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Allied Farmers Reports Stronger First Half Profit
Allied Farmers Reports Stronger First Half
Profit
Allied Farmers Limited today announced that the
group made an operating profit before tax of $1,425,000. For
the same period in 2005 the group earned $1,136,000. The
December 2006 result also compares well with the full year
profit to 30 June 2006 of $1,981,000.
The major factor contributing to the improvement was the performance of Allied Farmers’ subsidiary Allied Prime Finance Ltd which declared a profit before tax of $1,978,000 for the six months. The group result was impacted by the loss of $863,000 by the Allied Pine subsidiary.
The rural services operations of the group made a profit for the six months of $641,000.
The company has carried out a ‘fair value’ test on the loans acquired from Prime Finance Ltd in June 2006 and has written off $10 million to Goodwill. The operating profit of $1.425 million was after ‘one off’ integration costs for Allied Prime Finance of $870,000. The Company reports that the integration has been satisfactorily completed and no further costs are anticipated.
Allied Farmers Group chief executive David Bale said, “This is a pleasing result for the Rural and Finance activities. Both performed better than the same period in 2005. The saw milling operation is expected to make a loss of $1.6 million for the full year. This mill, along with other New Zealand sawmills, is affected by the high US $ price for logs and the relatively soft US market for milled timber. The board and management are investigating options to mitigate the continuing losses from this operation.
“In the next 6 months we expect a continuing good performance from the finance subsidiary. However the Rural operations are likely to be influenced by the impact that the New Zealand exchange rate and international commodity prices have on farm customers. Early indications are that dairy herd sales are unlikely to top the record set in 2006, which is a further reason for exercising caution.”
Following the Board meeting on the 27th of February the board will announce the interim dividend.
ENDS
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