Many holders (at least on hot copper) seem to harp on too much about Novacq when it is only a small fraction of their business. Furthermore it is one that Ridley themselves have recognised as over hyped and at present cannot deliver on what was previously hoped. Or in their words:
"Although the efficacy of NovacqTM in the production of prawns has been well demonstrated and the product is being sold commercially, delays in the development and installation of processing technology have hindered the scale-up of production and restricted sales volumes and earnings accordingly.
As a consequence of the above, coupled with the general economic uncertainty prevailing in domestic and world markets, the Company has raised a non-cash impairment of $21.6m in its NovacqTM CGU in the financial results for the year ended 30 June 2020."
Sure one day this might change. But even in the AgFood Conference Presentation they project that Novacq will only contributed a small amount to growth in the next few years.
As a holder I would prefer to see their core business continue to operating efficient and generate good cashflow. There was alot of restructuring and capital investment in the last year and a half, making sure these moves have been as effective as hoped is FAR more important.
RIC Price at posting:
91.5¢ Sentiment: Buy Disclosure: Held
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