The board of kiwifruit marketer Zespri has decided to sell licences for another 400 hectares of the SunGold variety kiwifruit next year and also signalled a further 400 ha would be released in 2018, 2019, and 2020 depending on the product's performance and global demand.
Zespri chairman Peter McBride said SunGold sales are expected to hit nearly $900 million this season.
"We've sold around 46 million trays of NZ SunGold this season, up 69 per cent on last season, and our customers and consumers continue to tell us that this is an exceptional product," he said. "We're confident that we can continue to grow the category and more than double our total sales to $4.5 billion by 2025."
In a statement on the Unlisted market, the board said because some further work was being done on details of the 2017 licence mechanism and process, more information will be communicated to growers by the end of this week.
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If 400ha of licences are released each year in New Zealand out to 2020, it would generate an additional estimated $500m in sales revenue to New Zealand at the current gold return, McBride said.
The release decision comes despite returns from gold varieties falling six cents per tray in the October forecast from the prior one to $8.21, the same as last year's final return. That equates to an average $93,984 per hectare.
Zespri's profit forecast range for the 2017 financial year of between $66m to $71m includes licence revenue of $50.2m after tax from the release earlier this year of 400ha of Gold3. The total fruit and service payment across all pools is forecast at $1.3 billion.
The board also approved yesterday a fully-imputed interim dividend of 8 cents per share for payment on December 9 and approved a forecast dividend range for the full year of 18 to 22 cents per share.
No deferred payment options will be offered to growers for the 2017 Gold3 release and the 20ha maximum bid area is unchanged. There will also be 200ha available, as there was last time, for cutover from existing Green or Green14 variety kiwifruit growers.
The bid process will open in February 2017, close in March, and successful bidders notified by mid-April. Several other process improvements will be implemented, the board said.
Zespri shares last traded at $3 on Unlisted, having hit a high earlier this year of $3.50.