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The co-operative yesterday announced an operating profit of $41.9million before tax and distributions for the year ending September 30, up from $27.3million last year.
Last year’s result was heavily impacted by a $19.9million provision for back-paying employees for donning and doffing. This year’s result included an allowance of just over $2million for that.
Revenue of $1.8billion was on a par with last year and a profit distribution of $8.5million would be made to farmer shareholders, in addition to $16.7million in loyalty payments already paid over the course of the year.
In a statement, Mr Taggart said the result reinforced the validity of the co-operative’s reinvestment strategy, and several years of sustained capital reinvestment was reflected in the profit result.
He also acknowledged the way staff had managed both the response to Covid-19 and ongoing global supply chain issues.
Chief executive David Surveyor was particularly proud of the way staff had responded to both the challenges and opportunities of the past 12 months.
‘‘Whilst pleased with the improved profit result, we had global customers seeking product which we could not load and ship at the rate we would have liked. This has had a meaningful impact on our inventory and cash flow.
‘‘One of the benefits of our balance sheet is that we have been able to use it in these times.
‘‘It is our view that global logistics and supply chains will be challenged well into the foreseeable future, therefore we are improving systems and processes to speed our cash cycle.’’
In a season summary, Alliance said its operating profit reflected a strong season across all species.
Recovery in the global ovine market had been impressive, lifting prices for farmers.
Just as lamb markets had been hit harder by Covid-19’s initial impact and the closure of restaurants overseas, prices had been more exposed to upside as restrictions eased.
Demand for all red-meat protein was growing and Alliance had processed more cattle this year than the previous year, increasing its bovine network capacity by 10% by opening its beef facility at Lorneville and activating additional capacity at Pukeuri and Levin.
More latterly, there had been a rebounding market for venison and the company would continue to work with shareholders to meet that demand.
Ongoing labour and skills shortages had been an issue for the meat processing sector across New Zealand for some time, affecting the ability to run processing plants to the desired capacity. The issue was exacerbated by the border closures caused by Covid-19.
There remained a significant shortage of halal butchers, despite a recruitment drive by the industry.
The company welcomed the Government’s announcement of one-off residence pathways for some temporary work visa holders already in New Zealand, but said a more permanent solution was needed.