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

 

Livestock Improvement Corp first-half profit drops 22%

Livestock Improvement Corp first-half profit drops 22% on cost of transforming business

By Paul McBeth

Jan. 24 (BusinessDesk) - Livestock Improvement Corp posted a 22 percent slide in first-half profit as the farmer-owned herd genetics cooperative ramped up spending to overhaul its business, which it says is vulnerable to the same disruption other industries face.

Net profit fell to $14.9 million, or 51 cents per share, in the six months ended Nov. 30, from $19 million, or 65.3 cents, a year earlier, the Hamilton-based company said in a statement. That included $20.7 million of transformation costs which chair Murray King said was already flowing to the bottom line. Stripping out that cost, earnings before interest, tax, depreciation, and amortisation rose 37 percent to $57.5 million with revenue up 17 percent to $153 million.

LIC embarked on a transformation programme after posting its first ever loss in the 2016 financial year as a slump in milk prices saw farmers scale back spending, and in turn, weighed on the value of the company's elite breeding herd.

"LIC is vulnerable to the same disruption that other industries have experienced in recent years from new technology and innovation, environmental challenges, regulation and alternative milk products," King said. "Standing still is not an option. We have to constantly be improving and adapting the way we do business."

The company's non-voting investment shares, which are listed on the NZAX, last traded at $2.25, and are down 12 percent over the past 12 months.

LIC wants to simplify its share structure, and King said the board has finished considering the options and will update the next steps in the coming weeks.

The company doesn't declare interim dividends because of the mismatch between artificial breeding revenue and costs.

LIC expects annual underlying earnings, which strips out bull valuation, to be in line with the $3 million reported in 2017, despite the $15 million impact of after-tax transformation costs. Once the transformation programme is completed, LIC expects underlying earnings will rise to a range of $18 million-to-$26 million in the 2019 financial year.

(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: