PGG Wrightson chief executive Stephen Guerin and chair Rodger Finlay have announced some of the best results ever for the rural servicing company.
Rural servicing company PGG Wrightson has reported the first half of the 2022 financial year, with record results and an improved guidance for earnings in the full year.
Chair Rodger Finlay said the business is performing extremely well and the earnings guidance before interest, tax, and depreciation (Ebitda) had been increased to $62 million, compared with $56m in the previous financial year.
The half-year results included revenue up 11% to $552.4m, operating Ebitda up 20% to $47.4m and net profit after tax (Npat) up 32% to $22.5m, all compared with the first half of FY21.
Directors decided to pay a fully imputed interim dividend of 14c a share, compared with 12c previously, payable on April 1 and distributing $10m from the company.
Chief executive Stephen Guerin said the record interim results came from very good trading performances in rural retailing and real estate, underpinned by a positive outlook for commodity prices.
Disruption in international supply chains and volatility in markets, inflationary pressures and a global pandemic were all reasons for caution, but the business was diversified and adaptive.
The retail and water division had 85% of the total revenue and contributed $43.7m Ebitda, up 30%.
Customers are ordering ahead of time, items such as seeds, fencing and fertiliser, while the company has expanded its inventory position by $30m to ease the supply chain risks.
Guerin mentioned agricultural chemicals being in short supply heading into autumn.
Also, the normal practice of three or four store upgrades each year had been delayed by shortages of building materials.
In the agency businesses, real estate had a strong six months over the spring and early summer.
“It is the best result for rural sales we have seen in many years and has been significant in heartland rural areas,” Guerin said.
“Our market share increased throughout the country and noticeably in the South Island.”
Livestock agency work was disrupted by wet weather in the North Island and covid restrictions on sale yards.
“During the period we have continued to reinvest in the business through upgrades to our sale yard network at Masterton and Wellsford and investment in new technologies to assist our agents better service their clients,” he said.
The online platform bidr had an increased user base of 30% after major weekly sales began live streaming.
Guerin drew attention to the improvements in the company’s website and the refreshed online account services portal that enabled clients access to their account and invoice details.
PGG Wrightson claimed a total shareholder return over the six months of 55%, being the upwards movement in share price, from $3.50 last August to $5.20 now, plus the 14c dividend.
The share price put on 20c, or 4%, after the interim results announcement and 28c in dividends for the full year would represent about 5% net yield.
