Bay of Plenty's Seeka reports increased profit

Seeka CEO Michael Franks. PHOTO/FILE

Seeka has announced an audited net profit after tax of $10.4 million for the 12 months to December 31, 2016, up 143 per cent on the previous corresponding period (PCP).

The Te Puke-headquartered listed company reported that turnover increased 24 per cent to $229.4 million, while total revenues were $191.3 million, up 35 per cent on the previous year.

"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.

Earnings before interest, tax, depreciation and amortisation (EBITDA) totalled $24.76 million, reflecting improving economies of scale, said Seeka, which is Australasia's biggest kiwifruit grower and a leading post-harvest operator.

Excluding the effect of the insurance settlement of $3.63 million relating to Oakside fire-related 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 for the financial year 2016 to $0.20 per share, compared to $0.19 per share in the financial year 2015.

Seeka's 2016 basic earnings per share, inclusive of the insurance settlement, were $0.65, up 124 per cent on the previous year.

Seeka handled a record 32.44 million trays of kiwifruit, up 17 per cent on the previous year, and reported an excellent year for kiwifruit handling, with low fruit loss 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, he said.

In its first full season in Australia, Seeka processed 660,000 trays of kiwifruit, along with 1523 tonnes of nashi pears and 1790 tonnes of European pears.

In 2015, Seeka bought Australia fruit company Bunbartha Fruit Packers Pty and its associated entities and subsequently set up Seeka Australia.

"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 has 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, he said.

Chairman Fred Hutchings said 2016 had been an exciting year, with considerable change, including shortening the company name from Seeka Kiwifruit Industries to Seeka Limited as part of a rebranding programme.

"Our strategy of focusing on excellence in everything we do has delivered outstanding results for our stakeholders," he said.

"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."

Company continues to invest
Seeka has continued to invest in infrastructure to maximise efficiencies and meet expected future demand, says chairman Fred Hutchings.

The company invested $43.06 million in its New Zealand kiwifruit business and orcharding, packing and fruit storage in Australia.

That included significant infrastructure and capacity build with coolstore and precooler expansion at two of Seeka's main sites at Main Rd, 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.

-$9.78 million 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 trialling new varieties.

[Factbox]

Seeka - 12 Month Financial Highlights 2016

-Total revenues: $191.32 million total revenues (up 35%)

-NPAT: $10.4 million (up 143%)

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

-Basic earnings per share: $0.65 (including insurance settlement -up 124%)

-Net asset backing per share: $4.88 (up from $4.34)

-Total assets: $197.31million (up 20%)

-Long-term borrowings: $68.73million (up 31%)

-Increase in share price for 2016: $1.15