Charles Dickens wrote “Poverty and oysters always seem to go together”.
Yep, oysters used to be a poor man’s food. A cheap source of protein often supplementary to beef.
Thanks to overharvesting in the 20th century the bivalves have since become a pricey delicacy, pulling profits for growers like Angel Seafood (ASX: AS1), the Southern Hemisphere’s largest producer of certified organic and sustainable pacific oysters.
The Company has enjoyed a productive quarter, delivering record revenue of $2.1 million, up 5% on the prior corresponding period. There has been an increase in the average price of oysters to 80 cents each (up from 75 cents in Q3) ahead of peak season demand as food services return to Victoria and New South Wales.
The Company’s farms remain well stocked, with biomass increasing by 94% to 496 tonnes, all but guaranteeing continued supply throughout the peak season, covering the festive summer period as well as Chinese New Year and Valentine’s Day. The Company expects annual sales to increase by 10-15% despite no further investment in assets.
Freight costs for export remain a challenge for the Company who recommenced exports during the quarter. Overseas sales only accounted for 5% of sales for the period however Angel hopes to see this rise as freight systems and logistics catch their breath post- COVID.
In an effort to expand their direct to consumer service the Company launched Halo Club- a subscription membership where customers receive 3 dozen Coffin Bay oysters and a range of restaurant quality dressings and sauces (plus an exclusive shucking set in the first month!). The Club is expected to generate a 30-50% price premium on comparable wholesale prices once running on a commercial scale, providing the Business with a high-value, recurring revenue stream.
The Company remains well funded with $3 million in the bank and operating outflows for the quarter coming in at $175k.
Angel CEO, Founder and ostreophile Zac Halman said: “Despite restrictive trading conditions in NSW, ACT and Victoria throughout much of the period, Angel has produced a record September quarter revenue result. Our ability to improve stock profiles, minimise mortality rates, and sell our oysters into our growing channels at improved prices has helped contribute to this record result. “
“September trading conditions in particular, showed promising signs of a resurgence in oyster demand ahead of the festive and summer season; sales increased 66% when compared to August.
“Good growth conditions have allowed us to increase our biomass considerably while increasing the average size of our oysters. We hold a very strong stock position as we move into Q4, placing us well to have sufficient supply on hand and ready to be deployed for the peak season as much of the economy reopens and to service the increasingly growing retail channel.”
Samantha Freidin is a business journalist at Emerald Financial whilst also completing a Masters of Marketing and Digital Communications at Monash University.
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