- Release Date: 14/10/15 12:16
- Summary: FORECAST: SEK: Seeka updates the market
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SEK 14/10/2015 12:16 FORECAST PRICE SENSITIVE REL: 1216 HRS Seeka Kiwifruit Industries Limited FORECAST: SEK: Seeka updates the market 14 October 2015 Seeka updates the market on late fruit loss and updates guidance On 19 August, Seeka updated the market on its financial results for the six month period ended 30 June 2015, and provided an outlook for the remainder of the current year. As we noted in the release, Seeka would not ordinarily give an outlook at that time, and would ordinarily give guidance in October when there was greater certainty over fruit prices, international markets and storage performance. Seeka elected to give earlier guidance in this year, as it considered it prudent given the significant lift in earnings for the first six months of the financial year. The forecast provided a range for the lift in after tax earnings for the full year of between 30% and 40% on the previous financial year's Net Profit after Tax of $3.17m, excluding one off gains, any gain arising from accounting for the insurance proceeds from the Oakside fire, revaluation and impairments, and costs associated with acquisitions or disposals. Seeka committed to update the market should there be any material variation in the guidance. The 4 March 2015 fire at the company's Oakside facility has unexpectedly impacted fruit storage performance and for this reason, now that the fruit storage performance is better understood, it is appropriate to up-date the market. The guidance given in August relied on a number of variables including Zespri sales rates, fruit storage and fruit loss, and the Oakside building reinstatement insurance proceeds received to that date. However, Seeka advises that late season Hayward (green) kiwifruit storage is proving to be abnormally difficult, and fruit losses are higher than predicted in the forecast. These losses financially affect Seeka as a grower and its post-harvest business. Seeka has investigated the cause of the losses and its current best information is that the cause is related to the Oakside fire and issues arising out of storage bins at the site. Seeka believes the event to be covered by insurance, and is in discussions with its insurers over a claim for the loss on behalf of itself and its growers. Allowing for the expected accounting gain for the insurance proceeds from the Oakside building fire claim, and costs and losses associated with increased fruit loss, which remain subject to a separate insurance claim, Seeka continues to expect performance will exceed the 2014 financial year, but expects profit performance now to represent a 10% to 40% increase over that financial year, with the lower end of the range being the outcome if the costs associated with the fruit losses are uninsured. The Company advises that it will update Shareholders and Stakeholders on Wednesday 21 October at commencing at 3pm at The Stadium Lounge Baypark, Truman Lane Mount Maunganui. For further information please contact: Michael Franks Chief Executive 021356516 Stuart McKinstry Chief Executive 0212215583 End CA:00271722 For:SEK Type:FORECAST Time:2015-10-14 12:16:07
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