Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

LIC full year result 2015-2016

21 July 2016
LIC full year result 2015-2016

Farmer-owned co-operative, Livestock Improvement Corporation (NZX: LIC), has announced its result for the year ending 31 May 2016.

The financial result is summarised below with background information attached to NZX, including Chairman Murray King’s letter to LIC shareholders.

Revenue: LIC revenue from ordinary activities was $205 million and including other income from grants, totals $211 million, 9% down on the total $232 million achieved during 2014-2015. Lower milk prices have impacted on-farm buying decisions, as many farmers look to reduce costs and indeed go into survival mode through the difficult financial times facing dairy farmers.

NPAT: LIC Net Profit After Tax (NPAT) was a loss of $4 million, down from a profit of $13.7 million the previous year. This decrease reflects the prolonged New Zealand dairy industry downturn, and the continued investment by LIC on R&D and core technology for the medium to long term future of our industry. During the last year LIC has made substantial reductions in costs through reducing expenses such as travel and training, focusing capital IT investments on key areas only, extending working life of assets and recruiting only essential personnel.

The benefits of LIC’s investment in R&D and core technology flow to LIC’s 10,500 New Zealand dairy farmer shareholders in the form of continually improved services and products to improve efficiency and productivity on-farm.

Investment in 2015-2016 included a significant investment in the new MINDA® LIVE product launched at National Fieldays in June 2016. MINDA LIVE is a modern online version of LIC’s herd management system that is used by 95% of New Zealand dairy farmers.

The results also reflect the significant spend on core technology in prior years that is now flowing through as increased depreciation annual charges. NPAT includes the annual revaluation required under accounting standards to “fair value” of the biological elite bull team which, this year, resulted in a decrease net of tax of $3.7 million to a value of $87.5 million in 2015-16 compared to a value of $92.6 million in 2014-15. This reflects lower expectations around future revenue consistent with the industry outlook. The bull team is valued using a model designed independently of LIC, that looks at future revenue streams and costs associated with the current bulls owned, discounted back to current value.

The fluctuations in fair value of the elite bull team are excluded for the purposes of determining the appropriate dividend amount and are not considered to be a key indicator of trading performance. For this reason, LIC also reports Underlying Net Earnings (NPAT excluding the increase or decrease on fair value of elite biological assets and the related tax effect) which was a small loss of $300,000 this year ($11 million profit 2014-2015). This is in line with the forecasts made at half year of a break-even position.

Strength of balance sheet: LIC continues to operate a strong balance sheet with total assets including cash, software, land and buildings and bull teams of $323 million, an increase of $21 million over the previous year with an equity ratio of 65%. Bank loans were $41 million at year end.

Cash flow: Cash flows from operations reflected lower sales on top of an increase in deferred terms to assist farmers’ on-farm cash flows but were still positive for the 2015-2016 year generating $14.4 million, compared to $34.8 million in 2014-2015.

ends

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Commerce Commission: Latest Broadband Report Confirms Improved Performance Of Premium Fibre Plans

The latest report from the Commerce Commission’s Measuring Broadband New Zealand programme shows that the performance of Fibre Max plans has improved substantially. This follows a collaboration between the Commission, its independent testing partner, ... More>>

Air New Zealand: Capital Raise Deferred

Air New Zealand has decided to defer its planned capital raise to later in 2021 allowing more time to assess the impacts of recent developments on the airline’s path to recovery. 'We’ve seen some clearing of COVID-19 clouds recently, with ... More>>

Commerce Commission: Cartel Conduct Now Punishable By Up To 7 Years’ Jail Time

Cartel conduct can now be punished with a term of imprisonment of up to 7 years, after the Commerce (Criminalisation of Cartels) Amendment Act 2019 came into effect today. Cartel conduct includes price fixing, market allocation and bid rigging (see ... More>>

Stats NZ: Auckland Population May Hit 2 Million In Early 2030s

Auckland’s population may rise from about 1.7 million currently to 2 million by early next decade, Stats NZ said today. “Auckland will likely have the highest average annual growth of New Zealand’s 16 regions over the next 30 years, from ... More>>


Stats NZ: New Report Shows Impact Of Demands On Land In New Zealand

A new environmental report released today by the Ministry for the Environment and Stats NZ, presents new data on New Zealand’s land cover, soil quality, and land fragmentation. The land cover data in the report, Our land 2021 , provides the most ... More>>

ALSO:

Stats NZ: March Card Spending Rebounds Despite COVID

There was a lift in retail card spending in March following a fall in the lockdown-disrupted February month, Stats NZ said today. Seasonally adjusted retail card spending rose by $53 million (0.9 percent), compared with February 2021. Visit our website to read ... More>>

PwC: Outcome Of Review Into Air New Zealand Gas Turbines Business

Air New Zealand has received the report into its Gas Turbines business from independent external advisers PwC. Air New Zealand Chairman Dame Therese Walsh says the report identified a range of effective controls in the Gas Turbines revenue contracting ... More>>