Murray River Organics Group Limited Provides Earnings Guidance for the Fiscal Year 2017; Announces the Acquisition of More Than 7,700 Acres of Farmland in Sunraysia
Consistent with MRG's growth strategy, the company announced that it has agreed to acquire an additional and significant property of 7,764 acres adjacent to MRG's Colignan vineyard in Sunraysia. The acquired property plays favourably to MRG's core agronomy strength and provides an immediately earnings accretive large scale growth option for future development of new vertically integrated healthy and better-for-you food products. Competition for large-scale high-quality-soil free-hold farmland in Australia is increasing significantly. Acreage with soil suitable for numerous crops, such as tree nuts, citrus, vines, grains, ancient grains and high protein beans and legumes, that is favourably located, with infrastructure and irrigation in place, is in high demand. MRG will pay $7.5 million cash consideration to acquire 7,764 acres of farmland in Sunraysia, adjacent to MRG's Colignan vineyard. Details of the acreage of the large and flexible future growth option acquired include: 157 acres planted to citrus where the land is drip-irrigated. Plantings are still maturing with approximately 60% currently mature and full maturity will be reached by 2021. 177 acres planted to wine. Land is drip-irrigated. 5,980 acres bare. Arable land highly suited, amongst others, for development to tree nuts, citrus, vines and or growing of grains, ancient grains and high protein beans and legumes. 1,450 acres bare. Non-arable land where value creation opportunities will be explored. The acquisition is earnings accretive in year one and will be funded via existing banking facilities. Further development of this new acreage is not an immediate priority to the Company, as the acquisition, on an as-is basis, is earnings accretive. Any future development will be subject to disciplined project and funding assessment to deliver shareholder value.