TasFoods is currently evaluating its Nichols poultry business, having received two proposals as part of this reassessment process.
In a statement released on December 18, the Launceston, Tasmania-based company characterized the proposals as “indicative non-binding” and did not disclose the identities of the proposing parties. TasFoods confirmed it is “pro-actively” engaging with these entities and exploring “all options, including divestment,” although it emphasized that these discussions are “not at an advanced stage.”
Earlier in August, when announcing its first-half results, TasFoods indicated it was conducting a review of its poultry operations. Notably, the company reported a non-cash impairment of A$1.2 million (approximately $792,732) in its poultry division, which followed a valuation review of its “cash-generating units and assets.”
Financially, TasFoods recorded a first-half net loss after tax of A$3.6 million, marking a significant 29% improvement compared to last year’s net loss after tax of A$5 million. Meanwhile, sales revenue from ongoing operations—which includes both poultry and cheese—fell by 21% year-on-year to A$19.9 million. This decline is largely attributed to an oversupply of poultry and heavily discounted wholesale pricing across various market channels. The gross margin for the poultry division also decreased slightly, slipping from 23% to 22% in the same period.
These indicative offers come amid a strategic reshaping of the company’s portfolio. In September, TasFoods agreed to sell its Pyengana Dairy operations to Research Corporation Pty Ltd. and Associates for A$2 million (then about $1.3 million). This acquisition, originally made in 2017 to diversify TasFoods’ portfolio, failed to meet performance expectations. During the announcement of the sale, TasFoods mentioned that part of the proceeds would be allocated to strengthen its poultry supply chain.
The decision to divest follows a recent A$1.3 million acquisition of Redbank Poultry in December 2023, which was part of TasFoods’ push to enhance its poultry sector. Additionally, in 2023, the company sold its Shima Wasabi spices business to Hillwood Berries as part of a broader brand streamlining effort.
In October 2023, TasFoods expanded its product offerings by entering the pet-food market, launching the Isle & Sky brand to cater to both cats and dogs. This move reflects the company’s commitment to adapting and responding to emerging trends within the food and beverage industry.
Overall, as TasFoods navigates these changes and evaluates potential viable options for its poultry division, it remains focused on maximizing its financial performance and aligning with evolving food and drink consumer trends.
