25 Jul 2014

LIC cuts dividend

8:29 am on 25 July 2014

The Livestock Improvement Corporation expects to continue to invest heavily and has slashed its dividend to accommodate its plans to grow.

The NZX-listed farmer-owned co-operative's annual net profit fell nearly 24 percent to $18 million in the year ended May as it increased its investment in information systems and research and development.

The profit fall was despite a 6 percent rise in sales to $211 million for the year.

LIC says because of its high level of capital investment currently, coupled with the potential for more mergers and acquisitions activity, it is slashing its dividend payment to 60 percent of underlying net earnings from 80 percent last year.

That means it will pay its farmer-shareholders $11.2 million this year, down from $16.8 million the previous year.

LIC chief financial officer Linda Cooper said even though profit fell, the company had a good year but it was prudent to cut the dividend.