You are using an older browser version. Please use a supported version for the best MSN experience.

Less tax lifts PGG Wrightson's profit

NZ NewswireNZ Newswire 8/08/2016 Jonathan Underhill

PGG Wrightson, the rural services firm controlled by New York Stock Exchange-listed Agria Corp, has posted a 20 per cent gain in full-year profit, largely by paying less tax.

Profit rose to $39.6 million in the year ended June 30, from $32.8m a year earlier, the Christchurch-based company said on Tuesday.

Sales fell to $1.18 billion from $1.2b. Wrightson's income tax expense almost halved from $16m to $8.8m.

The company pre-announced some aspects of its results, saying last week that operating earnings before interest, tax, depreciation and amortisation "exceeded $68m in the year".

Ebitda came in at $70.2m from $69.6m a year earlier as earnings in seed & grain rose 10 per cent to $44.6m and retail gained 7 per cent to $29.2m, making up for a 1 per cent decline in livestock earnings to about $15m.

"The parts of our business most exposed to dairy had the toughest year, and more cautious spending from our dairy clients is the main reason for the small reduction in group revenue this year," said chief executive Mark Dewdney.

"Repeating this operating ebitda result next year will again be a stretch target given current market conditions, but we will give it our best shot," he said.

Mr Dewdney said a number of non-operating items reduced Wrightson's effective tax rate in the latest year, such as gains on sale of property.

A geographical breakdown of revenue shows sales fell 3.6 percent to $978m in New Zealand, its biggest market, while Australian sales gained 12 percent to $86m. South American revenue climbed 5.9 per cent to $117.5m.

Wrightson will pay a fully imputed final dividend of 2 cents a share on October 4, bringing payments for the year to 3.75 cents, down from 4 cents a year earlier.

Wrightson shares last traded at 54 cents and have gained 30 per cent this year, almost twice the gain of the S&P/NZX 50 Index.

image beaconimage beaconimage beacon