For Personal Use Only Use Personal For
Total Page：16
File Type：pdf, Size：1020Kb
Costa Group Holdings Limited – Annual Report – Annual Holdings Limited Group Costa 2019 Costa Group Holdings Limited For personal use only Annual Report 2019 Costa Group Holdings Limited – Annual Report – Annual Holdings Limited Group Costa 2019 Contents 2 Chairman’s Report 6 Managing Director’s Review 9 Company Profile 12 Harvest Calendar 15 Directors’ Report 41 Auditor’s Independence Declaration 42 Consolidated Statement of Profit and Loss and Other Comprehensive Income 43 Consolidated Statement of Financial Position 44 Consolidated Statement of Changes in Equity 46 Consolidated Statement of Cash Flows 47 Notes to the Consolidated Financial Statements 88 Directors’ Declaration 89 Independent Auditor’s Report 95 Shareholder Information 96 Corporate Directory For personal use only Corporate Governance Statement Costa’s Corporate Governance Statement for the financial year is located at http://investors.costagroup.com.au/investor-centre/?page=corporate-governance Costa Group Holdings Limited ABN 68 151 363 129 Costa is Australia’s leading grower, packer and marketer of premium quality fresh fruit and vegetables. For personal use only Costa Group Holdings Limited 1 Annual Report 2019 Chairman’s Report The Board and management team have remained focused on building medium to long term profit growth through a number of strategic initiatives. These include our enlarged blueberry breeding program aimed to underpin our operations in Australia, Morocco and China, as well as licensing programs in the Americas, South Africa and China. Overview In avocados we are trialling high density, varieties and seasonal extension in the south trellised and protected cropping which of the country remains a priority and this is The 2019 financial year saw Costa deliver a has shown promising early results. This where our varietal breeding program comes $28.4million underlying Net Profit After Tax is designed to change the economic to the fore. (NPAT-S before material items) and in line farming model with improvement in crop with our amended forecast from late October yield, quality, pollination, per unit water The investments we are making across our 2019. This result reflects what was a very consumption and early cropping. Continuing strategic priorities means we are confident challenging year for the company in which we automation of our citrus packing operations of not only meeting current challenges but faced issues relating to drought and weather, has seen the doubling of our Spectrim vision more importantly building a stronger and and market conditions in some categories. sorting line in our Renmark South Australia more resilient company as a result. Costa packhouse to 16 lanes as well as installing has undertaken five significant expansion While it has clearly been important to address robotic carton consolidation and palletising. programs since our IPO in July 2015, where we the immediate short- term challenges of the The Spectrim technology is proving very have invested over $400m in capex and M&A. year just passed, the Board and management accurate with respect to colour and blemish In order to ensure we continue to deliver team have remained focused on building and the co located infra-red system grades the on these growth initiatives and maintain a medium to long term profit growth through a quality of the fruit. This is crucial for markets strong balance sheet, the company undertook number of strategic initiatives. These include such as the US, Japan, Korea and China where a $176 million capital raising in November our enlarged blueberry breeding program, the appearance and taste of the fruit is a key through a fully underwritten accelerated aimed at developing sub-tropical and differentiator for consumer preference. renounceable pro-rata entitlement offer, with tropical varieties to underpin our operations retail rights trading. Although Costa’s strategy in Australia, Morocco and China, as well as Our international operations continue to grow is growth oriented, management maintains a licensing programs in the Americas, South both in plantings and market penetration. prudent and disciplined approach to capital Africa and China. The IP we continue to In China demand for ‘super fruits’ such as deployment and generally targets a minimum develop,For personal use only including the leading premium blueberries is gaining market share due to return on capital of 20% on new investments variety, Arana, gives us the advantage of increased consumer awareness particularly in three to five years and typically the superior product genetics and positions the amongst the Chinese middle class. Gaining company targets a long term leverage range company as the world’s leading blueberry an advantage in Morocco through superior of 1.5 to two times net debt to EBITDA. company. Costa Group Holdings Limited 2 Annual Report 2019 For personal use only Costa Group Holdings Limited 3 Annual Report 2019 Chairman’s Report continued Results Costa is committed to respecting all There are always a number of great initiatives internationally recognised human rights that our business supports across the many Costa generated $1,048 million in full as relevant to our operations. Reflecting locations in which we have a presence. year revenue, a 5.8% increase on the prior this commitment, in early 2019 the Board Over the past year these included our berry comparative period. approved a Human Rights policy which category employees in Corindi New South applies across all of our locations and Wales who donated funds raised from the EBITDA-SL was $98.3 million, a 21.5% demonstrates our commitment to respecting recycling of scrap metal, cans and drink reduction on the prior comparative period, internationally recognised human rights in bottles to support the Woolgoolga OneWave while NPAT-SL before material items was a manner consistent with the UN Guiding Fluro Friday mental health awareness project, $28.4 million. Principles on Business and Human Rights which involves getting together with friends and the International Labour Organisation’s and talking about the importance of mental Group cashflow from operations was solid for Declaration on Fundamental Principles and health. the year with the year end debt level being Rights at Work. It sets out our expectations for better than expected. the conduct of our employees and suppliers. Our mushroom category sponsored the Multicultural Centre for Women’s Health Dividends Costa also takes human rights considerations (MCWH) 40th anniversary celebrations. into account when selecting suppliers. We This was in recognition of the long-standing The Board declared a fully franked final expect our suppliers to comply with our partnership between Costa and the MCWH dividend of 2.0 cents per share for the second Supplier Code of Conduct, and we actively through their Industry Visits Program at our half of CY2019, bringing the total dividend seek to work with third parties who support Mernda Victoria mushroom farm where 70% payment for CY2019 to 5.5 cents per share, our approach and standards in this area. of our 600 strong workforce are migrant fully franked. females with English as a second language. The challenging 2019 year placed significant The program is conducted in the workplace and relentless strain on our management and and is specifically designed for women from Our People all employees, who were outstanding in their immigrant and refugee backgrounds. Using The Costa business relies on labour as the key leadership and dedication across all of the bilingual health educators from different input, and we are committed to maintaining business. On behalf of all of our stakeholders I countries, cultures and backgrounds who a workplace that recognises, respects and want to recognise the tremendous effort of all understand the issues immigrant and refugee protects the human rights of our employees. who stood side by side to ensure our business women face when taking control of their own We strive to provide all employees and remained resilient throughout the year. health, the program delivers health education others who work with us safe and healthy sessions on many topics. working conditions. This includes providing a workplace where all people are treated Community Our Far North Queensland avocado, banana without discrimination or harassment, and in Despite the challenging year it was more and berry employees came together to build which employees are free to associate with important than ever to maintain a positive new vegetable gardens at the Walkamin State each other and participate or not participate presence in the communities in which School, in addition to providing fresh fruit for in unions or other labour organisations, free we operate. We not only owed this to our the school’s breakfast club. More than 30 of from any coercion. employees, but also to the many local people our employees volunteered their time and who rely on our company to have both a labour to install 11 new garden beds and an positive economic and social impact on the irrigation system. The school students use the communities in which we operate. vegetables for cooking classes where they learn about healthy eating and developing good food habits. It is activities such as these which the company and our employees will continue to actively support and promote across our more than 50 sites located throughout regional and rural areas. For personal use only Costa Group Holdings Limited 4 Annual Report 2019 Board Update for CY2020 Consistent with the Board’s view