AGM Update Today - Market clearly unimpressed with the lack of demonstrated growth and not happy with zero guidance being given. Can't help but think potentially some investors were looking at this as some sort of high growth stock, its not people its farming. Buying into this business means needing to be content with seasonal fluctuations , still a watch and see from me but proabbly more interested closer to $3 than $5
Costa (CGC) has had a pretty volatile year, at least their share price has. But the market liked today's numbers, marking CGC up +11.82% today.
* Before SGARA, pre-IFRS16, material items & amortisation of acquired intangibles. Refer to the Appendix for further details on non-IFRS measures and details of material items & amortisation of acquired intangibles.
Quotes from Costa Group CEO, Harry Debney
“Our international segment performed strongly over the half, with significant improvement in EBITDASL, reflected in growth of 98% compared to the first half CY19. The major northern Morocco harvest cycle returned to normal timing and yield from all of our China farms was exceptional.”
“The continued impact of CY19 adverse weather and drought conditions affected our first half CY20 results for our Australian operations. However, these historical conditions should have no material impact in 2HCY20 or beyond and there is broad based forward momentum in demand and pricing over our Australian portfolio leading into the second half of CY20.”
“We have been impressed with the relative performance of our citrus orchards in terms of fruit size and yield, especially given the circumstances where industry harvest volumes have been impacted due to previous heat events. Also, strong export and domestic demand, together with improved pricing levels are expected to continue to season end”.
--- click on the links at the top for more, including - hopefully - whatever SL, SGARA and EBITDASL means ---
I was curious why Costa Group's price has been suffering lately. This article explains: https://www.smh.com.au/business/companies/horticulture-giants-warn-fruit-and-vegetable-prices-could-rise-due-to-labour-shortage-20200729-p55gll.html
While I agree that shortage of seasonal workers might affect them there is on the other hand an upside in the government now recognising the problem and offering subsidies. The upside is also in finding ways to replace people with automated harvesting technology. In my opinion in short to medium term the upside is about 10% or perhaps more in the long run.