Shares in PGG Wrightson fell sharply today after the rural services company yesterday said difficult trading conditions meant annual profit would be at the lower end of its forecast range.
PGG Wrightson shares were down 17 cents, 9.1 per cent, to $1.70 in early trading today. The shareslost 3.9 per cent, or 7 cents, yesterday.
Since the end of March they had been on a rising trend with the market, lifting from $1.48 to $1.94 on Wednesday.
At its interim result, PGG Wrightson forecast a range for annual net profit, after tax and before amortisation, of between $39 million and $45m, including one-off gains of $8m.
The company posted an annual net profit last year of $27m, including amortisation and one-off gains.
"The directors advise that trading conditions in the current half-year have been more difficult than anticipated, with relatively low sheep prices, pressure on margins in the Rural Supplies business and the impact of the strong New Zealand dollar across most divisions of the group," the company said yesterday.
Chairman Bill Baylis said next year should see a significant boost from the rise in protein prices internationally and the recently announced increase in the milk payout by Fonterra.
"PGG Wrightson is already fielding strong enquiry for dairy cows and heifers, and for inputs to increase dairy farm productivity."
The company also announced a dividend reinvestment plan, effective from the final dividend for the 2007 financial year, payable in October.
The dividend policy for next year has been changed to the equivalent of between 80 per cent and 100 per cent of net profit after tax and before amortisation. The company previously paid a total dividend equivalent to between 65 per cent and 85 per cent.
PGG Wrightson has also appointed Michael Thomas group general manager Financial Services, and John McCombe general manager Rural Supplies.
