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Market Cap
£4.86m
Change Today
0.000p ()
Share Price
25.50p
Acquisition of MIS Project
RNS Number : 9414B
Radicle Projects Plc
26 August 2008
26 August 2008
Radicle Projects PLC
("Radicle" or the "Company")
Radicle acquires £1.86m MIS interests in Australian apple-growing projects
Radicle (EPIC: RDP.L), the AIM quoted UK company involved in the acquisition and management of Australian agribusiness projects, is pleased to announce that it has acquired interests in two further Managed Investment Scheme ("MIS") projects for a total cash consideration of AU$3.98 million (approximately £1.86 million). Both projects are involved in apple production and are managed by Advanced Horticultural Management Ltd ("AHM"). Radicle also announces the acquisition of 19.22% of Rivercorp Pty Ltd for AU$350,000 (£0.16 million).
AHM Organic Apple Project
Radicle has acquired 200 units in the AHM Organic Apple Project in the Nangwarry Region of South Australia for a total cash consideration of AU$2.64 million (£1.24 million). Radicle's investment represents approximately 50% per cent of the project. The project closed on 15 June 2008 and by the end of July AHM had already established the entire 106 ha of orchards.
The orchard has been planted with five different apple varieties at density of 2,200 trees per hectare. Traditional apple trees are planted at a density of 250-300 trees per hectare. The dwarf root stock used by AHM will enable higher volumes of fruit to be recovered from these more densely planted smaller trees. The dwarf stock tree also produces earlier maturity enabling harvests beginning in 2010 and reaching full maturity in 2013. The project term is initially planned for 17 years with the potential to extend the project.
AHM Early Season Apple Project 2007
Radicle has also acquired 25 hectares of the AHM Early Season Apple Project 2007 through the purchase of 100 units for a total cash consideration of AU$1.34 million (£0.63 million). This 100 hectare project is in the Riverland Region of South Australia. AHM has established three apple varieties in this project. Development of the Early Season Apple Project 2007 began in spring 2007 and is now fully established, with harvests anticipated to begin in 2010. This project is initially planned for 15 years and may also be extended at the end of the project period.
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The sites chosen for the projects have warmer climates than traditional apple regions which encourages early ripening, resulting in apples going to market during January and February, to take advantage of generally higher apple prices during those months.
Radicle anticipates that the projects will achieve an average price of AU$1,200 per tonne for the Organic Apples produced by the Organic Apple Project and AU$1,000 per tonne for the Early Season Apples. Cash income from sales is expected from 2010 and to continue to rise to an anticipated annual yield of 60 tonnes by 2015.
Rivercorp Pty Ltd
The Company has also acquired 19.22% of the share capital of Rivercorp Pty ("Rivercorp") for a total cash consideration of AU$350,000 (£163,800). RiverCorp owns the land, water rights, trellising, trees and irrigation of the AHM Early Season Apple Project 2007. Radicle anticipates that the Company will benefit from a share of dividends from income derived from leasing the AHM Early Season Apple Project 2007 land and from the sale of the assets at the end of the investment term
An independent appraisal prepared for Radicle by Advisor Edge values the assets acquired at approximately AU$7.19 million (£3.37 million).
Tim Bennett, Chief Executive commented,
"These three assets together represent the third major acquisition for Radicle in the last four months, adding significant crop, market and geographic diversification to Radicle’s existing portfolio. The early season apples project includes the acquisition of a proportion of the land and water asset owning company which generates immediate cash and substantial value uplift for Radicle. The fee income arising is significant for the group and adds substantially to revenue.
The Organic Apple Project meets a specific market niche and supports our stated objectives to making positive environmental investments that are profitable and make positive contributions to their communities.”
--ENDS--
Enquiries:
Radicle Projects PLC 020 7016 5300
Michael Finniston, Chairman +44 (0)7968 580 448
Tim Bennett, CEO +44 (0)7969 981 790
Charles Stanley Securities 020 7149 6000
Nominated Adviser
Russell Cook / Freddy Crossley
Bishopsgate Communications 020 7562 3350
Maxine Barnes / Nick Farmer
Notes to Editors
About Radicle Projects
Radicle Projects PLC (Epic: RPD.L) was established in 2004 to acquire interests in Australian Agribusiness Projects. Having admitted to trading on the London Stock Exchange AIM market on 4 August 2005, the Company has identified a series of acquisition opportunities which the Directors anticipate will generate significant cashflows.
Through the acquisition of interests in Australian Agribusiness projects with strong business fundamentals, sound market prospects and cash generative profiles, Radicle are committed to delivering income to shareholders by way of dividends and creating capital growth.
Based in London, with offices in Melbourne, Australia, the Directors believe that Radicle provides an opportunity for investors to gain exposure to cashflow streams and asset growth that are not correlated to the mainstream asset classes of equity, property and cash and thus diversify their portfolios. For further information, please visit www.radicleprojects.com
About Advanced Horticultural Management
Advanced Horticultural Management Ltd was incorporated in 1997 and operates as the Responsible Entity, regulated by the Australian Securities and Investments Commission, to maintain and manage the project and to harvest the crops. It currently operates as Responsible Entity for seven other agribusiness MIS projects. AHM operate the Adelaide Hills and Gumeracha vineyards for Radicle, as well as overseeing operational management of the Company’s Paulownia forestry assets.
This information is provided by RNS
The company news service from the London Stock Exchange