Costa Group (ASX: CGC) achieved EBITDA growth of 26.6% to reach AUD$49 million in the first half of 2016-17, boosted by a 9% jump in revenue to AUD$445.6 million.
In an announcement today (Feb. 23 in Australia), CEO Harry Debney said all of the group’s core produce categories performed strongly during the period, which also included a tie-up with Macquarie Agricultural Funds Management and the acquisition of Avocado Ridge.
“Our conservative balance sheet and strong cashflow generation is also underpinning the company’s growth capacity,” Debney said.
The company said blueberry volume growth was up 75% year-on-year, reflecting recovery from the previous year’s hail events and new volumes as a result of the berry growth program.
“We completed our second year of commercial harvest at our FNQ (Far North Queensland) and WA (Western Australia) berry farms and pleasingly these were above expectations,” Debney said.
“Despite new competitor volumes that came onto the market during the main harvest period, there was no noticeable impact on our own early season supply.”
The timing of some berry crops was delayed by cooler weather, with raspberry fields being affected, leading to a significant volume of the Tasmanian crop being pushed into January 2017.
The tomato segment also saw a more stable trading environment compared to the previous year, through a combination of increased demand, lower field crop volumes and changes to planting schedules across the industry.
The company described a solid half-year result for mushrooms, driven by consistent production output and a favorable sales mix with increased retail sales, while retailer engagement and sales promotions have also kept demand strong.
Costa has announced today its intention to expand its South Australian Monarto mushroom farm by doubling its production capacity by 120 metric tons (MT) to 240MT per week. The initiative carries an estimated cost of AUD$65 million and will take two years to complete.
Strong export activity continued for citrus and around 70% of the crop was exported with Japan as the top destination.
“Although the 2016 calendar year saw a significantly lighter crop, this was offset by fruit that was of exceptional quality. Initial flower counts for the 2017 season indicate potential record yield for the coming season,” Debney said.
Inclusive of the Avocado Ridge acquisition, the group is forecasting net profit after tax (NPAT) growth of approximately 25% for the full year, up from previous guidance of 15%.