Select Harvests (SHV) – Prices are trumps

Select Harvests engages in the growing, processing, packaging, and selling of almonds and its by-products in Australia. The company exports its products to Asia, Europe, and the Middle East, and also owns the Renshaw and Alling Farms brand names. The company was incorporated in 1969 and is headquartered in Richmond, Australia.

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Select Harvest’s first-half FY25 operating earnings (EBITDA) more than doubled to $61 million, driven by rising almond prices, to set the company up for strong full-year result. A surge in global almond prices has been the trump card, and Select Harvest reiterated FY25 guidance of $10.35 a kilogram, a 35% jump from the$7.69 price achieved in FY24.

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Overall, the result was significantly ahead of our expectations at the EBITDA line, and also below that line, due to timing differences and AASB 141 accounting requirements for agricultural assets. The result did, however, contain yet another mea culpa due to the underpayment of superannuation entitlements and the overstatement of revenues in the FY24 accounts.

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Our target price increased to $5.65 from $5.60 and we maintain a Buy recommendation on the stock.