Organic Pacific oyster producer Angel Seafood (ASX: AS1) has entered its 2021 sales season in a good position, delivering record March quarter sales and experiencing strong momentum in the lead up to Easter.
The South Australia-based business today reported the sale of 1.3 million oysters over the March quarter, up 21% on the previous corresponding period.
This record-breaking result was achieved despite the 2021 selling season starting later than usual, driven by strong demand in the retail segment as well as a “noticeable pick up” in the restaurant channel.
Quarterly revenue growth
Quarterly revenue totalled $1 million, up 15% on the 2020 March quarter, while cash receipts from customers were up 14% to $900,000.
Underlying prices for Angel’s oysters remained steady for most of the quarter, albeit 3% lower due to a preference of smaller oyster sizes being sold in the retail sector (which makes up a larger portion of sales since COVID-19).
Prices increased in late March due to high Easter demand at a time when flooding in New South Wales impacted the supply of Sydney Rock oysters.
Continued strength in retail sector while restaurant sales improve
Angel Seafood also noted an improvement in the restaurant sector, pointing to an increase in consumers dining out as Australia begins to recover from COVID-19.
“With COVID-19 restrictions across Australia now largely eased, we are pleased to see diners able to enjoy oysters in restaurants again with demand making a notable improvement,” Angel Seafood chief executive officer and founder Zac Halman said.
“I am also excited about the continued strength we have experienced within the developing retail channel, a channel we started a year ago in response to the COVID-19 situation,” he added.
“Today, it makes up an increasing portion of our sales and represents a key feature in our strategy moving forward.”
Angel Seafood also recorded a 42% growth in biomass during the quarter following good growth rates across all Eyre Peninsula bays during the summer and resulting in a record 33 million oysters on hand to cater for the growing demand.
Productivity initiatives progress with FlipFarm construction underway
In late 2020, Angel Seafood launched a three-pillar growth strategy aiming to double annual production to 20 million oysters and improve profitability through increasing scale, focusing on innovation and improving price.
As part of this strategy, the company planned to trial FlipFarms, an innovative floating system involving a semi-automated basket flipping process that is expected to increase operating efficiencies and improve accessibility. About 40 FlipFarm lines (each 100m long) are being developed for trials in Coffin Bay.
In today’s update, the company said on-water construction activities have commenced with the project on track to be delivered on budget and on schedule.
Summer oysters trial performance
Another growth initiative has been the company’s oyster farming trial during the summer period, which if successful, is expected to extend Angel Seafood’s sales period from the current 10 months to the entire calendar year and increase annual sales by 10-15%.
It is also hoped to strengthen the company’s position within the retail channel by offering a year-long, continuous supply of its organic and sustainable oysters including over the key festive periods of Chinese New Year and Valentine’s Day.
Angel Seafood has reported the oysters performing well through the summer with grading showing good survival rates of the spawnless triploid spat. The oysters are on track to be available for sale for the summer season in early January 2022, it said.
Additional water lease acquired
Angel Seafood also acquired an additional 10 hectares of undeveloped water in Streaky Bay, which is located close to Haslam where the company warehouses its oysters.
It said it acquired the area at a low cost in exchange for the company taking over ongoing obligations for annual licence fees and site maintenance.
This lease expands Angel Seafood’s total undeveloped water holdings to 33 hectares and provides further flexibility for future expansion beyond the current 20 million oysters per annum production target.