Select Harvests Reports 33% Underlying NPAT Rise, Declares Dividend and 10% Buy-Back

• Underlying NPAT up 32.9% to $29.1 million
• Interim dividend declared at 3.5 cents per share, fully franked
• On-market share buy-back of up to 10% of issued capital
• 2026 almond crop forecast at 29,500 metric tonnes midpoint
• Secured $60 million additional debt facility with extended tenor

Underlying Profit Growth Amid Challenging Harvest

Select Harvests (ASX:SHV) reported a solid half-year performance for the six months ending 31 March 2026, with underlying net profit after tax (NPAT) climbing 32.9% to $29.1 million. This contrasts with a 7.2% decline in reported NPAT to $26.6 million, reflecting timing and one-off adjustments. The company attributed the underlying growth to improved almond market conditions, operational efficiencies, and capital investments.

The 2026 almond crop is forecast between 28,000 and 31,000 metric tonnes, with a midpoint of 29,500 MT used for reporting. This represents an 18% increase on the prior year’s 24,903 MT, supported by enhanced horticultural practices and processing investments such as kernel recovery and harvest shakers. Processing capacity has expanded to 55,000 MT, enabling higher throughput and increased external grower volumes, which are expected to reach 15,400 MT in 2026, more than doubling from 7,329 MT in 2025.

Dividend Return and Share Buy-Back Signal Confidence

Reflecting confidence in the company’s trajectory, the Board declared a fully franked interim dividend of 3.5 cents per share, the first dividend since 2023. The dividend is payable on 15 July 2026 with a record date of 18 June. At the same time, Select Harvests announced an on-market share buy-back of up to 10% of its issued capital, citing a belief that the current share price undervalues the company’s intrinsic worth. The buy-back will run for up to 12 months starting no earlier than 12 June 2026 and will be funded from existing cash reserves.

Managing Costs in a Wet Harvest and Inflationary Environment

Production costs rose due to inflationary pressures on inputs including water, fertiliser, fuel, and labour, compounded by one-off expenses related to a wet harvest. The wet conditions necessitated accelerated drying and overtime payments, adding around $7 million in costs. Despite these headwinds, the company’s Project Management Office initiatives helped offset some cost increases, maintaining tight financial discipline.

Revenue for the half was down 43.5% to $59 million, mainly due to lower carryover crop sales and delayed harvest timing. However, the company expects revenue to grow materially in the full year, driven by the larger 2026 crop and increased external grower volumes. Operating cash flows were negative $66.1 million, reflecting seasonal working capital investment, but are forecast to improve in the second half as inventory is sold.

Strengthened Balance Sheet and Debt Refinancing

Net debt rose to $182.6 million at 31 March 2026, in line with seasonal working capital needs. Notably, Select Harvests secured an additional $60 million in committed debt with a five-year tenor, extending the average maturity of its debt portfolio from 2.7 to 3.3 years and reducing refinancing risk. The total facility now stands at $300 million, with unchanged covenants and a lower cost of debt, providing financial flexibility amid geopolitical uncertainties.

The company remains compliant with all banking covenants and holds sufficient liquidity to fund operations and growth initiatives. Market valuations for its key assets, including orchards, processing facilities, and water rights, continue to exceed book values, underpinning a robust balance sheet.

Leadership Transition and Strategic Ambitions

In a significant leadership change, Managing Director David Surveyor resigned effective April 2026 but will remain through a six-month notice period to ensure an orderly transition. Surveyor’s tenure saw Select Harvests double in size over three years, improve safety metrics, and return to profitability after earlier losses. The Board praised his leadership and the executive team’s capabilities as the company charts its next growth phase.

Select Harvests is targeting a substantial scale-up, aiming to increase almond volumes to 65,000 MT and revenues to $700 million by 2030. This ambition is supported by ongoing investments in horticulture, processing capacity expansion (including Optimus Phase 4), and value-added product development. The company also continues to expand its customer base in key markets such as China and India, while navigating supply chain challenges in the Middle East.

Safety performance improved with the Total Recordable Injury Frequency Rate (TRIFR) falling to 3.7 from 5.5 in the prior year, reflecting sustained focus on workplace culture and risk management.

These developments build on the company’s recent turnaround, including its CEO transition announcement and FY2025 profit and debt reduction, positioning Select Harvests for a new phase of growth and shareholder returns.

Bottom Line?

Select Harvests is capitalising on favourable almond market dynamics and operational gains, but investors should watch how the leadership transition and cost pressures unfold through FY2026.

Questions in the middle?

• How will the new CEO shape Select Harvests’ growth and capital allocation strategy?
• Can the company sustain its cost discipline amid inflation and unpredictable weather impacts?
• Will the share buy-back and dividend policy influence investor sentiment and share price momentum?