Listed produce company Seeka Limited has exceeded market expectations by increasing net profit before tax by 77% to $30.8 million in the six months ended June 30, 2021.
On October 13 it will pay a fully imputed interim dividend of 13c a share, compared with 10c in the first half of 2020.
Group revenue in the six months was $224m, up 26%, and chief executive Michael Franks said the company’s strategy had delivered a 77% increase in earnings.
“Seeka delivered outstanding customer service and excellent financial results to shareholders in the first six months of 2021,” Franks said.
Its share price put on 20c after the first-half results announcement, increasing from $5 to $5.20.
The share price has risen $1.12 over the past year, or 27.5%, and the market capitalisation is now $204m.
Franks says Opotiki Packing and Cold Storage was acquired for $34m in May, with an 8m tray capacity and the extended reach for Seeka into the quickly expanding Eastern Bay of Plenty, East Cape and Gisborne kiwifruit districts.
A significant cornerstone investment of $2.6m had also been made into digital startup Fruitometry for the development of smart orchard scanning technology to lift production and help supply chain efficiencies.
Seeka is putting $20m into post-harvest capacity for 2022, including a new automated packline and high-efficiency coolstores near Te Puke.
Guidance for the full financial year is net profit before tax of $13.5m and $16m, plus an expected share of the successful kiwifruit claim against the Crown.
The one-off gain would lift profit expectation to $20m to $22m.
Seeka says earnings are heavily weighted towards the first half of the year from fruit harvests in New Zealand and Australia.
In 2020, the full-year dividend was 22c and in 2019, 24c.
A 2021 result that exceeded these numbers would deliver about 5% gross yield on the current share price for 1500 smaller investors, mainly growers, who have less than 5000 shares each.
These shareholders are 70% of the number of investors but own under 10% of the total shares.
