PGG Wrightson has passed the $1 billion mark in revenue for the first time since the divestment of its seeds business in 2019. The rural services company on Tuesday posted its full-year results for the financial year ended June 30. Operating revenue of $1.1b was up $99 million or 10% on the previous corresponding period while after tax net profit was up $4.9m, or 46% to $15.6m. Operating ebitda of $64.3m was up $8.2m and cash flow from operating activities was $52.6m, up from $40.2m last year. A fully imputed final dividend of 5.5 cents per share was declared, bringing the total fully imputed dividends for the year to 10 cents per share. Chairman John Nichol said improved returns across the red meat, dairy, wool, parts of the horticulture sector and rural property sector contributed to stronger farmer confidence and increased investment activity. Those favourable market conditions, combined with disciplined operational execution and continued investment in strategic initiatives, supported improved earnings across the group. Chief executive Stephen Guerin said the retail and water group achieved record revenue and growth across most business units. Improved confidence across the sheep, beef, dairy and horticulture sectors, particularly kiwifruit, supported increased customer spending and investment throughout the year, Mr Guerin said. Rural supplies delivered record sales and profit, benefiting from increased on-farm investment in animal health, water, fencing, pasture renewal and farm development. Livestock was the standout performer, benefiting from historically strong sheep, cattle and dairy prices, favourable international demand for red meat, improved farm profitability and renewed farmer confidence. Its wool result was broadly in line with the prior year. Strong wool experienced renewed optimism across the financial year, with crossbred wool prices reaching their highest levels in decades. Demand for natural fibres and improving global market conditions contributed to improved sentiment across the sector. PGW Wool consolidated its auction activities into a national open-cry wool auction, creating a single marketplace to maximise buyer participation and competition for growers’ wool from across New Zealand. Real estate delivered an improved result as activity increased across rural, lifestyle and residential markets. Demand for dairy and horticultural properties strengthened significantly, supported by improved farm economics, lower interest rates and renewed buyer confidence. Dairy sales volumes increased about 30% year-on-year, while horticultural property sales volumes increased about 60%, reflecting strong demand in buoyant crop sectors. Mr Guerin said there remained a number of positive signals in the marketplace and the challenge ahead was when “that rainy day” — for which funds should be put aside — would come. While agricultural fared “pretty well” during the Covid-19 pandemic, that was a very unusual set of circumstances and it was a good 10 years since the same level of confidence as there was now had been seen, he said. There were a few challenges in both the horticulture and arable sectors. Last year, PGW spent $19.7m on acquiring animal health company Nexan and there had been a focus on integration. Now the focus would be on building that business, he said. A new PGW store was in the planning stage for Winton.
