Rural Equities full-year profit surges on dairy demand

Tuesday 2nd September 2008

Rural Equities Ltd, whose stock trades on the Unlisted market, posted a surge in full-year profit, reflecting rising demand for land that can support dairy farming.

Profit rose to NZ$32.4 million in the year ended June 30, from NZ$2.7 million a year earlier. Total equity rose to NZ$203.3 million from NZ$151.9 million.

"The very strong demand for dairy and arable properties, or those capable of dairy support operations, led to a substantial increase in rural land values of those farm types," chairman Selwyn Cushing said.

Rural Equities owns 62.4% of New Zealand Rural Property Trust and manages its portfolio of 30 farm properties. Dairy prices have reached record levels in the past 12 months stoking prices of farms and land that can be converted to dairying.

Cushing said the outlook for the rural sector is "very encouraging."

"We see continuing strong dairy product and arable crop prices as well as improving sheep and beef product prices," he said. "Combined with the recent decline in the exchange rate for the New Zealand dollar, there are positive signs for the year ahead."

By Jonathan Underhill

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