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Nufarm provides potent recipe for Australian growth

Friday 17th October 2003

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Chemical manufacturer Nufarm might not be listed on the local bourse anymore but the company still has a bevy of Kiwi shareholders now reaping rewards from across the Tasman.

The New Zealand-born company, now based in Melbourne, is enjoying a purple patch, having recorded another year of double-digit growth with net profit rising 13% to $A64.3 million for the July year.

The shares have leapt 130% from a low of $A2.31 in October 2001 and brokers have upgraded recommendations to reflect a $A6 price target.

Nufarm, formerly called Fernz Corporation, shifted to Australia in 2001 but its share price suffered as the stock dropped off New Zealand investor radar screens. It also took some time for the Australian market to warm to the company.

In a classic turnaround the company has since gone from being an Australasian-focused business dealing in agricultural and industrial chemicals to an international business with 2000 employees.

The company expects to lift earnings 10% in 2004 and says it can maintain this growth rate until at least 2006.

Significantly for investors the result also revealed a reduction in the company's gearing, with net debt to equity dropping to 98% from 152% the previous year.

The company maintains a strong Kiwi connection through directors Sir Dryden Spring and Bruce Goodfellow and major shareholder Amalgamated Dairies .

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