Tegel shares rally on raw chicken news

Tegel shares have rallied after NZ raw poultry products were cleared for export to Australia Photo / NZME

Tegel shares have rallied sharply after New Zealand's biggest chicken producer announced it had secured an agreement to export raw poultry products to Australia.

The Auckland-based company said its exports to Australia - worth A$70 million ($74m) in the last financial year, representing market share of 1 per cent - had previously been limited to fully-cooked products.

Australia's total poultry market is worth around A$7.1 billion, according to Tegel.

"This regulatory change opens up significant additional export opportunities for Tegel into the Australian market, although revenue upside cannot yet be quantified," the firm said.

"Tegel will immediately apply for new import permits and looks forward to the significantly increased business opportunities this change will present."

Tegel shares, which were placed in a trading halt this morning ahead of the announcement, recently traded up 8.5 per cent at $1.78.

The company floated on the New Zealand sharemarket $1.55 a share in May.

It also listed on Australia's ASX.

Tegel said the agreement would allow New Zealand raw poultry products to enter Australia within an "agreed access framework".

"This announcement is the result of a significant body of work undertaken by Tegel with the Ministry for Primary Industries to secure changed access conditions based on New Zealand's high standard of bio security and low disease prevalence," the company said.

Tegel reported a full-year profit of $11.3 million in June.

That was a 29.5 per cent lift on the same period a year earlier and $1.3 million ahead of the $10 million forecast in the initial public offering prospectus.

Tegel exports to a number of other markets including the Pacific Islands and the Middle East.