Seeka Confirms Sale Of Australian Kiwifruit Orchards And Announces Lift To 2020 Expected Earnings Guidance
Te Puke, December 9 2020: Seeka Limited (NZX-SEK), a listed New Zealand produce handler, advises that the sale and lease back of approximately 100 hectares of its Australian kiwifruit orchard portfolio has been approved by the Australian Foreign Investment Review Board (FIRB).
Accordingly the AUD$26.5m sale is now unconditional and is scheduled for settlement on 15 December 2020. The funds from the sale will be used to continue the investment in Seeka’s Australian orchard portfolio and to reduce overall debt.
Seeka advises that its current year earnings guidance is for a profit before tax between $15m and $17m compared to previous guidance of between $9m and $12m.
The lift in earnings guidance reflects both an improvement in operational earnings, cost savings and the expected gain arising from the sale and lease back of part of its Australian kiwifruit orchard portfolio.
Seeka's Chief Executive, Michael Franks, said, “Seeka has concentrated on its core business operations and the growing parts of its business as well as focussing on cost management after a challenging COVID-19 and drought impacted harvest. In spite of these challenges with an estimated impact of $10m, Seeka’s operational earnings are ahead of 2019. Seeka did not receive any Government wage subsidy.”
The Australian sale and lease back continues the Company’s focus on reducing debt, with Net Bank Debt expected, at 31 December 2020, to be between $75m and $85m, compared to $116.8m at the same date in 2019.