Select Harvests Ltd (SHV) - Appreciating almonds

SelectHarvests Ltd is a fully integrated almond business – growing, processing, packaging and sale of almonds and its by-products from company-owned and leased almond orchards. Value added products are marketed under two brands, namely Renshaw and Allinga Farms.  Company operations are integrated and range from orchards, primary processing, secondary value-added processing under the Renshaw & Allinga Farms industrial brands. Its orchards are in Victoria, NSW & SA. Demand for Select Harvests value-added industrial almond products continues to grow and the business supplies a full range of premium almond products to more than 600 customers globally. The company continues to build strong relationships in the fast-growing markets of India and China, as well as maintaining established routes to markets in Asia, Europe and the Middle East.

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The 1HFY24 returns financial stability to Select Harvests which, after two consecutive poor crops, was staring down the barrel of a distressed balance sheet. OML is confident that net debt has now peaked at $237.9m. Our investment thesis remains intact but the one thing that remains absent is a positive catalyst. The 1HFY24 results were largely a non-event post the April down grade to guidance, and the only remaining major catalyst is almond price appreciation over the next 12–24 months in response to the 2024 and 2025 Californian almond crops.

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