Kiwifruit exporter enjoying fruits of labour

Picture / Zespri International

Zespri Group Ltd today posted a net profit of $26.5 million for the year to March 31, up 16 per cent on the previous year, from global sales that were up 12 per cent on the previous year.

Zespri directors said they would declare a fully imputed final dividend of 25c/share, to be paid in August 2005, in addition to the first interim dividend paid in February of 25c/share.

"This represents a dividend yield of 12 per cent (fully imputed) on the new issue price of $4.10/share," said Zespri group chairman, Craig Greenlees.

He said in a statement that 2005-06 selling season now underway would be testing.

"We've had a slower than desirable start with increased freight costs and a New Zealand dollar that remains very strong against all of our trading currencies," he said.

"Having said that, initial sales into Asia have been strong with local currency prices in some markets up on last year".

Zespri's European sales programme was set for a positive start, and the focus would be on offsetting the adverse currency factor as far as possible by increasing revenues and reducing costs where practicable.

In the past season, faced with significantly higher volumes, a strong New Zealand dollar and variable eating and storage quality, Zespri had focused on retaining premium positioning while getting the best available returns, Mr Greenlees said.

Grower returns per tray were down on the previous year, but the company's "single point of entry" structure -- which means it lands all its European exports in Belgium -- and the strength of its brand helped to produce a "very creditable" result.

Mr Greenlees said the company's equity at balance date was $77 million, up from $53.9 million at March 31 2004, which included $12.6 million in proceeds from its share offer. The issue of 4.2 million shares to under-shared growers to achieve a closer alignment of company shareholding and production was 83 per cent subscribed.

New business units Aragorn and Zespri Fresh Produce both achieved turnarounds, reporting modest operating surpluses in 2004-05.

Mr Greenlees said that solid marketing performances in Europe and Asia which overcame the challenges of volume and eating quality, firm leadership and some temporary shelter from the escalating New Zealand dollar, contributed to another consecutive year of growth.

He said 2004-05 was a milestone year, with revenue topping $1 billion for the first time. The company's goal was profitable and sustainable growth through a year-round, differentiated, premium product range, and it was formulating and testing the strategies for the next 10 years.

- NZPA