PGG posts a solid profit rise on increased sales and record low debt

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PGG Wrightson has more than trebled its full year profit as a strong primary sector increased demand for rural supplies and services.

Farm and rural property sales were the best in a decade, PGG Wrightson says.
Photo: Facebook / PGG Wrightson

The company said many of its operations had the best business in years as high commodity prices lifted spending in horticulture, dairying and livestock trading, while low interest rates had boosted its real estate business.

Its net profit for the year to June after tax was $22.7 million compared with $5.7m the previous year; its revenue increased from $788m to $847.8m and its net debt fell from $33.1m to $6.5m.

Chair Rodger Finlay said the results vindicated the business’s decision to sell its seeds business.

The boom in horticulture underpinned growth in its Fruitfed business, while attracting new business drove earnings for its rural supplies network.

Chief executive Steve Guerin said supply chain disruptions have been a challenge.

“This will continue to have an impact on the timelines for sourcing product and grower inputs as well as exports to offshore markets.”

He said the company was holding more inventory and asking customers to spell out their likely needs three to six months earlier than would be usual.

The division covering livestock, wool and real estate businesses, had a 60 percent rise in earnings, with growing use of its online livestock trading systems.

Farm and rural property sales were the best in a decade as more farms came up for sale and demand for lifestyle properties continued.

“We also see early signs of a positive spring for rural sales, with higher than normal appraisals taking place along with earlier spring listings occurring, which we expect will turn into continuing solid demand for the first six months of FY22 [financial year 2022],” Guerin said.

The strength of commodity markets and prices was expected to sustain group earnings for the coming year.

The company’s debt level fell to a record low, while the full year dividend of 28 cents a share was a record also.

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