Producer eyes berry positive forecast

A DEMAND for berries has helped double Costa Group’s full-year profit, with the vegetable and fruit grower forecasting further growth in the year ahead.

Costa, which listed on the share market in July 2015, said its full-year statutory net profit rose to $57.7 million, from $25.3 million in 2015/2016. The company said all categories performed well, but its produce segment, particularly its berries, delivered the bulk of revenue, contributing $786.2 million, up 9.4 per cent on a year ago.

Overall revenue for the 12 months to June 25 rose 10.6 per cent to $909.1 million, from $821.9 million a year ago, while earnings lifted 29.4 per cent to $115.2 million.

Costa said that while blueberry production was up 55 per cent compared to a year ago, its raspberry sector had been impacted by cooler weather in Tasmania and pest issues in its north Queensland farm. But, it said, new volume came from the expansion of plantings across Australia last August.

Citrus enjoyed a positive combination of yield, price and quality.

Tomato pricing recovered somewhat from the challenging market conditions during the 2016 financial year, with Costa saying the average market price up 21 per cent from a year ago.

The grower said its move to make avocadoes a core focus through a joint acquisition of the Lankester Avocados orchards and packing operation completed in July this year, will bring in earnings growth in the 2018 financial year.

It expects to generate around 10 per cent growth in net profit in the 2018 financial year and anticipates a number of produce categories to deliver in longterm growth, including its blueberry division, following further expansion this year.