INDEPENDENT NEWS

Allied Farmers posts 60% lift in full-year profit

Published: Wed 30 Aug 2017 12:58 PM
Allied Farmers posts 60% lift in full-year profit as livestock division outperforms
By Rebecca Howard
Aug. 30 (BusinessDesk) - Rural services firm Allied Farmers reported a 60 percent lift in net profit on an improved result from its livestock division, particularly in the second half, and further cost reduction.
The Hawera-based company said net profit was $2.2 million in the year ended June 30 versus $1.4 million in the prior year. Pretax earnings were up 52 percent to $2.4 million, which was ahead of the guidance it gave in June when it forecast a 40 percent gain.
Its livestock division reported a 20 percent increase in earnings before tax to $2.7 million. Livestock sales performed well with commissions up 25 percent on the prior year, particularly in the second half due to higher levels of dairy herd sales, it said.
It noted, however, returns from the meat processing business were lower than the previous period. While volumes were consistent, turnover was 20 percent lower due to the impact of a decline in international prices for veal and skins.
During the year, its livestock division established a livestock financing unit, initially focused on financing service bulls but then expanding into other livestock financing. While it started from a low business, the business is already profitable, it said.
The company said it cut its corporate costs by 46 percent to $45,000 from $83,000. It also reduced its debt costs, replacing $600,00 of maturing bonds with a $550,000 three-year bond at a substantially reduced interest rate. In addition, holders of $1 million of bonds maturing in September have all agreed to roll them over for a further four-year term, also at a reduced interest rate.
"We are delighted at this vote of confidence from the bondholders," said chairman Garry Bluett. He noted the strong result for the 2017 financial year made it possible to negotiate improved terms.
Looking ahead, the company said its expectations for the current year are for "careful growth" in the livestock business, tempered with a flat outlook for the meat processing business as overseas prices remain low.
Allied Farmers shares last traded at 9.4 cents and are up 62 percent over the past 12 months.
(BusinessDesk)
ends
BusinessDesk
Independent, Trustworthy New Zealand Business News
The Wellington-based BusinessDesk team provides a daily news feed for a serious business audience.
Contact BusinessDesk
Email:

Next in Business, Science, and Tech

Scientists Say Methane Emitted By Humans ‘vastly Underestimated’
By: NIWA
Record Dry Spells And Effects On Forests – Expert Reaction
By: Science Media Centre
Official Cash Rate Remains At 1.0 Percent
By: The Reserve Bank of New Zealand
Novel coronavirus detected in China –Expert Reaction
By: Science Media Centre
Flooding could release toxic gas – Expert Reaction
By: Science Media Centre
Damning New Report Says Every Nation Undermining Children
By: Common Dreams - Andrea Germanos
‘And Then - Nothing. Silence’: The Deadly Facade Of ‘Democracy’
By: MediaLens
Concentration Of CO2 Hits 416 Ppm - highest EVER daily average, but it still wont be breaking news
By: Common Dreams - Jessica Corbett
23 Former Diplomats Urge Global Leaders To Adopt Paris-Style Agreement To Protect Biodiversity
By: Common Dreams - Jessica Corbett
Greenpeace Campaigner Of 22 Years Announces Bid To Stand For Parliament
By: Steve Abel
Kiwi youth feeling the heat
By: Business NZ
How NZ would fare during a world catastrophe
By: RNZ
Antarctic continent posts record temperature
By: United Nations
Climate action ‘both a priority and a driver of the decade
By: United Nations
Public surveyed on state of the environment
By: Lincoln University
View as: DESKTOP | MOBILEWe're in BETA! Send Feedback © Scoop Media