Seeka annual shareholders meeting

Press Release

Seeka Kiwifruit Industries annual shareholders meeting

Seeka Kiwifruit Industries’ operating profits improved in the last financial year despite a challenging season affected by hail, and a world economic recession.

Chief executive Michael Franks today told shareholders the company’s underlying performance in 2009/10 delivered its growers very competitive returns to their orchards. The Company had expanded its Bay of Plenty operations and invested in innovative fruit handling automation and new information systems which aided inventory management. Seeka also entered into a venture to trial packing New Zealand grown fruit in Shanghai.

The $7.5 million operating profit in the year to 31 March 2010 was up 35 per cent on the prior year. Non-recurring items however lowered the net profit to $1.4 million and included one-off costs of $3.9m associated with the acquisition of Te Awanui Huka Pak Ltd and a $1.8 million non cash write-down in non-strategic investments.

EBITDA increased to $14.5 million (up 3.5 per cent) and all divisions improved performance. M Franks commented that in the Seeka’s long term lease developments were now at full production and their production of gold trays would exceed 1.2m trays in the current year. Zespri Gold returns already strong in 2009/10 at $7.60 per tray were expected to improve again in 2010/11.
Normalised operating cash flow was $10.2 million. The company paid dividends of 20 cents per share fully imputed to shareholders.

Seeka reported that the purchase of Te Awanui Huka Pak grew Seeka by a quarter to represent approximately 25 per cent of the New Zealand kiwifruit industry. Huka Pak included a catchment of early maturing orchards that have improved Seeka’s infrastructure utilization. The Huka Pak purchase included a team of experienced orcharding and post harvest staff and premium orchards. This acquisition was expected to be earnings accretive to shareholders.

Seeka had invested $8.4m in the financial year. Investments had been targeted at a new gold grader situated at its Oakside facility, new coolstores and packing automation.

Seeka is a major employer throughout the Bay of Plenty. With approximately 250 full time employees, the company employs over 3000 seasonal workers through the kiwifruit harvest, packout and coolstore season, making the company one of the Bay of Plenty’s largest employers .

“We’ve come through the challenges of 2009 in good shape, and our investments have positioned the company well.

Looking forward to 2010 season Seeka had increased post harvest volumes, increased long term lease gold production and was obtaining the benefits of Post harvest innovation. Current year gold fruit loss was expected to be 1.3% on the over 5m trays handled. ” Mr Franks said.
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