Seeka is expanding cool store capacity and packing capability to meet both growing kiwifruit production and higher market share, chief executive Michael Franks said.
A good part of that is in Northland where the group bought substantial kiwifruit orchards and infrastructure last year, with the orchards being on-sold at a profit and the company locking in long-term supply agreements with the new owners.
Revenue for the year ended December 31 rose to $203.7 million from $186.8m a year earlier. Operating earnings (Ebitda) rose to $26.2m from $23.1m and the after-tax profit had a 27% rise to $7.42m from $5.83m. The bottom-line result allowed for a $1m write-down in the value of the banana business, described as lacklustre.
With NZ kiwifruit volumes rebounding last year the group packed its second highest trays tally, 31.4m trays, a 23% rise, including 10.8m of the SunGold variety.
Infrastructure and staffing were put in place to ensure fruit was processed at optimal maturity for fruit storage and quality, including industry-leading 0.78% fruit-loss results for SunGold handling, Franks said.
The post-harvest business, by far the group’s biggest activity, lifted revenue to $123.8m from $96.7m, and operating earnings to $32m from $21.9m. Orchards had revenue of $52.8m and operating earnings of $3.4m, compared to $48.5m and $6.37m previously.
The retail service operations, including the banana division, had lower revenue and an operating loss. The Australian business, mainly kiwifruit, went from operating earnings of $2.25m to a loss of $1.4m on revenue down to $14.8m from $16.5m.
“Seeka faced a difficult year in Australia,” Franks said.
The management team there was restructured. The Psa-V disease was found in a small area of the Australian orchards but had little effect on earnings, he said.
Seeka has changed some of the varietal mix and there will be a delay of a year in new orchards coming into production.
Franks said the orchard development, with 53ha of new kiwifruit over the next five years, will provide significant opportunity and the new development plan, along with management changes, provides a positive outlook.
In NZ $18.56m will be spent over the next two years increasing kiwifruit pack house and cool store capacity at the Oakside plant in Bay of Plenty and $17.6m on new pack house and cool stores at Kerikeri for the Northland business. Both developments are under way.
Seeka is already well established with growers in Northland and new growers have so far committed to supply 250,000 trays of kiwifruit.
The acquired Northland business was absorbed seamlessly in mid harvest and had performed to expectations operationally and financially, Franks said.
Seeka bought 140ha of orchard land from T&G and at balance date had 54ha of that under conditional sale contracts with a further 86ha to be marketed this year. The sales made a modest gain of $616,000, with further gains expected.
Seeka is also active in avocados, pears and kiwiberries.
The group reduced its borrowings during the year to $79m from just over $83m while increasing total assets to $269.7m from $222m. The ratio of shareholders’ funds in the business increased to 57% from 44% a year earlier.
Shareholders will receive a 12c a share final dividend on March 22. That lifts the total payout to 24c a share, up from 22c previously.
