Angel Seafood Holdings Ltd (ASX: AS1), an aquaculture company from the consumer staples sector announced that it has entered into an agreement to acquire an additional 0.5Ha of water for $125,000, that is situated in the extremely productive Beacon Zone in Coffin Bay.
Through this acquisition, the water holding of Angel in Coffin Bay increases to 10.75Ha as well as enhances finishing capacity by 360,000 oysters per year.
A deposit of 10% is payable while signing the agreement and the remaining balance will be payable by 31 January 2020 with an accruing interest of 5% p.a. The company expects that there will be a need for another $100,000 in the form of investment in infrastructure.
Angel will be funding the acquisition through its cash flow and existing NAB facility.
Zac Halman, the CEO of Angel Seafood Holdings Ltd considered this acquisition as an essential step in delivering the growth ambition of the company. He also stated that even though through this acquisition included a relatively small parcel of water, however still its location and the characteristics makes this acquisition attractive for the business.
Apart from that, the statement given by Mr Halman in the announcement reflects a confidence that the new acquisition will possibly give a very quick payback, similar to the previous investments.
On 4 March 2019, the company announced that it had secured an increase in its general banking facility with the National Australia Bank (NAB).
On 27 February 2019, Angel Seafood Holdings Ltd announced its half yearly results for the period ended 31 December 2018. During the period, there was an increase in sales by 184% to $2.48 million as compared to the previous corresponding period. Sales of approximately three million oysters drove the sales during the period.
In 1HFY2019, there was an overall strong financial result on pcp with positive EBITDA and positive operating cash flows. Further, during the period, the company made a significant investment in building substantial scale in the business, growing its water holdings as well as oyster stocks. The company was able to deliver key capital projects which significantly built the production capability of the company.
The company during the period added 4.5Ha of prime Coffin Bay water leases. There was an excellent supply of spat, both in terms of quality and quantity, allowing leases at Coffin along with Cowell to move towards full utilization.
On 25 January 2019, Angel Seafood Holdings Ltd reported an increase in the sale of seafood by 64% in CY2018.
In the previous six months, the stock has generated a return of 6.90%. The YTD results have improved where the stock has generated a return of 14.81%.
The shares of Angel Seafood Holdings closed the day’s trading at A$0.175 (5 April 2019), up by 12.9% as compared to its previous closing price. The company holds a market capitalization of A$20.44 million and has approximately 131.85 million outstanding shares.
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