Announcement
FLLYR: PGW: Annual Results Announcement to 30 June 2021
08:30am
PGW
17/08/2021 08:30
FLLYR
PRICE SENSITIVE
REL: 0830 HRS PGG Wrightson Limited
FLLYR: PGW: Annual Results Announcement to 30 June 2021
PGG Wrightson delivers impressive FY21 result
Group Performance
PGG Wrightson Limited* (PGW) today announced its results for the financial
year ended 30 June 2021.
Key highlights of the financial year to 30 June 2021 included:
? Revenue of $847.8 million (up $59.8 million or 7.6%)
? Operating EBITDA** of $56.0 million (up $13.8 million or 33.0%)
? Net Profit after Tax (NPAT) of $22.7 million (up $15.0 million)
? Fully imputed final dividend of 16 cents per share
? Very strong performances from our Retail, Fruitfed Supplies, Livestock,
Wool and Real Estate businesses
? Strong balance sheet and operating cash flows leading to a low net interest
bearing debt balance at 30 June 2021
? Continuing solid demand and pricing for New Zealand produce underpinning
outlook confidence for farmers and growers, and in turn agri-services
PGW Chairman, Rodger Finlay said that "...our team and the business have
again proved that they are leaders in the field in supporting our customers,
the agri-sector, and rural communities to deliver an excellent result. The
financial year started and finished strongly with year-end Operating EBITDA
at $56.0 million, up $13.8 million or 33.0% on last year's COVID-19 impacted
result."
"PGW also delivered a NPAT of $22.7 million which was up $15.0 million.
These results further vindicate the decisions taken over the last two years
in divesting the Seeds business and with the concomitant recalibration of our
cost base and systems."
"Based upon the strong full year earnings the Board declared a fully imputed
final dividend of 16 cents per share. The dividend will be paid on 4 October
2021 to shareholders on PGW's share register as at 5pm on 10 September 2021.
This will effectively bring the total fully imputed dividends paid for the
year up to an impressive 28.0 cents per share which I am sure all
shareholders will be delighted about."
"The Directors are particularly pleased that the business has backed up its
strong first half result and has continued to trade well over the second
half. This result reflects the collective efforts of the dedicated team that
we have who are passionate about agriculture, supporting our customers and
the role the sector plays for New Zealand. We have seen just how important
and critical to New Zealand's success the primary sector is and this has come
into stark focus through the global pandemic."
"As a business PGW is clear about its strategy of driving for growth through
providing our customers with sector leading expertise and innovative
solutions for their farming and production needs. We look to lead the market
through the specialist knowledge and technical expertise of our people. We
do this through investing in their capability and in identifying and bringing
to market new products that we source and prove in New Zealand conditions.
Our customers value PGW's technical offering and see this as a distinguishing
strength that we will continue to develop and foster. Our strong balance
sheet allows us to contemplate earnings accretive growth ambitions, both
internal and external."
Turning now to comment on the performance of our Business Units.
Retail & Water Group
PGW CEO, Stephen Guerin said, "Retail & Water's Operating EBITDA was a very
pleasing $37.5 million and was up $4.3 million on the prior year's result; an
increase of 13.0%."
"Both our Rural Supplies and Fruitfed Supplies businesses traded extremely
well. We continue to increase our market share and much of this growth can
be attributed to the superior technical expertise of our staff backed up by
our leading product range. We have a very stable rep force who are well
supported by our specialist technical and R&D teams."
"A significant challenge that we and many other businesses face is around the
much publicised supply chain disruption that is being felt around the world.
This will continue to have an impact on the timelines for sourcing product
and grower inputs as well as exports to offshore markets. Our team continues
to work assiduously to proactively minimise supply disruption to our
businesses and customers."
"Our teams have been working collaboratively with our key suppliers, securing
and taking product into stock earlier, and working with customers to lock in
their seasonal requirements three to six months earlier than would ordinarily
be the case."
"Our Rural Supplies business experienced particularly strong growth this year
which is a fantastic result in a highly competitive market. This success is
attributable to both new customers who have shifted business to PGW and also
growth in our market share as customers respond positively to our value-added
technical offering and advice."
"We have employed some great new talent in our business who have brought
fresh ideas, and in some instances, new business. Our sales culture has
grown through increased investment in our people and by providing more
training opportunities across all levels of our business with the focus on
sales and service."
"Our Fruitfed Supplies business has again registered another record year for
both Operating EBIDTA and revenue. This business is diversified across a
number of crops and we continue to adapt to customer and market needs. The
horticulture sector is growing and remains buoyant, and we are continuing to
see investment and development."
"We enjoy impressive market share across a broad range of horticultural crops
and with particular strengths in the grape, pip fruit, stone fruit, and
kiwifruit, and we continue to grow in the avocado and cherry sectors."
