NZ: Kiwifruit rival sells shares

Dissatisfaction with its direction and performance are cited as the reasons kiwifruit company DMS ha…

Dissatisfaction with its direction and performance are cited as the reasons kiwifruit company DMS has sold its shareholding in rival company Seeka.

Seeka's strong focus on other produce internationally, such as bananas, cherries and stone fruit through its recent $25 million expenditure in Australia, are among the reasons for the sale.

DMS's four per cent of shares have been bought by Sumifru Singapore – a company primarily involved in bananas and pineapples in Asia – which bought a small shareholding in Seeka in January this year.

Seeka's chief executive Michael Franks says Sumifru's purchase of further shares is a vote of confidence in the company.

Seeka this month reported a six-month net profit after tax of $3.72 million – up 152 per cent on the corresponding period in 2014.

The company forecast its full-year net profit after tax will be up by between 30 and 40 per cent on the $3.17 million reported for full year 2014.

Michael says Seeka is delivering on its goal of becoming a premium produce company for its growers and shareholders. But it's a strategy that is obviously at odds with what DMS expects.

Of even greater concern is the lack of all-round performance in Seeka's core business – New Zealand kiwifruit – including its high level of fruit loss as an example of its lack of focus, he says.

Funds from the sale of Seeka shares will be used to continue the DMS programme of investment in new coolstores, required to service its increasing market share.