By NZPA
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Wednesday 29th May 2002 |
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It also announced that chief executive John Loughlin would step down from his position later this year.
Chairman Sam Robinson said Mr Loughlin's decision "reflected John's desire to focus on the expansion of his winery as well as other business interests".
He said the board recognised "that change is essential, and the leadership cycle is an inevitable part of this".
Mr Loughlin was appointed in 1997. He and his wife own the Askerne Winery in the Hawke's Bay.
"The timing of John's departure, which will not be before the end of October, reflects the desire of both parties to ensure a proper timeframe for the appointment of a successor and to arrange and manage the transition," Mr Robinson said.
Despite the half-year loss, which compared with a year ago profit of $13.2 million, the company approved the payment of an interim dividend of 5 cents per share from retained earnings.
Mr Robinson said this reflected confidence in the company's performance outcome for the full 12 months.
"In the context of historic low average payout ratios, and the prospects for the current year, the board considers the interim dividend is sustainable."
The dividend would be paid on June 21.
Revenue for the half year was down to $678.5 million compared with $696.6 million. The pre-tax operating loss was $3.7 million compared with a profit of $11.5 million.
The company claimed a tax credit for the half year of $968,000 compared with a debit of $2.5 million in the year ago period.
A loss of 3.6 cents per share was posted compared with earnings of 32.49 cents.
Mr Robinson said that livestock flows during the first half of the year had affected margins, particularly for lamb and venison.
"We have a significant processing and supplier servicing advantage during peak supply periods, but this was blunted by the very flat livestock supply profile, the result of an exceptionally wet spring and early summer, and then rampant grass growth. Such conditions cannot accurately be forecast."
"Our interim result is disappointing, but nonetheless the major influencing factors are a reality in what is predominantly a volume sensitive, seasonal business."
He noted that in five of the last 10 years the second half year had accounted for virtually all profits.
"The full-year profit will be lower than last year's, but there has been a significant lift in margins during the past two months, and for this reason the interim result is not an accurate precursor to the company's full-year performance."
"To put this in perspective, the pre-tax loss for the first half was $2 million. This comprised a first quarter loss of $15.2 million and a second quarter profit of $13.2 million. The third quarter results are currently in line with the second quarter, with the expectation of a modest loss in the traditionally quiet fourth quarter," Mr Robinson said.
Mr Robinson said that in contrast to the company's position with pressure on margins during the first six months, the livestock market was very favourable to farmers, although this was sometimes at the expense of customers and end-users because of the availability of product.
"In such circumstances it is very challenging to manage the conflicting interests of suppliers and customers, whilst preserving margins for shareholders.
"We need to be careful that other meat products do not suffer the type of setback experienced in venison sales during this year, when high prices forced customers to source alternative meat options. As a result market prices collapsed."
The company expects growth from its newly established pharmaceutical division and from a new range of frozen convenience foods on the domestic market.
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