"Our core focus remains to add value to our clients' businesses through the
technical ability of our Technical Horticultural Representatives (THR) and by
supplying specialist products and services. Our technical expertise offering
is differentiated by our expert Technical and R&D teams who support our field
and store staff. This team conducts a number of trials across the industry
investigating new products and chemistry to assist our growers and engage
with industry bodies and prove products in New Zealand conditions."
"Our wholesale subsidiary, Agritrade, which manufactures, sells, and
distributes products continues to demonstrate positive momentum."
"Maintaining inventory during the worldwide supply chain disruption created
by COVID-19 caused Agritrade to place orders and receipt stock earlier than
usual. Whilst the inability to travel internationally has hampered product
development opportunities, it is nevertheless pleasing to note that five new
products were registered during the year and are being commercialised."
"We have reshaped the Water business to align with market conditions. This
has resulted in an improvement in EBITDA compared to the previous year. Our
full-service water and irrigation packages to customers through Rural Water
has seen an increase in sales. However, shipping delays will likely push out
some delivery timelines in the short to medium term."
Agency Group
"Our Agency group incorporates the Livestock, Wool and Real Estate
businesses. Trading for this group is weighted towards the second half of
the financial year. Operating EBITDA was $25.2 million and was up $9.5
million on the prior year's result; an impressive increase of approximately
60.6%."
"Our Livestock business has maintained market share throughout the country
with the South Island achieving a very solid result, especially within the
sheep and beef sector. During the year strong values were achieved for sheep
farmers, and dairy farmers also received increased pay-outs which in turn
supported our Livestock business. Our Deer business experienced a good
velvet season where values offset lower venison prices."
"We expanded our GO-BEEF and GO-LAMB product offering and launched GO-DEER.
Next year we expect to add to our GO-STOCK range with GO-DAIRY, which we
anticipate will be well received and grow our GO-STOCK offering further."
"bidr(R), our virtual saleyard has run over 400 auctions and sold more than
$50 million worth of livestock since its launch in June 2019. bidr(R)
continued its significant software development and in FY22 live streaming
from Fielding, Stortford, Wellsford, and Frankton saleyards will be launched
with others to follow as we roll out this technology. Excellent Livestock
Genetics results throughout the year culminated in the bull sales auction
series where bidr(R)'s hybrid platform came to the fore."
"PGW Wool has done a good job navigating through the ongoing challenges that
have been accentuated by COVID-19. Our team worked closely with growers to
reduce their stockpiles of crossbred wool and did see some benefit from
improved pricing in the second half. Our export subsidiary, Bloch & Behrens
worked diligently with overseas customers to ensure contracted obligations to
our growers were fulfilled."
"The Real Estate business has seen particularly strong demand across all
sectors of the rural property market, which has also been fuelled by low
interest rates. This resulted in the Real Estate business experiencing its
best returns in over a decade at both an Operating EBITDA and gross
commission income level."
"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. With strong commodity values in rural we
anticipate a number of retirement and succession initiated listings coming to
the market. The shortage of residential and lifestyle listings may continue
with the current low interest rate environment a contributing factor."
Cashflow and Debt
Mr Finlay noted that "PGW experienced strong operating cash flows during the
year which benefited from the good Operating EBITDA performance and a focus
on working capital management and receivables in particular. This focus has
seen PGW's overdue debtors balance continuing to track to historically low
levels with our book in very good shape."
"Capital expenditure of $6.8 million was $2.3 million lower than FY20 and was
impacted by a slowing in the implementation of projects as a consequence of
COVID-19 related disruption."
"Net interest-bearing debt was approximately $6.5 million as at 30 June 2021
and is the lowest recorded at 30 June in over a decade, excluding 30 June
2019 when the proceeds from the sale of its Seeds business were held."
Outlook
Mr Finlay said, "The outlook is positive in the rural sector with strong farm
gate and commodity prices. Robust demand is expected to continue for lamb
and sheep meat and cattle prices are anticipated to remain high. There is
also confidence in dairy with a positive outlook into next year and a solid
pay-out predicted."
"Looking ahead, the Board is confident that the PGW is well placed to
continue to grow. We have recently undertaken an internal review of our PGW
Group strategy and have reset our Group objectives and priorities and we are
rolling this out within the business currently. This exercise has served to
reconfirm a number of the key themes that are continuing to drive improved
performance for the business. Key in this is our continued focus on the
technical expertise of our people and technical offering which differentiates
us from our competitors."
"There remains a degree of uncertainty globally with increasing geopolitical
risks and as new variants of COVID-19 emerge. Implications from the pandemic
will continue to impact consumer markets and the global supply chain. PGW is
committed to supporting our customers through these ongoing challenges and
has demonstrated that it can do this effectively and profitably."
"We would hope to be in a position to provide guidance about our expectations
for FY22 at our Annual Shareholders' Meeting in October."
All media enquiries to:
Julian Daly
General Manager Corporate Affairs
PGG Wrightson Limited
Mobile: +64 27 553 3373
End CA:00377359 For:PGW Type:FLLYR Time:2021-08-17 08:30:41
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