Intial negative reaction from market (share price down 13%) upon release of update on Monday 17th October but a nice rally over the following days with the share price almost back to where it started

At three bucks it’s probably overvalued, but what is the real number? For what is Australia's largest horticultural company the current 20 something multiple seems too rich despite recent share price pressure. .

What’s to like:

• Market leading
• Decent moat through its market position 
• International, attractive expansion opportunities in China, Europe and surprisingly Africa
• Generating free cashflow from business operations
• Stable dividend yield of ~3%
• Strong CSG focus
• Focused on higher margin produce (but this fades quickly if there are ‘get to market’ issues, see below)

What is less attractive:

• Cyclical, seasonal business
• At the mercy of soul sucking supermarkets (did I think or write that, hopefully it was a dream) as well the whim of consumers, which mean volatile pricing 
• High capex demands

One to further research, or for you to tell me it should go in the too hard basket?

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 

pdf (markitdigital.com)

Financial Headlines

•  Revenue of $1.164bn – growth of 11.2% on CY19.
•  EBITDA – SL - $144.8m compared to $98.3m CY19. Improvement of 47.2%.
•  NPAT –SL - $59.4m increase of 108.4% on CY19.
•  Statutory NPAT of $60.8m.
• Net debt of $143.9m and leverage of 0.99x.
•  CY20 directly attributable COVID-19 costs of $5.4m. COVID-19 Morocco market disruption earnings impact of circa $5m for the year.
•  Dividend of 5.0 cents per share, fully franked (record date 11 March2021, payment date 8 April 2021).

Presentation

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02343915-3A561776?access_token=83ff96335c2d45a094df02a206a39ff4

28-August-2020:  Half year results announcement   plus   Investor presentation - half year results   and   Appendix 4D

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.  

Financial Headlines

• Revenue of $612.4m – growth of 6.8% on 1HCY19
• EBITDA – SL* - $93.7m compared to $82.4m 1HCY19. Improvement of +13.7%.
• NPAT –SL* - $45.8m increase of 12.0% on 1HCY19.
• Statutory NPAT of $43.4m.
• Net debt of $181.7m and leverage of 1.66x – ahead of plan.
• Dividend of 4.0 cents per share, fully franked (record date 17 September 2020, payment date 8 October 2020).

* 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 ---