Announcement
HALFYR: PGW: PGW announces strong FY21 half year result and dividend
08:31am
PGW
23/02/2021 08:31
HALFYR
PRICE SENSITIVE
REL: 0831 HRS PGG Wrightson Limited
HALFYR: PGW: PGW announces strong FY21 half year result and dividend
23 FEBRUARY 2021
PGG Wrightson announces strong FY21 half year result and dividend
Results Summary & Dividend
PGG Wrightson Limited ("PGW")* today announced its results for the first half
of FY21.
Key highlights of the first six months to 31 December 2020 included:
? Revenue of $499.3 million (up 6%)
? Operating EBITDA** of $42.1 million (up $7.4 million or 21%)
? Net Profit after Tax ("NPAT") of $18.0 million (up 41%)
? Fully imputed interim dividend of 12 cents per share
? Very strong performances from our Retail, Livestock and Real Estate
businesses
? Strong balance sheet and improvement in cash flows from the prior
comparative period
? Reconfirmed full year Operating EBITDA guidance of around $57 million
PGW Chairman Rodger Finlay said "Our strong half year results reflect well on
the health of the business and the performance of our people as they continue
to deliver for our customers in the agri-sector that is the powerhouse of New
Zealand's economy. It is particularly pleasing to be able to report that our
Operating EBITDA for the six months to 31 December 2020 was $42.1 million; up
21% on the same period last year (1H20, $34.7 million)."
PGW delivered a NPAT of $18.0 million from continuing operations which was
also up 41% on the corresponding period (1H20, $12.8 million).
"The Directors are delighted with the performance of the business over the
first half as PGW has traded very well and executed upon its strategy to
drive consistent performance and growth. Our focus remains on serving and
adding value to our customers' businesses by supplying on farm and grower
solutions together with leading technical advice."
"We are seeing the results of our continued investment in the business and
our customers are also benefitting from the enhancements in the PGW Group
offering. Recent examples include the launch of our eCommerce channel last
year, our on-farm hybrid bidr(R) auctions, and the promotion of our popular
livestock programme, GO-STOCK. These initiatives, along with the investment
we are making in R&D enable us to bring new technically proven products and
solutions to the New Zealand primary sector and demonstrates our commitment
to innovation and the bright future of the primary sector."
Mr Finlay said, "Following the strong performance of the business over the
first half the Board declared a fully imputed interim dividend of 12 cents
per share which will be paid on 24 March 2021 to shareholders on PGW's share
register as at 5pm on 3 March 2021."
First Half Trading Performance
PGW CEO, Stephen Guerin commented that "The result reinforces the combined
strength of PGW Group and the diverse portfolio of businesses that serve
farmers and growers across the length and breadth of the country."
Retail & Water
"The first six months of the 2021 financial year provided a very good start
with all business units within Retail and Water trading ahead of the
corresponding period last year. Operating EBITDA for this group was $35.8
million (up 15%) and revenue was $413.4 million (up 8%) on the solid
performance in the first half last year."
"The superior technical ability of our staff and our very stable rep force,
who are well supported by our expert technical and R&D teams, have
contributed to an increase in market share. Growth has also been supported
by the uptake in our new PGW eCommerce offering which was launched in June
2020. While online orders are a relatively small channel for us at this time
we are seeing orders come in from all corners of the country which serves to
increase the awareness of our product range, as well as influencing in-store
purchases and attracting new customers."
"In Rural Supplies we have seen solid growth across most categories. The
outlook for our Rural Supplies business is tempered with sheep and beef
farmers cautious about the meat company schedules which are back on last
year. However, dairy farmers are more positive with solid pay-outs
expected."
"The forecast remains very positive for our Fruitfed Supplies business with
positive returns for the sector and stability in prices being obtained by our
growers. Crops not affected by the recent weather events are in good health,
with harvest for a number of significant crops underway or commencing
shortly."
"The horticultural sector continues to be buoyant, experiencing good yields,
profitable returns, and a positive outlook, which is driving investment and
further development. Our market leading Fruitfed Supplies business is
diversified across a range of crops and continues to adapt to our customer
and market needs."
"We are heartened by the improvement in our Water business in its first half
trading results following our restructure of the business undertaken at the
beginning of this financial year. It is pleasing to see these early positive
signs and we see room for further gains for our Water business as we focus on
growing our service offering."
