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SEA HARVEST GROUP LTDSEA HARVEST GROUP LTDSEA HARVEST GROUP LTD

SEA HARVEST GROUP LTD

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Our opinion on the current state of Sea Harvest (SHG) is South Africa's most popular frozen fish brand with about 38% of the market. It was controlled by Brimstone, which had a 54,92% stake. Sea Harvest catches, processes, and freezes fish for local and export consumption. They acquired the business of Viking, which began 40 years ago and now employs 1 600 people with a fleet of 30 vessels operating in Cape Town, Durban, Hout Bay, Mossel Bay, and Maputo. Viking catches, processes, and sells horse mackerel, hake, pilchards, anchovy, prawns, tuna, and rock lobster. As part of this deal, they have also acquired 50% of Viking's aquaculture business, which is one of the largest in South Africa. The cost was a total of R565m, of which R315m was paid in cash and the balance through the issue of 19,2m Sea Harvest shares. Sea Harvest announced the acquisition of the Ladismith Cheese Company for R527m. This company produces cheese, butter, and related products and signals Sea Harvest's intention to diversify away from the fishing industry. The price paid seems quite high since it is based on Ladismith's R58m after-tax profit for the year to January 2018. On 8th March 2023, the company announced that it was increasing its stake in Viking Aquaculture to 82% for R210m. In its results for the year to 31st December 2024, the company reported revenue up 16% and headline earnings per share (HEPS) down 45%. The company said, "The Sea Harvest Group experienced its most challenging year since listing in 2017, impacted by hake catch rates at historical lows, weak market conditions in abalone, continued soft global prawn pricing, and high interest rates. This was offset by strong demand and improved pricing in hake, a solid performance from the newly acquired Sea Harvest Pelagic business, and a firm result from Ladismith despite challenges from foot-and-mouth disease (FMD), resulting in the Group delivering EBIT of R609 million (2023: R577 million, up 6%) and HEPS of 55 cents (2023: 100 cents, which included a once-off gain on purchased loans of R93 million that contributed 34 cents to HEPS)." The Sea Harvest share is fairly volatile, with reasonable volume traded. From its listing in March 2017, the share has moved mostly sideways and more recently downward since June 2022. Obviously, the Viking acquisition has changed the nature of this business substantially, but it remains subject to the weather (which affects the catch) and the regulatory environment (where quotas can be changed by the government). In our view, given the volatility, the share remains fairly fully priced. On 15th May 2024, the company announced that the acquisition of 100% of Terrasan had received approval from the Competition Tribunal.
JSE:SHG
by PDSnetSA
Our opinion on the current state of SEAHARVST(SHG)Sea Harvest (SHG) is South Africa's most popular frozen fish brand with about 38% of the market. It is controlled by Brimstone, which has a 54.92% stake. Sea Harvest catches, processes, and freezes fish for local and export consumption. They acquired the business of Viking, which began 40 years ago and now employs 1600 people with a fleet of 30 vessels operating in Cape Town, Durban, Hout Bay, Mossel Bay, and Maputo. Viking catches, processes, and sells horse mackerel, hake, pilchards, anchovy, prawns, tuna, and rock lobster. As part of this deal, they have also acquired 50% of Viking's aquaculture business, which is one of the largest in South Africa. The cost was a total of R565m, of which R315m was paid in cash and the balance through the issue of 19.2m Sea Harvest shares. Sea Harvest announced the acquisition of the Ladismith Cheese Company for R527m. This company produces cheese, butter, and related products and signals Sea Harvest's intention to diversify away from the fishing industry. The price paid seems quite high since it is based on Ladismith's R58m after-tax profit for the year to January 2018. On 8th March 2023, the company announced that it was increasing its stake in Viking Aquaculture to 82% for R210m. In its results for the year to 31st December 2023, the company reported revenue up 6% and headline earnings per share (HEPS) down 5%. The company's net asset value (NAV) rose 7% to 1216c per share. The company said, "The Group's performance benefited from strong demand across all markets and channels and improved pricing while its 43% hard currency exposure allowed it to benefit from the weaker rand. Performance, however, was constrained by lower volumes as a result of difficult fishing conditions, above-inflation cost increases, load shedding, and prawn prices under severe pressure globally." In a trading statement for the six months to 30th June 2024, the company estimated that HEPS would increase by between 13% and 18%. The company said, "The South African fishing business was challenged by continued low catch rates resulting in lower sales volumes, however, this was offset by strong demand in all markets and channels resulting in firm pricing." The Sea Harvest share is fairly volatile with reasonable volume traded. From its listing in March 2017, the share has moved mostly sideways with a downward trend since June 2022. Obviously, the Viking acquisition has changed the nature of this business substantially, but it remains subject to the weather (which affects the catch) and the regulatory environment (where quotas can be changed by the government). In our view, given the volatility, the share remains fairly fully priced. On 15th May 2024, the company announced that the acquisition of 100% of Terrasan has received approval from the Competition Tribunal.
