Angel Seafood produces strong quarterly results backed by three-pillar growth strategy

Angel Seafood Holdings AS1 ASX 2020 quarterly pacific oysters
Angel Seafood sold a record 2.4 million oysters during the December 2020 quarter, which was 36% higher than the December 2019 period.

Certified organic pacific oyster producer Angel Seafood Holdings (ASX: AS1) has finished the December 2020 quarter with record sales of 2.4 million oysters and record half-year sales of 5.1 million.

The sales represent a 36% increase on figures from the previous corresponding period and reflect continued retail momentum during the peak domestic selling season as well as the return of demand from restaurants following the easing of COVID-19 restrictions.

The company also reported quarterly revenue of $1.8 million (up 35% on the previous period) and cash receipts from customers of $1.6 million (up 11.7%), with underlying oyster prices remaining steady during the quarter.

Oysters on hand

At end December, Angel Seafood had 29 million graded oysters on hand with a biomass of 264 tonnes, indicating a 57% increase on the previous period.

Its oyster leases at Coffin Bay and Cowel, on South Australia’s remote Eyre Peninsula, are reported to be near capacity with an overflow of oysters warehoused at a facility in nearby Haslam.

Growing conditions during the quarter (spring and early summer) have remained positive and in line with expectations, and Angel Seafood said its oyster stock continues to be in good health.

Operations are now focused on grading the oysters and monitoring their conditions during spawning season (typically from November to March), while ensuring a trial of the FlipFarm biodynamic oyster farming method and a 15-month ‘summer oysters’ trial progress as planned.

Growth strategy

Chief executive officer and Angel Seafood founder Zac Halman said the “busy and productive [December] quarter” had been driven by a three-pillar growth strategy unveiled in November which aims to double production capacity to 20 million sustainable oysters per annum and improve profitability for the emerging brand.

The strategy will support the next phase of the company’s growth, building on the success of its multi-bay approach and profitable operating base.

“The retail channel has quickly become an important feature [for us] and we will look to further develop our [channel] offering with targeted initiatives that enable us to leverage our credentials based on [our company] being one of only two sustainable and organically-certified oyster growers in the world,” Mr Halman said.

“The continued strength in sales throughout uncertain times has given us the confidence to launch Angel into its next phase of growth, which over time will see capacity doubled to meet growing demand and profitability improved.”

Capital raising

In December, Angel Seafood completed a $4 million capital raising based on the offer of 23.5 million fully paid ordinary shares at $0.17 per share.

The raising was strongly supported by existing shareholders as well as “new and high-quality” institutional and sophisticated investors.

The company also secured a $1 million increase to its working capital facility during the period, taking its total facility with National Australia Bank to $3 million.

“The funds from the combined share placement and working capital facility further support [our] financial position and will allow [us] to fast-track our growth initiatives,” Mr Halman said.

Future growth

Angel Seafood enters the new year in a strong position with “exciting plans” focused on infrastructure upgrades and husbandry activities for the majority of the next quarter.

“I am incredibly proud of our team and the effort they have put into Angel in 2020, and I am very excited about the opportunities we have ahead of us,” Mr Halman said.

“We will continue to expand our scale in the Eyre Peninsula and strive to roll out the most innovative farming methods while making sure we look after the environment we operate in.”

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