Alico (NASDAQ:ALCO) has completed a major shift away from operating citrus groves and is now positioning itself primarily as a Florida landowner focused on leasing agricultural acreage and pursuing real estate entitlements, President and CEO John Kiernan said at an investor presentation hosted by Three Part Advisors.
Kiernan said the company, which has been public since 1960 and listed on the Nasdaq since 1972, has a current market capitalization of about $300 million and owns roughly 46,000 acres across 27 locations in seven Florida counties. Historically, Alico operated in citrus, timber, railroads and diversified real estate, but Kiernan said citrus growing is no longer economically viable for the company.
Citrus Exit Driven by Disease, Storms and Losses
Kiernan said Alico had been the largest U.S. citrus producer for juice, growing about 20% to 25% of oranges for the juice market, but had been losing money on shipments for two seasons despite receiving what he described as strong pricing from Tropicana.
He pointed to citrus greening disease, which weakens trees by impairing their ability to absorb carbohydrates, along with major storms in 2017, 2022 and 2024. By the October 2024 storm, he said the company’s trees “pretty much had had enough,” and the cost of producing a smaller crop no longer made sense.
In response to an analyst question, Kiernan said Alico did not have a liability to Tropicana from exiting supply arrangements because the contract did not require performance when production was uneconomical. He also noted that Tropicana later exited the Florida fruit-buying market and now brings in fruit from Brazil.
Land Portfolio Split Into Development and Agriculture Buckets
Kiernan said Alico evaluated the “highest and best use” of every acre in its portfolio with outside consultants, appraisers, real estate experts and other third parties. The company then organized its land into three main categories:
- Near-term development: About 5,500 acres across four properties that management believes could be monetized within five years, with an estimated present value of $335 million to $380 million.
- Longer-term development: Up to 7,000 acres that could be developable beyond five years, with an estimated present value of $140 million to $170 million.
- Agricultural land: About 33,400 acres expected to remain in agricultural use in the near to midterm, with an estimated value of $175 million to $200 million.
Kiernan said those figures total about $650 million to $750 million on a pre-tax basis. He said the capital gains tax rate would generally be in the 20% to 25% range, but tax impact would vary by parcel, particularly because some land has been held for more than a century while other acreage was acquired in 2013 or 2014 at citrus-related values.
He said Alico has sold about 7,000 acres of agricultural land over the past year to third parties, often neighboring operators seeking to expand their own agricultural businesses.
Corkscrew Grove Described as “Crown Jewel”
The most significant development opportunity discussed was Corkscrew Grove in Collier County, near Naples and adjacent to Lee County. Kiernan said the 4,660-acre property sits along State Route 82 and Corkscrew Road, an area he described as a development corridor.
Alico is seeking approval for two adjacent villages that could include about 3,000 acres of development, up to 9,000 homes and as much as 500,000 square feet of commercial space. Kiernan said about 7,000 acres would be reserved for conservation and open space, including roughly 1,500 acres immediately tied to the project and another 5,500 acres nearby.
The project has already received unanimous local approval in Collier County, including 5-0 votes from the planning board and county commissioners, Kiernan said. However, federal review by the U.S. Army Corps of Engineers is expected because the area is environmentally sensitive and tied to Florida panther habitat. Kiernan said that review may not be completed until late 2027 or early 2028.
Alico has also funded a $5 million wildlife underpass near the project area. Kiernan said the company chose to spend the money before receiving final permits to support conservation efforts and potentially shorten the approval process.
Other Development Projects in Review
Kiernan also outlined several other potential development properties. In Highlands County, the Bonnet Lake Grove includes about 610 acres with some lakefront access and could potentially support about 2,000 homes. He said Alico expects an initial county appearance by the end of the summer and is optimistic the matter could be resolved by the end of 2026.
In Polk County, Saddlebag Grove includes about 240 acres near a lake and could potentially support up to 440 homes. Kiernan said plans have not yet been filed publicly. In Hendry County, the smaller Plant World parcel includes about 80 acres near LaBelle and is surrounded by residential development activity from a national homebuilder. Kiernan said Alico sees that project as a potential 2026 approval.
Once land is entitled, Kiernan said Alico could sell it outright, partner with builders and receive value as homes are sold, or develop internal capabilities to prepare lots or pads before selling to homebuilders. He said the board would evaluate cost, timing and risk for each option.
Capital Allocation and Liquidity
Kiernan said Alico has returned $210 million to shareholders and reduced debt over the past 10 years. He said net debt is expected to fall to about $45 million by the end of the fiscal year, compared with more than $200 million of acquisition debt when he joined the company.
The company recently completed a $10 million open-market share repurchase program under a 10b5-1 plan, buying shares at an average price of slightly less than $41 and reducing the share count by about 3%, Kiernan said. He added that Alico has paid dividends consecutively since 1974.
Kiernan said Alico has more than $50 million in cash and $95 million of untapped credit from MetLife. He said management believes the company has enough liquidity to sustain itself through the end of fiscal 2028 even without additional activity, though he emphasized Alico continues to pursue leasing, land sales and entitlement work.
During the question-and-answer portion, Kiernan said Alico owns fractional mineral rights across about 50,000 acres but said approvals for activities such as phosphate mining are difficult. He said Alico has three legacy sand mines operating and noted that water rights in Florida are based on usage and are not assets the company can sell separately.
About Alico (NASDAQ:ALCO)
Alico, Inc is an agribusiness and land management company headquartered in Fort Myers, Florida. The company owns and manages over 110,000 acres of land in southwestern Florida, with operations focused on citrus groves, sugarcane production, forestry and other row crops. Alico leverages its extensive land holdings to support integrated agricultural and environmental stewardship practices.
In its citrus division, Alico cultivates and markets fresh oranges for both the retail and processing markets, while its sugarcane segment supplies raw cane to domestic sugar mills.
