- Australia’s leading produce supplier, Costa Group Holdings (CGC) has withdrawn its 2020 guidance
- The company had a strong start to the financial year and its farms are still operating
- However, it is becoming clear that restrictions, and the impacts from these, will continue in the long term
- This uncertainty is what has led the company to withdraw its guidance
- On market close, Costa is up slightly trading at $3.00 per share
Australia’s leading produce supplier, Costa Group Holdings (CGC) has withdrawn its 2020 guidance after having a positive start of the 2020 financial year.
Costa Group is Australia’s largest horticultural company and a major supplier of produce to food retailers in that country.
Food supply is an essential status in Australia and in other countries where Costa grows its produce. The company says all of its farms are operating in all countries and following the right COVID-19 procedures.
Costa performed above budget in the first quarter of 2020 and current trading remains positive.
Costa, like the rest of the world, was hoping for a quick economic and business recovery in Australia and internationally. However, in recent days it is becoming clear that restrictions, and the impacts from them, will continue for longer than initially hoped.
“With the current high level of uncertainty and volatility in the social and economic environment generally, it is not possible to provide meaningful forward financial forecasting with any reliable accuracy,” the company said.
This will impact different markets for the company’s produce. Therefore, the company has decided to withdraw its previous guidance for the 2020 financial year.
“Accordingly, the ongoing uncertainty regarding the extent, duration and potential impact of future government restrictions relating to COVID-19 both in Australia and internationally significantly hampers our ability to provide reliable and accurate forecasting,” the company explained.
The company’s balance sheet, cashflow and liquidity remains strong and supports current ongoing operations including new plantings and farm development.
On market close, Costa is up slightly trading at $3.00 per share.