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PGG Wrightson posts $5.9m half-year loss

Monday 7th February 2011

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Agricultural services company PGG Wrightson reported a half year loss of $5.9 million, compared to a net profit of $4.3 million a year earlier.

Newly appointed managing director George Gould said a number of one off items had affected the result, with seasonal and sectorial impacts also contributing negatively.

"(PGG Wrightson) typically makes most of its money in the second half, and this year is no exception, although there are a series of initiatives now under way that will improve consistency of earnings," Gould said.

Revenue for the six months to the end of December was up 10.7% from a year earlier to $645.9 million, while earnings before interest, tax and depreciation (ebitda) fell to $16.8 million from $25 million.

For the full year, the company is remaining with its guidance of operating ebitda between $58 million and $61 million.

During the latest half year, the company's AgriTech division recorded favourable sales levels with markets across the board experiencing a slow start to spring trading, Gould said.

"The grain business was able to capitalise on strong commodity prices and demand for seed cereals, maize and wheat while the International business group performance improved on the back of positive international markets for seed."

The Agri-Feeds division made gains on last year as milk solid prices supported supplementary feeds and a number of farmers utilised this to counter the drought conditions seen in parts of the country.

The latter part of the half year had brought more rural property activity, with conditional sales more than 25% above the same period last year, though those were taking longer to come to fruition, Gould said.

PGG Wrightson shareholder Agria has launched a partial takeover bid for 38.3% of the shares in PGG Wrightson which would take its stake to 50.01%.

Another party that has indicated an interest in bidding for all shares in PGG Wrightson is carrying out due diligence, but PGG Wrightson directors have cautioned there is no certainty of a better bid emerging.



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