PGG Wrightson posts after-tax profit of $42.3m for year

PGG Wrightson has returned to profitability and recorded a $42.3 million after-tax profit for the year to June.

That compared with a $306.5 million loss last year, driven by the company's decision to write off goodwill of $321.1 million that largely arose as an accounting entity from the 2005 merger of Pyne Gould Guinness and Wrightson.

This year, PGW achieved operating profit of $58.7 million, up from $45.8 million last year, while cash from operating activities grew by $15.5 million to $54.8 million.

The company will pay a fully imputed dividend of 3.5c per share, which comprises a final dividend of 2.5c and an additional special dividend of 1c to recognise the strong cash flows in the past year.

That brings the total dividends paid for the full year to 5.5c per share.

This year's strong financial result demonstrated the overall strength of the company, chief executive Mark Dewdney said.

The company had recently undertaken ''a significant exercise'' to refresh the PGW Group strategic plan and it was now being implemented at both group and individual business unit level.

The company would outline key elements of the plan to shareholders and the market in the coming months, he said.

PGW was challenging every business unit to grow market share.

The outlook for its core sheep, beef, arable, horticulture and viticulture markets was positive and would continue to be a major focus.

In addition, it was going to put more emphasis on the dairy, water and agronomy sectors in New Zealand and also saw potential to grow strongly in South America and other international markets, he said.

PGW was confident it could deliver further increases on this year's operating ebitda result.

However, given the volatility in the forecast milk price and the need to assess the likely impact for the company's clients and the sector, it intended to provide a forecast for the current fiscal year at the time of the annual shareholders' meeting in October, he said.

Forsyth Barr broker Andrew Rooney said the strong operating ebitda was above both Forsyth Barr's expectations and previous company guidance.

Stronger performances from both the rural supplies and the seed and grain business segments were pleasing, albeit the underlying commodity price backdrop had been particularly favourable through the year, he said.

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