By Phil Boeyen, ShareChat Business News Editor
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Thursday 21st February 2002 |
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The rural services company has posted a five-fold improvement for the six months ended December with a net profit of $6.3 million compared with the previous year's $962,000.
The previous half-year result included losses of $5.4 million for the Australian businesses but the company says that has been improved in the latest result by $4.7 million. In New Zealand net profit after tax rose by 5% to $7.4 million.
Earnings before interest and tax increased 135% to $10.1 million from $4.3 million previously although operating revenue of $332 million dropped $351 million.
The company claims this was largely due to the transfer of its fine wool business to the NZ Merino Company, lower fertiliser sales, and adjustments related to the one-off sale of an Auckland property.
"The reduction in operating revenue had no material impact on operating profitability," the company says.
Wrightson chairman, John Palmer, says the board and management are extremely pleased with the significant improvement in earnings and the progress that the group continues to make.
"This is the best result achieved by the Wrightson Group, excluding Wrightson Farmers Finance, which was sold in 1998, since the Company was floated 8 years ago.
"The result reflects strong performances across the company's operations, in particular its NZ Seed and Livestock businesses. There has been strong demand for seeds, particularly Wrightson's proprietary seeds, and livestock revenues have grown."
Mr Palmer says the ongoing focus on addressing the losses in the Australian and Uruguayan businesses is paying off.
"Our Australian Seeds business is on track to record an improved profit this year, and losses in the Uruguayan business have been reduced as a result of close management of costs and the generation of new business."
Wrightson reports that most of its businesses recorded improved earnings before interest and tax although Rural Supplies Ebit was $1.2 million below the comparable period, primarily as a result of the significant expenditure on the Logistics project.
Sales volumes were also below last year, due largely to reduced fertiliser sales, but the company says margins improved resulting in a gross profit increase of 10%.
Wrightson believes the outlook for NZ's rural sector for the remainder of the current year remains positive based on expectations of productivity remaining high and a continuation of positive growing conditions.
The company will pay a fully imputed interim dividend of 3.5 cents per share, up from the previous interim payout of 1 cent per share.
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