Costa sees shares drop 40 per cent following subdued demand for veg
Costa Holding Group has seen its share price drop by 40 per cent following “subdued demand” for tomatoes, berries and avocados over the month of December.
In a trading update today, the fruit and vegetable grower revealed that January trading conditions are “slower than planned”.
An earlier than expected finish to the citrus “off season” also contributed, with the share price falling from $7.37 at Wednesday’s close to as low as $4.47.
Costa was trading 34.12 per cent lower at $4.85 at 1155 AEDT.
The company said if current trading conditions continue, together with short term slippage of the commissioning of the Monarto mushroom facility upgrade in South Australia and the previously announced additional costs from its African project, it is expected to result in largely flat profit growth for the twelve months to July 2019.
Costa said it does not view the current issues as structural, but rather regards them as cyclical with the expectation that trading for 2019 will be in line with previous guidance. The company will provide a further update to guidance in late February.
Costa’s operations include approximately 4,500 planted hectares of farmland, 30 hectares of glasshouse facilities and seven mushroom growing facilities across the country.