All over? … new Goodman Fielder deal is a likely sign that Coles will no longer be able to offer $1 bread. Photo: Glen HuntThe days of Coles ‘‘dollar bread’’ may be numbered, following a price rise the retailer is believed to have agreed with its baker of private label bread, Goodman Fielder.

Shares in food products group Goodman Fielder surged today on news it has ‘‘successfully negotiated a private bread contract’’, which is believed to be with Coles, for the retailer’s ‘‘dollar bread’’ contract.

Goodman Fielder refused to give financial details of the contract, although the baker said earlier in the year it needed a price rise to continue supplying Coles beyond the end of June, when the contract was to finish.

A spokesman for Coles could not be immediately contacted.

Late last year, the price of Goodman Fielder’s own branded bread products rose around 8 per cent.

The new contract helped to push up the food products’ group’s shares by 4.6 per cent to 74.5 cents.

The new contract overshadowed a profit downgrade, with the group now expecting a pretax profit of between $195-200 million, down slightly from median analyst forecasts for a pretax profit of around $202.5 million for the year to June.

‘‘This result includes a significant increase in direct marketing expenditure,’’ it said, which will position the group for growth in the new financial year.

High mortality rates at its Fiji poultry unit, the second largest of its Asia-Pacific division businesses, will slice as much as 20 per cent off the pretax profit of this unit, it said.

In the year to June 2012, the Asia-Pacific division’s pretax profit was $62 million, which may fall to around $50 million this financial year, ending June 30.

Goodman Fielder has an estimated 60 per cent share of the Fiji poultry market.

Operations here have stabilised, it said, amid optimism the woes here will be resolved in time for the key Christmas sales period.

Asset sales, such as the sale earlier in the year of the New Zealand flour unit to Japan’s Nisshin Milling has helped to cut debt, it said, while ‘‘operational cashflow remains strong’’.

Goodman Fielder has previously said it intends contracting to five core businesses – baking, dairy, flour/cake mixes, spreads (for example margarine) and dressings/mayonnaise.

All other businesses may be sold.

The group would not comment yesterday on the prospects of a return to dividend payments. It had previously flagged paying out 50-80 per cent of net profits in dividends.

The original release of this article first appeared on the website of Hangzhou Night Net.

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