Lower kiwifruit returns, lower profit

Seeka Kiwifruit Industries is forecasting a small reduction in profit in its March year compared with 2004.

In October, Seeka forecast its 2005 result would equal, or exceed, the after-tax profit of $3.1 million made last year despite a significantly lower fruit value forecast by Zespri.

It said then that any improvement in fruit values over the Zespri forecast would improve the year-end result further.

Chairman Brian Allison said the lower forecast was the result of lower fruit returns and Seeka's acquisition programme.

The company was suspending its dividend reinvestment programme.

Since October, Seeka has bought a 20 per cent stake in Opotiki Packing and Coolstorage, has bought packing firm Eleos and agreed to buy Tauranga packing company Bridgecool for $13 million on April 1.

Allison said the three investments would increase Seeka's kiwifruit-processing capacity to 25 million trays, or 27 per cent of the market.

The enlarged company would have total assets in excess of $90 million, and was aiming to provide significant benefits to shareholders and growers through the rationalisation of supply chain costs and delivery of improved services.

Seeka said the last six months' trading reflected its costs in the three acquisitions and its positioning for an equity capital-raising programme to repay short-term debt.

- NZPA