ALLIED Farmers has increased its interim result forecast for the six months to December 31 by $200,000 for a net profit before tax (NPBT) in the range from $1.2 million to $1.4m.
But the directors said in December they were not prepared to make a full-year guidance because of uncertainty surrounding livestock trading and herd sales in the second half.
The share price of the small listed rural servicing company responded by lifting 10c to 90c.
The increase in NPBT forecast was due to a $200,000 sale of veal inventory in late December 2021 that had been expected to sell during the second half when a previous guidance was issued on December 20.
Veal is processed and sold during the first half of the financial year by subsidiary Farmers Meat Export (FME).
The January 28 updated guidance said that the changed veal sale timing would make no impact on the expected full-year contribution from the FME subsidiary.
Allied Farmers is restructuring itself by reducing costs at the parent company level, including the move of group chief executive Steve Morrison to NZ Farmers Livestock, in which Allied holds 67%.
At the late November annual meeting, chair Mark Franklin said the company had been on a long and complex journey of recovery from the impact of the Global Financial Crisis which decimated value for shareholders.
“Today, it has re-established itself as an investor in rural-focused businesses with a strong balance sheet and a focus on building value for its shareholders,” Franklin said.
The investment in the management company of NZ Rural Land Company was transformational and would enable earnings diversification and growth.
The directors had decided not to pay a dividend in FY21 to retain and redeploy earnings in preparation for the decision whether to call its option to acquire the 50% of NZ Rural Land Management not already owned.
The FY22 interim report is due later this month.
