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Wrightson full-year profit jumps 80%

Tuesday 19th August 2008

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PGG Wrightson, the rural services company seeking to buy half of meat processor Silver Fern Farms, posted an 80% jump in full-year profit on increased sales and a one-time performance fee.

Profit rose to NZ$73.2 million in the six months ended June 30, from NZ$40.6 million a year earlier, the company said in a statement. Sales rose to NZ$1.3 billion from NZ$1 billion.

Wrightson reaped a NZ$17.8 million performance fee from NZ Farming Systems Uruguay, its spin-off that's developing dairy farms in South America. The fee will reduce to NZ$4.2 million in the current year, when profit is expected to be NZ$50 million to NZ$55 million, the company said today.

"Performance improvements were achieved by each of our divisions despite the impact of long periods of dry weather, adverse exchange rates and poor returns to sheep and beef farmers," chairman Craig Norgate said.

The stock fell 1.8% to NZ$2.75. In the past 12 months, the shares have soared 60%.

Revenue from South America, where it is introducing New Zealand-style intensive dairy farming, more than doubled to NZ$55.6 million. Sales from rural services, Wrightson's biggest business, rose 14% to NZ$818 million.

The company will pay a final dividend of 11 cents a share, bringing annual payments to 16 cents, from 12 cents a year earlier.

The company created from the merger of Pyne Gould Guinness and Wrightson three years ago.

By Jonathan Underhill

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