Tony Gibbs reiterated his company's commitment to the pipfruit industry. Photo / Martin Sykes
Tony Gibbs reiterated his company's commitment to the pipfruit industry. Photo / Martin Sykes
KEY POINTS:
Listed fruit and produce exporter Turners & Growers has unveiled a big jump in annual profit, higher dividends and a bonus share issue despite facing a higher tax rate.
The improved result for the year to December 31 followed stronger export apple prices - after 2005's "bloodbath" -and a healthy performance from domestic businesses.
The pre-tax profit for the year to December 31 - excluding a one-off gain of $1.1 million above book value from the sale of a Hastings coolstore - was $22.2 million or 38 per cent better than the previous year.
Net profit of just under $17 million was 28 per cent better. Revenue was 13 per cent ahead at $550 million.
The company declared an increased fully-imputed final dividend of 14c, payable in April, and this will be followed by a 1 for 5 bonus issue.
The increased profit was achieved even though the company's effective tax rate was 27 per cent against 17.6 per cent the previous year.
Chairman Tony Gibbs - a director of Turners & Growers' majority owner GPG - said 27 per cent was closer to what the group expected to pay going forward as more profits were generated in New Zealand and emerging markets.
"Our effective tax rate used to be a lot more affected by our overseas associates, where we paid tax overseas so it wasn't taxable when it got here," said chief executive Jeff Wesley.
"Now with us generating more profit in New Zealand the tax rate's going to be pushing towards 30 per cent."
Most domestic divisions had exceeded earnings targets and, while last year's export pipfruit crop was smaller, in-market prices were better and the mid-year exchange rate favourable, Gibbs said.
New Jazz apples were generating more profits each year.
The company had become a pipfruit grower last year by establishing a joint venture in Nelson and had bought two more orchards in Hawkes Bay after year end. "These positive investments reflect the company's long-term commitment." Turners & Growers shares closed up 13c at $2.83.
