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

 

Wools of New Zealand well set for end of grower-funding

Wools of New Zealand well set for end of grower-funding

Wools of New Zealand (WNZ) Chairman Mark Shadbolt says the company is making strong commercial progress with an expected maiden profit for the 2016 financial year.

Shadbolt was responding to a recent shareholder comment in a local rural newspaper that the company would “almost certainly fail” without income from farmers’ Wool Market Development Commitment (WMDC).

“To the contrary, WNZ is making investments that are reducing the company’s reliance on the WMDC.”

Shadbolt says for the year ended June 30, 2016, WNZ expects a maiden operating profit of more than $600,000 and a net after-tax profit of more than $1.1 million.

WNZ’s grower shareholders committed to pay the WMDC out of their clip when they funded the company in a capital-raise in 2012/13.

“We’ve always known and planned for the WMDC to conclude in June 2018 and thereafter for the business to be in a position to be self supporting and profitable.”

Initially, WNZ was totally reliant on WMDC.

However, over time WNZ’s reliance on the WMDC had been steadily decreased as WNZ developed other revenue streeams.

In 2013/14, WMDC was $2.2m representing 20 per cent of gross revenue. For 2015/16 the expected WMDC would be $2.6m representing less than 8 per cent of expected total revenue.

WNZ expected its revenues would continue to increase due to ongoing increased commercial activity. The WMDC would increase in dollar terms through to 2018 but continue to decrease as a percentage of WNZ’s total gross revenue.

Shadbolt says it is regretful that the shareholder called for the Financial Markets Authority to “look at WNZ performance and vs Prospectus and call the directors to account.”

“The company’s performance met its prospectus targets to the 2014 financial year and there were no prospectus-related commitments after that year.

“As a grower I am bitterly disappointed with the ongoing destructive behaviour of individuals and entities who would rather see the ongoing exodus of growers rather than a thriving and prosperous sheep industry.”

WNZ expected its revenue to keep rising as it did more business. Income from the WMDC would also rise, but only because it was handling more wool.

WNZ has made strong progress in the past 15 months, rolling out an improved ‘Direct to Scour’ processing and sales model, investing in new technology to differentiate WNZ fibre and increasing the value of WNZ brands and grower contracts.

Shadbolt said some of the investment, like Oritain traceability, GlacialXT and Kiteq had attracted government investment to get products to market faster.

ENDS

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Fuels Rushing In: Govt "Ready To Act" On Petrol Market Report

The Government will now take the Commerce Commission’s recommendations to Cabinet...
• A more transparent wholesale pricing regime • Greater contractual freedoms and fairer terms • Introducing an enforceable industry code of conduct • Improve transparency of premium grade fuel pricing... More>>

ALSO:

Reserve Bank Capital Review Decision: Increased Bank Capital Requirements

Governor Adrian Orr said the decisions to increase capital requirements are about making the banking system safer for all New Zealanders, and will ensure bank owners have a meaningful stake in their businesses. More>>

ALSO:

Aerospace: Christchurch Plan To Be NZ's Testbed

Christchurch aims to be at the centre of New Zealand’s burgeoning aerospace sector by 2025, according to the city’s aerospace strategic plan. More>>

ALSO:

EPA: Spill Sees Abatement Notice Served For Tamarind Taranaki

The notice was issued after a “sheen” on the sea surface was reported to regulators on Thursday 21 November, approximately 400 metres from the FPSO Umuroa. A survey commissioned by Tamarind has subsequently detected damage to the flowline connecting the Umuroa to the Tui 2H well. More>>

Taskforce Report: Changes Recommended For Winter Grazing

A Taskforce has made 11 recommendations to improve animal welfare in intensive winter grazing farm systems, the Minister of Agriculture Damien O’Connor confirmed today. More>>

ALSO: