Looks really good @bug1. There are some slight differences in...

Looks really good @bug1.

There are some slight differences in our models, but the main thrust remains the same. As long as Tassal continues to invest it's earnings in productive prawns and maintaining those salmon, the returns are looking good at current valuations. This will never be a winner overnight, but the models are showing a clear above-market return over the next decade even using conservative figures. If things progress along the current pathway, the dividend yield on cost will be ~10% by 2030 supported by a ~20% CAGR on the share price reflecting ongoing increases in earnings.

The main risk that the models don't flush out is capital allocation. If they find another De Costi, well you can throw the models in the bin and walk away now. Even if the third pillar to Tassal isn't as strong as the business case for prawns, as long as it's decent the company will be fine. We have probably three to five years to really work that out. Right now the focus is on improving and expanding prawns; we don't have the capital to start heavily investing in another commodity just yet. But soon enough, we will need to start investing in that next pillar if the company wants to continue to grow.

P.S> My guess is prawns will have slightly higher EBITDA/KG margins; and domestic sales will basically flatline or grow at 1-2% with population/preferences, and most of the production growth will need to be exported.