16th March 2016
Sent by email
Please find below a link to our half-yearly financial report for the six months to 31 December 2015 as well as an update below.
For the half year to 31 December 2015 Boundary Bend Limited reported a net loss after tax of $4.5m (2014: $2.7m loss), which included loss of $2.25m from the Australian operations (2014: $2.13 loss) and a loss of A$2.25m from US operations (2014: A$0.59m loss).
It is important to note that we do not recognise the net value of the 2016 olive crop in our half yearly accounts, therefore the net value of the crop will not be realised until after harvest and mill the olives in the June quarter. The loss for the period (both Australian and US operations), is slightly better than budget. We are still expecting to report a full year profit but this is highly reliant on the final results of harvest which will not be completed until June.
The consolidated entity also reported positive cash flows from operations of $14.30m compared to $1.57m for the same period last year.
Oil sales are tracking ahead of budget for the 8 months to 29 February 2016, mainly attributable to strong packaged goods sales. Bulk sales are in line with forecast. Sales of packaged goods (olive oil sold in bottles and tins) are tracking approximately 9.4% above the same time last financial year, and are forecast to exceed $80 million this financial year.
Cobram Estate still remains the major driver of our finished goods sales, accounting for over 65% of finished goods sales this year to date. Over the past 12 months, Cobram Estate has extended its position as the number 1 brand of Extra Virgin olive oil sold in Australian supermarkets. Red Island is well ahead of the previous year due to some increased supermarket rangings and pricing initiatives. The following chart summarises the sales in retail revenue and volume of leading brands of Extra Virgin olive oil in Australian supermarkets.
Our US based business continues to perform as planned with major expansions completed late in the 2015 calendar year including phase 1 of the processing plant buildout, and the new oil storage facility at the Harter Road site in Woodland, California. The 2015 harvest (October and November) pleasingly exceeded forecast volume of fruit milled, and sales prices achieved are also better than planned. Planting of an initial 150 acres (60ha) will commence at the Boundary Bend flagship grove in May of 2016. Cobram Estate’s launch to the trade in the US has been well received by retailers with initial new store commitments 38% ahead of forecast for FY16. Finished product is scheduled to ship to retailers April 2016.
Grove development and 2016 Australian harvest
In early March 2016 we commenced planting a new greenfield development of 420 hectares at Boort Estate.
Harvest will start in a limited capacity on early varieties at both groves this week but will commence in earnest after Easter. We expect harvest to be complete by mid-June and will send shareholders a full update shortly thereafter.
The board and key executives from both Australia and the USA have just completed our annual two-day strategic planning retreat. It was certainly one of our most successful retreats and there is no doubt in my mind that Boundary Bend is very well positioned and is pursuing real opportunities that have potential to significantly increase shareholder value.
We thank you for your continuing support. Should you have any questions please feel free to contact me at any time on mobile 0418 955 363 or via email email@example.com