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

 


Scales first-half profit falls on European apple price fall

Scales first-half profit falls on lower European apple prices, listing costs

By Suze Metherell

Aug. 29 (BusinessDesk) - Scales Corp, the listed fruit and vegetables logistics company, said first-half profit fell 22 percent from a year earlier, reflecting lower apple prices and the one-off costs of its NZX listing.

Profit was $20.6 million in the six months ended June 30, down from $26.4 million in the same period a year earlier, the Christchurch-based company said in a statement. Sales rose 3.4 percent to $150.2 million.

Scales debuted on the NZX in July at $1.60 per share. Of the $148 million worth of shares sold, $30 million was new capital to be used to reduce debt, while private equity firm Direct Capital sold into the offer, reducing their stake to 20 percent from 84.2 percent. Shares of Scales last traded at $1.53, and have fallen 4.4 percent below its offer price.

The company is New Zealand's largest apple exporter and also owns businesses across the primary sector, including sea and air freight services, cold store operations, and food ingredients, pet foods and juice concentrate businesses. Last year the company lifted annual profit 50 percent to $20.4 million, on the back of rising Asian demand for apples.

"We are continuing to develop our presence in Asia and other near markets, aided by the fact we expect premium variety apple plantings to yield increased volumes for 2015," said managing director Andy Borland. "Together with a group of other primary sector New Zealand exporters, we are establishing ServeCo, a collaborative venture based in Shanghai which is designed to assist the partners' trade into China."

The company is boosting its cold store network's capacity by 16 percent, building an 8,700 square metre Polarcold plant at the Ports of Auckland inter-modal freight hub at Wiri, South Auckland. Fonterra Cooperative Group had already signed on to use half of the space, Borland said, which is expected to be complete in the third quarter of next year.

Its horticulture segment, which includes its Mr Apple business, orchards, and fruit packing and storage businesses, increased sales 1.9 percent to $90.1 million in the six months, while operating earnings slipped 11 percent to $23 million. Scales blamed a drop in European apple prices for the decline, which it said was partially offset by higher volumes, with its Mr Apple final export volume 7 percent above forecast, and higher early season prices.

Storage and logistics increased sales by 4 percent to $61 million, while profit slipped 7.7 percent to $7.9 million. Sales in its food ingredients business rose 12 percent to $18.8 million, for a 3.4 percent gain in earnings of $2.8 million.

Improved operating cash flows meant Scales halved its forecast net working capital facility to $11.2 million, reducing forecast average prospective net debt to $38.2 million, below its prospectus forecast of $44.1 million, it said.

In its offer documents, Scales forecast net profit to fall to $15.9 million in 2014, before rising to $20.8 million in 2015.

"We have hit out targets and expect to remain on track to meet the prospectus guidance for the full-year result," said chairman Jon Mayson.

According to its prospectus, Scales expects to pay a dividend of between 9.4 cents per share and 9.6 cents per share, implying a gross dividend yield of 7.2 percent to 8.2 percent, for the 2014 financial year, and between 10.5 cents to 10.7 cents per share, for a gross yield of 8 percent to 9.1 percent, the following year.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Balance Of Trade: NZ Posts Trade Deficit In October On Falling Dairy Exports

New Zealand’s posted its largest monthly trade deficit for October in six years, while narrowing the shortfall from September, led by a fall in dairy exports to China while all main imports into the country rose. More>>

ALSO:

Gigatown Winner: Plenty Of Positives For Dunedin

Although the city has taken the Gigatown title, along with new ultrafast 1Gbps broadband and funding for $700,000 worth of UFB-related initiatives across the community, Mr Cull says Dunedin has gained so much more through its involvement. More>>

ALSO:

R18: The Warehouse Group Praised For Removing Games

The decision by New Zealand’s largest retailer The Warehouse Group (TW Group), to withdraw stocks of the latest version of Grand Theft Auto V (GTA V) and other R18 games, has been praised by advocacy group Stop Demand Foundation. More>>

ALSO:

Air NZ Wine Awards: Victory For Villa Maria As Pinot Noir Thrills

It was a night to remember as Villa Maria Estate picked up one of the highest accolades of the evening, the O-I New Zealand Reserve Wine of the Show Trophy, at the 28th Air New Zealand Wine Awards. The Villa Maria Single Vineyard Southern Clays Marlborough ... More>>

ALSO:

Future Brighter Money: RBNZ Releases New Bank Note Designs

New Zealand’s banknotes are getting brighter and better, with the Reserve Bank today unveiling more vibrant and secure banknote designs which will progressively enter circulation later next year. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news