Richmond to beat $20m profit

By LIAM DANN

Listed meat company Richmond has upgraded its full-year profit forecast, a day after its majority shareholder announced a full takeover bid.

In a huge turnaround on January's gloomy projections the company says it is on track to exceed last year's pre-tax profit of $20 million.

On Monday, Dunedin-based meat co-operative PPCS announced a takeover offer of $3.11 a share for the outstanding 37 per cent of Richmond it does not already own.

The revised profit forecasts would be included in information provided to the independent adviser assessing the takeover notice, management said yesterday.

"Ordinarily we would not issue a profit announcement until we have completed the forecasting process and forecasts had been approved by the board," said chief executive Richard Carver. "However, indications are that we will comfortably exceed our year end target and prior year profit before tax."

In January, Richmond announced a major profit downgrade due to the high dollar and competition for lambs in the lower North Island. Management later indicated that things were improving but yesterday's announcement represents a remarkable change in outlook.

Richmond's half-year result compared badly with the prior year - a profit of just $433,000 compared to $14 million for the same period the year before. But Carver said strong trading in the last three months showed no sign of letting up.

Richmond chairman Sam Robinson said an independent committee - including himself, Malcolm Don, Warren Larsen and Bruce Hancox - had been appointed to assess the takeover offer.

Long-time PPCS opponent Robin Bell said he would not necessarily support the offer despite having called the southern company to make it. The Bell Group of Richmond shareholders has argued all the way to the court of appeal that because PPCS was found guilty of deception in its original attempt to take over Richmond, it should not have been allowed to retain its majority shareholding.

The reason he argued for the full offer came back to the High Court judgment which said PPCS should either be 100 per cent in or 100 per cent out, he said. "We would have preferred 100 per cent out but second best is a full take out."

At least that offered all shareholders the chance to make up their own minds, he said.

He said it was unlikely that the Bell group would make any joint recommendation for or against the the offer. Bell said he would wait to see what the independent advisers had to say before he decided whether to sell his shares.