Seeka delivers record $10.4m profit for 2016

Media Release

Seeka delivers record $10.4m profit for 2016, up 143% on previous year

Te Puke, 27 February -- Seeka (NZX-SEK) has announced an audited net profit after tax of $10.4 million for the 12 months to 31 December, 2016, up 143 per cent on the previous corresponding period (PCP). Turnover increased 24 per cent to $229.4 million, while total revenues were $191.3 million, up 35 per cent on the previous year.

Earnings before interest, tax, depreciation and amortisation (EBITDA) totaled $24.76 million, reflecting improving economies of scale, higher volumes of kiwifruit and insurance settlement related to the 2015 fire. Excluding the effect of the insurance settlement of $3.63 million relating to Oakside fire-related fruit losses, EBITDA was $21.14 million, up 52 per cent on the PCP.

The directors declared a dividend of $0.10 per share, which will bring fully imputed dividends in relation to financial year 2016 to $0.20 per share, compared to $0.19 per share in financial year 2015. The dividend is payable on 24th March to all shareholders on the register at 5pm on 17 March.

Inclusive of the Insurance settlement, Seeka’s 2016 basic earnings per share were $0.65, up 124 per cent on the PCP. (Excluding the Insurance settlement, basic earnings per share were $0.47).

“In addition to Seeka producing a record profit and delivering operational improvements, Seeka delivered excellent fruit-handling results for our growers based off excellent harvest timing and capacity planning,” said Chief Executive Michael Franks.

Seeka handled a record 32.44 million trays of kiwifruit, up 17 per cent on the PCP, and reported an excellent year for its kiwifruit handling. Fruit loss was low in all varieties, particularly SunGold at 0.35 per cent.

Seeka also delivered industry-leading avocado returns of $26.86 per tray from its targeted export programmes.

In its first season in Australia, the company processed 660,000 trays of kiwifruit, along with 1,523 tonnes of nashi pears and 1,790 tonnes of European pears.

“The new Australian business is now fully integrated into Seeka’s business systems although a separate stand-alone business operated from Australia.” said Mr Franks. “As a result, Seeka now has year-round Seeka branded produce in the Australian market and have set a platform for growth there.”

Seeka has also continued to develop its retail services business, centred on its tropical fruits category in New Zealand.

Chairman Fred Hutchings said the company had continued to invest in infrastructure to maximise efficiencies and meet expected future demand. Seeka invested $43.06 million in its New Zealand kiwifruit business and in orcharding, packing and fruit storage in Australia.

That included major infrastructure and capacity build with coolstore and precooler expansion at two of Seeka’s main sites at Main Road, Katikati and KKP in Maketu, as well as the construction of additional coolstores and a new kiwifruit packing machine in Australia.

Key investments included:

• $16.94 million in developing New Zealand kiwifruit coolstore and packing infrastructure.

• $3.98 million acquiring the site at Young Road, Paengaroa, and initial refurbishment for Seeka’s new headquarters.

• $2.01million acquiring the Pukenga orchard, a strategic land bank for future post-harvest development.

• $2.36 million in the ongoing rollout of 9,500 new Seeka Surestore plastic bins.

• $4.74 million in upgrading New Zealand kiwifruit packing equipment ahead of the 2017 harvest.

• $9.78million in upgrading other New Zealand plant, property and equipment.

• $3.25 million in developing Australian orchards and post-harvest facilities, including establishing nursery operations and trialing new varieties.

“2016 was an exciting year for Seeka, with considerable change including shortening our name to Seeka Limited as part of a rebranding programme that presents us in a more modern and fresh way,” said Mr Hutchings.

“Our strategy of focusing on excellence in everything we do has delivered outstanding results for our stakeholders. We will continue to look for opportunities to innovate, expand or diversify to secure long-term growth and sustainable profitability as we pursue our vision to be New Zealand’s premier produce business.”

Seeka - 12 Month Financial Highlights 2016

• $191.32 million total revenues (up 35%)

• $10.4 million NPAT (up 143%)

• $24.76 million EBITDA (up 78%)

• $21.14million EBITDA (excluding the effect of insurance settlement - up 52%)

• $16.96 million EBIT (up 135%)

• $0.65 basic earnings per share (up 124%)

• $4.88 net asset backing per share (up from $4.34)

• $197.31million total assets (up 20%)

• $68.73million long term borrowings (up 31%)

• $1.25 increase in share price for 2016

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