Bega Cheese delivered profit after tax growth of 36% to $69 million in FY2026, reflecting strong execution across its core strategy and driving a 21% increase in the fully franked dividend to shareholders. The result shows the success of the company’s “simplify and focus” transformation that began in late 2023, positioning the business to capitalise on structural consumer trends toward wellness and functional foods.
The company achieved revenue growth of nearly 7% while simultaneously expanding margins and lifting EBITDA by almost 12% year on year. Return on funds employed reached 10%, hitting the company’s 2028 target ahead of schedule. This reflects payoff from operational consolidation over recent years, including the closure of Strathmerton and expansion of Ridge Street, which doubled production capacity. The leverage ratio fell to 0.8 times, providing flexibility for future growth investments while maintaining balance sheet strength.
Operating performance was driven by strong branded performance, particularly in yoghurt, milk-based beverages, spreads and cream cheese, which benefited from the company’s “Better For You” innovation pipeline. The foodservice channel grew 6%, outpacing market growth despite subdued consumer sentiment, while the international branded business continued to expand strongly in Southeast Asia. The bulk ingredients business rebounded from challenges in 2023, with increased premiumisation and better integration with branded operations. Operating cash flow reached $129.3 million, supporting capital expenditure of $109.8 million and dividends of $37.3 million.
For FY2027, management confirmed EBITDA guidance of $240 million to $245 million, with first half earnings expected to be relatively flat and strong growth anticipated in the second half. The company plans capital expenditure of approximately $110 million, targeting further expansion in manufacturing capacity for yoghurt, cream cheese and milk-based beverages. These investments are expected to support growth opportunities emerging in FY2028. Management cited consumer research through “Project Thrive” as guiding the next phase of product development, with focus on five consumer themes including gut health and wellbeing, weight wellness, everyday performance, treat and reward, and long-term consumer transformation.
What investors should watch is the company’s execution against its capital program, including the planned $110 million in FY2027 spending. Management has demonstrated strong project delivery over recent years, completing transformation initiatives on time and within budget. Consumer adoption of the Better For You product pipeline and response to increased marketing spend, a $9 million boost to brand investments, will indicate whether momentum sustains into FY2027. The company’s progress in Southeast Asia and its infant nutrition business, which management highlighted as benefiting from tightening industry capacity, warrant close attention as growth drivers. This announcement has been flagged as price sensitive and material by the ASX.
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About Bega Cheese Ltd (ASX: BGA)
Bega Cheese Ltd is an Australia-based dairy processor and food manufacturer of well-known brands including Bega Cheese and Vegemite. The company operates two business segments: a branded segment producing consumer packaged goods sold through supermarket and foodservice channels, and a bulk segment producing commodity dairy ingredients for business-to-business customers. The company is headquartered in Bega, New South Wales, Australia.
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