Seeka Announces 2019 Year-end Financial Result
· Total revenue of $236.9m, an increase of 16% on pcp
· Net profit after tax of $6.9m, an increase of 3% on pcp
· EBITDA of $34.5m, an increase of 4% on pcp
· Dividend of $0.12 per share declared
Te Puke, 26 February 2019: Seeka Limited (NZX-SEK), a listed New Zealand produce handler with operations in New Zealand and Australia, has today reported its audited results for the year ended 31 December 2019.
Total revenue grew to $236.9m from $203.7m in 2018, an increase of 16%. Net profit after tax (NPAT) of $6.9m and increase of 3% on the $6.7m reported in the previous corresponding period (pcp). Earnings before interest, tax, depreciation and amortisation (EBITDA) is $34.5m (2018: $33.3m) an increase of 4%.
"Seeka's financial performance was impacted by the early 2019’s long dry summer which lowered Hayward kiwifruit yields in both Australia and New Zealand. Hayward volumes were well down on forecast and prior year yields, and negatively impacted Seeka’s financial results. Offsetting this, Seeka expanded our core business with the purchase of Aongatete, delivered cost efficiencies, made good gains on the sale of Northland orchard assets, and delivered significant improvements in our retail services business. Operationally, the performance and returns to supplying growers were excellent," says Seeka chief executive Michael Franks.
2019 was a successful year for harvest and handling operations across New Zealand and Australia including kiwifruit, avocado, kiwiberry, nashi and pears. In New Zealand, 33.5m tray equivalents of kiwifruit were packed by Seeka (2018: 31.4m); 29.6m from Seeka’s traditional post harvest operation (down on a seasonal drop in Hayward yields), plus 3.9m trays from the 2019 Aongatete acquisition.
Seeka continued to invest in core infrastructure with the build of onshore New Zealand post harvest capacity. The Oakside $21.4m packhouse and coolstore project was completed in 2019 and a modern packhouse and coolstore complex is under construction in Kerikeri, with phase two underway. The company expects lower post harvest capital expenditure through 2020 and 2021.
Franks says, "Seeka is focused on consolidating operations following the acquisition of the Northland and Aongatete assets, including selling orchard assets to repay debt while securing supply to our core kiwifruit business. We are also investigating the sell down and lease back of the Australian kiwifruit orchards which would release funds for debt reduction and potential expansion, as we continue to look for investment opportunities by acquisition to deliver growth and shareholder value."
Year-end total net bank debt of $116.8m compares to $79.1m at year end 2018, and $148.1m at 30 June 2019. The successful sale of orchard assets currently being marketed will further reduce net bank debt by at least $27.1m, with the sale of $10.1m of properties conditionally sold at year-end being settled in February 2020.
Franks adds, “Seeka continues to realise orchard assets held for sale to reduce debt. In some cases, the orchard sales are still awaiting subdivision or boundary adjustments, and once completed both the sale and gain will be recorded in 2020.”
A dividend of $0.12 per share has been declared by Seeka's Board. The dividend comprises a normal dividend of $0.08 per share (following Board policy on a pre NZ IFRS 16 basis) and a special dividend of $0.04 cents per share following the completion of property sales negotiated in 2019 and completed in 2020.
The dividend is fully imputed and will be paid on 17 April 2020 to those shareholders on the register at 5pm on 20 March 2020. The dividend reinvestment plan will apply with a 2% discount to the strike price. This dividend will bring the total dividends distributed in the last 12 months to $0.24 (prior twelve months $0.24).
Seeka is anticipating improved earnings in 2020 conditional on New Zealand and Australian crop volumes. The company has an increasing volume of Zespri SunGold with both new growers and new developments, along with a significantly improved SeekaFresh business and increasing avocado volumes. The company continues to consolidate the acquired businesses and complete Northland orchard sales, and is investigating the potential sale and lease back of the Group’s Australian kiwifruit orchards. Seeka is anticipating earnings growth, noting market uncertainty from the current coronavirus outbreak.
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