PGG Wrightson annual profit falls 28% on higher debt costs, weaker real estate market

Rural providers agency PGG Wrightson reported a 28% drop in annual revenue as increased debt and a weaker actual property market weighed on earnings.

Revenue fell to $17.5 million within the yr to June 30, from $24.3m the earlier yr, the corporate stated in an announcement to the NZX on Tuesday. Income superior 2.4% to $976.2m.

The agency’s debt virtually doubled to $65.3m from $32.8m, pushing up its financial institution curiosity prices 377% to $4.6m.

Wrightson performing chair U Kean Seng stated towards “a difficult backdrop”, the corporate had generated a robust working efficiency in most enterprise models, with livestock, wool and water experiencing strong demand and its rural retail shops experiencing a “standout efficiency”.

“The exception was our actual property enterprise which continues to function in tough market circumstances,” he stated.

Chief govt Stephen Guerin stated the true property market had skilled one of many hardest years in a while with excessive rates of interest, stricter regulatory necessities, softening commodity costs, and uncertainty relating to the result of the overall election in October all contributing to unfavourable sentiment.

He stated the decline in market exercise leading to considerably fewer gross sales.

Nonetheless, he stated the true property enterprise had maintained its market share and elevated share in some areas.

Wrightson’s retail and water division, which incorporates its retail shops and irrigation providers, reported a 1.9% carry in revenue earlier than curiosity and tax to $37.9m as income rose 3.2% to $785.3m. The division’s web revenue fell 3.7% to $24.5m as its curiosity prices greater than doubled to $3.8m from $1.7m.

The corporate’s company division, which incorporates its livestock, wool and actual property companies, reported a 31% drop in revenue earlier than curiosity and tax to $7.6m as income slipped 0.3% to $188.8m. The division’s web revenue dropped 57% to $2.6m as its curiosity prices jumped 36% to $3.9m.

Wrightson can pay shareholders a ten cent ultimate dividend, taking the full-year dividend to 22c, down from 30c the earlier yr.

Shares in Wrightson, which is 44% owned by Singapore-based Agria Group, slid 0.5% to $4.25 shortly after the NZX opened for buying and selling at 10am.