Dunedin-founded A2 Corporation, which has delivered a maiden profit of $2.1 million seven years after listing, is retaining a cash balance of $7.5 million for expansion in Australia this year.
Expanding operations in Australia are responsible for turning around last year's loss of $2.19 million to a $2.11 million after tax profit for the year to June.
Managing director Geoff Babidge said when contacted yesterday he was "pleased" with the profit.
He noted Australian A2 milk sales grew 32% during the year - and had gained 4 % grocery outlet market share - having sold 21.6 million litres.
A2 milk comes from cows specially selected by a DNA test to produce A2 betacasein protein rather than A1 variety, which may assist with digestive wellbeing.
A2 Corp was started by the late Howard Paterson in the early 2000s and listed in 2004, having since then been in several joint venture partnerships.
While Mr Babidge declined to give any financial guidance for the year ahead, he said A2 was now targeting a market share of more than 5%.
He said in Australia the company had access to "many multiples of A2 milk" suppliers, who were approaching A2.
A2 is bucking the industry trend as the Australian supermarket milk price war continues, being the only brand which had enjoyed strong growth.
"A decision to lower the retail prices of house-brand dairy milk by the major grocery chains from January had a significantly negative impact on most competitive brands of dairy milk, which contrasted with A2 milk, which recorded growth in sales over subsequent months," Mr Babidge said.
He said Australia had been successful for A2 because of an earlier joint venture which during the past four years had resulted in significant investment in marketing, sales and distribution.
This year, the $7.5 million cash in hand would be used to build A2's own milk processing plant in southwest Sydney.
The money came from a $4.5 million asset finance facility and $3 million raised last December.
The plant could produce up to 60 million litres of milk annually and production is scheduled to begin in January.
In New Zealand, Fresha Valley is the sole licensee and to assist with building sales, management of A2 in Australia and New Zealand were recently merged.
When asked if Fresha could expect a financial boost this year to ignite the New Zealand business, Mr Babidge said the companies would look at new arrangements on "how to fund and form a new structure" this year.
He ruled out A2 Corp exporting any produce from Australia to New Zealand.
However, Australian and New Zealand produce in the form of A2 infant formula could go into prospective Asian markets.
