Tonkens Agrar - Drought affects profits

Tonkens continued with its strategy of increasing volumes of higher-margin processed vegetables in FY18/19, supporting a 17% y-o-y increase in group revenue. However, as flagged by management in March, the prolonged drought in calendar year 2018 caused a scarcity of vegetables, cutting profit before tax by €0.6m to €0.2m. Management expects that continued drought in calendar year 2019 will result in a similar financial performance for FY19/20.

Tonkens Agrar - Calendar 2018 drought affects profits

The prolonged drought during calendar 2018 had an adverse effect on crop yields, particularly potatoes and onions. This resulted in better produce prices, boosting H118/19 (to December 2018) revenue, but the associated reduction in inventories resulted in a €2.2m drop in total operating income and a similar fall in profit before tax. Consequently, management now expects FY18/19 (to June 2019) EBIT will be around break-even.

Tonkens Agrar - Back to the black

Improved farmgate milk prices and higher volume sales of processed vegetables enabled Tonkens to achieve its stated goal of reporting a net profit after tax for FY17/18, compared with a loss the previous year. However, persistently low potato prices prevented the group from meeting its expectations of year-on-year revenue growth. Management continued with its strategy of focusing on higher-margin, added-value business, with volumes of peeled and packaged produce rising by 23% year-on-year.

Tonkens Agrar - Value-added strategy drives H118 uplift

Management’s strategy of generating more profit from its crops by selling processed onions and potatoes, supported by higher farm gate milk prices and an exceptional profit on the sale-and-leaseback of land, delivered a three-fold increase in profit after tax during H117/18. Management has raised FY17/18 guidance and now expects a year-on-year increase in both revenues and profit after tax.

Tonkens Agrar - Better farm gate milk prices reduce losses

As management predicted at the interim stage, the sustained increase in farmgate milk prices helped Tonkens Agrar (Tonkens) deliver an improved performance during FY16/17. Self-help initiatives, such as a drive to gain new customers for processed potatoes and onions, also helped. The group remains vulnerable to changes in commodity prices. The current slump in potato prices for example makes it unlikely that there will be a further performance improvement in FY17/18.

Vertically integrated agricultural producer

Tonkens Agrar’s c 3,000 hectares of high-quality farmland in the Saxony-Anhalt region of Germany is the starting point for a vertically integrated agricultural production group. It processes the potatoes and onions grown on the farm in-house, substantially adding value to the harvested vegetables. Manure from the dairy herd and residual material from harvesting and processing crops is used to generate electricity, creating an additional revenue stream that is predictable and non-seasonal.

Hybridan Small Cap Feast - 17 Jan 23

17 January 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment object

North America drives the stock down

North America looks to be a concern following what seems to be a clear slow down. Nevertheless, overall organic net sales exceeded the consensus, as did operating profit. Tomorrow’s report from Remy tomorrow will help to draw some conclusions.

Hybridan Small Cap Feast - 12 Jan 23

12 January 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment object

Morning Note – 16 January 2023

Sparkling YE update with strong momentum entering 2023

Today’s YE update is excellent, with stellar growth of 53% in the higher margin sparkling wine category the stand out feature. Good progress is evident across all trade channels, market share is higher and momentum going into 2023 is strong. In short, new management is building a track record of delivery against the sparkling wine / premiumisation led strategy. English sparkling wine is in structural growth, benefiting from an improved maritime climate, international recognition and investment.

Dekel Agri-Vision (DKL) – Corporate – Cashew moves to 100% ownership; transformative project moving ahead

This morning's announcement that the company's stake in its Tiebissou raw cashew nut (RCN) processing project is being raised from 70.7% to 100% appears well-aligned to the company's strategy of growth and diversification, and particularly so at a point when the cashew project is set to deliver significant rewards in FY2023-24 and beyond. DKL is an increasingly diversified agricultural concern focussed on West Africa (Ivory Coast) whose portfolio of projects includes a fully operatio

SHORE CAPITAL - Greencore+ (GNC) House Stock, 76p

Exceptional 2022 harvest yield & quality

A very positive update today from Chapel Down on the all-important yearly harvest. The yield is a bumper 2k tonnes, a near historical high and significantly, of very high quality grapes. This is consistent with the Group’s premium strategic positioning and helps underpin outer year revenue expectations. The exceptional harvest news builds on the solid interims recently and supportive of the ambition to double the size of the business by 2026 (>£28m sales and >£5m EBITDA). English sparkling wine

Domestic, regulated and medicinal

ABI takes over the lead

ABI outperformed its peers, even beating expectations, and this is rare enough to be noted. Although the environment is not the most conducive, it may be time to recognise the group’s worth.

WH Ireland: Capital Metals (CMET) - Updated development study for Eastern Minerals Project, Sri Lanka

Capital Metals today updates the market on the economics for the development of the Eastern Minerals Project in Sri Lanka – one of the world's highest grade mineral sands projects. The low capital cost of $37m to positive cashflow and $81m in total (which includes a 20% contingency) is to be spread over 4 years as Capital Metals brings the project into full production in four stages; from delivering a Heavy Mineral Concentrate (HMC) to expansion and mineral separation to sell separate mineral s

Capital Metals (CMET) - Low-capex, high-margin mineral sands project in Sri Lanka primed for development

Capital Metals has advanced its high-grade Eastern Minerals Project in Sri Lanka to a point where it is ready, subject to funding, for construction. With minimal construction capital ($48m WHIe), the project would be generating cashflow within 12 months, and cashflow-positive 12 months hence. Amid growing demand and restricted supplies of zircon, titanium dioxide, and garnet, we believe the high-margin Eastern Minerals Project is eminently fundable and will generate high returns for shareholders

Premier Foods+ (PFD) - House Stock at 113p - Acquisition of The Spice Tailor - a hand-in-glove growth driver - 1Y EPS enhancement

SHORE CAPITAL - Initial Trading Comment

Steady progress in line with expectations