PGG Wrightson has achieved a major change in fortunes, with a
net profit after tax of $24.5 million for the year ended
June, following the previous year's loss of $30.7 million.
The 2011-12 financial year was primarily about "getting back
to the fundamentals", building on the core businesses to the
benefit of stakeholders, particularly farming clients,
managing-director George Gould said.
Earnings before interest, tax and depreciation (ebitda) was
$55.2 million (up from $49.4 million for the previous
corresponding period) from operating revenue of $1.3 billion
(up from $1.2 billion).
The financial result followed strong performances in the
majority of the company's business units, highlighted by
record returns from livestock, positive gains in both retail
and real estate operations and the successful reintegration
of wool brokerage into the business, Mr Gould said.
PGGW attributed a substantial turnaround in net operating
cash flow from $4.9 million last year, to $58.6 million this
year, to a strong focus on working capital and particularly
debtor management, while enabling the company to reduce bank
The livestock sector experienced high early season values for
sheep, beef and dairy, which helped that business unit in
achieving a "stand-out" financial performance.
Some key appointments resulted in a strengthened dairy
presence, with a 38% improvement in dairy cattle volumes for
Live dairy cattle export and velvet sales also contributed
strongly to earnings.
With the Silver Fern Farms procurement contract in its third
year, the business was on track to meet its target volumes
for the season.
Rural supplies had a strong year, benefiting from increased
agri-chemical sales on the back of positive growing
conditions through spring and summer.
The wool business benefited from high wool production due to
good feed levels. More growers moved to contract positions,
in the wake of market volatility.
Confidence returned to the rural and lifestyle real estate
market, reflected in a 54% improvement in revenue from 2011,
while irrigation and pumping revenue was up 28% on the back
of new on-farm irrigation and dairy shed reticulation
While the results of agri-tech were impacted by lower than
anticipated sales of proprietary seeds in Australia as a
result of the wettest season on record, the division remained
an important contributor to earnings. The company believed
the agri-tech business had the potential to generate growth,
Mr Gould said.