PGG Wrightson profits on rise in most business units

PGG Wrightson was on a steady path to reclaiming its position as a leading option for investors seeking exposure to the ongoing strength of New Zealand agriculture, its chief executive Mark Dewdney said yesterday.

Releasing the company's profit result for the six months ended December, Mr Dewdney said the operating profit of $22.3 million, up from $18 million in the previous corresponding period (pcp), was a strong result and increases were recorded across most areas of the business.

Group revenue was up 8% and profit after tax increased to $13.4 million, up from $4.8 million in the pcp. Operating cashflow increased to $10.5 million, up from $1.7 million last year.

A fully imputed interim dividend of 2c a share will be paid.

''This half-year reflects gains in our underlying performance and improved conditions on-farm.

Staff throughout our many businesses are working with renewed energy and focus to make the most of our group's strengths,'' he said.

The ''One PGW'' internal initiative launched in October was playing an important role in the results being achieved.

Business units were increasingly working together, rather than independently, which was historically how the group tended to operate.

Senior staff developed the initiative and now the wider team was making it a success, Mr Dewdney said.

''Results show improvements throughout the group with almost every business unit ahead of last year's results.''

Real estate stood out, having delivered operating earnings of $2 million compared with a break-even position last year.

The only major business unit not to deliver a rise was wool, as a consequence of sheep farmers destocking following the drought and continued land use conversion to dairy.

The group's balance sheet remained strong, Mr Dewdney said.

In October, the sale of shares in Heartland Bank realised $112 million.

When the business resumed dividends last year, the primary focus moved away from debt reduction to growth.

Banking facilities were refinanced during the period, achieving a lower overall cost and increased flexibility.

''We are completing a wider review of our overall business strategy which we will share with the market in the next few months.''


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