28 Oct 2015

PGG Wrightson expects 12 percent fall in profit

4:52 pm on 28 October 2015

Rural services firm PGG Wrightson expects its full-year operating profit to be as much as 12 percent down on the last year, as weak dairy prices begin to flow through to the wider rural economy.

The company said its first quarter operating profit was tracking slightly ahead of expectations, but it has forecast a full year operating profit in the range of $61 to $67 million, compared with last year's $69.6 million result.

Chief executive Mark Dewdney said low dairy prices were behind the anticipated fall in profitability, but he was confident of continued strength in the beef, horticulture and viticulture sectors.

He said continued operational improvements would help support earnings this year and drive future growth.

However, the recent bounce in global dairy prices had probably come too late to prompt dairy farmers to increase their spending in the current season.