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Investment key to six-years of profitable trading

31 October 2005

Investment key to AgriQuality’s six-year trend of profitable trading

Releasing its 2004/05 financial statements this week, AgriQuality continues its uninterrupted run of profitable trading, posting an impressive EBITDA as it delivers traceable proof of food integrity from farm to fork and best practice biosecurity.

AgriQuality, New Zealand’s largest food safety, quality assurance, and biosecurity organisation, delivered earnings before interest and tax of $5.01 million or 6.2 per cent of sales in 2005. Its $2.76 million profit after tax, saw a dividend of $1.66 million returned to its shareholder, the Crown.

Impressively, in a year that saw revenue fall due to the wind down of the successful painted apple moth and Asian gypsy moth eradication projects , AgriQuality has maintained an excellent EBITDA of $8.7 million.

While delivering its shareholder dividend, AgriQuality has not compromised on its commitment to future growth via significant investment in leading edge systems, processes and people.

“Our vision at AgriQuality is to be the most trusted food safety and biosecurity company in Australasia – and equal to anyone else globally. To achieve this we need to constantly lead the way in developing and adopting the technological and scientific advancements that allow us to deliver unparalleled quality assurance across the entire supply chain and across all industries,” says AgriQuality CEO John Morgan.

In total more than $10.3 million has been invested in 2004/05 with $2.9 million being spent on IT projects and systems, $6.9 million being invested into laboratories and more than $0.7 million into ensuring AgriQuality’s scientific leadership, and 750-plus full time work force is as highly skilled as the best in the world.

The financial year has seen growth across almost every area of the company (the only exception being the fall in biosecurity revenue due to the wind down of the successful eradication contracts). Previous investment in the laboratory testing division has returned notable growth, with that division now the largest within the business.

“Laboratory testing provides the scientific evidence which backs up the quality assurance process and provides the confidence and accountability customers are increasingly demanding. AgriQuality believes laboratory testing will continue to grow in importance and we are ideally placed to deliver the best possible solutions and services thanks to our continued commitment to investing in developing this side of the business,” says Mr Morgan.

Mr Morgan says AgriQuality’s Australian operation, begun two years ago, continues to grow and has doubled its 2004 turnover this year.

“A large number of customers operate throughout Australasia. We set up our Australian operation to ensure we could provide seamless traceable integration across the supply chain in order to meet our trans-Tasman customers’ expectations,” says Mr Morgan.

He says the trans-Tasman growth strategy has been measured carefully to ensure New Zealand operations will not be compromised in any way.

“AgriQuality is a State Owned Enterprise and our 2004/05 results show there is a lot for New Zealanders to be proud of. Our commitment is to continue to keep leading the way in quality assurance and biosecurity, so that we can deliver the very best assurances to our customers and consumers here and abroad and at the same time protect the unique biodiversity of New Zealand and our vital economic interests that rely on our exports being above reproach.”


ENDS

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