Good Result For Landcorp
Landcorp achieved its best financial result since 1993/94 with a net operating profit before interest and tax of $10.5 million compared with $5.6 million for the previous year.
Chairman Alison Paterson said the favourable result was achieved following an improvement in beef cattle and deer prices. Landcorp's livestock performance was ahead of the average over the previous 5 years and Mrs Paterson said this had been achieved in the face of another climatically challenging season with severe drought in parts of the South Island and widespread outbreaks of facial eczema in the North.
Group net profit after tax was $16.5 million compared with a loss of $3.0 million the previous year, and represented a return of 4.3% on shareholders' funds. The value of total assets at 30 June was $454.5 million.
Mrs Paterson said that conversion of some sheep and beef properties to dairying, expansion of deer, and an emphasis on livestock nutrition and genetic improvement had enhanced productivity. To streamline management, Landcorp had amalgamated four previous regions into two business centres based in Rotorua and Christchurch and closed its offices in Whangarei and Invercargill. It had also withdrawn from the processing and marketing of its own meat.
No interim or final dividends were provided for during the year. Mrs Paterson said the Board had concentrated on continuing targeted debt reduction within Landcorp Farming Ltd and on resolving a substantial tax dispute affecting Landcorp Investments Ltd.
Mrs Paterson noted that Landcorp continued to be affected by the Crown's use of farm assets in the settlement of Treaty of Waitangi claims but wherever practical took a commercial approach to avoid or minimise the business impact. The coming year was expected to be a particular challenge as directors and shareholders charted the future shape and direction of the organisation after the Crown's settlement of the Ngai Tahu claim. This could involve a number of Landcorp farms in the South Island.
Although the overall outlook for New Zealand agriculture remained uncertain, Mrs Paterson said Landcorp remained positive and believed the strength of its varied properties and livestock enterprises provided a strong base for future profit in the increasingly competitive world food and fibre markets.