PGG Wrightson’s full-year earnings have been hit hard by persistently challenging market conditions in the rural sector, resulting in an after tax net profit of $3.1 million — down $14.5m on the previous year.
Yesterday, the company announced its results for the year ended June 30, which also showed operating ebitda of $44.2m (down $17m on the pcp) and revenue of $915.9m (down $59.7m). No final dividend was declared.
While most of the agri-sector has been impacted, some have been harder hit, with sheep farmers experiencing soft export demand and weaker commodity pricing and the rural real estate market going through a particularly quiet period, it said.
The 6% decline in revenues represented the first drop in PGW revenues since FY18 and the retail and water businesses accounted for the majority of that decline. There remained a carry-over effect from the devastation caused by Cyclone Gabrielle last year, with areas not yet replanted.
Chief executive Stephen Guerin said the results came as no surprise and the company was "probably fairly proud" of it, given the backdrop. Not many agricultural businesses reported publicly and the company had a reasonable year in contrast to some other companies, while it had also maintained and grown market share.
The reality was when PGW’s clients were successful, it was successful and when it was challenging times for clients, then the company had challenging times.
Asked his stand-out performers, Mr Guerin said the crop monitoring, ag-chemicals and Fruitfed business recorded its second highest sales year.
The velvet business also had a very good year, driven by a strong Chinese market. There were also some good results in the wool business, although it was still nowhere near it needed to be.
While there were some green shoots in the sheep market, particularly Europe and the United States, the challenge remained of a depressed Chinese economy and strong volumes out of Australia. He was hopeful that market would improve in 12 to 18 months.
There was also the prospect of an improvement in interest rates and also some resetting of the regulatory frame work for farming.
Mr Guerin acknowledged the "immeasurable loss" the company experienced with the death of its general manager wool, Grant Edwards, in April. "Grant dedicated 40 years to the business and his leadership will leave a lasting influence. As a stalwart of wool, his passion for the industry was unwavering."
He also acknowledged the recent death of Victor Schikker, a valued member of the company’s livestock team, who died after a fall at an ice and curling rink in Mid Canterbury on Friday. He had worked for the company for 49 years.
The company said it was too soon to forecast trading performance for the year and it expected to be better placed to provide guidance for FY25, following the start of the important spring trading period, at its annual shareholders meeting in October.
