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PGG Wrightson posts $30.7 mln loss on wool, meat charges

PGG Wrightson posts $30.7 mln loss on wool, meat charges

By Paul McBeth

Aug. 29 (BusinessDesk) – PGG Wrightson Ltd., the rural services company that sold its finance unit to Heartland New Zealand Ltd., posted a loss after writing down its wool business and supply contract to Silver Fern Farms Ltd. and other one-time items totalling $47 million.

The loss was $30.7 million, or 0.04 cents per share, in the 12 months ended June 30, from a profit of $23.3 million, or 0.04 cents, a year earlier, Christchurch-based Wrightson said in a statement. The loss included $18.5 million to write down wool assets and a $9.6 million charge against its annual agreed level of supply of livestock to Silver Fern Farms.

Earlier this month, Wrightson got the last sign-off from investors needed to divest its finance unit in a $100 million cash-and-share sale with Heartland New Zealand, the lender formed by the merger of Marac Finance and the Canterbury and Southern Cross building societies.

Wrightson’s earnings before interest, tax, depreciation and amortisation fell 14% to $49.4 million, even as revenue gained 14% to $1.24 billion.

The company’s agritech unit, which has been acquiring more seeds companies, reported a 3.2% fall in ebitda to $38 million, while the agriservices business lifted ebitda 13% to $30.4 million.

Chairman John Anderson said the divestment of non-key assets, such as its stake in NZ Farming Systems Uruguay Ltd. and NZ Merino helped it strengthen its balance sheet.

The board decided against paying a dividend. The shares dropped 2.2% to 45 cents, the biggest fall on the NZX 50 index in trading today.


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