"We are conscious of the challenges in international supply chains given
widespread disruption caused by the impacts of COVID-19. We are remaining
vigilant in this space and doing what we can to mitigate supply risks for our
Agritrade wholesale and retail businesses. Our stores have reviewed their
forecasts and stock levels and are ordering for early delivery to assist with
continuity of supply in coming months."
Agency
"Trading for our Agency group delivered an Operating EBITDA of $9.5 million
for the first six months of the 2021 financial year (up 44%) and revenue was
$84.8 million, in-line with the same period last year."
"With many parts of the country coming out of drought conditions we saw a
number of farmers rebuilding their capital stock numbers. Buoyant prices and
widespread rain throughout the South Island created good conditions with
plenty of feed on-farm stimulating farmer confidence."
"Strong global demand for dairy persists with farmgate prices continuing to
rise and underpin confidence in the dairy sector."
"With capital available to support growth of our GO-STOCK livestock grazing
programme for trading and finishing beef and sheep, we have increased the
promotion of our GO-STOCK offering. With good demand for this popular
livestock trading solution we expect to see further demand and utilisation of
GO-STOCK."
"bidr(R) continues its commitment to offering buyers and sellers of livestock
a seamless online experience whether they are bidding on-farm or at a
saleyard auction. Following the launch of the on-farm hybrid auctions for
on-farm/auctioneer sales, bidr(R) announced it will expand into livestreaming
auctions at saleyards from April 2021."
"Uncertainty around global markets and the effects of COVID-19 are causing
farmers to take a more conservative approach than normal in the cattle and
lamb trading space. The venison market has also been affected with schedules
having been reduced by over half with most companies only processing if they
have orders."
"All three categories of our PGW Real Estate business including rural,
lifestyle, and residential experienced the strongest six months of sales in
the past six years. Every sector of rural, particularly sheep and beef,
grazing, and finishing properties experienced significant activity with dairy
farms also enjoying heightened interest."
"The outlook for real estate for the second half of the financial year
remains positive subject to the availability of listings, especially within
the lifestyle and residential sectors. We anticipate there will be a steady
flow of rural properties with new rural listings coming to the market ahead
of the traditional autumn selling period."
"PGW Wool continues to proactively navigate through depressed crossbred wool
prices, associated international demand challenges, and supply chain issues
accentuated by impacts of the global pandemic. Despite these challenges,
Operating EBITDA for PGW Wool was up modestly compared to the same period
last year."
Cashflow and Debt
Cashflow from operating activities saw a $3.9 million inflow; an $18.8
million improvement on the prior period's result. Capital expenditure was
$1.5 million, $3.0 million lower than the comparative period, with cashflows
from the disposal of property, plant, equipment, and investments totalling
$0.5 million.
Net interest bearing debt as at 31 December 2020 was $39.2 million, which was
34% lower than 31 December 2019. PGW renewed and extended its bank
facilities during the period.
New Insurance JV Offering
"I am pleased to note the new joint venture relationship that PGW has entered
into in recent days with BrokerWeb Risk Services Limited ("BWRS") who will
take customer referrals and provide leading insurance broking services to
PGW's customers and the wider rural community." Mr Guerin said.
"The relationship has a strong strategic fit for us given that BWRS already
has a solid presence in the rural sector and our association will provide an
excellent opportunity to deliver another important and tailored service to
our customer base. BWRS's brokers have local knowledge access to
market-leading insurance products and risk advice that our customers will
benefit from. Both PGW and BWRS place customers at the centre of everything
we do and focus on building enduring relationships by working together and
delivering outstanding service."
Outlook
Mr Finlay said "Global markets continue to support New Zealand's primary
exports while international supply chains may pose some challenges in the
short to medium term. Following the roll out of vaccines in our trading
market countries we anticipate these challenges will ease over time. With
these dynamics at play we are seeing reasonable confidence from our farmer
and grower customers and remain optimistic about the prospects for the
sector. Although there will always be unforeseen events, PGW and the country
are in a stronger position than we were at the outbreak of the virus to
navigate these."
"The Directors are very pleased with the progress achieved in the first half
and the financial performance of the business. We remain cautiously
optimistic about the remainder of the financial year and believe the company
is well placed to deliver our 2021 full year Operating EBITDA guidance of
around $57 million."
For media enquiry contact:
Julian Daly
General Manager Corporate Affairs / Company Secretary
PGG Wrightson Limited
Mobile: +64 27 553 3373
End CA:00367998 For:PGW Type:HALFYR Time:2021-02-23 08:31:50
Click here
to view related attachments.
