Why to look at 5 NZX food stocks ahead of 2022?

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Why to look at 5 NZX food stocks ahead of 2022?

 Why to look at 5 NZX food stocks ahead of 2022?
Image source: mokjc,Shutterstock

Highlights

  • NZ food and fibre exports are anticipated to increase to $50.8 billion in the year to 30 June 2022, up by 6% on previous year.
  • PGG raised its operating EBITDA guidance to nearly $58 million for FY22.
  • Seeka recently signed an amalgamation contract to acquire NZ Fruits.

A recent Situation and Outlook for Primary Industries (SOPI) report has predicted that the export revenue from food and fibre was likely to soar to $50.8 billion for the year to 30 June 2022, up by 6% on pcp. Export revenue is expected to increase for dairy, meat, horticulture, seafood and forestry.

NZ Agriculture Minister Damien O’Connor, commenting on the statistics, stated on Wednesday that it would be the first time that the country’s food and fibre export revenue would surpass $50 billion.

The NZ government has backed projects and programmes to propel sustainability, value and jobs in the sector to bolster foundations of NZ’s COVID-19 recovery.

On this note, let’s have a look at how these 5 NZX food stocks are faring ahead of 2022.

5 NZX Food stocks and their details

Image source: © 2021 Kalkine Media®, Data source- Refinitiv

PGG Wrightson Limited (NZX:PGW) 

PGG Wrightson increased its FY22 operating EBITDA guidance to roughly $58 million after witnessing impressive trading in the first half of FY22. The business has shown remarkable resilience in responding to changing COVID-19 operating procedures.

On 16 December, at the time of writing, PGW was trading at $4.64, up 1.98%.

Fonterra Cooperative Group Limited (NZX:FCG)

Fonterra conducted its annual meeting on 13 December. The Group delivered a strong performance this year.

RELATED READ: Fonterra (NZX:FCG): What are the Company’s 2022 priorities?

FCG also aims to make a 40-50% increase in operating profit from FY21. It has also raised the forecast Farmgate Milk Price range to $8.40 - $9.00 per kgMS for the 2021/22 season, which made the Co-op revise its earnings guidance to 25-35cps.

On 16 December, at the time of writing, FCG was trading at $3.1, down 0.64%.

Comvita Limited (NZX:CVT)

Comvita announced on Wednesday that it planned to purchase up to 300K shares related to proposed share scheme arrangements for employees. It also informed that offers would be made from and including 20 December 2021 to 31 March 2022.   

On 16 December, at the time of writing, CVT was trading at $3.48, up 1.75%.                                                                                                                                                                               

Seeka Limited (NZX:SEK) 

Seeka recently signed an amalgamation contract to purchase New Zealand Fruits Limited that valued the business at nearly $21 million. The consideration will be paid 50% in cash and 50% in Seeka shares at $5.25 per share.

DO READ: Seeka (NZX:SEK): What is its latest financial guidance for 2021?

On 16 December, at the time of writing, SEK was trading at $5.25, up 0.19%.

Sanford Limited (NZX: SAN)

Sanford suffered from the COVID-19 impact, reporting a decline of 16% to $16.2 million in FY21 compared to FY20. Sanford has clear strategic priorities for next year that will rebuild its profitability and help in growth.

RELATED READ: Which are 5 NZX food stocks to explore before 2022?

On 16 December, at the time of writing, SAN was trading at $4.95, down 1.79%.

Bottom Line

The food and fibre sector has been witnessing solid demand as consumers looked for healthier food and natural fibres with solid environmental certifications.

(NOTE: Currency is reported in NZ Dollar unless stated otherwise)

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