Insights

Why the Keytone Dairy (ASX:KTD) share price is up 8% today

The Keytone Dairy Corporation Ltd (ASX: KTD) share price is rocketing today due to a deal with Coles Group Ltd (ASX: COL).
The post Why the Keytone Dairy (ASX:KTD) share price is up 8% today appeared first on The Motley Fool Australia. –

dairy asx share price represented by happy looking cow close up

The Keytone Dairy Corporation Ltd (ASX: KTD) share price is on fire today, up 8.12% to 26 cents at the time of writing. Keytone shares closed at 24 cents on Friday afternoon, but opened at 26 cents this morning and were up to 28 cents at one point, a rise of more than 16% at the time.

Despite this strong showing today, Keytone isn’t having a great year in terms of share price performance. Keytone shares remain down 33% year to date on this pricing, and down more than 40% from the highs of 46 cents we saw back in mid-April.

So why is this dairy company seemingly in investors’ good books today?

Why the Keytone share price is surging today

Today’s Keytone share price performance is most likely due to an ASX release the company provided just before market open this morning. In this announcement, Keytone revealed it has inked a significant deal with major supermarket operator Coles Group Ltd (ASX: COL).

Keytone will provide private-label goods to Coles that will be sold under Coles’ ‘in-house’ white-label brands under the agreement. The products to be provided under this arrangement are “multiple powdered SKUs [stock keeping units] in various pack formats, flavours and sizes”. Keytone told the markets the deal is a result of the company’s “first-class manufacturing facilities and rigorous health and safety standards, highly responsive and innovative new product development team and the growing strategic relationship between Keytone and Coles”.

Production of goods under the deal is expected to commence “late in the first quarter of 2021”, with the products set to appear in Coles’ stores “from the second quarter of 2021”. The company tells investors the “term of the arrangement has not been specified”. However, Keytone “anticipates the term will be longer than an initial 12 month period, implying a gross sales value multiples higher than the annual value”.

The company forecasts the deal will result in $5.2 million worth of sales per year.

Keytone CEO, Danny Rotman, had this to say on the announcement:

This is a fantastic and significant win for the business. It highlights the growing awareness of the Keytone brand of quality and our credentials across the broader health and wellness sector… The calibre of the client base is becoming increasingly robust and we look forward to supporting the growth of our diversified customer base through our state of the art facilities and first-class product development and operations teams.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of June 30th

More reading

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the Keytone Dairy (ASX:KTD) share price is up 8% today appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!