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Sales boost has Clean Seas swimming back towards profit

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Record sales of $31.3 million for the six months to the end of December has buoyed South Australian kingfish farmer Clean Seas Seafood after a couple of loss-making years.

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The listed company announced to the Australian Securities Exchange this morning it sold a record 1946 tonnes of kingfish in the first half of FY 22, generating $31.3 million in revenue.

This was boosted by price increases to $18.25 per kilo in the December quarter with the revenue result up 40 per cent on the H1 last year and 28 per cent ahead of 2020.

The result follows a strong September quarter that generated $14.8 million in revenue.

It is also likely to move the company back towards profit after posting a $32 million loss last financial year and a $14 million loss in 2019-20.

The sales increase in the six month period was driven by Clean Seas’ two biggest markets Australia (up 29 per cent to 1009 tonnes) and Europe (up 75 per cent to 770 tonnes).

It said the increase in Australian sales had been driven in part by the national rollout of a number of retail products with Woolworths.

A secondary listing last year on Euronext Growth Oslo (OSE) – the leading exchange for high growth seafood companies – also appears to be bolstering Clean Seas’ European performance.

However, sales to North America (down 27 per cent to 146 tonnes) and Asia (down 10 per cent to 21 tonnes) tapered off compared to the previous year.

In its statement to the ASX today, Clean Seas said it had also cleared all excess frozen inventory and completed the harvest of high-cost surplus fish, which contributed to a decrease in costs.

The Adelaide-based company has also finished stocking its new Fitzgerald Bay site near Whyalla with juvenile kingfish, which is a key part of its plan to double production to 10,000 tonnes per annum.

The Fitzgerald Bay farm is set to be Clean Seas’ largest site with a capacity of more than 4000 tonnes of yellowtail kingfish.

Clean Seas reactivated farming in Fitzgerald Bay last year for the first time since about 2010 despite some concerns about the impact on a nearby Giant Australian Cuttlefish population.

Clean Seas CEO, Rob Gratton said the company was thrilled to report another record sales result.

“Demand and appreciation for our premium quality fish continues to expand globally, which is a testament to our successful diversification and our team’s ability to highlight the quality, flexibility and provenance only achievable by growing a native species in its natural waters,” he said.

“Our ability to clear excess inventory and deliver a record positive cash flow has again supported the proving out of our financial model.”

Clean Seas is headquartered at its processing facility in Royal Park while its hatchery is at Arno Bay and its Spencer Gulf fish farms are at Port Lincoln, Arno Bay and Fitzgerald Bay on Eyre Peninsula.

Meanwhile, fellow SA listed company Spacetalk also reported strong first-half figures to the ASX this morning.

The smartwatch company announced a 50 per cent increase in revenue for the six months to December 31 to $12.3 million following expansions in North America and northern Europe in November.

Annualised Recurring Revenue (ARR) from the company’s Spacetalk App monthly subscriptions was up 52 per cent to $3.5 million while device sales in the six months were up 57 per cent to $9.9 million.

However, revenue from the company’s school messaging services was down 10 per cent to $900,000, which it blamed on two years of COVID-19 disruptions, particularly in NSW and Victoria.

Spacetalk CEO Mark Fortunatow said the results demonstrated the strategic value of the company’s ownership and control of its own technology.

“It has been a little over four years since we launched our wearables business. In this time, our wearables distribution has expanded to three continents and generated cumulative revenues of greater than $37 million,” he said.

“And we have done this by keeping true to our brand and values of safety and trustworthiness, including by respecting the privacy and data of our customers.

“I am delighted with our progress to date and remain excited about the opportunities that are before us.”

The share prices of both Clean Seas and Spacetalk responded positively to the announcements with Clean Seas up five per cent to $0.60 and Spacetalk up 12 per cent for the morning to $0.18 at noon.

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