Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Wrightson returns to profit after year-earlier impairment

Wrightson returns to profit after year-earlier impairment; outlook clouded by dairy slump

By Jonathan Underhill

Aug. 12 (BusinessDesk) - PGG Wrightson, the rural services firm controlled by China’s Agria Corp, posted an annual profit after a year-earlier loss driven by a historical impairment, and held off making a forecast for 2015 because of volatile dairy prices.

Profit was $42.3 million in the 12 months ended June 30, from a loss of $306.5 million a year earlier, when it took a $321 million charge to write off goodwill from its 2005 merger. Sales rose to $1.2 billion from $1.13 billion.

The Christchurch-based company updated its guidance for what it called operating Ebitda in June, to a range of $56 million and $58 million. Based on that non-GAAP measure it reported earnings for the year of $58.7 million, beating guidance and exceeding a Forsyth Barr forecast of $57 million.

Despite uncertainty over dairy prices, Wrightson is upbeat about the outlook, having acquired irrigation businesses and bought back properties it was leasing, including retail stores, seed processing sites and livestock saleyards in the latest year.

“The outlook for our core sheep, beef, arable, horticulture and viticulture markets is positive and will continue to be a major focus for the company, and in addition we are going to put more emphasis on the dairy, water and agronomy sectors in New Zealand,” said chief executive Mark Dewdney.

He said the company is confident it will increase operating Ebitda in the current year but “given the volatility in the forecast dairy price at the current time, and the need to assess the likely impact for PGW’s clients and the sector,” the company would wait until its annual meeting in October to give guidance.

Prices of dairy products tumbled to the lowest since October 2012 in the latest GlobalDairyTrade auction, which came after Fonterra Cooperative Group slashed its forecast farmgate milk payout for 2015 to $6 per kilogram of milk solids from $7/kgMS.

Wrightson’s rural services division delivered the biggest contribution to earnings in the latest year, with net profit of $37.5 million, from an impairment-marred loss of $78 million a year earlier. Sales rose 11 percent to $766 million.

Seed & Grain, which took the biggest share of the previous year’s impairment, posted profit of $23.9 million from a loss of $206 million. Sales climbed 9 percent to about $530 million.

Retail lifted profit to $17 million from $15.9 million as sales rose 12 percent to $486 million, while livestock posted profit of $10.4 million from a loss of $73.8 million as sales fell 22 percent to $76.9 million. Profit from Other Rural Services was $10 million, from a year-earlier loss of $20.5 million as sales climbed about 30 percent to $202.8 million.

The company will pay a fully imputed dividend of 3.5 cents a share on Oct. 3, with a record date of Aug. 26. The payment is made up of a final dividend of 2.5 cents and a special dividend of 1 cent brings total dividends for the year to 5.5 cents.

The shares last traded at 39.5 cents and have declined 1.3 percent this year.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: Wheeler Downplays Scope For ‘Large’ Rates Fall

Reserve Bank governor Graeme Wheeler says some market commentators are predicting further declines in interest rates that would only make sense for an economy in recession, although some easing is likely to be needed to maintain New Zealand’s economic growth. More>>

ALSO:

Ruataniwha Dam: Consent Conditions Could Mean Reduced Intensity

Legal advice sought by the Hawke’s Bay Regional Council on the Ruataniwha Dam consent conditions has confirmed that farmers who sign up to take water from the dam could be required to reduce the intensity of their farming operation to meet the catchment’s strict nitrogen limit. More>>

Health And Safety: Bill Now Sees Rules Relaxed For Small Businesses

Health and safety law reform sparked by the Pike River coalmine disaster has been reported back from the industrial relations select committee with weakened requirements on small businesses to appoint health and safety representatives and committees. More>>

ALSO:

Bearing Fruit: Annual Fruit Exports Hit $2 Billion For First Time

The value of fruit exported rose 20 percent (up $330 million) for the June 2015 year when compared with the year ended June 2014. Both higher prices and a greater quantity of exports (up 9.0 percent) contributed to the overall rise. More>>

ALSO:

Interest Rates: NZ Dollar Jumps After RBNZ Trims OCR

The New Zealand dollar jumped more than half a US cent after Reserve Bank governor Graeme Wheeler cut the official cash rate by a quarter-point and said the currency needs to be lower, while dropping a reference to criteria that justified intervention. More>>

ALSO:

Drones: New 'World-Class' Framework For UAVs

The rules, which come into effect on 1 August, recognise the changing environment and create a world-class framework that accommodates ongoing development while still ensuring the safety of the public, property and other airspace users. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news