Why Australian Dairy Farms Group Share Price Jumped Higher Today

ASX stock market gains

What happened to the Australian Dairy Farms Group Ltd share price?

At the time of writing, shares of Australian Dairy Farms Group Ltd [ASX:AHF] are up by 25.64%, to 24.5 cents, in today’s trading.

Why did Australian Dairy Farms Group Ltd share price increase?

Australian Dairy Farms Group Ltd signed a significant new contract with an international food company. Camperdown Dairy Company — a wholly-owned subsidiary of Australian Dairy Farms Group Ltd — is expected to generate $30 million dollars’ worth of sales in the first four years of production from the agreement.

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What now for Australian Dairy Farms Group Ltd?

The acquisition provides significant share price upside potential. The company will provide premium, specialised, fresh dairy products that have achieved high levels of success in other international markets over many years. The undisclosed products — new to the Australian market — are expected to launch during July or August through a major Australian supermarket chain.

There’s share price potential from the naming of the potential customer in the months ahead. Non-disclosure agreements are in place until the products have been launched. The identity of the customer isn’t considered, by the directors of the company, to be sensitive to the share price. However, assuming a Chinese customer, the market could react positively given the growth potential.

Jason Stevenson,
Resources Analyst, Money Morning

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Jason Stevenson

Jason Stevenson

Jason Stevenson is Money Morning’s resource analyst. He believes the best way to make money lies in the resources sector.

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