Ridley is one of the largest manufactureres of stockfeed in Australia. Their business is spread across ruminants (sheep and cattle), swine and poultry, and aquaculture.  The current dry conditions in some parts of the counttry have given sales to the ruminat and poultry categories a lift.

Ridley are a strong player in this market with good market share. In addition they have invested in R&D in collaboration with CSIRO and have a new product on the verge of commerical release for prawn farmers. Development has focussed on Thailand and Yamba on the north coast of NSW, with recent very encouraging results. The biggest market for this product (to be called Novacq) will be in SEA where prawn farming and other forms of aquaculture are widespread. The company is now engaging Investec to develop a strategy to fast track the monetisation of Novacq in as many markets as possible other than AU and Thailand.

The 2018 AR came out yesterday, and reported revenues are up but EBITDA down mainly due to a once of dispute over inventory which was settled in June. After correcting for this and other nonrecurring items EBITDA is up 11% and revenue up 7.5%. Tonnes sold and the apparent price they achieved are also both up.

Good assets and market share in an industry with high barriers to entry, plus a path to revenue and margin growth both here and in other markets with Novacq suggests that Ridley could be a good opportunity. The SP was up 3% yesterday, and more than 15% in the last month. 4.25cps for 2018