26 Feb 2020

PGG Wrightson posts $12.8m half year profit

11:32 am on 26 February 2020

PGG Wrightson has reported a lift in earnings on improved sales for its livestock and horticultural businesses.

PGG Wrightson

Photo: Facebook / PGG Wrightson

The rural services company's net profit for the half year ended December was $12.8 million, compared with $0.3m the year before, which reflected the sale of its seeds business and accounting changes.

Chief executive Steve Guerin said the first half of the trading year has been strong with good farming conditions across much of the country and good commodity prices, especially for meat, flowing through into business.

"Trading conditions have remained challenging in some pockets of the business with Mycoplasma bovis having an impact on dairy and beef customers."

He said new overseas land ownership rules and other environmental regulations have hit land values and investment decisions, with tighter bank lending being felt by the dairy sector.

The buoyant horticulture sector and improved turnover for the rural supplies business helped to drive earnings, but its water business was struggling in the face of an end to big irrigation schemes, environmental rules and lack of on-farm developments.

The company was forecasting full year operating earnings of around $30m, but warned the second half might be more challenging.

"There are still many months of trading to complete and there could be some volatility to earnings due to the impacts of Covid-19 on agricultural trade flows."

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