Richmond hopes for greener pastures after horror

Friday 21st May 2004

A weaker half-year profit left little impression on Richmond's share price as investors look for better trading conditions in the months ahead.

The meat processor posted a profit of $433,000 for the six months to March, down from $14.2 million for the same period last year. The share price was unchanged at $2.80 following the announcement, suggesting investors were content with the company's statement that it was on track to deliver its full-year profit target.

With the company fresh from last year's takeover offer from South Island PPCS, the lack of movement was even more understandable. Shareholder numbers have fallen from 2200 to about 550 as a result.

Richmond said it was disappointed with the result but expected a drop in profit due to the higher Kiwi dollar, storms over the East Coast last spring and severe flooding in February.

The industry remains volatile, being subject to climatic conditions, stock procurement battles and historic overcapacity.

Richmond said the result included one-off net costs in relation to business restructuring, shareholder litigation and insurance deductibility of $1 million relating to storm damage.

The company was 63% owned by PPCS and both companies were now working on lifting returns through combined synergies, Richmond chief executive Richard Carver said. The company was back on track to achieving its year-end profit target and "in excess" of this target for the 11-month period to August 31, 2004, following a change in balance date, he said.

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