Select Harvests enjoying higher production and higher prices

Following a site visit to Almond Producer, Select Harvests, we reiterate our BUY rating. SHV is developing a strong platform for EBIT growth in future years with momentum in the almond price continuing (spot almond premium price now approaching A$15.00/kg) coupled with volume improvement as tonnes sold increase. Continual investment in farming infrastructure (frost fans etc.) will improve almond yields as the company targets >1.2tn/ac from next year onwards, and continues to grow its bearing acreage from the current level of 9k acres to 15k over the next 10yrs. With revenue per acre running at ~A$18k/acre for premium almonds (1.2tn/acre x A$15/kg), and maintenance (including water) and processing costs running at $4.5k/ac, there is a serious amount of Free-cash-flow expected to be generated over the coming years: Research available here: (VIEW LINK)

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