KEY POINTS:
The head of rural group Allied Farmers says the company is in good shape but faces a tough 2009.
Chairman John Loughlin, in his address to the Allied Farmers annual meeting yesterday, said the year ended June 30 was overshadowed by the deepening international credit crisis and a drought that was for some farmers the worst in living memory.
However, it was also a year of a record dairy payout. The NZX-listed rural services and finance group, with 5200 shareholders, made a pre-tax profit of $3.2 million this year.
Allied Nationwide had to pay out more than $100 million in maturing deposits, but the ability to match debenture maturities with loan repayments, and a programme of remaining liquid saw Allied Nationwide finish the year in good shape, Loughlin said.
The purchase of Speirs Finance meant the finance company had $400 million of assets and access to a $250 million securitisation programme, backed by BNZ up to $150 million.
"It is an understatement to say that the drought had a serious effect on our beef- and sheep-farmer customers. While it affected our dairy-farmer customers and impacted on their milk production, the increased payout gave them extra resources to cope."
The drought saw large numbers of cattle and sheep pass through stockyards at low values, but overall the annual revenue was a record.
Allied Farmers had opened a livestock office in Ashburton and was growing the placement of stock in the South Island. The Taranaki market for farm merchandise was strong and total merchandise revenue was the best in a decade. This reflected the buoyancy of the dairy sector on the back of the high payout.
Loughlin said the next year would be difficult for the global economy.
But, "through both the recession and the recovery phases, people will need food sourced from agriculture. Thus there will be a place for rural services operations such as our own".
- NZPA
