As Australian supermarket shelves are stripped bare from the hysteria of coronavirus panic buying, agriculture company Murray River Organics (ASX: MRG) will do their bit to meet demand, having secured a new deal worth $15 million.
The 2-year deal is a key milestone for Murray River Organics which has endured a torrid few years where drought conditions and the recent bushfires have impacted their network of farmers who have been pushed to the brink of commercial survival.
Addressing some of these uncontrollable forces, the Group put together an action plan in 2019 to turn its fortunes around, but stay firmly committed to entirely organic produce with a focus on natural and healthy foods to be marketed globally.
“We have been building our relationships through extensive collaboration, numerous site visits and engagement with our growers, as well as joint planning with our retail customers over the last nine months,” said Murray River Organics CEO, Valentina Tripp.
“We are delighted that the program is delivering and enabling us to secure material contracts going into FY21.”
Addressing its decline in cashflow with a strategy to rebuild the Murray River Organics brand profile, the Company has been undergoing a major cost-cutting corporate restructure which has included moving facilities and putting a freeze on all non-urgent capital expenditure.
Like most Australian businesses however, Murray River Organics has felt the wrath of the global coronavirus outbreak with Tripp forewarning investors that they, too, have had delays to their supply chain through February and March.
For the half year ending December 31, 2019, Murray River reported revenues of $24.8m, an 18% decline over the corresponding period the year prior.
Despite the tumultuous few years endured by the agriculture company, Murray River was successful in raising $25 million last month via an Entitlement Offer at an issue price of $0.015 per share which was fully underwritten by Canaccord Genuity and Shaw and Partners.
Following news of their new $15m supply deal with one of Australia’s largest supermarket chains, MRG shares rose 20% to an intraday high of $0.012.