Case Study - Select Harvests Ltd (ASX:SHV)

September 30, 2020

Select Harvests Ltd (ASX:SHV) is a top-5 almond producer which grows, processes, packages, sells and distributes almond from its almond orchards, located in Australia and California, USA. In FY21, Select accounted for ~2.5% of global production. SHV is also a manufacturer and marketer of edible nuts, dried fruits, seeds, and a range of natural health foods to the Australian, Asian, European and the Middle Eastern retail and industrial markets.

• Production growth of almonds. The growth cycle is seven years to full maturity, and SHV has underlying 5%/annum mature orchard growth for the next four years from plantings three to six years ago. Local mature orchard acquisitions at a smaller scale than Piangil are likely, and offshore acquisition growth are possible in the medium term.

• Margin improvement of almonds with yield improvements, lower cost across process supply chain with increased volume, quality improvements and brands.

• Leverage almond and food presence into healthy foods in Australia, Asia (e.g.: PepsiCo JV in China), and Nth America. Add other tree nut production and/or plant-based proteins with long shelf life.

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