Notes

108 Pages·2006·1.23 MB·English

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Contents Almond Vegetable Tagine
Our mission, strategy, Our community 19
pg04
activities and outlook 1 Shareholder open day 20
Description
Our year in brief 2 Our people 21
Our business at a glance 3 Our board 22 A simple one pot meal (Serves 4)
Select Harvests: A snapshot 4 Our organisation 23 Ingredients
Owned and Statistical summary 24 2 tablespoons vegetable oil
Select Harvests – A Snapshot managed orchards 5 Financial contents 25 75g pkt (Xcup) blanched almonds
From the Chairman Financial reports 26 1 red onion, chopped
pg09
and Managing Director 6 2 cloves garlic, crushed
Auditor’s declaration 37
1 teaspoon ground coriander
Our almond operations 9
Director’s declaration 100
V teaspoon ground cumin
Our food products 14
Independent audit report 101
2 X cups sweet potato, peeled
Our environment 18
ASX additional information 103 and cut into chunks
415g or similar weight can
Our almond operations chopped tomatoes
With new acreage coming into production, 2 cups vegetable stock
pg14
3 V cups green beans, trimmed,
ambitious expansion plans and a planned Almonds at their best, a delicious addition to any dish
cut in half
10-15 spinach leaves rinsed
upgrade in processing capacity, Select Harvests
Salt, freshly ground pepper
is poised to succeed in an environment of or chilli flakes
Our food products growing global almond demand and strong Instructions Nutrition Information*
Heat 1 tablespoon oil in a large pan, stir fry almonds Energy 1294kJ
pg18 market fundamentals.
until golden. Remove, drain on paper towel. Protein 9.6g
Add remaining oil to pan, add next 5 ingredients,
Fat, total 20.2g
fry over moderate heat, stirring occasionally
- saturated 2.00g
for 5 minutes.
Shareholder Information
- monounsaturated 13.4g
Add tomatoes, stock and beans. Bring to the
boil, reduce heat, cover, simmer 10-15 minutes - polyunsaturated 3.3g
Annual General Meeting 2006/2007 Calendar
until vegetables are tender. Stir through spinach,
Our environment Carbohydrates, total 22.8g
The annual general meeting will be Feb Announcement of interim results cook until just wilted.
- sugars 12.4g
pg20 held on Monday, 30 October, 2006, Apr Payment of interim dividend Add almonds. Season to taste.
Sodium 558mg
at the ASX Theatrette, 530 Collins St, Aug Announcement of preliminary Serve with couscous or rice, tossed with chopped
Dietary fibre 10.8g
coriander and whole pitted black olives.
Melbourne Victoria, commencing full year results
Handy Tips *Source: Nuts for Life Newsletter 1 July 2003 issue
at 2:00 pm. A separate notice of Sept Annual report to shareholders
meeting has been posted to all Oct Payment of fi nal dividend Alternate the vegetables, eg diced eggplant, pumpkin,
zucchini or capsicum.
shareholders. Oct Annual general meeting
Inaugural shareholder open day
Our mission
Is to continue to develop and expand our business model, generating
sustainable earnings growth and delivering increased value to shareholders.
Our strategy
Is to develop a fully-integrated food company via ongoing
diversification and expansion of our income streams, leveraging
core strengths – almond growing and knowledge of edible nuts and
their markets – to develop sustained earnings growth and reduced
volatility from agricultural risk.
Our activities
Today, we operate our own orchards, manage orchards for investors,
market almonds in domestic and export markets, and process and
market an extensive range of nut- and fruit-based products to all market
sectors. Select Harvests has rapidly and successfully migrated into an
integrated agri-food business with diversified income streams.
Our outlook
Select Harvests is one of the world’s biggest almond growers. Our
food products division has a significant – and growing – share of the
Australian market. Our future outlook is positive, thanks to increasing
world nut consumption, the existence of strong fundamentals in the
domestic and international almond markets, increasing interest in
almonds as a healthy food product and increasing investor interest
in almonds as a mainstream horticultural investment. A further
11,000 acres of new almond plantings, significant technological and
scientific advances, further upscaling of nursery and development
resources and processing capacity are planned for 2007 and the years
ahead. Ambitious sales, market, and distribution targets from our food
products business will continue to capitalise on growing consumer
demand, and our strong balance sheet and cash flows will enable us
to both fund and accelerate our growth strategies into the future.
