By NZPA
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Monday 24th February 2003 |
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The unaudited result, up 27 percent on the $4.6 million interim profit recorded a year earlier, was based on improved operating revenues of $140 million, against $120 million.
Earnings per share rose to 11.59 cents from 10.86 cents.
No dividend was declared.
The two interim results are not totally comparable, as last year's surplus included only four months of the merged PGG/Reid Farmers.
Based on a full six months net surplus after tax for the merged company, the surplus of $5.8 million this year compares with $4.97 million last year -- a 17 percent increase. In a joint statement, chairman Bill Baylis and managing director George Gould said the result was pleasing given the slow down in some aspects of the rural sector compared with last year.
The rising New Zealand dollar and lower meat prices meant trading conditions were more difficult than a year ago.
"Directors are satisfied with this result but naturally we remain cautious about the outlook ahead given the trend and some key indicators such as currency exchange rates and their impact on livestock values," Mr Baylis said.
The New Zealand dollar touched a fresh near four-year high on Friday of US56.04c.
Mr Gould said that all divisions traded profitably with a stand-out performance from the seeds division.
Rural finance also performed strongly, buoyed by solid growth in both term and seasonal lending.
Mr Gould said that livestock and farm supplies -- traditionally the mainstay of the company's earnings -- had felt the impact of lower values and "less cash in the system" compared with last year, but overall the company was trading extremely well.
"In many cases market share gains have offset the commission reductions. New lines of business have added further depth to the company's revenue stream and continued efficiencies have played a key part in the improved contribution," Mr Gould said.
During the period PGG agreed to buy Irrigation and Pumping Services. Settlement occurred after the interim balance date and the business has already been integrated into PGG.
"Irrigation and pumping has already started well and we are confident that over time it will deliver significant contribution to the group, commencing with the 2003/04 financial year," Mr Gould said.
Looking ahead, PGG said climatic conditions across the South Island, currency and livestock values were making trading conditions more difficult.
This was offset by enhanced revenue from the seeds and rural finance divisions and cost efficiencies and the company is predicting a "sound and satisfactory" year.
"Notwithstanding the state of the rural sector the directors anticipate that the company will achieve a year end surplus similar to last year," Mr Baylis said.
PGG last year posted a net after tax full year profit of $13.2 million, down 15 percent on the the previous June year.
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