Seeka on growth trajectory

Seeka Kiwifruit Industries Ltd is back on a growth trajectory, both in size and profitability, says CEO Michael Franks.

The company has announced a net, after-tax profit of $3.17 million - up 38 per cent on the previous year's $2.3 million - in its audited financial results for the year ended 31 December 31, 2014.


Positive outlook: Seeka lease account manager Peter Wells inspects vines with orchard owner Mike Blackburn, who is a Seeka leased grower.

The net profit is ahead of the guidance range of $2.6 million-to-$3 million provided to stakeholders and the NZX in October last year.

'We have been steadily rebuilding since Psa,” says Michael. Seeka is now back on a growth trajectory, both in size and profitability. Sustainable profit recovery remains our key strategy.”

Seeka, which is New Zealand's biggest kiwifruit grower and a leading post-harvest operator, reported earnings before interest, tax, depreciation and amortisation of $11.29 million, up 19.5 per cent from $9.45 million the previous year.

That was ahead of the guidance range of $10 million-to-$10.5 million.

Profit before tax totalled $4.26 million, up 42 per cent on the previous year of $3 million. This included a $1.4 million gain on the sale of Seeka's shares in Opotiki Packing and Coolstorage Ltd (OPAC), and a cost of $1.85 million associated with Seeka's grower share scheme.

'The improved results are an important step in rebuilding the profitability of the company,” adds Michael. 'This has been achieved in a competitive market for Seeka's post-harvest services and we have achieved great returns for our supplying growers.”

Operating revenues of $115.67 million were up 18.8 percent from $97.37 million the previous year. Total turnover for the year was $148.6 million. Earnings per share for the year were $0.22, compared with $0.16 per share the previous year.

Seeka issued 1.08 million shares in 2014 and at the end of the year each share had a net tangible asset backing of $4.07 and a market price of $3.23.

Seeka will distribute a fully imputed final dividend of $0.08 per share on March 27 to all shareholders on the register at 5pm March 20, bringing the total for the year to $0.16 fully imputed.

The dividend reinvestment plan will apply, allowing shareholders to convert their cash dividend into shares at a strike price of $3 per share.

Michael says all parts of the business had performed well, including the newly acquired Glassfields business, which had been integrated within Seeka to form its retail services division.

Seeka is taking deliberate steps to reposition itself as a more broadly-based produce company, he said.

However, Seeka continues to take a long-term view in maintaining and developing its core kiwifruit business. Kiwifruit capacity plans have been reviewed and new investment made to ensure Seeka had the capabilities to handle the anticipated increased volumes in the 2015 harvest.

Seeka Chief Financial Officer Stuart McKinstry says Seeka is carrying low debt levels, with total debt less cash at December, 31 2014 of $17.24 million.

Of this amount, Seeka had invested $11.59 million in growing the crop that would be harvested in 2015, which was treated as inventory and typically funded on short-term debt.

'Removing this from the total debt amount leaves us with a core debt of $5.65 million, which we consider to be low in the context of Seeka's total long-term assets of approximately $80 million,” says Stuart.


Seeka Kiwifruit Industries has announced a net profit of $3.17 million.

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