Is happy Vegemite Bega buying Capilano Honey, Costa continuing to slide, and Metcash moving

Posted by AFN Staff Writers on 2nd September 2018

BEGA Cheese is understood to have bought a large parcel of shares in Capilano Honey on Friday night, fuelling suggestions the company could now be subject to a bidding war (see our story for the rival).

Bega reportedly acquired at least 2 per cent of Capilano’s shares, which closed at $21, up 5.3 per cent.

Bega recently acquired Vegemite and has peanut butter within its portfolio so honey seems a sweet fit to its stable of consumer goods.

Bega on Wednesday reported strong revenue growth in FY18, up 17 per cent to $1.44 billion.

The full-year results showed a 45 per cent rise in after-tax profit to $44 million. Export sales rose 29 per cent to $430 million.

 Costa Group slides

SHARES in fruit and vegetable grower Costa Group continue to slide, slumping 21 per cent since reporting setbacks to its adventure growing blueberries in Morocco.

The group earlier in FY18 paid $68 million to about double its stake to 68 per cent in the African Blue blueberry business.

But bad weather in the period delayed harvest, reducing yield by 10 per cent and increasing the percentage of low-grade product.

The Morocco move acquiring an additional 41 per cent in Africa Blue led to Costa ending 2017-18 with net debt of $176.1 million, up from $84.2 million the previous year.

At the close on Friday the stock was at $7.23, down 21 per cent from $8.74 on the eve of reporting a week ago, and down from a 12-month high of $8.98 in June.

Also in this edition of Australian Food News

Costa chief executive Harry Debney though says strong performance from its citrus, mushrooms and tomato categories helped outweigh a lower-than-expected contribution from African Blue.

The group reported a full-year net profit after tax of $115.2 million compared to $57.7 million in FY17.

It also reported on expansion – 100ha planted at the end of FY18 across three farms, 77ha blueberry, 16ha raspberry, 7ha blackberry with a further 65 ha to be planted in 2019, predominantly blueberry.

Costa is a leading grower, packer and marketer of fresh fruit and vegetables and operates principally in five core categories: berries, mushrooms, glasshouse tomatoes, citrus and avocados.

Operations include approximately 4,000 planted hectares of farmland, 30 hectares of glasshouse facilities and seven mushroom growing facilities across Australia.

Costa also has strategic foreign interests, with majority owned joint ventures covering six blueberry farms in Morocco and three berry farms in China.

Metcash movement

METCASH on Wednesday presented an update at its AGM, reporting increased sales in the two months since booking a FY18 $149.5 million loss, due to a $352 million impairment after South Australian Drakes Supermarkets declined to sign on to its new distribution centre.

Metcash does not expect the Drakes decision to have an impact on its supermarket earnings in FY19.

The retailer on Tuesday announced it has signed a deal with Foodland Supermarket in South Australia, which will see Foodland retailers being supplied from Metcash’s new distribution centre for 10 years.

Metcash shares got a short 10 per cent bounce off the news but ended the week close to where it started, at $2.74, down from its pre-reporting 12-month high of $3.68.