There’s a new horticulture stock listing on the ASX today and it’s targeting the USA
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Today, the ASX will welcome another horticulture company to its ranks in olive oil company Cobram Estate Olives (ASX:CBO).
Cobram grows and sells olive oil, which is incredibly sophisticated and a commonly utilised cooking ingredient.
It began in 1998 under co-founders Paul Riordan and Rob McGavin.
The company produces 71% of Australia’s crop across 2.4 million trees in Victoria.
The company is listing without raising new capital, a move unusual but not unprecedented. However, it has taken the opportunity to gift shares to some of its longest serving employees.
It also has two groves in California, making it one of the few ASX horticulture companies to target North America.
“The USA is really great opportunity for so many people and no one was doing it well over there so we’ve gone there,” McGavin said speaking with Stockhead yesterday.
“It hasn’t been easy but we’re now at break even and (there’s) quite a lot of upside left in that market. But these agriculture crops like olives, they’re not get rich quick schemes; they’re tangible, asset-heavy with land and investment and you’re building something for a more medium to long term basis.”
McGavin says while Covid-19 presented some challenges from a logistical point of view, there were some upsides in making customers become more educated about cooking ingredients such as olive oil as well as about sustainability.
“There’s been some serious disruptions, interruptions, difficulties travelling to and from the USA, even getting the harvest done,” he said.
“On the flip side, I think the population has had to learn to cook, know what ingredients are and focus on Australian produced products.”
There have been very few comparable IPOs in recent years. The closest could arguably be owner of horticultural assets Duxton Broadacre Farms (ASX:DBF), which listed at the start of 2018 and has flatlined since.
If cannabis companies count, there have been a handful of IPOs in recent years with mixed results. One of the more recent is Little Green Pharma (ASX:LGP) which initially declined but began to rise as it notched up its exporting endeavours.
One comparable IPO from the perspective of a company not raising capital is PNG-focused bank BSP Financial (ASX:BFL). While the company had a shaky start to listed life, it has made a modest climb in recent days.