Tassie wasabi maker not hot enough as Tasfoods writes off $2.1m
Health & Biotech
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Purveyor of fine Tasmanian produce Tasfoods is taking a $2.1 million hit to its bottom line, when results are released in February.
The $33 million company (ASX:TFL) said on Thursday it’s writing off almost the entire value of its acquisition of Shima Wasabi.
Tasfoods bought the Tasmanian wasabi maker in 2015 for $2.75 million, of which $300,000 was paid in shares prices at 25c each.
Tasfoods closed Thursday at 18c.
“While Shima Wasabi reported unaudited growth in sales revenue of 13 per cent in fiscal 2017, future sales growth to support the carrying value of goodwill is not certain given the early stages of its product, market and customer development,” Tasfoods told investors.
It said the “conservative approach” was to impair the goodwill held in its 18 month old investment, an accounting term implying the business’ value is less the amount that’s written off.
“We do however recognise we are in the early stage of market development and sales growth may take time to reach its full potential,” said TasFoods chairman Shane Noble.
“We remain confident in the long- term prospects and future opportunities that exist within the Australian and export market for wasabi.”