Australia’s Bega Group is being assisted by local advisory business Kidder Williams over the potential sale of a Queensland manufacturing plant.
The site in Kingaroy was acquired in 2017 when what was then Bega Cheese bought the Peanut Company of Australia (PCA).
Bega Cheese changed its corporate name to the Bega Group in 2022 to better reflect the nature of the company’s portfolio, which ranges from the cheese brand of its former name, Bega peanut butter and Vegemite spreads.
A disposal of the Kingaroy facility is the most likely option as part of a strategic review, according to The Australia Business Review, quoting Kidder Williams’ proprietor David Williams.
“It could be a very interesting opportunity for a food manufacturer to supply one of Australia’s premier brands, Bega’s peanut butter, as well as other food manufacturers,” Williams said in the article.
The Review suggested PCA generates annual sales of around A$19m ($12.5m) and operates three other factories in Gayndah, Inverlaw and Tolga.
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By GlobalData
Just Food has approached publicly-listed Bega for comment and confirmation of its plans outside of Australia business hours today (7 June).
This publication has also asked Mr Williams if he is able to clarify whether the whole business or only the Kingaroy plant is being considered for sale.
Bega’s approach to PCA was accepted in 2017 at 83 cents a share, initially through a 20% share purchase and then a full takeover at the same price, according to a document at the time from the peanut processor.
The full value of the overall deal was put at A$11.9m.
The document read: “Bega’s acquisition of PCA will ensure continued Australian ownership of our iconic peanut business.” It added the transaction will “facilitate business expansion opportunities and provide confidence to farmer suppliers to expand peanut plantings, increase production and therefore provide additional supply to our customers”.
In another product area, Bega started bringing output in-house in February based around the dairy assets acquired in a deal last year from TasFoods – the Betta Milk and Meander Valley Dairy brands.
For the first half of fiscal 2024, Bega booked revenue of A$1.73bn, up 3.2%, results issued in February showed.
Normalised EBITDA edged up to A$76.5m from A$74.6m a year earlier. Net profit after tax rose 41% to a normalised A$13.3m.
In the 2023 financial year, Bega posted a loss after tax of A$229.9m, swinging from an A$24.2m profit a year earlier.
The company said the loss was “significantly impacted by non-cash after-tax asset impairment” of A$230m related to commodity assets.
Normalised EBITDA dropped 11% for the year to A$160.2m, based on revenue of A$3.4bn, an increase of 12%.
