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Re: [sharechat] WRI - Question

From: "" <>
Date: Sun, 30 May 2004 15:20:56 +1200

Hi Harley,
>Reading Grant Samuel's report on WRI  there is mention of a 
>in earnings  EBIT from livestock operations of $8m between 1992

2002 and 2004  :-)

>Expected earnings for this year are $3.8m projected. This is  blamed
>on sales volume and price decreasing.
>My question is did WKL and PGG have the same drop in there 

I don't know the specific answer to your question Harley.   I do know 
that receiving lots of stock to slaughter is not necessarily a good thing.   
It could mean that the farmers land is in such poor condition that they 
have to destock to remain in business.    So a 'boom year' in selling 
livestock could be a sign of bad things to come.    Perhaps farmers 
might even hold a grudge against WRI if they sold their livestock out 
from under them too cheaply?

On the subject of why WRI has underperformed PGG, the Cameron 
and Co. report suggests that the synergies released when Reid 
Farmers and PGG combined forces is a major factor.  The report also 
suggested that the finance division of PGG performed well.    Call me 
wrong but I thought that PGG was a pure rural services play, and the 
finance side of the business came under the umbrella of parent 
company PGC (?).   If I am wrong, hopefully someone will correct me.

On the underperformance relative to Williams and Kettle, the 'excuse' 
is that W&K have been riding the highs of a buoyant horticultural 
market, through 'Fruitfed', and that WRI are not big in this sector of the 



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