ASX 300 Almond Producer, Select Harvests (ASX:SHV) Resumes Trading

Summary

  • On 6 October 2020, Select Harvests disclosed the completion of its Institutional Placement to raise nearly A$81.7 million; trading halt lifted.
  • As part of the offer, the Company raised ~A$41.5 million via Institutional Entitlement Offer. Select Harvests is set to raise an additional A$38.3 million through a Retail Entitlement Offer.
  • Following the announcement, the share price of Select Harvests soared by 15.108% to close at A$6.280.
  • Recently, the Company announced the acquisition of Piangil Almond Orchard in north-west Victoria.

The share price of almond producer, Select Harvests Limited (ASX:SHV) an ASX300 constituent, skyrocketed by 15.018% to close the day’s trade at A$6.280 on 6 October 2020 after the Company lifted its trading halt. With a market capitalisation of approximately A$527.64 million, the Company has 96.64 million shares. The share price increase was witnessed after the Company disclosed successful completion of its Institutional Placement to raise nearly A$81.7 million.

Let us delve deep and discuss Select Harvests in detail-

About Select Harvests Limited

ASX300 player Select Harvests Limited is a wholly-integrated almond business comprising of orchards, primary processing, secondary processing, trading as well as Consumer products.

Select Harvests is one of the leading almond companies in Australia, that is engaged in the supply of almonds domestically as well as at international level. The Company supplies its almonds to health food stores, supermarkets, retailers, other food manufacturers.

Select Harvests Successfully Completes Institutional Placement

On 6 October 2020, SHV disclosed the completion of its institutional placement as well as an institutional component of its 1 for 6.3 fully underwritten pro-rata accelerated non-renounceable entitlement offer.

The Institutional Offer (Placement and Institutional Entitlement Offer) closed on 2 October 2020.

The Institutional Offer had robust support from institutional investors, with a take-up rate of almost 99% from eligible institutional investors under the Institutional Entitlement Offer. The Institutional Offer raised almost A$81.7 million gross profits at a per New Share offer price of A$5.20, consisting of ~A$40.2 million under the Placement and nearly A$41.5 million under the Institutional Entitlement Offer.

The Institutional Offer attracted solid demand from both existing as well as new institutional investors introduced to the Select Harvests register.

On the outcome of the Institutional Offer, Managing Director and CEO of Select Harvests Paul Thompson, commented-

The Company disclosed that under the Institutional Offer, no shareholder approval is required in relation to the issue of New Shares.

New Shares under the Institutional Offer are anticipated to be settled on 12 October 2020 and to be issued and start trading on the ASX on 13 October 2020.

Select Harvests disclosed, the New Shares of SHV issued under the Institutional Offer shall rank similarly with existing fully paid ordinary shares in Select Harvests as at the issue date.

The is a fully underwritten Offer by Bell Potter Securities Limited and is anticipated to raise ~A$120 million, comprising of the Placement of almost A$40 million and Entitlement Offer of nearly A$80 million.

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Retail Entitlement Offer to raise a further ~A$38.3 million

In addition to the Institutional Offer, Select Harvests also disclosed a Retail Entitlement Offer to raise additional A$38.3 million. The offer is anticipated to open at on 9 October 2020 and close on 22 October 2020.

The Company said that the terms & conditions are outlined in the Booklet, under which eligible retail shareholders may submit an application for New Shares as well as additional New Shares under the Retail Entitlement Offer.

Under this offer, eligible retail shareholders who subscribe for their complete entitlement to New Shares are also eligible for additional New Shares in excess of their entitlement.

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Acquisition of Piangil Almond Orchard

On 1 October 2020, SHV disclosed that the Company agreed to acquire the Piangil Almond Orchard in north-west Victoria.

The Company announced an implementation deed & sale agreement for the acquisition of Piangil Almond Orchard from United Almonds Limited, Lake Lucas Almonds Pty Ltd and Bright Light Agribusiness Pty Ltd for a total consideration of A$129 million in cash. Select Harvests shall acquire the 2021 almond crop in exchange for reimbursement of growing costs up to the date of completion.

Moreover, the acquisition is anticipated to be low-mid single-digit EPS accretive in the financial year 2022, being the first full year of operation.

The Company stated that the acquisition is anticipated to complete by 31 December 2020. Notably, the Piangil Almond Orchard is projected to deliver volume growth of nearly 20% to SHV in the financial year 2021.

Outlook 2020

  • The Company stated that 91% of hulling and shelling of 2020 crop is completed, with the rest forecast to be complete by mid-October 2020.
  • The crop volume during 2020 has increased to greater than 23,250MT, up on the crop of 22,690MT during 2019.
  • The 2020 crop pricing shall remain as previously advised in the range of A$7.25 - A$7.75/kg.
  • For the fiscal year ended on 30 September 2020, the Company anticipates EBIT to be in line with consensus.

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