T&G Global, the fruit marketer controlled by Germany's BayWa, reported a 67 per cent jump in full-year profit, boosted by a solid performance from most of its business segments and the sale of its crate business.
The Auckland-based company reported net profit of $32.4 million in the year to December 31 versus $19.5m in the prior year, on continued strong pricing for New Zealand apples, a full year of trading from tomato companies acquired at the end of 2015 as well as strong growth in table grapes and asparagus out of Australia and North America. New kiwifruit sales in South East Asia and uplifts in businesses in the New Zealand, Australian and Fijian domestic markets also contributed, it said. Earnings per share were 25.1 cents versus 15.4 cents in the prior year.
Revenue rose 7 per cent to $872m over the 12 months. It noted gains were offset by approximately $7.5m of lost revenue due to the sale of its crate business and by higher costs, such as purchases, raw materials and consumable costs.
T&G continued to grow its global presence with new offices in Thailand, Japan and Europe, which contributed to a lift in employee costs. The company said it is on track to achieve its 'Strategy 2022' target of $2 billion in sales and is "well positioned for continued growth both in New Zealand and in our international markets."
The pipfruit division saw the first impact in 2016 of an expansion programme, with increases in volume that will continue as young trees mature. Overall, the division's operational result was driven by better continuity of year-round supply and strong in-market pricing, it said.
However, its international produce division was held by back by unexpected costs. While increased volumes and margins in global trading of table grapes, asparagus and blueberries meant revenue from Australian and North American exports hit new highs, the default of a major customer and additional set-up costs for new offices overseas "tempered the success in 2016," it said. Still, the division is "well positioned" to recover in 2017.
The company also pointed to some challenges at its processed foods division due to lower prices, competition in Australia, and the high New Zealand dollar, among other issues. Its New Zealand produce division fared better after it regained wholesale market share and saw improved results for imported tropical fruits.
T&G Global will pay a fully imputed final dividend for the 2016 financial year of 6 cents per share on April 7.
The shares last traded at $3.33 and have gained 62 per cent over the past 12 months.