East Tamar's Hillwood Berries to buy Shima Wasabi for $700,000

Agribusiness will sell its top-performing Shima Wasabi unit to Hillwood Berries Tas for $700,000, following a strategic review of the group's business, TasFoods chief executive officer Scott Hadley confirmed in a statement to the Australian Securities Exchange on Monday morning.

"Our recent business unit review concluded that TasFoods is not the appropriate custodian to develop a premium range of wasabi products," the statement read.

"Whilst Shima Wasabi products continue to be enjoyed by customers in restaurants and at home, the business unit is unable to scale at the appropriate level to justify being retained within the core TasFoods brand stable."

The sale of Shima Wasabi to Hillwood Berries would give the brand "the best opportunity to achieve its full potential" and allow TasFoods to focus on its core products, according to the company.

Hillwood Berries, the farming business started by Robin Dornauf in 2010, is located at Hillwood, north of Launceston on the East Tamar River.

Robin and son Simon were unavailable for comment on Monday morning.

TasFoods, which is 22 per cent-owned by Tasmanian businesswoman and Kathmandu founder Jan Cameron, has seen its share price collapse over the past several years as the company struggles to reach profitability.

Its shares, which were trading at over 12 cents each during 2021, were changing hands on Monday morning at below 3 cents each.

After raising nearly $6 million in two separate placements in April 2022, the company had $960,000 in cash at the end of March this year, with a further $2.91 million in bank credit available.

After spending millions of dollars on a disastrous venture into organic chicken and then abandoning it less than a year later, the company recruited Mr Hadley to narrow the company's focus and bring its businesses into profitability.

But since his October 2021 appointment, the company is still in the red, although sales in its key poultry and dairy units increased by 14 per cent and 15 per cent respectively in the March quarter.

The company said it expected the sale to finalise by 30 June and would use the proceeds to retire debt and support working capital requirements.

"The sale price of $700,000 (less employee entitlements at settlement date) represents 1.8 times revenue, which is a reasonable outcome in the current environment," the TasFoods statement read.

"TasFoods continues to explore and review all possible strategic initiatives including partnerships, vertical integration, complementary asset utilisation and divestment options.

"We will review any opportunity through the lens of ensuring enhanced returns to shareholders."

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