By Phil Boeyen, ShareChat Business News Editor
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Thursday 20th December 2001 |
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Chairman Sam Robinson told shareholders at the company's annual meeting on Thursday that although the board's minimum expectation for the year is for a post tax result as good as last year, the interim profit will likely be less than last year's.
"This is because the year to date has been unusually slow as the result of weather and feed factors, leading to a very tight procurement situation.
"Our confidence in achieving a result at least as good as last year is based on a higher livestock supply throughout the North Island, and the payback on the investments we have made in further processing in the past year."
Richmond posted a record annual profit of $20.65 million in the year ended September, up 77% on the year before.
Despite the apparent strong result Mr Robinson says the profit has underscored just how fine the company's margins are.
"For instance Ebit to turnover is 3% and net profit after tax is 1.5%. Put in language farmers will understand, this represents 8.4 cents a kilo on livestock purchased.
"At this level there can be no suggestion whatsoever that we are achieving our profit margins at the expense of our farmer suppliers."
Mr Robinson says the fine margins reinforce the importance of the board's strategic initiatives aimed at enhancing margins and reducing volatility.
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