's 2019 outlook commentary confirmed "further revenue growth" was expected, although no specifics were provided.