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Highlights

  • SHV is expected to benefit from the rise in Australia's food retail turnover, which increased by 0.6% in August 2024
  • In 1HFY24, EBITDA surged by 115.9% YoY to AUD 18.7 million, compared to an EBITDA loss of AUD 117.7 million in the previous period
  • The company expects to deliver underlying EBIT of AUD 17-19 million in FY24

Select Harvests Limited (ASX:SHV), an ASX-listed company engaged in the production of almond products for retail and industrial markets, is expected to benefit from a rise in retail turnover. According to the data released by the Australia Bureau of Statistics (ABS) on 1 October 2024, Australia’s food retail turnover increased by 0.6% in August.

In July, the retail turnover increased by 0.1%, in June by 0.5% and in August by 0.7%, on a seasonally adjusted basis, marking the third consecutive month of rise.

Notably, household goods retailing was the only sector that witnessed a drop in August, following increased spending in the recent month due to mid-year sales.

Additionally international demand for Australian food products and increasing interest in organic, healthy and plant-based food can boost demand for specialty food producers.

Recent financial performance of SHV

In the first half of the financial year 2024 (1HFY24), the company recorded 1.6% YoY decrease in its revenue to AUD 67.8 million, impacted by lower crop sales during the six months ended 30 June 2024.  Meanwhile, EBITDA increased by 115.9% YoY to AUD 18.7 million, compared to EBITDA loss of AUD 117.7 million in the previous corresponding period.

During the reported period, net loss after tax dropped to AUD 2.1 million, compared to AUD 96.2 million in 1HFY23.

The company has designed a strategy through operational review that provides a disciplined path to execute its growth strategy and execute identified cost reduction initiatives. This strategy is expected to create near-term growth opportunities and assist an increase in yields of up to 15%.

Outlook

In FY24, the company expects to deliver underlying EBIT of AUD 17-19 million on the back of final almond prices, which is anticipated to range between AUD 7.70-7.75 per kg.  

During the reported period, underlying NPAT is anticipated to fall in the range of AUD 1.5-3 million and reported NPAT is forecasted to be in the range of AUD2.5-4 million.

Share performance of SHV

SHV shares closed 3.11% higher at AUD 3.65 apiece on 7 October 2024. Including this gain, SHV’s share price has dropped by 7.79% in the past one year and has increased by nearly 2.40% in one month.

52-week high of SHV is AUD 4.53, recorded on 18 September 2024, and 52-week low is AUD 2.66, recorded on 12 January 2024.

SHV Daily Technical Chart, Source: REFINITIV

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, and currency, is 07 October 2024. The reference data in this report has been partly sourced from REFINITIV.