Tegel shares soar on access to raw export market
Tegel Group shares have risen sharply in response to an announcement that it will be able to export raw poultry to Australia for the first time.
In a statement to the NZX, Tegel told investors that previously exports had been limited to fully cooked chicken, but work alongside the Ministry for Primary Industries had secured changed access conditions to the market across the Tasman. The shares rose 7.3 percent, or 12 cents, to $1.76.
Tegel exported chicken valued at A$70 million to Australia in its full year 2016, less than 1 percent of a market estimated to be worth A$7.1 billion.
"This regulatory change opens up significant additional export opportunities for Tegel into the Australian market, although the revenue upside cannot yet be quantified," the company said.
Tegel listed on the NZX and ASX in May, selling shares at $1.55 apiece in an initial public offering with the aim of using the money raised to target export markets.
EARLIER: Tegel shares are in a trading halt amid news the government has struck an agreement allowing the export of raw poultry products from New Zealand and Australia.
The company requested its shares be halted on the NZX and ASX after the Ministry for Primary Industries announced the agreement within an agreed access framework, Tegel says in a statement to the ASX.
The information was not provided in the NZX statement.
Further details are yet to be released but the development is likely to be good news for Tegel, this country’s largest chicken producer.
In June the company reported annual sales and profit ahead of its prospectus forecasts.
In announcing its result Tegel said it was "well positioned" to meet its 2017 targets, having forecast profit to more than triple to $44 million on a jump in sales to $637 million.
Tegel raised $284 million in its IPO, of which $129 million went to repay the existing shareholders - private equity firm Affinity Equity Partners. Another $130 million went toward repaying external debt.