T&G Global first-half profit jumped 89% on sales from new, existing businesses

UPDATED: Profit rose to $22.7 million, or 18.2c a share in the six months ended June 30.

T&G Global [NZX: TGG], the fruit marketer controlled by Germany's BayWa, posted an 89 percent gain in first-half profit driven by sales from new and existing businesses, and a one-time gain from the sale of its crate hire unit.

Profit rose to $22.7 million, or 18.2 cents a share in the six months ended June 30, from $12 million, or 9.8 cents, a year earlier, the  Auckland-based company said in a statement. Sales rose 14 percent to $423 million.

The company's growth bodes well for Chinese fruit exporter Golden Wing Mau Agricultural Produce, which emerged with a 19.99 percent stake last month,  becoming the second-biggest shareholder behind BayWa on 73 percent. T&G has grown through acquisitions over the past two years, adding Hawke's Bay Apollo Apples, tomato grower Great Lake Tomatoes in the Bay of Plenty and Rianto in Waikato, moving to control of its Australian asparagus joint venture. In June it opened a new office in Thailand and in Washington state in the US to expand its global footprint.

Chief executive Alastair Hulbert said the growth was achieved even though fruit production was hampered by unhelpful weather in New Zealand.

"It has been a challenging first six months for some of our apple growers, particularly those in Nelson who were hit by severe hailstorms," Hulbert said. "Some growers lost their entire harvest and T&G lost roughly 10 percent of its potential volume for the first six months of the year.”

While a warm summer in New Zealand delayed exports of pipfruit and local citrus sales, "northern hemisphere markets are performing strongly with increased sales volumes and firm pricing, especially for Jazz and Envy apples," he said. "In the diversified business, our Australian operation has been a standout performer in the first half of 2016.”

T&G's shares trade infrequently because of the amount locked up with major shareholders. It last traded at $2.90 and has gained 38 percent this year.