A big loss for generics pharmaceuticals maker Mayne Pharma in 2018-19 surprisingly produced a big gain, meanwhile listed horticulture producer and distributor Costa Group has reported a 15% drop in statutory interim profit.
With a new backer, Food Revolution Group is taking an aggressive approach to the Middle Kingdom. Further up the food chain, investors are trying to work out whether Costa Group’s issues are cyclical or more systemic
Citi notes pricing for mushrooms has been unusually weak this year. This is Costa Group's largest domestic product category. The weakness should abate in coming months but the broker remains cautious about forecasts.
It was a litany of disaster for Costa in May. Variable harvest conditions for Moroccan blueberries, not cold enough for mushroom demand, crumbly raspberries and a fruit fly-spotted in one of the companies seven citrus orchards.
Macquarie believes the company is well-positioned for growth and on track to achieve its targets for five-year berry plantings of 240ha in China by 2020. The international business is a driver of the company's target for net profit growth of 30% or more in 2019.
Post profit warning, Macquarie analysts stick with the view this company remains solidly positioned with (still) a solid track record, though the latest market update must have come as an unwelcome surprise.
A tour of Costa’s berry and avocado operations in FNQ did nothing to alter the broker’s belief FY18 guidance is conservative. The broker forecasts strong growth in both categories over the next five years, helping Costa to realise its ambition of 52-week supply of all categories.