Seeka updates 2016 guidance with ''extraordinary gain''

Seeka, the largest kiwifruit grower in New Zealand and Australia, says it has settled a second insurance claim from a 2015 fire, and has updated its earnings guidance to reflect the "extraordinary gain".

The company will get about $3.6 million, plus GST, in the insurance settlement for "losses associated with the mitigation efforts" after a fire which destroyed a shed at its Oakside post-harvest site in Tauranga in March 2015. The blaze significantly affected a coolstore containing about 250,000 trays, the company said at the time.

Seeka has already received $5.5 million in insurance proceeds, though not all claims were finalised or accepted by the insurers at year end 2016. The fire at its Oakside site had unexpectedly impacted fruit storage, and fruit losses were higher than previously forecast, meaning the company initiated a separate claim, it told shareholders last October.

Net profit guidance has been lifted to between $9.5 million and $10.6 million, from between $7 million and $8 million, with earnings per share forecast to be between 59 cents and 66 cents, from between 44-and-50 cents which it predicted in October. Seeka posted a $4.3 million profit in 2015, and earnings per share of 29 cents.

"The settlement, less a small amount of costs and tax, will form an extraordinary gain in 2016 financial year, with the financial cost of the event being recorded in Seeka’s accounts in 2015 financial year," it said in a statement to the NZX.

The shares last traded at $4.50 and have surged 31 percent this year.

Source: scoop.co.nz

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