Fruit and veg grower and distributor Costa Group has continued its recovery from the drought and poor growing conditions for some crops in 2019 with a solid six months to December.
The company’s rebound was of course (like so many other companies involved in retailing) driven by the pandemic which has prompted more shoppers to cook from scratch at home.
If the likes of Coles, Woolworths and Metcash have seen sharp rises in supermarket sales – especially fresh fruit and vegies, then Costa, as one of the biggest suppliers, had to be doing well, as well. And that’s what we saw on Monday.
Revenue rose 11.2% to $1.16 billion for the December half and its net profit after tax more than doubled to $59.4 million.
The company will pay a 5-cent dividend which is more than double the 2-cent interim paid a year and almost all the 6 cent total paid for the 2019-20 financial year.
Costa directors said the company saw high demand across all main product lines including better-than-expected pricing in truss tomatoes, high export demand for citrus, and strong sales for pre-packed mushrooms as hygiene-conscious consumers avoided the bulk option.
Costa’s Morrocan and Chinese international segments also performed well, though the company paid out $5 million in costs due to COVID-related disruptions in Morocco.
“There were favourable market conditions in CY20 supported by positive demand and pricing across a number of our produce categories, including citrus, berry, and avocado,”CEO Harry Debney said in the earnings release.
“Our superior blueberry IP, in particular our premium Arana variety, meant we were able to sell increased volumes while also receiving a significant price premium,” he said.
Demand is remaining ‘generally’ strong into the new year, the company said, though uncertainty over the continued impact of the virus remained.
Mushrooms and blueberries were problem products for the company in 2019.