Ann: Select Harvests Update , page-7

The market seems to like the update as the shares are up for a third straight day and the sell side is looking the thinnest it's been for ages.

Some more rain in the area over the weekend and reports late in the week suggesting that a deal is close for some of the TIM orchards.

Just on the TIM orchards, by my estimation it appears that there is about 20k acres of orchards that are producing which appear to be the ones a deal looks likely to be struck on. Then there's another 11k of acres planted from 2007 that are yet to commence production.

On my previous question about contracts, SHV's contract is with TIM (as Responsible Entity for the growers) not with the growers themselves. Therefore if TIM is replaced as RE (which given the financial position they are in is inevitable) then the contracts are null and void with no recourse. It is then up to SHV to either acquire the assets themselves or to re-negotiate contracts with the new RE.

Given SHV already have the majority of equipment/assets in place they are in a good position to retain the management rights for the orchards.

So the expectation is that margins will reduce although how much is unknown until the TIM mess is all sorted out. Given they have been able to maintain a profit even on the company owned orchards whilst having to acquire temporary water rights I fully expect that they will continue to turn a decent profit.