Organic Pacific oyster producer Angel Seafood (ASX: AS1) has reported a successful first half of the 2021 financial year, selling 55% more oysters at a record 5.1 million.
This drove a 52% increase in revenue to $3.8 million, with underlying oyster prices remaining steady.
According to the South Australia-based company, strong sales were underpinned by continued momentum in retail, backed by growing recognition of Angel’s ability to “guarantee continuous supply of its high-quality organic oysters and Angel’s emerging brand presence”.
Angel chief executive officer Zac Halman described it as a “fantastic outcome” considering the challenging trading conditions of the past six months.
“This demonstrates the underlying strength of our business and the continued demand for oysters. I am particularly pleased with the momentum we have experienced in the retail channel, and excited for future value this segment will present,” he said.
Other financial achievements over the six-month period included a 20% reduction in operating costs, on a volume-adjusted basis, reflecting the benefits of scale and productivity gains.
Earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 39% to $1.4 million, while profit after tax rose 74% to $700,000.
Aiming to double production capacity
In late 2020, Angel launched a three-pillar growth strategy which aims to see the company double its annual production capacity to 20 million oysters per annum through scale and innovation and improve profitability.
“We have already started the work towards these growth ambitions by acquiring additional water leases and launching a number of innovative farming methods to improve farming efficiencies,” Mr Halman said.
The company recently acquired an additional 6.25 hectares of water leases and increased its finishing capacity to 12 million oysters per annum.
It also made a net investment of $380,000 in spat purchases to grow its stock profile for the future, leading to a strong stock position of more than 29 million oysters on hand and a 57% increase in biomass to 264 tonnes.
“Coffin Bay and Cowell leases are near capacity with the overflow of oysters warehoused at the Haslam facility,” Angel reported.
According to the company, this investment is expected to extend the sales season to be year-round and potentially adds 10-15% to annual sales revenue.
In addition, Angel launched FlipFarming and ‘summer oyster’ trials to boost productivity and profitability.
2021 sales season about to start
Angel said the 2021 sales season is anticipated to begin around March and a “sound supply” of oyster sizes are expected to be available to cater for restaurant and retail demand.
“Following an earlier than usual spawning season experienced in Coffin Bay, some stock has started regaining condition ahead of schedule, resulting in some sales in the first quarter, albeit at a reduced scale,” it reported.
“The company will continue to build scale in its multi-bay strategy, invest in industry-leading farming methods and roll-out initiatives that will strengthen the Angel brand and support favourable pricing for its oysters.”
New funding to support next phase of growth
In December, Angel secured $4 million through a share placement to accelerate its growth plans.
The company has also secured an additional $1 million through a its working capital facility with the National Australia Bank (ASX: NAB) with the facility limit now standing at $3 million.
As at 31 December 2020, Angel’s liquidity (cash and available facilities) totalled $5.2 million.