PGG Wrightson net profit down, performance strong

Ian Glasson.

PGG Wrightson has posted full-year operating ebitda of $70.2million, up from last year's $64.5million result, while net profit after tax of $18.9million was down from last year's $46.3million.

In a statement, PGW deputy chairman Trevor Burt said the ''significant'' increase in operating ebitda was very pleasing and it was especially gratifying to have matched 2016's record result.

The company declared a fully imputed dividend of 1.25c per share, which would be paid on October 3, bringing the total fully-imputed dividends paid for the year to 3c per share.

In declaring the dividend, the board balanced the one-off nature of those items affecting NPAT and the strong underlying performance against the reinvestment opportunities available to the business. It felt it prudent to reduce the final dividend this year, Mr Burt said.

NPAT was affected by various one-off non-trading items including a one-off provision for the remediation costs of historical liabilities under the Holidays Act 2003.

Last year also benefited from significant capital gains on the sale of property. ''With our property divestment programme largely complete, these one-off gains were much lower in 2018,'' he said.

PGW chief executive Ian Glasson said it was an excellent trading result for the company. In particular, it showed the strength of PGW's rural services businesses.

Almost all its New Zealand businesses were up on last year and most achieved double-digit earnings growth.

Those results were achieved despite its seed and grain Australian and South American businesses facing challenging climatic conditions.

While the Mycoplasma bovis outbreak had not affected PGW's financial performance to date, the company was working closely with customers and industry bodies to help manage and monitor the impact on the broader sector.

The seed and grain group's operating ebitda was down 4% to $35.6million. Its New Zealand business was the standout performer for seed and grain, but strong sales volumes were not quite enough to offset the impact of extremely dry conditions in South America and in its Australian markets, Mr
Glasson said.

Earlier this month, PGW announced it intended selling its seed and grain business to Denmark-based DLF Seeds for $421million.

Upon completion of the transaction, PGW would also recognise a gain on sale of more than $120million, he said.

Last year, the board made a joint appointment of Credit Suisse (Australia) Ltd and First NZ Capital Ltd as financial advisers to begin a strategic review.

In July this year, the company refused to comment on Australian media reports that ASX-listed agribusiness company Elders was looking to buy it for $600million.