Select Harvests shares (ASX:SHV) are on the move today, following the company’s reinstatement of dividends and launching a substantial share buyback, this all despite a 43% revenue decline driven by weather disruptions and harvest timing issues.
The Select Harvests share price is up 6.08% to A$3.84, marking a sharp reversal after a bruising start to 2026 that has left holders nursing year-to-date losses of 21.7%. The rally came as markets digested the almond producer’s interim results, which featured a complex mix of headline weakness offset by improving underlying profitability and aggressive capital management initiatives.
What Was Reported
Select Harvests reported interim results that highlighted the challenges of weather-dependent agriculture while simultaneously demonstrating improved operational efficiency. Revenue collapsed 43% to $59.0 million, driven by a lower carryover crop from the prior season and a late harvest caused by wet weather conditions across growing regions.
Despite the dramatic top-line contraction, earnings proved more resilient. EBITDA declined a modest 6% to $59.0 million, while reported net profit after tax fell just 7% to $26.6 million. The standout figure was underlying NPAT, which jumped 33% to $29.1 million, stripping out biological adjustments and one-off weather impacts that have plagued recent reporting periods.
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The divergence between reported and underlying earnings underscores both the quality of cost management and the inherent volatility in valuing agricultural assets. Markets appear to have focused on the underlying profit acceleration as the more meaningful indicator of the company’s core earnings power.
Dividend and Buyback Boost Sentiment
In a clear vote of confidence, the Select Harvests board declared an interim dividend of 3.5 cents per share, fully franked, compared to nil in the first half of 2025. The resumption of shareholder distributions after a hiatus sends a powerful signal about both cash generation and management’s outlook for the business.
The company also announced an on-market share buyback of up to 10% of issued capital. The board explicitly stated that the buyback reflects its view that the current share price does not reflect the company’s intrinsic value, a message that resonated with markets given the stock’s year-to-date underperformance.
The dual capital return program comes despite net debt rising to $182.6 million from $168.2 million, driven by investment in the expanding crop. To support growth, Select Harvests increased its banking facilities by $60 million to $300 million, securing both lower interest costs and extended tenure from its lenders.
Volume Growth Drives Recovery
The company’s 2026 crop forecast provides the fundamental underpinning for its recovery story. Select Harvests expects to produce 29,500 metric tonnes of almonds, with a range of 28,000 to 31,000 tonnes, representing an 18% increase over the 2025 harvest. More significantly, external grower volumes are forecast to more than double to 15,400 tonnes, substantially boosting throughput across the company’s processing infrastructure.
Almond pricing has remained stable at $10.21 per kilogram, virtually unchanged from the $10.18 per kilogram achieved in fiscal 2025. The price stability provides a more predictable revenue base, though it also means earnings growth will be driven primarily by volume and operational efficiency rather than commodity price tailwinds.
The larger crop and expanded grower network should drive improved asset utilisation and overhead absorption across Select Harvests’ processing facilities, supporting the margin improvement evident in the interim underlying earnings.
Looking beyond the immediate recovery, the board has set new long-term growth targets aimed at transforming the scale of the business. By 2030, Select Harvests is targeting production of 65,000 metric tonnes and revenue of $700 million, more than doubling current crop volumes and substantially expanding the top line.
These targets signal management’s confidence in both the structural growth of almond demand and the company’s ability to execute on orchard development and grower partnerships. However, they also highlight the capital intensity and execution risk inherent in scaling an agricultural business, particularly one exposed to weather volatility and commodity price cycles.
Bull Case:
- Underlying NPAT surged 33% demonstrating strong operational leverage and cost control
- Reinstated 3.5 cent fully franked dividend signals robust cash generation and confidence
- 2026 crop forecast 18% larger with external volumes doubling boosts scale
- 10% buyback at depressed prices provides EPS accretion and technical support
- 2030 targets of 65,000 tonnes and $700 million revenue offer compelling growth narrative
Bear Case:
- Revenue plunged 43% highlighting severe weather and agricultural earnings volatility risks
- Net debt rising to $182.6 million while funding dividends and buyback increases leverage
- Flat almond pricing means growth relies entirely on volume execution risk
- 21.7% year-to-date decline reflects damaged sentiment requiring sustained proof of recovery
- Ambitious long-term targets raise capital intensity and execution concerns in cyclical sector
