PGG Wrightson posts 24% gain in operating income on strong sales across the board

PGG Wrightson 12-month price history (NZX.com)

PGG Wrightson [NZX: PGW] reported an operating earnings gain of 24 percent in the first-half as the rural services firm controlled by China's Agria Corp achieved growth in all its business units except wool. The shares jumped 6 percent to 44 cents.

Earnings before interest, tax, depreciation and amortisation were $22.3 million in the six months ended Dec. 31, from $18 million in the same period a year earlier. Net profit jumped to $13 million from $4.8 million, reflecting gains made from accounting adjustments of continuing operations including derivatives and biological assets.

The Christchurch-based company expanded its irrigation business, buying Water Dynamics and Aquasec from Switzerland's Pentair for an undisclosed sum last year. Its PGG Wrightson Water business reported 32 percent sales growth to $33 million from the same comparable period a year earlier.

It also launched an internal 'One PGW' strategy in October to streamline its interests, which are divided into retail, livestock, seed & grain and other rural services, which includes PGG Wrightson Water.

Other rural services grew EBITDA by 74 percent to $5.1 million, although earnings from wool declined 42 percent, which the company said reflected farmers reducing sheep numbers following the drought and continued land conversion to dairy. There was significant growth in real estate earnings to $2 million from a break even position of $174,000 a year earlier.

Its livestock division sales slumped 42 percent and earnings rose to $2.7 million from $812,000. The retail division, which includes Rural Supplies and Fruitfed brands, grew sales 12 percent to $297 million, and reported an EBITDA rise of 13 percent to $21 million. Seed & grain revenue rose 17 percent to $255 million and earnings nearly doubled to $12 million.

Last year the company sold its shares in Heartland Bank for $11.2 million, to reduce debt and shift to growth.

The company will pay a dividend of 2 cents a share down from 2.2 cents a year earlier.

(BusinessDesk)

This article is tagged with the following keywords. Find out more about My Tags

NZ Market Snapshot

Forex

Sym Price Change
USD 0.7831 -0.0010 -0.13%
AUD 0.9224 0.0005 0.05%
EUR 0.6286 -0.0005 -0.08%
GBP 0.5013 0.0005 0.10%
HKD 6.0858 0.0040 0.07%
JPY 92.9740 0.0740 0.08%

Commods

Commodity Price Change Time
Gold Index 1167.0 -29.600 2014-11-28T00:
Oil Brent 74.4 -5.030 2014-11-28T00:
Oil Nymex 66.2 -7.540 2014-11-28T00:
Silver Index 15.5 -1.060 2014-11-28T00:

Indices

Symbol Open High Last %
NZX 50 5455.4 5474.7 5455.4 -0.57%
NASDAQ 4797.1 4810.9 4787.3 0.09%
DAX 9990.7 9990.7 9974.9 0.06%
DJI 17830.5 17893.4 17827.8 0.00%
FTSE 6723.4 6734.7 6723.4 -0.01%
HKSE 23982.3 24117.2 24004.3 -0.07%
NI225 17340.2 17471.9 17248.5 1.23%