'Defining year' for Silver Fern Farms

Silver Fern Farms chairman Eoin Garden.

Meat cooperative Silver Fern Farms has reported a 16 per cent rise in full year net profit to $43.6 million, boosted by its settlement with PGG Wrightson.

Revenue for the 12 months to the end of August rose 1 per cent to $2.015 billion.

Removing the gain from the settlement with PGG Wrightson of $37m and other one off items, left an operating profit of $5.1m, the company said today.

Chairman Eoin Garden also warned that the impact of exchange rate volatility in the current year, based on current exchange rates, would have a detrimental impact on livestock values.

"This is particularly frustrating when so much has been, and is being achieved in maximising value from global markets," he said.

The settlement from PGG Wrightson came after that company defaulted on an offer to buy a 50 per cent shareholding in Silver Fern Farms for $220m, when the global financial crisis affected PGG Wrightson's ability to come up with a $145m first instalment.

Today, Silver Fern Farms said its debt was cut by $57.7m to $184.5m during the past financial year, including a $50m bonds repayment in March.

No shareholder distributions would be paid for the year "in view of the economic environment and the company's recent focus on recapitalisation of the business".

Garden said 2009 had been a defining year for Silver Fern Farms and its stakeholders.

The group had made substantial and measurable progress towards its transformation from a traditional, sales oriented meat processor to a market led food company, Mr Garden said.

In July , Silver Fern Farms' shareholders voted in favour of constitutional changes, effectively endorsing the need to align the company's capital and governance structure.

Approval of that new constitution meant the company had the ability to introduce a modern capital structure which protected the company and offered increased benefits over past structures, Garden said.

Subsequently, 5787 shareholders, holding 42.9m shares and representing 75 per cent of the total shares eligible for exchange, had participated in an offer which closed on October 9.

Shareholders subscribed for a further 22.2m shares under the associated rights offer.

The ordinary shares would list on the Unlisted trading platform on October 27.

- NZPA