Scoop has an Ethical Paywall
Work smarter with a Pro licence Learn More

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.

Advertisement - scroll to continue reading

Are you getting our free newsletter?

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.

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

Advertisement - scroll to continue reading
 
 
 
Business Headlines | Sci-Tech Headlines

 
GenPro: General Practices Begin Issuing Clause 14 Notices

GenPro has been copied into a rising number of Clause 14 notices issued since the NZNO lodged its Primary Practice Pay Equity Claim against General Practice employers in December 2023.More

SPADA: Screen Industry Unites For Streaming Platform Regulation & Intellectual Property Protections

In an unprecedented international collaboration, representatives of screen producing organisations from around the world have released a joint statement.More

 
 
 
 
 
 
 
 
 
 
 
 

Join Our Free Newsletter

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.