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Tassal lifts FY profit, flags prawn plans

Alex Druce
Salmon farmer Tassal has lifted its full-year profit 2.0 per cent to $58.4 million

Salmon farmer Tassal has lifted full-year profit 2.0 per cent to $58.4 million and unveiled a capital raising that will help accelerate its prawn plans in north Queensland.

The company's shares entered a trading halt on Tuesday after it announced it aims to raise $133 million to support the purchase of the Exmoor Station property and expand its Proserpine operations, where it has about 200 hectares of prawn ponds.

Tassal wants to increase potential prawn production to about 6,000 tonnes a year by FY22, pending state and federal government approvals, and is eyeing a long-term annual target of 20,000 tonnes.

The prawn market in Australia is about 60,000 tonnes a year.

Managing director and chief executive Mark Ryan said Tassal's belief in its prawn production had only increased since its 2018 acquisition of Fortune Group's prawn assets in northern NSW and Queensland.

"We are quickly delivering on the potential we saw for prawns and the investment we have made to date ... is leveraging our experience and success with salmon," Mr Ryan said.

Tassal has announced a $108 million fully underwritten placement at $4.40 per share, representing a 6.8 per cent discount to Tassal's last closing price of $4.72.

As well as the placement, Tassal will also conduct a $25 million non-underwritten share purchase plan.

Tassal said it planned to invest about $85 million on the Proserpine expansion and Smart Farm initiatives to accelerate growth over the next two years.

Beyond FY22, Tassal said there was potential to develop a further 60 hectares of ponds at Proserpine.

"The further potential development of Proserpine, together with our acquisition of Exmoor Station, will strategically position Tassal to further drive growth ... and solidify Tassal's position as Australia's leading seafood producer," Mr Ryan said.

The company's profit lift was underpinned by a 15.7 per cent increase in revenue to $560.8 million, including a 19.9 per cent growth from salmon to $474 million.

Tassal's salmon harvest was up 7.0 per cent to 33,036 head on, gutted tonnes, while total sales volumes rose 10.3 per cent to 33,856 hog tonnes.

The company said it expected salmon demand would continue to outstrip supply, allowing it to increase prices and further increase returns.

Tassal will pay a partially franked 9.0 cent final dividend compared with a fully franked 8.0 cents a year ago.

TASSAL LIFTS FY PROFIT

* Net profit up 2.0pct to $58.4m

* Revenue up 15.7pct to $560.8m

* Final dividend 9.0 cents, 25 per cent franked vs. 8.0 cents fully franked in pcp.