Site menu

Search by ticker code:
Generic filters

Menu

Search by ticker code:
Generic filters

Search by ticker code:
Generic filters

What can A2 Milk (ASX:A2M) investors learn from the Synlait (ASX:SM1) restructuring?

The Synlait Milk (ASX:SM1) share price is in focus after it plans to restructure. What can A2 Milk Company Ltd (ASX:A2M) shareholders learn?

The Synlait Milk Ltd (ASX: SM1) share price is in focus after announcing it plans to restructure. What can A2 Milk Company Ltd (ASX: A2M) shareholders learn?

Synlait plans for a restructuring

Synlait announced that it has told staff it has started a consultation to update its organisational structure.

The proposed changes are designed to align leadership and resourcing around key business units, being nutritionals, ingredients and liquids. It will also remove “unhelpful” hierarchy from the organisation to ensure staff have the information, resources and freedom to act as they need to, so that they can work their best.

This restructuring would see Synlait’s overall headcount reducing by around 15% and lead to potential annual savings of between $10 million to $12 million.

Synlait CEO John Penno said:

Synlait has been through a lot of change over the last 12 months. This means some areas are now over resourced, and some areas are under resourced. We need to review and reset the structure of our business to match our current goals to be successful.

As part of this, we are also on a journey to transform our culture. We need to build teams that are working together with clear roles and responsibilities, and the systems needed to chase the growth we are looking to achieve. This is not just a cost out exercise, it is a complete reset of how we operate as a business.”

Synlait is discussing these proposed changes with impacted staff and union representatives. This will take place over the next two weeks.

What can A2 Milk shareholders take from this?

It has been a very difficult time for Synlait over the last year. Profit and expectations have been falling. That’s why the Synlait share price is down 46% in the last 12 months.

Until demand for Synlait’s services changes, it can’t really do much on the revenue side of the business. But reducing costs is probably the best way to go. For most businesses, wages are one of the main expenses. Reducing its staffing costs is difficult for those involved, but seemingly necessary.

The Synlait share price and A2 Milk share price may be opportunities if they can turn things around. But there hasn’t been much evidence of that possibility yet- Chinese and daigou demand seem to have shifted.

I’ve got my eyes on other ASX growth shares for now.

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

At the time of publishing, Jaz does not have a financial or commercial interest in any of the companies mentioned.
Skip to content