Failed strategies hit Wrightson result

By Nick Stride

Friday 20th August 2004

Wrightson's new majority owners got a rude shock yesterday as the company's result came in even worse than the market had feared.

The June-year net profit was $10.3 million, down from $18.5 million a year ago.

An appraisal report prepared in May in response to the bid by Rural Portfolio Investments predicted a profit of $12.5 million.

RPI, the vehicle of Craig Norgate and the McConnon family, in late June secured 50.1% with a $1.65 a share offer.

The company blamed the profit fall on less favourable trading conditions for farmers, particularly in the first half, and "unseasonably poor weather" in many regions.

A series of one-off costs included a staff holiday pay claim ($1.2 million), the undisclosed payout to sacked managing director Allan Freeth, a writedown and losses relating to the 15.4% stake in Genesis Research and Development ($2.7 million), higher provisioning for the Wrightson Rewards loyalty programme, and the write-off of the remaining goodwill in the forestry business ($569,000).

Operating cashflow crashed to $9.1 million, from $32.7 million a year ago.

New chairman Keith Smith said the previous year's cashflow had included several one-off gains.

Acting chief executive Barry Brook said external factors had made the first six months tough.

"However, we have to acknowledge that key strategies failed to get traction during the year. In particular, our attempts to turn our rural supplies business around and our Solutions strategy."

Comments from our readers

No comments yet