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

 


Wrightson shares rally as rural, seed & grain drive profit

Wrightson shares rally as rural services, seeds & grain drive profit rebound

By Jonathan Underhill

Aug. 12 (BusinessDesk) – Shares of PGG Wrightson rose to their highs of the past five months after the rural services firm controlled by China’s Agria Corp posted full-year earnings that beat estimates, driven by its Rural Services and Seed & Grain units.

The stock rose 8.9 percent to 43 cents, a level it hasn’t surpassed since February. Operating earnings before interest, tax, depreciation and amortisation was $58.7 million in the 12 months ended June 30, beating the guidance it gave in June and exceeding the $57 million forecast by Forsyth Barr.

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.

The company refrained from giving guidance for the current year, saying it will wait until its annual meeting in October, given the volatility in dairy prices and the potential impact on customers. Still, it said the outlook for its core sheep, beef, arable, horticulture and viticulture markets “is positive” and the company plans to “put more emphasis on the dairy, water and agronomy sectors in New Zealand.”

“Operating Ebitda was excellent – above expectations, with substantial margin growth from both Rural Services and Seed & Grain operations,” said James Bascand, an analyst at Forsyth Barr.

“FY14 has been a favourable year, such that sustainability of earnings may be a challenge across all segments,” he said. “In saying that, the underlying market share and market sizes of some segments have undisputedly increased and will underpin a higher base level of earnings going forward.”

Wrightson’s Retail business 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.

In omitting any immediate forecast for 2015, chief executive Mark Dewdney said the company is confident it will increase operating Ebitda in the current year.

Net 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 Ebitda to revenue margin at Wrightson’s Rural Services division widened to 6.9 percent in the latest year from 6.5 percent, while for Seed & Grain it expanded to 6.4 percent from 5.4 percent.

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 and brings total dividends for the year to 5.5 cents.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Media: Julian Wilcox Leaves Māori TV

Māori Television has confirmed the resignation of Head of News and Production Julian Wilcox. Mr Maxwell acknowledged Mr Wilcox’s significant contribution to Māori Television since joining the organisation in 2004. More>>

ALSO:

Genetics: New Heat Tolerant Cow Developed

Hamilton, New Zealand-based Dairy Solutionz Ltd has led an expert genetics team to develop a new dairy cow breed conditioned to thrive in lower elevation tropical climates and achieve high milk production under heat stress. More>>

Fractals: Thousands More Business Cards Needed To Build Giant Sponge

New Zealand is taking part in a global event this weekend to build a Menger Sponge using 15 million business cards but local organisers say they are thousands of business cards short. More>>

Scoop Business: NZ Net Migration Rises To Annual Record In September

New Zealand’s annual net migration rose to a record in September, beating government forecasts, as the inflow was spurred by student arrivals from India and Kiwis returning home from Australia. More>>

ALSO:

Scoop Business: Fletcher To Close Its Christchurch Insulation Plant, Cut 29 Jobs

Fletcher Building, New Zealand’s largest listed company, will close its Christchurch insulation factory, as it consolidates its Tasman Insulations operations in a “highly competitive market”. More>>

ALSO:

Scoop Business: Novartis Adds Nine New Treatments Under Pharmac Deal

Novartis New Zealand, the local unit of the global pharmaceuticals firm, has added nine new treatments in a far-ranging agreement with government drug buying agency, Pharmac. More>>

ALSO:

Crown Accounts: English Wary On Tax Take, Could Threaten Surplus

Finance Minister Bill English is warning the tax take may come in below forecast in the current financial year, as figures released today confirm it was short by nearly $1 billion in the year to June 30 and English warned of the potential impact of slumping receipts from agricultural exports. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news