Rural services and supplies company PGG Wrightson has posted a full year net profit of $23.3 million and ebitda of $70.5 million, in line with market expectations and its November forecast.While this is well up on last year's net loss of $66.4 million, at
Rural services and supplies company PGG Wrightson has posted a full year net profit of $23.3 million and ebitda of $70.5 million, in line with market expectations and its November forecast.
While this is well up on last year’s net loss of $66.4 million, attributed to series of one-off costs, the company is not busting out the bubbles just yet.
It has signalled that business conditions in the rural sector are expected to remain muted in the short and medium term as a result of tighter liquidity and market volatility and expects a similar trading performance this year.
Excluding tax changes on depreciation announced by the government in the budget which shaved $2 million off PWG’s bottom line, underlying profit was $25.3 million.
Revenues were slightly down at $1.1 billion compared with $1.3 billion last year.
PGW chairman Sir John Anderson said the results reflected tight liquidity on farm and with it a reduced appetite for expenditure on agricultural inputs as well as intensifying competition in core markets.
“Nevertheless, the performance underscored the group’s strong management focus on cash flow returns and increasing operation efficiencies,” he said.
Sir John said a highlight for the year was the successful recapitalisation of the business and the securing of a new cornerstone shareholder with Agria Corporation which enabled PWG to retired $207 million of debt.
Since December 2009, the group issued $33.85 million of convertible redeemable notes, which were invested in PGG Wrightson Finance.
Bank debt was reduced by 53% from July last year, down $243 million.
“The balance sheet had been substantially strengthened, with the depth and capacity to see the group through foreseeable market and trading conditions, whilst the group continued to be focused on cash flows and further debt reductions,” Sir John said.
