Photo by: Bloomberg
To boost its organic and acquisitive growth, while advancing its ambitions of becoming a global business, seafood producer Sea Harvest Group plans to list on the JSE by the end of March.
Listing would provide the black-owned company, which has operations in South Africa and Australia, ongoing access to national and international equity capital. “[This will enable] the company to continue investing in its people, vessels, factories and markets to enhance margins in an attractive international seafood market,” CEO Felix Ratheb said.
The proceeds from the listing of up to R1.5-billion will be used to repay all debt and further invest in the group.
Ratheb, who is also nonexecutive director of ASX-listed agribusiness Mareterram, in which Sea Harvest owns a 56% stake, added that through the capital raise, Sea Harvest will be well-positioned to pursue further acquisitions in the South African fishing industry, as well as support Mareterram’s growth ambitions of becoming a diversified agribusiness in Australia.
The group has demonstrated strong growth in the last five years, with revenue growing at a compound annual growth rate (CAGR) of 15% and earnings before interest, taxes, depreciation and amortisation (Ebitda) growing at a CAGR of 22%.
In this period, Ebitda margins expanded to 19% and, in the financial year ended December 31, 2016, 59% of the group’s revenues were generated in hard currencies, with Europe and Australia being the group’s largest international markets.
“This solid performance could not have been achieved without investment in assets, a new and energised management team, supportive shareholders and a dedicated workforce. Sea Harvest is well-poised for further organic and acquisitive growth as the demand for wild-caught sustainable seafood increases globally and supply remains stable,” said Sea Harvest chief investment officer Muhammad Brey.
The group has invested over R300-million in the past three years in vessel acquisitions and factory upgrades to enhance margins and create a world-class asset base.
In addition, the company invested close to R250-million in acquiring an interest in Mareterram to fortify its ability to earn foreign currency and diversify its earnings base and use Mareterram as a platform for future growth in Australia.
Listing the business on the JSE will be another milestone in Sea Harvest’s 53-year journey and will see the formation of a truly black-owned industrial fishing company. “We look forward to our continued commitment to transformation in the fishing industry where, after listing, [investment company] Brimstone will remain the majority shareholder of Sea Harvest,” said Brimstone chairperson Fred Robertson.
Brimstone currently holds 828-million Sea Harvest ordinary shares, which represents an interest of 85%. After listing, this will be diluted to around 52%.
In addition, Brimstone has provided Sea Harvest R575-million in funding, in the form of the Sea Harvest preference shares and Sea Harvest shareholder loans.
“The listing will allow us to continue building a sustainable black-owned fishing company that will generate a return for all its shareholders and be a true asset to the South African economy,” said Robertson.