Maple Leaf Foods Inc. increased its dividend as it anticipates profitable growth this year from its meat operations and revenues increasing by 30 per cent from its plant protein group.
The company says it will now pay a quarterly dividend of 16 cents per share, up from its previous rate of 14.5 cents per share.
“We are very excited about where we are headed as a company,” stated CEO Michael McCain.
“Our investments in our meat protein business are paying off. In plant protein, we are continuing on a purposeful yet disciplined path as we build our brands and solidify our strong market position.”
The company last year set a goal of deriving $3 billion in plant protein sales by 2029 assuming a market size of about $25 billion. These sales were $176.4 million in 2019, up 27.3 per cent from 2018.
That included $49.7 million in the fourth quarter.
Maple Leaf says it Greenleaf brand had a strong second-place position in both the U.S. and Canadian markets. Its U.S. market share was 29 per cent in the fourth quarter and 16 per cent in Canada.
Maple Leaf reported a fourth-quarter profit of $17.5 million or 14 cents per share for the period quarter ended Dec. 31, compared with a profit of $11.9 million or 10 cents per share in the last three months of 2018.
Sales totalled $1 billion, up from $893.9 million in the fourth quarter of 2018. While plant protein sales gained 31.5 per cent in the quarter, meat sales rose 13.3 per cent or 9.9 per cent excluding acquisitions, driven by strong pork prices.
On an adjusted basis, Maple Leaf says it earned 12 cents per share, down from an adjusted profit of 29 cents per share in the same quarter a year earlier.
Analysts on average had expected a profit of 17 cents per share and revenue of $986.5 million, according to financial markets data firm Refinitiv.
Irene Nattel of RBC Dominion Securities said the company’s additional disclosure of information is critical “to closing the forecasted earnings chasm and setting realistic expectations as management works to achieve its reiterated 14-16 per cent EBITDA margin target by 2022.”
“Overall, while magnitude of spend is higher than our forecasts in 2020, appears to be within the range of expectations, results and outlook supportive of our recent upgrade to outperform,” she wrote in a note.
Maple Leaf shares lost $1.07 or 4.5 per cent at $22.60 before all trading on the TSX was halted because of an outage.