Last week Select Harvests Ltd.’s (ASX: SHV) securities were placed in a trading halt pending an announcement by the group, until commencement of normal trading on October 09, 2017 or when announcement is released to the market. It is said that the group is looking out for a capital raising which is speculated to be needed considering the cash position.

For FY17, the group’s net debt of A$104.4m was above FY16 figure of A$25.5m. Further, the group’s performance was below expectations as it reported NPAT down 72.63% to $9.25m against last year while revenue from ordinary activities plunged by 15.4% to $227.9m. The earnings before interest and tax also slipped to A$17.0m against reported FY16 EBIT of A$49.8m. The group had reported for lower almond crop volume of 14,100 MT against FY16 figure of 14,200 MT while average almond price was A$7.43/kg against FY16 price of A$8.08/kg. Lower crop prices also let to decreased working capital.
As per 2017 California Almond Objective Measurement Report, California’s 2017 almond production is forecasted at 2.25 billion meat pounds, which is up 2.3% from May’s subjective forecast and up 5.1% from last year’s crop. It was noted that the 2017 bloom was an extended bloom, owing to cold temperatures; while rains before and during bloom made application of dormant and bloom sprays more difficult. The average nut set per tree was said to be 5,714, down 7.2% from 2016. This gives a mixed scenario for the group. Group’s expenses and currency movements have impacted the stock that fell about 25% in last six months (as at October 04, 2017) and the group witnessed a disappointing FY17 (partly impacted by a lower almond price). Cash position and gearing remain at uncomfortable levels.
 

SHV Theoretical Volume Growth (Source: Company Reports)

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