COMMENT
Looking at Wrightson's annual result was a little like checking out the fleas on a dog.
Obviously the new owners, Rural Portfolio Investments, had not imagined a dog quite so infested.
Wrightson's earnings before interest and tax were $16.5 million, compared with $26 million the previous year. Net profit after tax declined from $18.5 million to $10.3 million. Cold comfort though it might be, RPI chief executive Craig Norgate and chairman Baird McConnon can say, "We told you so".
Norgate was uncompromising with his trenchant and at times vitriolic criticism of the Wrightson board and management's financial and operational stewardship of the company during the partial takeover saga. Both are now Wrightson directors, with Norgate deputy chairman.
The result could in part be put down to less than favourable trading conditions and reduced farming returns as confidence slipped in key sectors of New Zealand agriculture and many regions were ravaged by the weather.
But the result also showed that underperformance in some areas of the business had a big effect on the bottom line.
RPI's wholesale cleanout of the former board and former managing director Allan Freeth means the blame cannot be laid at their feet any longer. Having acquired one of the country's leading brands, it will be down to the RPI-dominated board and whoever becomes chief executive to do the silk purse, sow's ear transformation.
Financial and operational performance are, of course, not the only areas in which the new Wrightson will have to lift its game.
Long-standing and loyal farmer-shareholders who in the late 1990s were boxed around the ears by former chief executive Greg Kay's radical restructuring of the company, then watched it perform poorly under the well-meaning but ineffectual Freeth and fellow directors, could be forgiven for feeling shell-shocked.
The old Wrightson may have slipped a hospital pass to RPI with the company's new corporate mantra "Agriculture: that's our culture", perhaps an unfortunate emphasis in all the circumstances. Certainly the tarnished Wrightson culture needs a good deal of rehabilitation, if it is to reclaim its former glory and respect among farmers.
Moving forward then, as everyone associated with the company must do if it is to prosper, where are the opportunities for rationalisation? For it's an open secret that rationalisation, consolidation, call it what you will, is inevitable in the agribusiness sector, dominated as it is by Wrightson, Williams & Kettle, PGG, RD1, CRT, and other players.
The appointment of Southlander Murray Flett to the Wrightson board was interesting.
RPI scooped up Flett as an independent director after he was defeated in Fonterra's election.
Flett is an experienced hand in the dairy industry and certainly has been at the sharp end of restructuring before and after the industry mega-merger which combined New Zealand Dairy Group, Kiwi Co-operative Dairies and the Dairy Board. This raises the question of how and where his skills and background might be applied with his new responsibilities.
The dairy industry's recent performance and payout troubles don't make it look like a shining beacon of corporate efficiency.
But Wrightson directors observing from afar should be able to combine the hard lessons learned from that industry's growing pains, with the salutary experience of the recent rough-and-tumble of their own takeover, and identify and foster smart and common-sense proposals to streamline not only their business but the wider rural servicing sector.
In this high-stakes game, players will need to be stoic and inscrutable.
* Mark Peart is a Dunedin freelance writer.
<i>Mark Peart:</i> Wrightson in need of good old TLC
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