1
Select Harvests Annual Report 2006
Our year in brief
2006 Highlights
· New almond developments UP 102 percent · 2 millionth tree planted!
· Acres under management UP 48 percent · Established high-tech tissue
culturing laboratory
· Inaugural shareholder open day held
in Robinvale · Employed additional specialised,
technical personnel to meet
· Largest planting year – over 800,000 trees
the challenges of a larger, more
· Laid groundwork for a further 11,000 acres
diversified business
of planting in 2007
Total shareholders’ equity Earnings before interest and tax (EBIT)* Earnings per share (EPS)*
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* FY05 and FY06 exclude discontinued operations.
2
Select Harvests Annual Report 2006
Our business at a glance
Almond Division
2,368 acres
9%
owned
Almond Operations
2006 EBIT $32.1 million
2005 EBIT $26.3 million
91%
24,485 acres
Nursery managed
Orchard establishment
Farm management
Harvesting
40%
Processing
Export
60%
Almond Sales
Domestic
$50.1 million
5,500 metric tonnes
Lucky
Sunsol
35%
Nu-Vit
Food Products Division
domestic Meriram
sales Soland
Temptations
Sales and Marketing
2006 EBIT $9.2 million
2005 EBIT $9.3 million
2006 Sales $152.5 million
2005 Sales $131.4 million
Supply to major Supply to Supply to
supermarkets, independent manufacturers other distributors
supermarkets and
health food stores
3
Select Harvests Annual Report 2006
Select Harvests – A snapshot
“
Our strategic initiatives, Australia’s competitiveness in international
almond markets and a high demand for almonds as a horticultural
investment vehicle continue to help us to expand our business
”
and enhance future growth prospects and returns.
John Bird: Managing Director
Select Harvests Limited is Australia’s diversification and growth strategy on a fee-for-service basis. Our
largest almond grower. Today, it which has delivered an annual increase comprehensive service includes
manages over 50 percent of Australia’s in after-tax profit of 20 percent or more orchard establishment, tree supply,
almond orchards and is one of the for the seventh consecutive year. farm management, harvesting,
world’s largest and most forward- processing, and marketing.
looking growers, supplying almonds to Balanced business streams · Currently process approximately
domestic and export markets in Asia, 6,200 metric tonnes of almonds
Select Harvests operates a
Europe and the Middle East. – approximately 40 percent of
comprehensive ‘seedling-to-
More than this, Select Harvests is supermarket’ almond growing and Australia’s crop. Future tonnage will
also Australia’s leading manufacturer, marketing operation, made up of two, exceed 30,000 metric tonnes as
processor and marketer of a range of balanced business streams: almond orchards planted in the recent past
packaged nuts, fruit- and nut-based operations and food products. mature and come into full production.
foods and associated products, with · Export approximately 40 percent of
distribution into Australian supermarkets, Our almond operations almonds produced to India, Japan,
healthfood stores, and industrial markets, China, Indonesia, the Middle East,
· Own or lease 2,368 acres of almond
as well as to export markets in Asia. Germany, Spain, the United Kingdom,
orchards in northwest Victoria.
Russia, France, Holland, Belgium and
This integrated business model has
· Manage 24,485 acres of almond other markets.
been deliberately created via a focused
orchards for external investors
Our food products division
· Produces an extensive and innovative
range of packaged cooking
ingredients, snacks, muesli, and
natural health foods from nuts,
seeds, grains, and dried fruits.
· Leads the Australian market in the
supply of processed and packaged
nuts to retail stores through the Lucky,
Sunsol, Nu-Vit, Meriram, Soland and
now Select Harvests Temptations.
· Manufactures a range of
ingredients for food manufacturers
and distributors.
