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Wrightson stays in farmers' good books

By Phil Boeyen, ShareChat Business News Editor

Thursday 6th July 2000

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Listed rural company Wrightson believes it has held onto its goodwill with the farming sector despite the embarrassing seed mix-up earlier this year.

In February Wrightson discovered a line of the company's swede seed had been inadvertently sold containing some rape seed. Most of the 1,000 farmers that had received the mixed seed were in Otago and Southland.

The company began sending out compensation claim forms this week as part of the process to deal with the mix-up, and the first payouts to the farmers are expected later this month.

Wrightson says it has worked hard to make the claims process as straightforward as possible, and spokesman Mark Thomas doubts the mix-up will have had a negative impact on the company's profile.

"Farmers realise this has been a one-off event" he says.

Wrightson itself will only have to shell out a maximum of $250,000 dollars to solve the problem - t-hat amount is the excess it must pay before an insurance policy kicks in and sorts out the rest.

The $250,000 has already been provided for the in the accounts and Wrightson chief executive Allan Freeth says the amount will not significantly affect the company's profit.

The company announced earlier this year that it had recorded a net profit after tax of $1.5 million for the six months ended 31 December 1999, compared with a $0.4 million loss for the previous corresponding period.

At that time it also said it was optimistic the improved trading conditions would be maintained for the year, and a strong result is expected when the full year's profit is announced next month.

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