For the second time in two years shares in fruit and vegetable grower and distributor Costa Group have fallen out of bed after a weak trading update.
The shares slumped more than 25% at one stage yesterday after the annual meeting was given what investors took to be a weak trading update for the company’s first half to the end of June.
In May 2019 an update that revealed problems with mushrooms, strawberries and other crops saw the shares plunge steeply as well.
Costa shares ended the session down 24.1% at $3.37, and its worst session since May 2019. They had closed at $4.44 on Wednesday.
Yesterday’s close was close to seven-month lows for the company.
The shares actually hit a day’s low of $3.31 – the lowest since October last year – after warning that its Australian growing and harvesting operations would continue to be hurt by COVID-19 curbs and labour shortages.
That’s despite the company’s annual meeting being told that the company had seen a slightly better-than-expected start to the financial (calendar) year thanks to strengths in its international growing operations in China and Morocco.
The company told investors its overall first-half performance is expected to be marginally above the prior corresponding half.
The company’s Chinese operations, where the company grows and distributes berries, has seen strong pricing and demand, along with its Moroccan operations.
The stronger Australian dollar has clipped Costa’s international revenue and earnings growth, though.
Domestic performance has been mixed, Costa said, with berries and avocados performing well but mushroom growth limited by those labour constraints.
Citrus has also been hurt by hail damage and fruit fly restrictions in South Australia.
No formal guidance though was issued in the update or to the AGM.
