After announcing a record profit for the 2014 financial year, Australian almond company Select Harvests Limited (ASX: SHV) has announced a AUD$63 million (US$59 million) acquisition of three properties that will help support an expected doubling of production capacity by 2018.

Managing director Paul Thompson said the move followed a decision three years ago to control more almond acreage to expose the company to the crop's positive market fundamentals, while also diversifying cultivation further south to mitigate disease, pest and climate threats.

"Today I'd like to announce the acquisition of three additional properties - two of them operating orchards and a third a greenfield property," Thompson said.

"We've done extensive due diligence on these properties using our own internal teams and external, independent experts.

"As they are currently operating orchards, we benefit from increased volumes, increasing our exposure to the current dynamic of the almond industry, plus the processing volumes will be put through our Carina West processing facility with no overhead increase."

The acquisitions are set to be completed in September, with the Amaroo orchard the largest by far with 2,046 acres, compared to 435 acres on the Grewal property.

Combined, these two properties will bring SHV 2,865 acres worth of plantable land, bolstered by 1,600 plantable acres from the greenfield property Mendook; the transaction is already complete for the latter.

Included in the total sum is an AUD$11.2 million (US$10.4 million) investment in 6,215 megaliters in high security water entitlements.

Thompson described the properties as "the platform for growth that's been missing from our existing strategy".

"The biggest acquisition is the Amaroo orchard in South Australia – this is a unique, high quality asset. It will become the headquarters of our southern hub," he said of the orchard, located on the Murray River between the Victorian and South Australian border.

"This acquisition effectively triples our orchards in the Riverlands and Northern Malee growing region."

The company's net profit after tax (NPAT) of AUD$29 million (US$27 million) is 27% higher than the underlying NPAT for 2013.

"In the almond division we took advantage of the rising almond price, with the average prices moving from AUD$6.38 (US$5.86) to AUD$8.30 (US$7.72) year-on-year. There was a positive adjustment related to the larger than anticipated 2013 crop, and orchard revaluations," Thompson said.

"We’ve increased our export sales and were able to keep our processing costs flat year-on-year."

Thompson added global demand for almonds was expected to continue rising by 8% annually, while global supply was set to only increase by 4%. For the coming year, he felt the big issue would be how drought will affect almond crops in California.

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