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CRT To Pay $2.4 Million Bonus After Record Year

MEDIA RELEASE
July 15, 2005

Immediate Release:

CRT To Pay $2.4 Million Bonus After Record Year

South Island farmer co-operative Combined Rural Traders Society Ltd (CRT) achieved a record $13.7 million operating surplus this year, half a million dollars higher than last year.

In announcing CRT’s annual result Chairman Don McFarlane said the total revenue of $388 million represented seven percent growth over the previous year. “The trading year for CRT was characterised by a highly competitive market. The fact that we have grown sales in the face of this competition is a reflection of the solid performance of CRT staff and loyalty of our shareholders,” Mr McFarlane said.

The role of the co-operative in providing strong competition has proven a winner for farmers over the year. “As a farmer owned organisation with the support of 19,000 shareholders across the South Island, CRT has the scale and efficiency required to create strong competition in the farm inputs market.” Mr McFarlane added. “Being effective in this role will become increasingly important in a market where competition is reduced through investor owned competitors consolidating.”

CRT’s $13.7 million operating surplus before rebates was on total revenue of $388.6 million. Of this surplus $10.5 million was paid in monthly rebates to shareholders, leaving a year-end profit of $3.2 million. This year’s bonus rebate to shareholders is a record $2.4 million. “This bonus rebate reinforces the benefit for farmers trading with their own organisation as profits are distributed back to them.” said Mr McFarlane. The individual members share of this rebate is calculated on purchases over several CRT divisions and will be paid half in cash and half additional capital shares.

Dunedin based Chief Executive Brent Esler said strong sales growth in nearly every area of CRT’s business was very gratifying for CRT staff. Shareholder numbers continue to rise and now total 19,000. “The $388 million total revenue reflects the strong support of those shareholders across a wide variety of farm inputs that CRT is involved in. Apart from the high profile 23 store FarmCentre network operated by CRT, other divisions contribute greatly to this result. For example, the CRT Card with its association to more than 2,000 South Island businesses providing generous rebates to shareholders, is still the largest single contributor to this revenue” Mr Esler said. This supplier network to the CRT Card enabled it to capture shareholders total on-farm and household goods and services purchase requirements.

CRT remains very focused on its role in the farm inputs market and has taken ownership at various levels in the supply chain where opportunities arose that commercially or competitively advantaged farmer shareholders. FarmDirect, providing on farm bulk fuel, had delivered benefits to shareholders with competitive pricing and this year it will again contribute significantly to the bonus rebate payments. CRT had taken ownership in stock food manufacturing through the Reliance brand and this year acquired the McMillan Stock Foods Ltd business in Christchurch. This has added equine and other specialised products to the extensive range offered under the CRT Reliance brand.

These operations, together with CRT SkinnerSeeds, CRT Real Estate Ltd and CRT’s supply of Ballance agri-nutrients products at trade pricing complete the CRT product basket.

CRT has considerable growth opportunities available within its’ South Island geography and the co-operative is focussed on achieving that growth. The coming year will see continued improvement in store presentation, and logistics are also being targeted to increase efficiencies. Mr Esler said improvements in data processing were continual with new technologies being deployed to handle the 2 million plus transactions processed annually in the Dunedin Support Office. New systems were also being implemented to enhance CRT’s shareholder / customer relationship management capabilities.

ENDS

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