Agriterra (LON:AGTA) (3.25p and 1.6% of JIC portfolio) has given a brief update on its beef operations in Mozambique. Following the opening of its new abattoir and its first retail unit in Chimoio a couple of months ago it has opened a second unit located in Tete. The Company plans to open a further four retail units during 2013 to be supplied by its abattoir. As Euan Kay, Executive Director says this should improve the margins from its beef operations significantly.
Conclusion: Having invested heavily in building its beef operations in Mozambique we are now moving into a phase where we should start to see some returns on that investment. Since buying the position back in November a fair amount has happened at the Company but the share price has made very little progress. After receiving $28m cash from Marathon Oil in January, cash now represents about half of the market capitalisation. Furthermore, the NAV of the business is around 5.3p per share. As sales increase at the agricultural operations hopefully scepticism about the Company will turn to enthusiasm. Happy holder!
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