PGG Wrigthson chairman Rodger Finlay says that while the financial result was “not what we had targeted at the start of the year it nevertheless reflects well on the resilience of the business”.
The impact of Covid-19 has hammered rural supplies group PGG Wrightson, which has reported a second-half loss of $5 million to June 30.
But despite the reversal of fortunes PGG Wrightson (PGW) still made a profit of $7.8m for the year. That compared to a profit of $131.8 in the previous year which was boosted by $134.3m gain on discontinued operations after the sale of its seeds business.
In the first half of the most recent year PGW made a net profit of $13m.
Chairman Rodger Finlay said that while the result was “not what we had targeted at the start of the year it nevertheless reflects well on the resilience of the business, our people and the support from our customers in what has been an extraordinary year”.
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“To deliver a trading performance similar to last year after the level of disruption that we have experienced is heartening and demonstrates that the business is in good health,” Finlay said.
While some business units continued to trade through the higher alert levels, PGW’s real estate, water, wool and livestock sale yards could not operate due to the Government restrictions, he said.
However, the company had recorded a “credible operating result”, in line with the year before when the fall-out from coronavirus was taken into consideration, he said.
No final dividend would be paid to shareholders, but regular dividends would resume when the market stabilised,Finlay said.
“Depressing” “tragic,” and “very frustrating” – those are just some of the words being used to described the state of the country’s wool industry.
PGW shares were down 2.6 per cent at $2.62 in Tuesday afternoon trading.
With reduced trading in the second half, PGW applied for and received $4.1m through the Government wage subsidy scheme.
Finlay said despite export demand for New Zealand agricultural commodities remaining strong it was prudent to be wary due to the degree of uncertainty globally.
PGW’s rural supplies and horticultural supplies businesses had performed well, while its vet supplies business Agritrade continued to grow with revenue up on the same time last year.
Buoyant livestock trading in the first half of the year was followed by the temporary closure of sale yards and restrictions on processing capacity at meat works in the second half.
As a result, its online real-time trading platform, Bidr, saw an up-tick in demand as livestock sales went digital during lockdown.
However, the wool division was badly impacted by Covid-19, which Finlay described as “arguably the most significant issue the wool industry has experienced in a generation”, as it had affected the international supply chain.
Demand and prices for all wool types subsequently fell, he said.
“Farmer growers have elected to hold wool rather than sell into the current market. Additionally, wool auctions were placed on hold for two months.”
Finlay was cautiously optimistic about the outlook noting that consumers in key export markets had been shielded from the impacts of coronavirus through fiscal support, propping up retail food spending.
It was unknown how the continued cases of infection and secondary lockdowns would impact trade in the year ahead, he said.
“There is a healthy measure of optimism with solid production returns continuing in dairy, red meat and horticulture.
“We are seeing growers and farmers gear up for the busy spring period and would expect to be in a position to provide a trading update by the time of our annual shareholders meeting in October,” Finlay said.