Crocodile skins and meat producer, Padenga Holdings Limited, is planning to expand its business portfolio and venture into avocados and macadamia farming.
In a statement to stakeholders this week, company secretary, Andrew Lorimer said the group was contemplating diversifying its business. But hesaid the proposed move would not result in a dilution of existing shareholders of Padenga.
“Shareholders are advised that Padenga Holdings Limited is considering a proposed transaction to diversify its business through investments into an alternative export orientated business,” Lorimer said.
“To this end, transaction advisors have been engaged and developments will be communicated to shareholders in due course. In the interim, shareholders are advised to exercise caution in dealing their Padenga shares.”
“They have done their due diligence on the agriculture venture and a decision will be made soon,” said one industry player familiar with developments at the company.
Another source said the deal was “within reach” of Padenga Holdings, which operates three crocodile breeding and production farms, namely Kariba Crocodile Farm, Ume Crocodile Farm and Nyanya Crocodile Farm.Each farm has the capacity to breed close to 15,000 hatchlings per year.
Efforts to get a comment from Padenga chief executive officer, Gary Sharp, were futile by the time of going to press but last year he hinted at the group’s last analyst briefing that there were plans to expand the business into agriculture. This comes as Padenga’s main customer can only take 46 000 skins per annum, which they already fully produce leaving little room for growth except to negotiate on price increases.
The company is yet to publish financial results for 2018. But research firm, IH Securities, expects revenues for Padenga to surge by more than 10% for 2018 due to a favourable global market.
Reviewing the company’s financial results for the six months to June 2018, IH Securities predicted that Padenga would have a solid year after its revenues rose to $30.2m in 2017, from $11.7m in 2010.
IH Securities said: “We anticipate a significant rise in revenue of 12.5% year-on-year for 2018 to $34.07m on favourable conditions in the global market, as commodity prices and emerging markets, including China, are exhibiting signs of recovery.”