As it pushes ahead with its growth plans to meet mounting demand, sustainable and organic oyster producer Angel Seafood (ASX: AS1) has secured $4 million to shore up its financial position and accelerate its next expansion phase.
Existing and several new institutional and sophisticated investors have shown strong support for Angel’s strategy and backed the $4 million placement which will see 23.5 million ordinary shares issued at $0.17.
The $0.17 issue price was a 9.7% discount to Angel’s five-day volume weighted average price of $0.188 prior to it entering a trading halt on 11 December.
Angel founder and chief executive officer Zac Halman said the company was “very encouraged” by the strong support it has been shown from new and existing shareholders.
Placement funds next growth phase
Placement proceeds will be used to accelerate the next phase of Angel’s growth plans – particularly its three-pillar strategy which focuses on efficiency, innovation and price to double production while improving profitability.
As part of this, Angel will acquire additional premium water leases to increase scale, invest further in innovative farming techniques to boost productivity, while continuing to purchase spat to underpin future growth.
Angel also plans to build its brand and improve its oyster pricing while strengthening its financial position.
Mr Halman pointed out Angel was only producing 1 million oysters annually when it listed on the ASX in 2018.
“The IPO funds were used to enable the rapid expansion of Angel to become a 10 million oysters-a-year producer operating a unique multi-bay strategy which has built valuable intellectual property.”
“This scale in our business ensures we are cash flow positive from operations and profitable.”
He added the company is now ready for its next growth chapter – which aims to double oyster production to 20 million a year and improve profitability.
Retail sales boom drives year-round sales
While COVID-19 rocked many companies around the world, it provided an opportunity for Angel to shoulder into the retail space.
Demand for Angel’s oysters in this market has taken off.
To meet this rapidly mounting demand, Angel recently added 6ha of water leases within South Australia’s Eyre Peninsula.
Mr Halman said the company would continue to assess “further opportunities” within the region.
“We have also recently launched flip-farming and summer oyster trials, which, if success, we will look to roll-out more broadly to further improve profitability and allow our oysters to be sold year-round, compared to the current 10-month sale season – allowing Angel to continue servicing our increasing demand.”