PGG Wrightson (PGW) H2 2024 earnings summary

Executive summary

• Operating EBITDA for FY2024 was $44.2 million, down $17.0 million from the prior year, reflecting challenging agricultural sector conditions and reduced discretionary spending by farmers and growers.

• Net profit after tax was $3.1 million, down $14.5 million year-over-year, impacted by a one-off non-cash tax expense of $0.9 million due to legislative changes.

• Revenue declined to $915.9 million, a decrease of $59.7 million or 6.1% from the previous year, marking the first revenue drop since FY2018.

• No final dividend was declared for FY2024 due to ongoing sector and economic pressures.

• Directors confirmed the financial statements present a true and fair view, with an unqualified audit opinion.

Financial highlights

• Operating cash flows increased to $57.7 million, up $32.2 million from the prior year, driven by lower cash stock balances and reduced tax payments.

• Capital expenditure rose to $22.8 million, up $5.7 million, mainly for IT improvements and acquisition of a half share in Frankton Saleyards.

• Net interest-bearing debt was $59.2 million at year-end, a reduction of $6.1 million.

• Gross profit decreased to $235.7 million from $252.8 million year-over-year.

• Total assets at year-end were $477.6 million, with total liabilities of $312.9 million.

Outlook and guidance

• The rural servicing market in New Zealand is expected to remain subdued in the near term, with moderate growth anticipated over the longer term as inflationary pressures ease and input costs stabilize.

• Commodity price volatility and geopolitical tensions continue to create uncertainty.

• Guidance for FY2025 will be provided after the key trading period, at the October 2024 annual shareholder meeting.

• The business is subject to significant seasonality, with first-half earnings weighted to Retail and second-half to Livestock.

• MPI forecasts food and fiber export revenue to grow to $67 billion by June 2028.