Turners & Growers posts FY loss of $18.9 mln

Monday 27th February 2012

Turners & Growers, the fruit marketer taken over by Germany’s BayWa Aktiengesellschaft, posted an annual loss of $18.9 million due to write-downs in orchard values, a tax write-off and takeover costs.

The fresh produce company's loss for calendar 2011 compares with the $6.3 million net profit it reported for 2010.

T&G said before the one-off write-downs, profit was an improvement on 2010 “and the highest for a number of years.”

The company didn't spell out what the pre-one-offs result was but the total write-downs it noted totalled $32.5 million, implying a pre-abnormals result of $13.6 million.

T&G said legal and advisory costs relating to the takeover bid by Germany-based BayWa shaved $3.1 million off its bottom line and the change of control meant the loss of an $8.5 million deferred tax asset.

BayWa bought former major shareholder Guinness Peat Group's 63.5 percent of Turners and its takeover bid at $1.85 per share has since taken its stake to 71.8 percent.

Earlier this month, Scales Corporation, which owns the Mr Apple packing business, announced it had bought just over 10.3 percent of Turners at $1.90 a share and said while it supported BayWa's controlling position, it wished the company to remain listed.

The shares last traded a week ago at $1.78 and were trading at $1.70 before the BayWa bid.

T&G owns Enza, New Zealand's largest apple exporter and Mr Apple is one of Enza's largest customers. The company said poor pipfruit grower returns, particularly in Europe, its largest market, the impact of the high New Zealand dollar and the impact of the PSA-V kiwifruit disease contributed to $20.9 million in write-downs of its orchards.

Enza's contribution was a significant improvement on 2010 with increased export volumes of higher value varieties and reduced coolstore costs, the company said.

Prices in the US rose nearly 10 percent. Due to the success of its Jazz variety in the Northern Hemisphere, it has increased its planting allocation to growers there, it said.

“Of concern is the poor pipfruit return for New Zealand growers, including Jazz, where returns are lower than desired,” T&G said.

“The high New Zealand dollar against the traditional export markets is making it very difficult to increase orchard gate returns.”

T&G said its domestic division had a difficult year with profit considerably down on 2010.

Directors said due to the current takeover bid, which is currently set to close on March 7, and the potential change in ownership, “the time is not appropriate to consider a dividend.”

Rather than a dividend, last year T&G executed a profit distribution plan at an effective 6 cents per share without tax credits.

The company's only comment on the outlook for this year was “early 2012 trading is overall in line with plan.”

BusinessDesk.co.nz

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