Seeka reaches $3.6m insurance settlement on Oakside fire-related fruit losses

Seeka chief executive Michael Franks says the settlement completely closes out any fruit compensation issues. Photo/File

Seeka has reached a $3.6 million agreement with its insurers in settlement of its insurance claim for losses associated with the mitigation efforts after the fire at its Oakside facility in 2015.

As a consequence, Seeka has revised its profit forecast for the 2016 year upwards.

The claim relates to fruit losses which occurred in other sites while the Te Puke-headquartered company was mitigating problems at Oakside related to the fire damage.

"We have already paid out a grower retention payment of $4m and some other compensation to our growers last year," said Seeka chief executive Michael Franks.

The company also incurred interest costs and advisory fees relating to reaching the settlement with the insurers.

The settlement completely closes out any fruit compensation issues, he said. "We're satisfied and we're happy that it's done."

The financial cost of the event was recorded in Seeka's 2015 accounts, but the possible settlement was not included in the current year guidance provided to stakeholders and the market on October 21 2016.

The settlement, less a small amount of costs and tax, will now form an extraordinary gain in the 2016 financial year. The net profit after tax guidance for 2016 including the insurance settlement has now been increased from $7m to $8m, to between $9.5m and $10.6m, with earnings per share now forecast to reach between $0.59 and $0.66.

Mr Franks thanked all staff, advisers and consultants who had assisted Seeka in the complicated process to reach settlement. He also thanked the insurer, Vero, and loss adjusters Cunningham Lindsay for their efforts in reaching the agreement.

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Seeka
NZX-listed Seeka is Australasia's biggest kiwifruit grower and a major post-harvest operator which also handles a number of other fresh produce lines.