14 Aug 2013

PGG Wrightson upbeat about coming year

6:57 am on 14 August 2013

PGG Wrightson believes things are trending the right way for the company and that it will benefit from high dairy prices and improved stock values in the coming year.

The company on Tuesday posted a $306.5 million annual net loss due to another write off, this time of $321 million.

As well, operating profit for the troubled rural services company fell 17% to $45.7 million for the 12 months ended June - almost $10 million down on the previous year's $55.1 million.

PGG Wrightson said the goodwill write-off relates to the merger which created it in 2005.

Chief executive Mark Dewdney, who took over six weeks ago, said drought in the North Island and Australia, as well as reduced prices for key agricultural commodities, made late-autumn trading conditions challenging.

But he was upbeat about the coming year.

"We historically haven't provided profit forecast at the full-year result time.

''Last year we did that at the half-year and again we're not providing guidance because it's just too early in the year but my overall view is that things are trending the right way for us," Mr Dewdney said.

"Dairy payouts will be strong this year, values for sheep, beef and cattle are trending up, farmers will reinvest into their farming businesses with improved incomes this year and we will be a beneficiary of that along with others in the agricultural sector."

However, he sounded a note of caution, saying the agriculture market was at the mercy of the weather.