The company said its base business, the Morton Mains ovine processing plant, generated a small pretax profit.
Looking back on the year, Blue Sky said the new ovine season started with a promising outlook but projected lamb numbers didn't eventuate, mostly due to an unusually cold and wet start to the season. Disrupted and inconsistent stock flows throughout the season and competition with stock yards pushed up prices to unprofitably high levels, and the company chose to accept lower overall stock numbers with a wider margin per unit, it said. Higher selling prices were partly undone by a stronger New Zealand dollar, it said.
Grave said the results for the first three months of the company's 2018 financial year are "up significantly" on budget and previous years, which he said displayed a positive trend for the upcoming season.
He said the new strategic plan forms the platform for a return to profit for the business, through 20 projects forecast to bring $7.8m of added value to the business. In the fourth quarter of the 2017 financial year, the business achieved $1.5m of additional value, more than double the financial benefits targeted for the period and with all nine projects started on or ahead of time, he said.
During the quarter, the company prioritised the top three projects for implementation, which account for more than half of the strategic plan's total financial benefits over the next three years, including improving yields, doubling annual export chilled volume, and remediation of the Gore beef plant.
The company's total equity fell to $18.8m at the end of the 2017 financial year, from $21.5m in its 2016 year and $23.6m in the 2015 year. Blue Sky noted it breached debt covenants with its lender as of March 31 this year, but said its lender had approved an unconditional waiver of the covenant.
"Our management team is acutely aware of the impact financial underperformance in recent years has had on the balance sheet of the company," Grave said. "The only remedy is a return to profit."
Blue Sky's shares last traded at $1.85 on the Unlisted platform in November, giving it a market capitalisation of $21.3m.