Tasmania future focus of TasAg

The profit compares to $12.58 million last year and includes gains from the sale of 60 New Zealand dairy units, totalling $207.7 million.

TasAg says the successful completion of the New Zealand farm sales process and settlement of farm proceeds has placed it in a very strong financial position.

"Despite distributing $101.53 million to shareholders under a distribution proposal during June, settlement of New Zealand farms have placed the group's New Zealand operations in a cash surplus of $10.80 million at July 15," the company says.

"While significant opportunities to add value to the group's Tasmanian operations are apparent, profitable opportunities within the New Zealand dairy sector are currently more difficult to identify as underlying farm conversion land prices, and the cost of capital associated with supplying New Zealand Co-operative Processors, continues to rise."

TasAg says as a result it is likely that, after selling its remaining New Zealand properties, it will focus on its Tasmanian operations.

This could include a foray in A2 milk production.

The company owns the largest dairy herd in Australasia and says it will soon begin comprehensive testing to identify and select cows with the Beta Casein A2 genotype.

Last week the TasAg board approved the testing of its entire Tasmanian dairy herd on its 22 farms situated in close proximity to each other in North West Tasmania under licence arrangements with A2 Corporation Ltd.

Meanwhile the company says that in the absence of further investment opportunities within the New Zealand dairy sector, a further capital distribution to shareholders is likely. It has not yet declared a final dividend.

"Until future strategic initiatives and group structure is determined, directors do not, at this stage, intend recommending a dividend to shareholders in relation to the year ended 31/05/2001," the company says.

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