Costa Group Holdings Ltd (ASX: CGC) has reported its December 2018 result, its share price is up 5% in early response.

Costa is Australia’s largest horticultural business. It produces glasshouse tomatoes, berries, avocados, mushrooms and citrus fruit. It has over 4,500 planted hectares of farmland, 30 hectares of glasshouse facilities and seven mushroom growing facilities across Australia. Costa also has international interests, with majority owned joint ventures covering six blueberry farms in Morocco and three berry farms in China.

Here’s What Costa Reported

Costa had already warned that this report would not reflect growth. Costa said its revenue declined by 2.4% to $477.6 million. Citrus category revenue was lower by $22 million than last year. However, transacted sales growth was higher through Driscoll’s and avocado marketing sales.

EBITDA (click here to learn what EBITDA means) before SGARA (the movement in value of its farm plants) fell by 42% to $35.3 million with a shift of seasonality of earnings, the citrus earnings and the African Blue consolidation all impacting profit.

Operating net profit (NPAT-S) declined 70% to $8.5 million and reported net profit dropped 94% to $4.3 million.

Costa said that it remains on target to meet its medium to long term profit growth objectives and the company said that there will be more earnings weighted to the second half than previously communicated.

Costa Dividend

Costa declared a fully franked dividend of 5 cents per share, which is the same as a year ago.

Costa Management Comments

Costa CEO Harry Debney commented on the business’ growth plans, “This includes building new capacity and scale through both greenfield investment and M&A activity, developing varieties that further extend our production and supply period, establishing premium brands that deliver quality and consistency to consumers, further expansion of our Moroccan and China operations and continued investment in automation to drive productivity improvements.”

Is Costa a buy?

Costa said that during Feburary solid price recovery has been experienced across our categories from the earlier challenging period. The company now expects calendar year 2019 operating profit growth of at least 30%.

I think the above positive news could provide a boost to the share price if this is borne out in the results over the next year, so Costa could be one to watch in 2019 and 2020 along with the two rapid growth shares in the free report below.

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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).

Disclosure: At the time of publishing Jaz owns shares of Costa, but that could change at any time.