Pure Foods Tasmania says it has aspirations to become as successful as Tassal, the last major locally listed aquaculture company until its sale to Canadian firm Cooke for $1.1 billion last year, as it eyes fresh acquisitions in a bid to grow tenfold.
The company’s chief executive, Michael Cooper, said the group aims to reach $100 million in annual revenue, a step-up from the $10 million it is now generating.
“We’re not going to get there through organic growth,” Mr Cooper said, adding Tasmanian Pure Foods was closely assessing a buyout.
“We’ve got one on the radar now, we’re doing due diligence,” he said.
“If we exhaust all Tasmanian opportunities we definitely would,” he said.
Sales have been climbing sharply after the group’s tubs of Daly Potatoes & Gravy were stocked in Coles supermarkets in Victoria and Tasmania in March, and in Woolworths in Queensland and Tasmania in April.
“It’s blown our doors off with our volumes,” he said.“Considering the economy at the moment, it’s perfect timing”.
The company has appointed investment bank Kidder Williams to guide its expansion plans. Kidder Williams managing director David Williams said bigger scale was important for Pure Foods Tasmania, which aims to be on the front foot in consolidation.
“Down here, there’s plenty of room for scale,” he said. The company was in the sweet spot in its categories with its gourmet range and strong links to the local supply chain.
“One of the megatrends that people overlook is provenance,” Mr Williams added.
Mr Williams led a syndicate two decades ago which acquired the Tassal salmon business when the company went into receivership owing money to ANZ. It was subsequently floated on the ASX. In 2022, he was an adviser to Cooke in its purchase of Tassal.
Pure Foods Tasmania’s share price has been struggling, falling 2 per cent, or 0.3c on Monday to close at 13c. Shares have fallen 56 per cent in 12 months.
A former Tassal executive, Phil Excell, has been hired as the company’s new chief financial officer.
Mr Cooper said there may be some rationalisation of the businesses in the Pure Foods Tasmania portfolio as the growth plans are stepped up.
“You can’t be all things to everyone,” he said.
Exports constitute about 20 per cent of the total sales, with Hong Kong an important market for its vegan ice-cream made with a cashew base, that is gluten and dairy-free.
The company also operates the Woodbridge Smokehouse salmon business, Tasmanian Pate and Lauds plant-based foods.
Mr Cooper said inflation in input costs appeared to have passed its high point.
“I think we are definitely passed the peak,” he said.
But transport costs were still high and a shortage of truck drivers was adding to the headaches in logistics caused by the collapse of the Scott’s Refrigerated Logistics business.
Mr Cooper said the Pure Foods Tasmania ranges covered the premium end, the middle ground and the value end and would be able to withstand a tightening of spending by consumers.
He said a new product under the Daly Potato Co. brand of vegetables in a meal tray was being rolled out in IGA supermarkets and had been well received by shoppers looking for value, in its early days on the market.