Wools of New Zealand (WNZ) has bounced to a net after tax-profit of $1.5 million in the year to June, despite factors such as the Brexit result, the high New Zealand dollar and reduced Chinese demand.
Established in 2013 with farmer capital, the grower-owned sales and marketing company's maiden profit was on the back of a 16 per cent lift in wool sales, helping push revenues past $30 million for the first time to $31.5 million.
Operating profit increased to $681,000, a 242 per cent increase of $1.16 million over the prior year's loss of $493,000.
The company transacted 5.5 million kg of shareholders' wool during the year, reflected in an increase in Wool Market Development Commitment (WMDC) levy income to $2.6 million, from $2.2 million in 2015.
Chairman Mark Shadbolt said the WNZ EU Ecolabel lambs wool contract was again a highlight of the year.
The EU Ecolabel helps European consumers identify products with a reduced environmental impact.
"Now in its fifth successful year our lambs wool offer remains as one of our flagship contracts, providing value and certainty for our shareholder growers and our customers," he said.
The fall in wool prices from earlier highs, thanks to factors such as Brexit result, the high New Zealand dollar and reduced Chinese demand was disappointing "but the company remained committed to delivering long-term value for its shareholders".
Commenting on the WMDC levy, Mr Shadbolt said at the time (2012) the levy was critical "to driving our marketing initiatives and investments".
"By 2014 we'd reduced our reliance to 20 per cent of revenue and this year this has fallen to 8 per cent, in spite of the WMDC's increase in real terms."
Chief executive Rosstan Mazey said the company would continue to focus on technology and innovation.
"We've made substantial progress, upgrading our direct-to-scour logistics, processing and sales model, investing in new technologies to differentiate WNZ fibre and increasing the value of WNZ brands and grower contracts," he said.