LIC selling Deer Improvement unit to concentrate on dairy
Livestock Improvement Corp, the farmer-owned cooperative that focuses on herd genetics, farm software and automation is selling its Deer Improvement subsidiary business in order to concentrate on its dairy business and reinvest funds back into areas that are more focused on adding value for its dairy farmer shareholders.
The buyers are South Canterbury sheep, beef and deer farmers Tom and Samantha Macfarlane and associated parties and the sale is expected to be completed on Oct 5. It includes the 390-hectare Southland farm at Balfour, artificial breeding collection and laboratory facilities and the herd of 2000+ high genetic merit animals. No price was disclosed.
LIC established the Deer Improvement subsidiary in 2003 as part of its multi-species strategy, which identified deer as an industry which could benefit from the co-op's experience and transferable knowledge in animal breeding.
Since then, Deer Improvement has contributed an average 15kg liveweight gain per animal over the ten years to 2014 (based on yearling weight). LIC's reproduction technologies have also increased the number of high genetic merit stags available for deer farmers to purchase.
"LIC has generated significant genetic gain for the deer industry with Deer Improvement and the sale is a natural progression for the business. The new owners are great advocates for the deer industry, and will take the business into the next phase of its growth," said LIC chief financial officer, Linda Cooper.
LIC is the leading supplier of artificial breeding and herd improvement services for New Zealand's dairy industry. Approximately three-quarters of the country's dairy cows are sired by an LIC bull.
Earlier this month it reported an annual profit after its biological bull team was revalued sharply higher and it was upbeat about the current financial year.
Net profit was $20.8 million in the 12 months ended May 31, compared to the prior year's loss of $4 million. This includes the annual revaluation post tax of the biological bull team of $17.7 million, compared to a write down of $3.7 million in the prior year. The valuation of the bull team is based on a model that looks at future revenue streams and costs associated with the current bulls owned, discounted back to current value, LIC said.
Looking ahead, it said in conjunction with improved industry conditions, a more positive milk price and its ongoing transformation programme "further improvements are expected in the 2017-18 financial year."
LIC's investment shares, which are listed on the NZAX, last traded at $2.40. They have shed 7.7 percent over the past 12 months.