Farm Pride is clucking again after avian flu recovery
Food & Agriculture
Food & Agriculture
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The share price of Farm Pride Foods (ASX:FRM) has jumped by over 28 per cent today after the company advised that Agriculture Victoria has revoked a quarantine notice on two of its farms that was put in place after an avian flu outbreak in August 2020.
The company also said it managed to successfully offload a farm in Pittsworth, Queensland, after a strategic review concluded that it is no longer relevant to its long term strategy.
In August 2020, Farm Pride confirmed that it had lost a third of its productive hen stock after an outbreak of the H7N7 avian flu virus at two of its farm facilities in Lethbridge, Victoria.
The outbreak affected a total of 380,000 hens, with the company subsequently downgrading its full year FY2021 revenue forecast by $18 – 23 million.
The outbreak led to a temporary ban on Victorian poultry by at least eight countries, with Agriculture Victoria issuing an immediate quarantine notice on the farms. The quarantine has been lifted as of the end of last week.
Following the outbreak, Farm Pride called in external advisors to undertake a strategic review of its business as a pathway to financial recovery. The review recommended the sale of a non-core farm in Pittsworth, Queensland – with the proceeds to be directed to working capital and debt reduction.
Farm Pride announced today that a sale contract has been entered into with Hall & McLean Pty Ltd for $3.1 million excluding expenses, to be finalised by mid-March 2021.
The company says it will do further work to strengthen its capital structure, and is committed to providing future volume requirements for cage-free and free-range eggs to all its clients.
The Farm Pride share price fell to as low as 17c when the outbreak was announced in August, but has since recovered to 19c prior to today. The share price has jumped by almost 28% after the announcement today, with the stock now changing hands at 25c.