Forum Archive Index - February 2004

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

WRI has a policy of operating 'primarily in one industry segment'.  That 
means they lump 

real estate and insurance broking, 
supply of seeds grains and feed supplements, 
livestock marketing and supply, 
wool procurement warehousing marketing and export,
 rural merchandise, 
farm consultantcy, 
forestry services, 
farm finance 
and biotechnology 

all in as 'one business' and that tends to obscure the driving forces 
behind the result.     

Studying the just released half year press releases, coupled with a bit 
of guessing, leads me to believe the breakdown in WRI EBIT and 
profitability is like this ( '?' follows estimated figures):

EBIT Real estate: $2.4m (?)
EBIT Rural Supplies: $1.7m
EBIT Seeds: $2.3m
EBIT Livestock $1.75m (?)
EBIT Finance $0.25m(?)
EBIT Wool ($1.75m) -loss
EBIT Australia ($0.5m) -loss
EBIT Uraguay (insignificant)
EBIT Genesis research ($0.7m) -loss

Total EBIT $3.8m

Less tax, reduces this to $A2.7m

Notes: 

1/ For finance, I am assuming a 2% gross profit margin on the loan 
portfolio worth $24.9m.  That works out to $0.5m per year or $0.25m 
over six months.

2/ Real estate commissions.  Total commissions for the half was given 
as $10.75m.   The $2.4m profit I quote is a guess of the amount left 
over in the company's coffers after saleperson's commissions and 
office expenses are taken out.    Since this is a guess I'd be interested 
to see if anyone can comment on the reasonableness of this 
assumption.

3/ $1.75m profit on livestock, was the number I needed to make up the 
total!   Could be right or wrong so comments welcome.

Whatever, It looks like the main problem child in the Wrightson's stable 
is wool!

SNOOPY







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