Sea Harvest | Setting Sail
In this report we assess Sea Harvest's (SHG) recent investments. We find the acquisitions to be earnings accretive to date. The acquisitions are a welcomed diversification from the vagaries of the fishing cycle. The timing of the acquisitions has led to favourable pricing, in our view. By our estimates, the acquisitions raise our three-year EBIT CAGR estimate from 18.4% to 32.4%. However, the share has de-rated from a 1.1x PE relative in September to a 0.8x PE relative on the offer to purchase Ladismith Cheese. We believe the diversification of SHG's FMCG exposure in Ladismith Cheese ameliorates some catch rate and farming risks that currently weigh on Group margins. The shift into aquaculture and fishing other species provides SHG with a further platform to counter challenges in the fishing industry.Sea Harvest Group Limited, formerly Sea Harvest Holdings Proprietary Limited, is engaged in fishing of Cape hake and Shark Bay prawns; processing of the catch into frozen and chilled seafood, and the marketing of these products, locally and internationally in a seafood market. It operates in two segments: South African Operations and International Operations. The South African Segment comprises fishing operations within South Africa relating to fishing of Cape hake and by-catch species, the processing of the catch into frozen and chilled seafood products and the marketing and distribution of these products locally and across 22 international markets. The International Segment comprises the operations of Mareterram. The main operations of Mareterram comprises the trawling, processing, marketing and distribution of Shark Bay prawns, scallops and crabs, and a foodservice sales and distribution business, which distributes a basket of products into the Australian food service market.
Avior is a globally recognised capital markets research and trading firm, with the broadest research coverage within the region, with 100+ SA and 20+ SSA companies under coverage. Avior services clients from offices in London, Cape Town and Johannesburg.
Our research quality is consistently recognised in local and global surveys, with 18 analysts currently rated in their respective sectors (FM 2017). Value add through in-depth, innovative, high quality and consistent research with comprehensive underlying fundamental modelling supported by regular analyst and roadshow interactions.
Avior has proven that by working closely with our clients we can mutually develop dominant positions in certain sectors, going from strength to strength. Avior has a dedicated ESG team, having been ranked #1 in Corporate Governance research since 2008.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.