4
Select Harvests Annual Report 2006
Owned and
managed orchards
0 10.0km
Robinvale
N
NSW
Happpy
Valleeyy
Boouunnnddry
Bendd
BBaannnnneeerton
VICTORIA
Wemen
Hattah
Wandown
Liparoo
Kooooloonongg
Annuello
YEAR ESTABLISHED ACRES YEAR ESTABLISHED ACRES
2006 1,041 1997-2003 2,420
1987 420 1978-2002 360
2002-2005 596 2003 2,763
2001 2,474 2004-2005 4,279
2006 2,051 2006 3,751
2005 2,240 Other orchards 1,255
(not shown)
1981 1,083
Total 26,853
2004-2006 2,120
5
Select Harvests Annual Report 2006
From the Chairman
and Managing Director
Delivering Our achievements for the year
Shareholder Value
We are once again pleased to report Earnings
to shareholders that our business
model continues to deliver value in Strategic objectives
all important sectors: profit growth,
Earnings growth, improved quality of earnings and diversification
increased dividend payments and
of earnings streams, with reduced dependency on almond pricing.
share price appreciation. At the same
time we have made further progress in Achievements during 2005/06
expanding our core activities, creating a
· T otal sales revenue from continuing operations increased
larger and more secure base upon which
to secure future shareholder returns. by 25 percent to $217.9 million.
· T otal EBIT from continuing operations increased by 16 percent
Our pattern of integration into a
balanced agri-food business operation to $38.4 million.
spanning both almond growing
· N et profit after tax from continuing operations increased
and the production of nut-based
by 20 percent to $26.5 million.
products continues, with the ongoing
expansion of our almond operations Objectives for 2006-07
and aggressive and effective marketing
· C ontinue to deliver earnings growth through the aggressive expansion
in our food products business.
of our almond operations and branded food products business.
We have made conscious and
determined efforts over the past year
to increase our technical capabilities.
This has been achieved in two ways: Shareholder value
Firstly, by employing new, highly-
qualified personnel in key areas; and
Strategic objectives:
secondly, by adopting appropriate
Enhance shareholder value.
systems and technologies in key areas.
This strategy of combining the Achievements during 2005/06
best available expertise and the
· Total dividends increased by 50 percent to 63¢ per share.
latest technologies will ensure our
· Earnings per share increased by 18 percent to 67.1¢ per share.
capabilities and efficiencies in the
challenging times ahead. · Total shareholders’ equity increased by 15 percent to $101 million.
Naturally, we continue to operate · Return on shareholders’ equity increased to 26 percent p.a.
responsibly in all areas, contributing to
· Share price increased by 34 percent to $13.02 at 30 June 2006.
our communities, exercising all due care
in resource use and waste disposal, and Objectives for 2006/07
exercising all due environmental care.
· U tilise our strong balance sheet and cash flow to fund expansion,
R&D activity, new business opportunities, and returns to shareholders.
6
Select Harvests Annual Report 2006
2006 EBIT $38.4 million 2005 EBIT $33.1 million
Almond operations 78% Almond operations 73%
Food products 22% Food products 23%
Pesticide products 4%
2004 EBIT $23.8 million 2003 EBIT $17.4 million
Almond operations 71% Almond operations 70%
Food products 26% Food products 24%
Pesticide products 3% Pesticide products 6%
The past year’s results Dual expansion Market opportunities
Domestic and international almond In the last year we have expanded both A sustained period of consumption
demand continues to grow. However, our orchard management services growth, coupled with the USA’s
due to climatic conditions, and the and food products division – the supply plateau (brought about by
effects of a record 2005 almond crop, cornerstones of our expansion and low additional planting levels in that
yields achieved from our company diversification strategy. country) have contributed to a rise
owned orchards were adversely in almond prices. The anticipated
Our footprint across Victoria continues
affected. This was partly offset by the 15 percent drop in the 2005 USA almond
to increase: We have recently
sale of the balance of our 2005 almond crop did occur, bringing global almond
established a further 8,300 acres of
crop at historically high prices. The supply significantly below the previous
almond orchards (bringing our total
increase in earnings for the year was year’s demand – and helping maintain
area under management to 26,853
driven by the growth of our managed prices at higher-than-usual levels.
acres, a 48 percent increase). This
orchard operations.
will provide an increased base for The lag we expected between US
In food products, sales increased by generating orchard management plantings and resultant enhanced crop
16 percent, but margin pressure, increased services income and brings our share levels will continue to benefit us as our
competition, and higher operating costs of all Australian almond acreage above past years’ plantings become mature
(notably fuel- related) have impacted 50 percent, cementing our ranking in and commence production.
on our financial result. It has been a the top three almond growers globally.
