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Highlights
- Seeka updates its net profit before tax guidance for FY21 to be between $22 million and $24 million.
- The guidance includes the agreement of the kiwifruit claim against the NZ government.
- Seeka also concluded its Orangewood acquisition last month.
Seeka Limited (NZX:SEK) functions as a produce company that grows, produces and packs produce worldwide.
On 1 December, the Group updated its financial guidance for FY21. The Group announced a net profit before tax (NPBT) guidance, including a settlement between $22 million and $24 million with an expectation of NPBT to be in the upper end of the range for the year ending 31 December 2021.
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Seeka has provided guidance on present year earnings two times, which was one with the agreement of the Kiwifruit appeal against the Crown and one without the agreement.
Seeka advised that the High Court had authorised the planned distribution approach to applicants of net settlement funds from the kiwifruit appeal. The Group expects to get a one-off gain from the agreement.
What was Kiwifruit claim?
On 9 April 2020, Seeka and Strathboss Kiwifruit Limited had sought a claim from the Crown for the losses faced by them due to the PSA disease outbreak in NZ. The Court of Appeal had decided that the Government was responsible for the PSA outbreak but was not liable for the losses.
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The Kiwifruit Claim Committee had appealed to the Supreme Court after this decision. Seeka reached a settlement on 15 February 2021 in this matter. The settlement is $40 million, which includes costs related to legal, funding and claimants.
Seeka completes Orangewood amalgamation
Seeka concluded its merger with Orangewood Limited on 22 November for $6.9 million. Seeka will have Orangewood as its wholly owned subsidiary once the Certificate of Amalgamation is issued by the Companies Office.
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Seeka will pay $1,301,737 to Orangewood shareholders while issuing 639,302 new shares and assuming Orangewood’s debt of $2.15 million.
The Group plans to move into an assimilation phase to make business processes of Orangewood parallel with Seeka while setting the amalgamated Northland business for a lucrative 2022 harvest season.
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On 7 December, at the time of writing, SEK was trading at $5.78, down 0.34%.
Bottom Line
The increased guidance showed its focus on enacting strategy and the successful incorporation of acquisitions and delivery of synergy gains.
(NOTE: Currency is reported in NZ Dollar unless stated otherwise)
