Bostock … cashed up to re-focus

This week Bostock Group announced a deal to transfer most of the Group’s conventional apple-growing properties – 240 hectares of orchards – to Scales Corp, owner of Mr Apple. 

This deal is valued at $47.5 million (including the sale of Bostock’s 50% interest in Profruit, maker of juice concentrates) and together with some smaller private sales of orchard land plus $35.3 million secured from the earlier sale of Bostock Brothers Chicken brings about $90 million in funds into the Bostock business.

As John Bostock told me, we’re “cashed up”. No doubt some of these funds will reduce debt, but Bostock emphasised funds were now available to pursue “new, exciting opportunities”.

One outcome, he says, will be a re-focus on organic apples, with Bostock Group remaining the largest organic apple grower in the southern hemisphere. Export-focused, Bostock’s top overseas markets are the US, Europe and Japan. He says his company is “market-driven”, giving as an example that the top-selling apple in the US these days is the Honeycrisp variety, originating in Minnesota, which Bostock grows on the cooler South Island.

But it’s not all about apples. Bostock has had a good season with onions and squash, with high yields and new premium varieties coming along there as well.

So, the bottomline? A strategic retrenchment, moving 240 hectares of conventional orchards off the books to generate the cash to clear debt and create a bit of a war chest for the next opportunities.

Bostock’s announcement said: “I am happy to say the Bostock group and family have fully recovered from Cyclone Gabrielle and are in a very strong position to expand the existing business and looking for exciting new opportunities.”

Or as John reduced it: “I own my business.”

That’s a significant achievement, in a sector with many growers threatened by two years of Covid, then a cyclone, plus rising ‘normal’ costs of all kinds — labour, inputs, rates, insurance and debt-servicing.