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

 

LIC seeks $125M debt facilities, targets $140M equity long

LIC seeks $125M debt facilities this year, targets $140M equity over decade

By Jonathan Underhill

June 22 (BusinessDesk) - Livestock Improvement Corp, which aims to lift annual revenue to $1 billion by 2025, says it plans to establish $125 million of debt facilities this year and is likely to require $140 million in equity capital over the next 10 years to meet its growth goals.

Details of its capital requirements are included in a presentation the bull semen and dairy genetics database manager is taking around the country to explain to its shareholders how its changing focus, with increased capital spending and new product development, is changing its financial profile. Previously it has only required seasonal debt funding, typically for three months, the presentation shows.

"Even with debt, [there is a] high likelihood, if LIC delivers on strategy and value on farm to farmers, that additional capital will be required in early 2017," it said.

The Hamilton-based company plans to establish a $50 million term facility and $75 million seasonal debt facility this year, it said. Capital spending is expected to run at about $25 million to $35 million a year through until 2020, he said.

The 2025 revenue target is a substantial increase from current sales, which are running at about $200 million a year, and would be driven by growth of its existing business, new product launches, acquisitions and growth offshore of its Minda herd records service, Protrack farm automation solutions and its Dairy Automation milk testing sensors.

So far this year, the company has entered a research and development partnership with Dutch agricultural company Lely Group, whose local unit designs sensors for animal health and production, and entered into a deal with 'cow intelligence company' SCR Dairy to distribute its technology into new regions including Belarus, Israel, Russia and Turkey. In December, LIC acquired a majority stake and exclusive supply to its Brazilian genetics distributor, NZ Brasil Genetics Producao Animal. Strategic growth decisions yet to be made include whether to enter the Chinese market.

The company says in the presentation that it has been assisting its dairy farmers during a period of low prices with three-month, interest-free deferred payments on artificial breeding, and 24 months interest-free on its Protrack, DAL and GeneMark products.

LIC shares are a closed market on the NZX and are only available for its shareholder-farmers. They were last at $4.80 and have declined 38 percent in the past 12 months.

BusinessDesk receives funding from Callaghan Innovation to assist reporting of the commercialisation of innovation.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

$7.5 Billion Surplus: Government Accounts "Show Strong Economy"

“The surplus and low levels of debt show the economy is in good shape. This allows the Government to spend more on infrastructure and make record investments in health and education,” Grant Robertson says. More>>

ALSO:

New OIO Application Trumps Judicial Review: OceanaGold Cleared To Buy Land For Waihi Tailings Expansion

In a surprise turnaround, the government has given OceanaGold a greenlight to buy land to expand its Waihi mine after the application was previously turned down by Land Information Minister Eugenie Sage. More>>

ALSO:

Christchurch Rebuild: Fletcher Sued For $7.5m Over Justice Precinct

Fletcher Building is being sued for $7.5 million by utilities contractor Electrix, one of the subcontractors on the Christchurch Justice and Emergency Services Precinct. More>>

Three New Drugs: PHARMAC Signs Bundle Deal For More Cancer Medicines

420 New Zealanders with lung cancer, breast cancer, multiple sclerosis and respiratory disease will benefit each year from a bundle deal PHARMAC has finalised with a medicine supplier. More>>

ALSO:

"Levels Playing Field": Government Responds To Electricity Price Review

The changes announced today include: • Supporting new and independent retailers by requiring the big power companies to sell into the wholesale market at affordable rates. • Extending discount rates to all customers • A pilot scheme to help customers who have not switched power providers before to shop around for better deals... More>>

ALSO: