PGW shares, one of only a few pure rural-related stocks trading on the New Zealand stock exchange, have gained 25% in value - boosting its market capitalisation from $578 million to $734 million since March 26.
Since PGG Wrightson shares were $2 on March 26, consistent volumes had been traded on most days, valued between $300,000-$500,000, compared to historic infrequent trading, ABN Amro Craigs broker Peter McIntyre said yesterday.
"There's several positives combining here. Trading and financials for PGW are looking strong for all its divisions," he said.
In mid-February, PGW shares were boosted 10c to $2.10 after announcing a 68% rise in first-half after-tax profit to $34.6 million and also announcing an increased dividend. PGW's share in South American dairy farm operator New Zealand Farming Systems Uruguay was viewed positively - with NZFSU expanding in Uruguay and possibly Brazil as its herds totalling 4300 cows are forecast to deliver a $US1.5 million after-tax profit for the six months to June.
The New Zealand dairy sector - which received a bolstered record forecast Fonterra payout to $7.90 per kg of milk solids a fortnight ago - was assisting PGW business in several ways, Mr McIntyre said.
PGW's services division would be supplying materials for the increasing number of dairy farm conversions while its real estate division would similarly be busy with sales of existing dairy operations and conversions, Mr McIntyre said.
Both its seeds and finance divisions were also trading well, he said.
PGG Wrightson Finance (PGWF) has obtained a $100 million facility from ASB Bank, NZPA reported.
Bringing in a new bank and additional funding would ensure PGWF continued to grow, PGG Wrightson group general manager financial services Michael Thomas said yesterday.
PGWF, a fully owned subsidiary of PGG Wrightson, funds its loans with retail deposits, bonds, bank credit lines and parent company equity.