JSE:SHG
by PDSnetSA
Our opinion on the current state of SEAHARVST(SHG)Sea Harvest Group (SHG) stands out as South Africa’s leading frozen fish brand, commanding approximately 38% of the market. The company, which is majority-owned by Brimstone with a 54.92% stake, specializes in catching, processing, and freezing fish primarily for local and export markets. Sea Harvest has recently expanded its operations through strategic acquisitions, including the purchase of Viking’s business operations. Viking, with a 40-year history, employs about 1,600 people and operates a fleet of 30 vessels across various South African and Mozambican ports. This acquisition included 50% of Viking’s aquaculture business, making Sea Harvest a significant player in South Africa’s aquaculture industry. The total acquisition cost was R565 million, funded partly by cash (R315 million) and partly through the issuance of 19.2 million Sea Harvest shares. Further diversifying its portfolio, Sea Harvest ventured beyond its traditional fishing business with the acquisition of Ladismith Cheese Company for R527 million. This move into the dairy sector, based on Ladismith’s after-tax profit of R58 million for the year to January 2018, indicates Sea Harvest’s strategic intent to mitigate the risks associated with the fishing industry. Additionally, in March 2023, Sea Harvest increased its stake in Viking Aquaculture to 82% for R210 million, reinforcing its commitment to growing its aquaculture division. For the fiscal year ending 31st December 2023, Sea Harvest reported a revenue increase of 6%, although headline earnings per share (HEPS) declined by 5%. The company’s net asset value (NAV) improved by 7% to 1216c per share. The company attributed its performance to strong demand and improved pricing in its markets, coupled with a 43% hard currency exposure which provided a buffer against the weakening rand. However, challenges such as difficult fishing conditions, above-inflation cost increases, load shedding, and global pressure on prawn prices constrained its performance. The Sea Harvest share has demonstrated volatility with reasonable trading volumes since its listing in March 2017. The stock has largely moved sideways with a recent downward trend, influenced significantly by the acquisition of Viking which has substantially altered the company's business dynamics. Factors such as weather conditions affecting catch volumes and potential changes in regulatory environments regarding fishing quotas continue to pose risks. Most recently, on 15th May 2024, Sea Harvest announced that its acquisition of 100% of Terrasan, another step in its expansion strategy, received approval from the Competition Tribunal. This approval likely provides a further diversification of its business portfolio, which could influence its market dynamics and investment attractiveness. Overall, while Sea Harvest is navigating through several challenges and leveraging acquisitions to diversify its business model, the share price, after a recent uptick, remains fairly valued. Investors should consider both the opportunities presented by the company’s strategic acquisitions and the inherent risks of the fishing and aquaculture industries when evaluating its shares.
JSE:SHG
by PDSnetSA
SeaHarvest is ready to float to R12.00The price has broken above the downtrend. There is a crucial level that was tested, and it might be where the buyers and Smart Money have filled their orders. Every other indicator is showing downside, but remember indicators are based on past momentum NOT the future. So we can expect the price to rally up before the next drop. But I'll let you know. 21>7 - Bearish RSI<50 - Bearish Target short term R12.00 ABOUT THE COMPANY SeaHarvest Group is a South African fishing and food processing company listed on the Johannesburg Stock Exchange (JSE) under the ticker symbol SHG. The company was founded in 1964 and is headquartered in Cape Town, South Africa. SeaHarvest specializes in the harvesting, processing, and marketing of a wide range of seafood products, including hake, prawns, squid, and value-added frozen seafood meals. Hake is the primary species for SeaHarvest, and the company is one of the largest hake fishing and processing companies in South Africa. South AFricans are very lucky to have Hake at your disposal. In Europe it's difficult to find. SeaHarvest operates a fleet of vessels that engage in both inshore and deep-sea fishing to ensure a sustainable supply of seafood. The company's fishing operations primarily target hake, a popular white fish species known for its mild flavor and versatility in cooking. SeaHarvest operates state-of-the-art seafood processing facilities that adhere to strict quality and food safety standards. The company's product range includes frozen whole fish, fillets, portions, seafood mixes, and coated products, catering to both retail and foodservice sectors.
JSE:SHGLong
by Timonrosso