Costa Group buoyed by higher demand and better market conditions
Costa Group is rewarding shareholders with a fatter dividend after the ASX-listed fresh food company's first half profit was boosted by improved Australian market conditions and strong demand for fresh produce in export markets.
The company's statutory net profit, for the half year ended June 28, 2020, rose six per cent to $43.4 million, while total revenue for the period rose by a comparable 6.8 per cent to $612.4 million.
Fresh food producer Costa Group has delivered a first half net profit of $43.4 million.Credit:
Costa has declared a fully franked dividend for the half of 4 cents per share, to be paid on October 8, up from 3.5 cents at the same time last year.
Chief executive Harry Debney said the adverse weather conditions and drought, which had affected the company's Australian operations last year and earlier this year, had eased.
"These historical conditions should have no material impact in the second half or beyond and there is broad based forward momentum in demand and pricing over our Australian portfolio leading into the second half of calendar year 2020," he said.
The company's international business performed strongly, he said, with significant improvement in EBITDA (earnings before interest, tax, depreciation and amortisation) and an "exceptional" yield from its China farms.
This year Costa Group has changed its financial reporting year, and for the first time will report on a calendar year basis.
Costa did not give specific earnings guidance in dollar terms, but it said it had broad based momentum, and cited improving Australian market conditions that would drive increased earnings in the December half. It also said it had "excellent" water security in its operating regions.
Costa shares closed up 1 per cent at $2.96 on Thursday ahead of its results.
More to come