Livestock Improvement profit drops on bull, stag valuations

Monday 4th August 2008

Livestock Improvement Corp (LIC), the farmer-owned developer of systems to track and improve farm animal genetics, posted an 18% drop in annual profit after bull and stag valuations rose less than in the previous year.

Net income fell to NZ$15.6 million from NZ$19 million a year earlier, the company said in a statement. Sales jumped 18% to NZ$132.3 million.

LIC's investment stock has soared almost 80% in the past 12 months, buoyed by booming dairy prices and the move last month to end a restriction on owning the securities, one of two shares the company offers to dairy farmers.

Chairman Stuart Bay said bull and stag team valuations are volatile and he favours a measure of underlying earnings that rose 30% to NZ$8.7 million in the latest year. The valuations are required to comply with IFRS reporting.

LIC had record volumes of semen sales last year, when it rolled out its "DNA Proven" product, which enables it to provide customers with genetics from elite bulls at two years of age, down from about five years using conventional systems, it said.

The shares were unchanged at NZ$3.30.

By Jonathan Underhill

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