Murray Cod Australia Ltd

Saville Capital Emerging Companies Fund continues to hold Murray Cod Australia (MCA) as the company shows solid progress with sequential growth in 2Q FY24. Customer receipts were up 32% on the previous quarter, driven by increased supply and price hikes, particularly a 12.5% rise for larger fish. The company also experienced its best spawning season to date, setting the stage for significant future growth. MCA is focused on expanding its production capacity, with the Australian Sustainable Protein Fund (ASPF) set to purchase the Stanbridge site, which will accommodate up to 78 grow-out ponds. This expansion is expected to support future volume growth, significantly beyond current levels. Additionally, the ASPF is working to bring in external investors, which could provide MCA with a more affordable capital source by enabling the company to vend its property and water rights. With these developments, Saville Capital remains optimistic about MCA's future growth trajectory and its potential to benefit from both increased supply and strategic partnerships.

Saville Capital Emerging Companies Fund continues to hold its position in Murray Cod Australia Ltd (MCA) based on the company's recent update detailing its fish stocks, capacities, and future projections. The adverse impact of significant sales during COVID on MCA's saleable fish stocks is now dissipating, with the company forecasting a biomass of 3,000 tonnes by FY25 and over 5,500 tonnes by FY26, an increase from 535 tonnes in FY23. This rapid growth will necessitate substantial capital expenditure for hatchery and pond development, as well as working capital primarily for fish feed. MCA plans to finance this growth through external investment in the proposed Australian Sustainable Protein Fund (ASPF), funded by the sale of property and water rights valued at over $40 million. The successful launch of the ASPF is viewed as a critical catalyst for MCA, allowing the market to focus on its robust growth outlook rather than funding challenges.

Saville Capital Emerging Companies Fund continues to hold its position in Murray Cod Australia Ltd, given the positive indicators from the company's March quarter update. MCA reported a 44% increase in receipts compared to the December quarter and a 23% rise year-on-year, reflecting a steady rebound in sales volumes driven by enhanced fish supply. The firm also achieved a 44% increase in biomass, crucial for sustaining growth in supply and sales over the coming years. However, MCA is encountering selling pressure attributed to current market conditions, particularly its sub-$100 million market cap and potential equity raising concerns. The market appears to overlook the company's plans for the Australian Sustainable Protein Fund, which aims to generate additional capital through the sale of property and water rights. MCA is actively engaging with various potential partners and is optimistic about securing agreements soon. Furthermore, the company has a debt facility to support its working capital needs and the construction of new ponds, positioning it well for future growth despite present challenges.

Saville Capital Emerging Companies Fund continues to hold its position in Murray Cod Australia Ltd (MCA) following a recent capital raise of approximately $20 million at $0.07 per share to support ongoing working capital and infrastructure investment. Although discussions to vend property and water rights into the Australian Sustainable Protein Fund (ASPF) did not materialize quickly enough to prevent the need for equity raising, the capital raise received strong backing from both existing and new institutional investors. This funding alleviates the risk of accepting undervalued offers for significant assets. MCA plans to initiate a separate sale process for its Stanbridge site while seeking a suitable partner for the ASPF to facilitate future growth. Looking ahead, Saville Capital has optimism that market focus will shift from funding concerns to MCA's substantial production and sales growth prospects as it gears up for profitability over the next few years.

Saville Capital Emerging Companies Fund continues to hold its position in Murray Cod Australia Ltd, viewing the recent share price appreciation in June as a recovery from the artificial decline experienced in May due to a $20 million capital raising at $0.07 per share. The fund believes that with the completion of this capital raising, the market can now refocus on MCA’s substantial production and sales growth anticipated in the coming years, which supports the path towards profitability. This shift in attention, coupled with ongoing operational developments, reinforces the updated investment thesis for Murray Cod Australia as a promising opportunity in the evolving aquaculture sector.

Saville Capital Emerging Companies Fund updates its investment thesis on Murray Cod Australia Ltd, noting a 12% growth in cash receipts for 1Q FY24 despite ongoing negative cash flows due to rising feed costs linked to increased fish stocks. The Fund believes that as these fish approach saleable size, significant sales growth and improvements in cash flows are expected. Encouragingly, enhanced feeding methods and favourable weather have led to larger average fish weights than previously forecasted, positioning MCA for accelerated biomass growth as temperatures rise this summer. The Fund anticipates a substantial increase in the availability of saleable fish in the second half of FY25. Furthermore, developments at the Stanbridge grow-out site are on schedule for completion by March 2025, and MCA is exploring options for selling or financing this asset to bolster operational capital.

Saville Capital Emerging Companies Fund has updated its investment thesis regarding Murray Cod Australia Ltd following the announcement of a $43 million finance facility secured from Westpac with a three-year term. This funding will enable the company to refinance an existing $20 million facility, resulting in significant annual interest savings exceeding $1 million. Additionally, the capital will be utilized to purchase adjacent land to enhance their Bilbul site, complete the Stanbridge project, and support ongoing working capital needs, including growing fish for harvest and expanding hatchery stocks. The fund views this facility as a strong validation of MCA’s fish inventory and associated assets, positioning the company to achieve cash flow positivity and alleviating the necessity for further equity raises.

Saville Capital Emerging Companies Fund continues to hold Murray Cod Australia Ltd (MCA) due to the company’s strategic focus on improving its sales mix and preparing for significant growth. While sales growth for 2Q FY25 was deliberately modest, up only 2% on the prior corresponding period, MCA’s sales mix is improving with a 29% increase in the average weight per fish sold, now at 1.6 kg. This shift towards larger fish allows MCA to achieve better pricing per kilogram and enhances its export potential with options like frozen fillets. The company’s biomass is also growing rapidly, positioning MCA for a step-change increase in fish available for sale, which is expected to drive higher sales revenue in the second half of FY25 and beyond. Additionally, MCA reported a successful Spring spawning season, with a 20% improvement over the previous year. These developments suggest that MCA is on track for sustained growth, and Saville Capital Emerging Companies Fund remains optimistic about the company’s prospects.

Saville Capital Emerging Companies Fund continues to hold Murray Cod Australia (MCA) following an encouraging 1H FY25 result. The company has successfully built significant inventory, increasing by 47% since 2H FY24, and achieved a statutory profit for the half. Notably, MCA's inventory has grown by another 27% since December 31, reaching 2,002 tonnes by February 26. The fund is optimistic about the company's ability to start realizing the value of this inventory in 2H FY25, which is expected to drive sustainably higher quarterly cash sales. In response to this increased supply, MCA is focusing on expanding into new sales channels, including China, while also reopening prior channels to fully capitalize on its growing inventory. Saville Capital Emerging Companies Fund remains confident in MCA's strategy and growth potential.