Select Harvests (ASX:SHV) lifts underlying NPAT 33% and launches a 10% buy-back

A 29,500MT crop forecast tells you why management thinks the share price is wrong

Select Harvests (ASX:SHV), the largest almond company in Australia, delivered a HY2026 result this morning that reads better the second time through. Underlying NPAT came in at A$29.1 million, up 32.9% on the prior half, and the Board paired that with a 3.5 cent fully franked interim dividend after paying nothing at the same point last year.

On top of that, SHV’s management announced an on-market buy-back of up to 10% of issued capital, around 14.2 million shares. The Board’s stated reason was that they believed the current share price does not reflect intrinsic value.

Reported NPAT actually fell slightly to A$26.6 million from A$28.7 million, and EBITDA softened to A$59.0 million from A$62.7 million. The underlying line tells the more accurate story once prior year crop adjustments and last year’s one-off water sale gain are stripped out.

The 2026 almond crop is now forecast at 29,500MT, roughly 18% larger than FY2025, with an achieved price of A$10.21 per kilogram. That combination is what gives the buy-back its logic.

Why the buy-back is the real signal in this result

Buy-backs from agricultural processors are rare. The sector is capital-intensive, the cash cycle is long, and net debt sat at A$182.6 million at half-year end. So when this Board chooses to return capital rather than hoard it, that is a deliberate statement about where they think the cycle sits.

Management has also secured a A$60 million facility increase, taking total facilities to A$300 million at a lower total cost. The skeptical read is that a buy-back funded against a recently expanded debt line is financial engineering. The more constructive read is that cheaper funding was locked in because second half cash conversion looks strong enough to support it.

We think the buy-back matters more for the price floor it implies than for the EPS accretion. A company telling the market it will be a daily bid for up to 10% of its own stock over twelve months changes the trading dynamic in a thin small-cap name.

The second half is where the actual growth shows up

HY2026 revenue was A$59.0 million, down A$45.5 million on the prior comparable period. That looks ugly until you understand the cause. A lower carryover crop and wet weather pushing the 2026 harvest later meant inventory was simply not in the warehouse to sell during the half.

External grower volumes are forecast to more than double to 15,400MT from 7,329MT, and value-added sales carry materially better margins than bulk almond kernel. MD David Surveyor was explicit. The second half will see the benefits of both flowing through to what he called a meaningfully improved FY2026 result.

The risk is timing. A crop range of 28,000MT to 31,000MT still leaves uncertainty, and only a small percentage of field weight had been processed at reporting date.

Almond pricing is doing the heavy lifting

The macro backdrop is genuinely constructive. The US is forecasting a 2026 crop of 2.6 to 2.7 billion pounds, with carry-forward inventory of just 480 to 520 million pounds. That is a tight supply picture against demand growing at 5 to 7% CAGR driven by health, convenience and plant-based food trends.

Select Harvests sold at A$10.21 per kilogram in the half, marginally above the FY2025 average. With Californian inventories drawn down and demand structurally rising, the company sits in a pricing environment that does not require it to fight for every dollar. Middle East supply chain disruption remains a drag, but volumes have been redirected to China and India.

The Investors Takeaway for Select Harvests

The Board has set a 2030 target of 65,000MT and A$700 million in revenue, which implies roughly doubling again from current scale. The company has actually delivered that kind of growth over the past three years, so the ambition is not fanciful.

What investors should watch from here is second half cash conversion and the FY2026 result later this calendar year. If external grower volumes and value-added sales deliver the margin step-up management is signalling, and if almond pricing holds above A$10 per kilogram, today’s buy-back will look like the right capital call. If the crop lands at the bottom of the range, the debt position becomes the conversation. Investors can find more in-depth coverage of ASX agriculture names at stocksdownunder.