Wrightson warns of difficult spring

By NZPA

Friday 6th December 2002

Rural services company Wrightson Ltd warned today its half year result would be affected by continuing difficult weather over the spring.

One-off costs would also affect the result, the company said.

"Even allowing for some catch-up during December, we expect the group's profit for the six months to December 31 to be around half of the same period last year, which was $6.3 million," chairman John Palmer said.

"The board has a positive outlook for the full year, based on current exchange rate, commodity price level and sector condition forecasts, and the fact that traditionally Wrightson earns two thirds of its net profit in the second half of the financial year.

"As evidenced over this recent spring, climate will always be a variable with the potential to impact on our performance," Mr Palmer said.

"As we said at our annual meeting in mid-November, the cold weather coupled with an advancing El Nino has resulted in unfavourable climatic conditions that have since developed into the most difficult spring season for farming in the last 20 years. This has hit our sector hard.

"November was a poor trading month, with our livestock and rural supplies businesses in particular feeling the impacts of the difficult climatic conditions.

"While we achieved revenue growth in the South Island, there has been a decline in revenue in the North Island."

Mr Palmer said that net revenue for the five months to the end of November was slightly below the same time last year, but expenses were considerably higher. This was due to bringing forward expenditure on various initiatives that will lower the company's overall cost base for the year, but have raised it for the first half.

These costs include nearly $2.5 million of one-off costs on strategic initiatives and restructuring.

Wrightson will announce its half-year result in February.

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