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Zespri earns its stripes

By Hugh Stringleman

Friday 18th July 2003

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Zespri Group doubled net profit and trebled dividend to kiwifruit grower-shareholders in the year ended March 31.

It also maintained a steady 60% orchard gate payment ratio from total sales amounting to $860 million, compared with $800 million the year before.

Growers received an average of $8.61 per tray ($1.28 higher than the previous year) or $33,685 a canopy ha.

Net profit was $14.4 million, from which directors propose to pay $4.2 million or 20c a share fully imputed to shareholders in October.

The dividend represents a 16% return on the $1.20 share issue price.

Chief executive Tim Goodacre said kiwifruit sales in the current season were progressing well but that returns to growers and future dividends depended on the value of the New Zealand dollar during the selling season. Zespri has about 25% of sale value hedged in forward currency exchange contracts.

NZ Green and Gold kiwifruit were holding price and volume improvements gained in the large Japanese market, he said. Gold kiwifruit were well established in the European market.

They were bringing growers about $2.50 a tray more than green fruit. Organic growers enjoyed a similar margin over the green fruit base.

The 2002/03 year was the first that Zespri maintained a year-round market presence with one million plus trays of counter-seasonal supply successfully sold.

However, it is early days to see if that strategy will be profitable for New Zealand growers.

Total volumes of fruit sold by Zespri last year amounted to 62 million trays, which is expected to increase slightly this season.

Bond Offer: Infratil Ltd, 7.2 year & 10.2 year unsecured unsubordinated bond

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