Leading Tasmanian salmon farmer Tassal Group Limited (ASX: TGR) has reported a 14.8% rise in operating profits.
Despite the solid growth in full year earnings the share price has slipped 2.7% by mid-afternoon in a weak market which has seen the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) lose 1.2%.
Investors may now wonder if the stock will retest the recent 52-week lows which were set in late June or whether today's result will help the stock steady around current price levels.
Here are the key results you need to know:
- Revenue up 16.2% to $309.8 million
- Operating earnings before interest and tax up 12.8% to $54.2 million
- Operating net profit after tax up 14.8% to $35 million
- Gearing contained at 17.6%
- Total dividends for the year up 21.7% to 14 cents per share (cps). A partially franked final dividend of 7 cps has been declared by Tassal's board with the stock set to trade ex-dividend on September 9 and payment due on September 30.
Outlook:
Tassal's strategy is to grow domestic per capita consumption of salmon and seafood, with the majority of sales in retail.
In the past year this strategy has indeed been effective with domestic retail sales enjoying volume and revenue growth rates of 6.5% and 7.7% respectively. Meanwhile, wholesale volume and revenue growth rates surged 45.8% and 33.5% respectively.
Looking forward and the recent acquisition of De Costi Seafoods is set to benefit Tassal's operations in the current year with Tassal's management aiming to optimise the combined supply chains through scale and national co-ordination of procurement, processing and distribution.
Investors will also watch closely for the results of listed peer Huon Aquaculture Group Ltd (ASX: HUO) to provide a comparison on the outlook for the salmon aquaculture sector.
