Ann: Tassal 1H22 results presentation, page-20

I spoke with a fund manager yesterday that has a small allocation to Tassal, and he asked me an insightful question: What is going to be the catalyst for a re-rating? We know the company is trading well below it's peers (internationally, and Huon takeover) and is 'cheap' according to three brokers on *today's* earnings.

David Berthon-Jones at Aequias Capital (not who I spoke to) posted on Twitter yesterday about Tassal, and I feel this captures the mood really well. He noted revenues are up, as per usual. He noted that "the market stopped valuing those increased assets long ago" - indeed when Intelligent Investor ceased coverage in 2016 they essentially said the value to shareholders is being captured by the fish off the coast of Tasmania.

But David then noted that "it was the cashflow that surprised". Even if you backout the ~$10m operating Cash Flow gained from the inventory draw down, one can clearly see the trend of reducing CAPEX and increasing operating cash flow.




David went on further to say "if [the market] it is now ready to realise the benefits from the capex, earnings and NPAT growth, [TGR] could be quite attractive. Expectations are very, very low."


"It is not for the faint hearted. Gearing is high. No room for error. But a trade is there, depending on your appetite (and faith in salmon and prawn pricing)."