WSI annual profit surges almost six times on record wool prices
By Paul McBeth
Sept. 2 (BusinessDesk) – New Zealand Wool Services International Ltd., whose wool-scouring businesses are the target of rival Cavalier Wool Holdings, boosted annual profit by a magnitude of six on the back of surging wool prices.
Net profit climbed to $6.6 million in the 12 months ended June 30, from $1.1 million a year earlier, the Christchurch-based company said in a statement. The wool exporter and scourer boosted sales 33% to $200.1 million as international demand and a supply shortage helped bolster revenue.
“All sectors of our operation which includes trading and scouring made major contributions,” the company said. “WSI is encountering a slow start to the new financial year but is confident this situation will improve and particularly in our prime markets in Asia.”
The company’s scouring assets face a raid by rival CWH earlier this year, which was granted antitrust approval to create a national scouring monopoly, a decision under appeal in the High Court in Wellington.
WSI’s assets came up for grabs because its two biggest shareholders, Plum Duff Ltd. and Woolpak Holdings, with a combined 64% holding, are in receivership. Both companies have ties to Timaru businessman Allan Hubbard, and went into receivership last December.
WSI paid a dividend of 0.03 cents per share, and said it may struggle to make a return in the 2012 financial year.
The company is reviewing its strategy and structure over the coming 12 months, and may try to raise some fresh capital to bolster its balance sheet.
The shares climbed 8% to 54 cents in trading today, and have gained 16% this year.