Ridley Corporation (ASX:RIC) has announced that its subsidiary, Ridley Agriproducts, has entered into an asset sale agreement with the Baiada group to sell the Wasleys Feedmill in South Australia for $22 million.
The transaction, expected to close by June 30, is in line with Baiada's expansion plans in the region.
Ridley’s CEO, Quinton Hildebrand, noted that it provides a fair price and will strengthen Ridley's balance sheet, supporting its growth strategy.
The Wasleys Feedmill generated an EBITDA of $3.5 million in the last 12 months, with more than 90% of its output sold to Baiada.
Following the sale, Ridley anticipates a pre-tax profit and a reported gain of approximately $4 million in FY25.
However, the company’s ongoing business reset initiative is expected to offset some of the earnings reduction by achieving $5 million in annual cost savings starting FY26.
Trading conditions in the second half of FY25 are expected to be impacted by lower selling prices in Ridley's ingredient recovery business, along with challenges posed by avian influenza export restrictions and weather-related disruptions in Queensland.
At the time of reporting, Ridley's share price was $2.44.