The Tassal Group Limited (ASX: TGR) share price is edging back up higher today after spending much of the day in the red. This follows the company's announcement that it has purchased neighbouring land to strengthen its future prawn production.
At the time of writing, the seafood company's shares are fetching for $3.67, up 0.5%. During most of the hours in market trade, Tassal shares were selling for as low as $3.61.
Tassal plans for growth
Investors are snapping up Tassal shares after digesting the company's latest positive update to the ASX.
According to today's release, Tassal advised it has acquired Mid Farm, an 800-hectare property. The purchased land is situated between its existing Proserpine prawn farm and Billy Creek property.
Tassal stated that the Mid Farm acquisition allows it to expand pond production capacity for future demand of prawns. The new and existing properties will be integrated and known as the Proserpine farming precinct.
In addition, the company also revealed that it has sold off its 6000-hectare of surplus land at Exmoor Station. However, the most productive and economical land parcels at the site have been retained for future planning development.
It is expected the sale of the surplus land will generate a net cash positive for FY21. These funds will be used in financing the purchases of Billy Creek and Mid Farm.
Tassal managing director and CEO, Mark Ryan touched on the acquisition, saying:
Securing Mid Farm, which is located between our Proserpine farm and Billy Creek property, creates the potential to substantially improve operational aspects for the whole Proserpine farming precinct. The completion of these property acquisitions provides the foundation for Tassal's Strategic platform to deliver 20,000 tonnes of annual prawn production.
Tassal share price review
In the past 12 months, demand has been up and down for Tassal shares. The company's performance has been impacted by COVID-19, but has recently been on the rebound. As such, Tassal recorded a near-52-week high of $3.97 in mid-April before profit-taking swooped in.
Based on the current share price, Tassal commands a market capitalisation of roughly $772 million, with 212 million shares outstanding.
