Dried fruit company Murray River Organics (MRG) has secured two contracts with an Australian supermarket worth A$15 million over two years.
The deal is part of MRG’s strategy to bring organics and better-for-you foods to mainstream consumers.
The ASX listed company said the deal builds on the branded ranging announced in February 2020 for eight new products with another retailer. which is expected to generate A$5 million to A$6 million per annum. The products will be available on shelf from June 1.
“We have been building our relationships through extensive collaboration, numerous site visits and engagement with our growers, as well as joint planning with our retail customers over the last nine months. We are delighted that the program is delivering and enabling us to secure material contracts going into FY21,” said Valentina Tripp, MRG CEO.
MRG said that it has experienced delays to shipping and orders since February due to the coronavirus outbreak and is expecting future delays. It has implemented measures to all its sites including “social distancing, limiting visitors to sites unless critical to operations, meetings using technology and remote working where possible”.
The company said there is significant uncertainty around its export, fresh programs and import supply chain delays. It will continue to closely monitor its expected financial performance against the EBITDA-S guidance provided in August 2019 and will keep the market informed of any material updates once it has sufficient information available.
MRG said, however, that it currently has a strong balance sheet, after the successful capital raising undertaken earlier this year. It is optimising the business for long-term growth by carefully managing the allocation of capital during the coronavirus outbreak.
It has applied cost reduction and cash management initiatives and is building on significant farm restructuring activities from December 2019. It has exited from the Colignan farm lease reducing cash needs by over A$10m; frozen all non-urgent capital expenditure and exited the South Park Drive warehouse facility for a variable 3PL model in Dandenong.
