Costa Group has released its FY2016 results with revenue and sales exceeding its prospectus forecast.
Australia's leading horticulture company posted a pro forma revenue of A$809m, up 11.8 per cent from the previous financial year.
Costa’s transacted sales exceeded A$1bn for the first time, with revenue and transacted sales exceeding the prospectus forecast by 9.6 per cent and 6.5 per cent, respectively.
CEO Harry Debney said the strong results were evidence of the strength of Costa’s business model, with its high-quality diversified portfolio.
Strong citrus and mushrooms sales made up for lower pricing on tomatoes and bananas, while category growth in berries returned a solid performance driven by an increase in raspberry volumes.
Export market demand for citrus was buoyant, particularly from the Japanese market, which resulted in 59 per cent of the Costa crop being exported.
“The contribution of raspberries to our produce performance has been exceptional this year and follows six years of continuous growth where raspberries now rank equally as significant as our blueberry crop,” said Debney in a Costa ASX announcement.
Costa has continued to expand its berry plantings, with 76ha of protected cropping in Tasmania, Western Australia, Far North Queensland and New South Wales.
“Due to the success of our berry growth projects, Costa now has greater than 50 per cent of blueberry production outside of the main production period of August to December. This gives us a significant advantage over our competitors with a full 12 month market offer,” said Debney.
Costa is also bringing in new Driscoll’s blackberry genetics, which have cleared quarantine with small trial plantings being established this year.
Overseas, the success of Costa’s blueberries varieties has continued, with strong sales in the UK, Europe and in the Americas via Driscoll’s.
In Morocco, the African Blue programme has exceeded expectations, with blueberry sales increasing 76.7 per cent compared to last year.
“Expanding production in Morocco through our African Blue joint venture means that our blueberry varieties are now available in volume in the UK and Europe, with retailers routinely rating our varieties as preferred product, commanding a price premium,” said Debney.
In China, Costa’s joint venture berry farm with Driscoll’s will yield its first crop of blueberries in March 2017, with a second farm to be established in Southern Yunnan.