Agribusiness MIS out of favour

Select Harvests is unlikely to employ managed investment schemes moving forward from the Timbercorp administration, the company said.

Now that there is certainty about the ownership and management of the former Timbercorp orchards, “future growth funding is unlikely to be derived from MIS,” said Select Harvests chief financial officer Paul Chambers.

“We haven’t discounted it, but the funding mix will likely be from more traditional growth options,” he said.

In a year of significant transition, Select Harvests has focused on supporting its balance sheet with disciplined and effective capital management strategies, the company said.

Select Harvests has a core debt facility in place and has recently reduced the bank facility limit by $10 million. The board is now considering long-term funding requirements, with a focus on funding future growth opportunities, the company said.

Australia is the third largest and most developing almond-growing region in the world, and with plans for new orchard developments in Western Australia these growth opportunities are compelling, the company said.

Select Harvests have agreed to a three-year deal to manage 29,500 acres of the former Timbercorp almond orchards. Singapore-based Olam International owns 20,000 acres of the almond orchards, and is in the process of acquiring the remaining 9,500 acres.

Olam will pay Select Harvests a fixed service fee for management of the orchards and processing and marketing of the almonds, with an additional incentive component payable based on performance targets.