Allied Farmers back in black as livestock unit grows
By Paul McBeth
Sept. 1 (BusinessDesk) - Allied Farmers, which is rebuilding from a disastrous takeover of the Hanover and United Finance loan books, returned to profit as its core livestock unit lifted income with gains in Taranaki and Waikato.
The Hawera-based company reported a profit of $1.03 million, or 1.03 cents per share, in the 12 months ended June 30, turning around a loss of $1.12 million, or 2.94 cents, a year earlier, it said in a statement. Revenue in the slimmed down entity shrank 38 percent to $16.9 million.
"The focus for the coming year will be to continue to grow the livestock business and to leverage off the client relationships and trust that exists with those clients to provide value for money services," chairman Garry Bluett said. "The effect of the reduced dairy payout is likely to have some uncertain impact on dairy livestock sales going forward and the continuing high dollar is already having some impact on meat exports at the early stage of this season."
This month Allied cut a deal with Crown Asset Management Ltd to repay $2 million by selling down its stake in subsidiary company NZ Farmers Livestock and issuing a three-year bond. It avoided liquidation last year, raising $600,000 in a bond issue, almost half of which was bought by interests associated with chairman Bluett, and as a series of asset sales helped reduce its debt with Crown Asset Management.
Allied's livestock unit reported a profit of $1.65 million on revenue of $15.2 million, up from earnings of $468,000 and sales of $12.8 million a year earlier.
The asset management unit, which housed the former Hanover assets, reported a profit of $198,000 on income of $398,000, compared to a loss of $3.7 million on income of $14 million a year earlier. The unit held assets worth $103,000 with liabilities of $1.01 million as at June 30.
"This reflects some small over-recovery on the disposal of assets less some small write-downs on assets still held," Bluett said. The unit "remains active in pursuing possible avenues for improving the returns from these assets."
The shares last traded at 6.5 cents, valuing Allied at $6.86 million.