Capilano Honey is hoping to raise $16.8 million in capital from its shareholders to fund acquisitions, new product development and export market expansion.
The Queensland-based ASX-listed company this week launched an offer document for a rights issue, with the money raised to go towards the company's acquisition of more beekeeping enterprises and other licensed apiary sites in order to continue to secure honey supply.
“Capilano has a pipeline of potential beekeeping acquisition opportunities and intends to continue its strategy of acquiring strategic assets that meet its objectives,” the company said.
“These acquisitions represent strategic assets that are expected to enhance Capilano’s high value honey supply base, including Manuka, provide geographic diversity including a beachhead in Western Australia, provide capacity to materially grow production, and advance Capilano’s strategy to attract and retain new entrants to the beekeeping industry.”
The funds would also help it to invest in production efficiency upgrades and new product capabilities – such as growing its supply of premium products like Manuka honey, Capilano said.
Capilano recently forged a Manuka honey joint venture with New Zealand company Comvita to secure greater honey volumes in order to meet growing global sales demand, particularly in high value-in-use therapeutic and medicinal channels.
The capital raising will also strengthen Capilano's balance sheet, the company said, by reducing debt and providing flexibility for further growth, and increase its working capital to support business growth and new export market sales.
Finally, the funds would also provide the honey processor with additional marketing resources for new product developments and export market growth.
In the 2015 financial year, Capilano's revenue rose 41 per cent increase over the previous corresponding period, and its profit rose 70 per cent.
