PGG Wrightson has more than trebled its after-tax net profit for the year ended June 30 as the agricultural sector continues to recover.
Key results announced yesterday included operating revenue of $975.3 million (up $59.4m or 6% on prior financial year), operating ebitda of $56.1m (up $12m or 27%) and net profit after tax of $10.7m (up $7.6m or 248%).
The board declared a fully imputed final dividend of 4c per share, bringing the total fully imputed dividends for the year to 6.5c per share.
Chief executive Stephen Guerin attributed the strong result to long-standing relationships with customers and an uptick in agricycles.
The retail and water business recorded operating ebitda of $42.2m, up $1.1m from the previous year while revenue of $773m was up $39.4m.
That sector of the business refreshed its five-year plan with a focus on a range of growth initiatives.
Mr Guerin was relatively positive about the year ahead. The big focus was on the upcoming spring and ensuring PGW had all the products required in its supply chain, along with settling in Nexan Group.
PGW was open to further acquisitions but they had to be right for the company, he said.
Sentiment in the farming sector improved over the year with the strengthening in export commodity prices. It had been pleasing to see dairy, sheep and beef farmers all realise increased returns which helped many farming operations return to profitability.
While sales revenue improved on the prior year, farmers took a generally conservative approach with many using the good returns to reduce debt.
Staff were noting forward orders for seed and stock feed sales were strong, along with the number of calves reared. The bull-selling season had also been strong and it was great to see that confidence, he said.
Operating ebitda for PGW’s agency group — which incorporated the livestock, wool and real estate businesses — was $23.5m, up $11.1m on the prior year’s result. Revenue was $201m, up from $20.3m.
The arable sector saw reduced demand for seed crops and grower returns being challenged while Fruitfed Supplies also faced a more challenging trading environment during the financial year.
But despite the headwinds, Fruitfed maintained its strong market position and encouragingly, there was renewed optimism in both the kiwifruit and apple sectors.
Orchard investment, new plantings and a focus on varietal development signalled confidence in the future of those crops. The viticulture and vegetable sectors had been less buoyant. Viticulture supplies were subdued due to a global oversupply of wine.