Almond prices have now returned
challenging year, and we anticipate 2007
Significantly, the groundwork was to lower levels than the records of
being equally competitive.
completed this year for a planting of a 2005 – but they are at historical highs
We are doing everything possible further 11,000 acres in 2007. and provide good returns. The strong
to maximise opportunities in an fundamentals of the almond market
The wisdom of previous strategic
environment of increasing consumer improves returns for both Select
acquisition decisions continued to pay off,
demand and increasing retail response Harvests and our investor growers and
adding significantly to an increase in food
to that demand. We are launching underpins the attractiveness of almond
product sales for the year from $131 million
new products, we have employed key orchards as an investment in Australia.
to $153 million. The appointment of
personnel and have ambitious plans.
dedicated specialist staff and aggressive
From a strong base, we are maximising
growth in long-established brands such
economies of scale resulting from
as Lucky significantly increased our
our deliberate growth strategies,
share in important supermarket and
and continuing to position ourselves
healthfood market sectors.
for the future.
These initiatives have expanded our
business model and future growth
prospects and we are targeting further
growth in the current year.
7
Select Harvests Annual Report 2006
“
We are fortunate to be operating in a marketplace that goes on
providing opportunities for growth and are delighted to once
”
again report that we approach the future with confidence.

Max Fremder: Chairman & John Bird: Managing Director
Emphasising the ‘nut’ resources, and with our partners we are Our ability to successfully manage our
focussing on identifying suitable land ongoing expansion and at the same
in nutrition
reserves to support this growth. time deliver improved results is in no
Internationally, the nut health small part due to the skill, effort and
We are planning to establish a
message continues to gain momentum. dedication of our staff at all levels, at all
further 11,000 acres of investor-owned
Australia is a strong promoter of nut- of our locations. The continued support
orchards in 2007. The larger area under
based products, and Select Harvests of our customers and suppliers has
management and increased production
is working with others to create and also been vital.
from maturing orchards will increase
increase awareness of the beneficial
orchard management services We thank board members, management
effects of regular and increased nut
revenue for the year. and staff for their efforts over the last
consumption. We have targeted health
year and their contribution to the
professionals and other food and Our food products division continues
ongoing development of the company.
diet influencers, and will continue to operate in a growth market and
promoting to our end users – the we are looking for further growth We are pleased with the progress the
consumers who buy our products. in 2007, particularly from our company has made in recent years:
branded businesses. Our business model continues to serve
Nut-based products continue to
us well today and we anticipate it
grow in popularity showing strong Our strong balance sheet and future
will do so in the coming years as well.
consumption growth both domestically cashflow position will allow us to
We are fortunate to be operating in a
and in international markets. There is fund the expansion of our business to
marketplace that goes on providing
continuing evidence of a move towards support and deliver growth in to the
opportunities for growth and are
natural snacks with a greater focus future. We will continue to aggressively
delighted to once again report that we
by retailers and increased marketing expand our almond operations over the
approach the future with confidence.
activity from retailers, suppliers and next few years with external investors
industry groups. and investigate other tree crops We remain committed to profitably
that may be suitable to our business growing the company and delivering
The consumption trends towards healthy
model. We continue to look for further even more enhanced shareholder value
eating matches the branding position
expansion opportunities by acquisition in the future.
of our food products division and the
which would complement and add
market growth provides the base for
value to our existing food products
revenue growth and an expanded
business. In addition, we will continue
market for our future almond crops.
to monitor and assess opportunities to
Max Fremder, Chairman
increase dividends to shareholders.
Future Prospects
Our People
The strong fundamentals of the
international almond market and
We have in the last year significantly
Australia’s competitiveness as an almond John Bird, Managing Director
grown our business in terms of sales,
grower and marketer, has increased the
acreage and, most significantly, people.
demand for almond orchards. To match
this demand we are planning, with our A restructuring of the management
alliance partners, to expand our orchard organisation of both our almond and
establishment activities over the next food products divisions has been
few years. To facilitate this expansion, conducted to support our aggressive
we will upgrade our tree nursery capacity growth objectives.
and development infrastructure and
8
Select Harvests Annual Report 2006