Costa share price slides after listing reaches target

THE SHARE price of Geelong’s biggest company, Costa Group Holdings Limited, has fallen to $2.10 after listing a week ago with a starting price of $2.25.
The float had been priced from $2.20 to $2.70, which would have raised between $541 million and $637 million.
The sliding share price indicates wariness among investors as they take a wait-and-see approach to the newly listed stock.
The company, with an Australian Stock Exchange code of CGC, is valued at $850 million.
Its net profit for 2015/2016 is forecast to be $47.6 million, excluding float costs, with revenue of over $700 million this year.
Joint owners Costa and US investor Paine and Partners will retain 10.5 and 12.4 per cent stakes respectively.
Now the largest grower of berries, mushrooms, glasshouse tomatoes and citrus, Costa has major joint ventures in blueberry farms in Morocco and China. In a statement, Costa Group said the market size of its categories was estimated at $3 billion in 2014.
Costa chairman Neil Chatfield said the float was a significant new phase for the company.
“Through our scale, national reach and product quality we are well-positioned to capitalise on future growth opportunities, including further investment in produce categories that enable year round production and supply to Australian retailers and consumers.“