PGG Wrightson reports $5m profit

Rural services firm PGG Wrightson today reported a net profit of $5 million for the six months to December 31.

This is PGG Wrightson's first financial result since it was formed through the merger of Pyne Gould Guinness and Wrightson in October last year.

The company said amortisation and one-off merger expenses amounted to $5 million, which brought up the underlying net profit to about $10 million.

Earnings before interest and tax for the period were $22.5 million.

A fully imputed interim dividend of 4c per share was declared, and will be paid on March 31.

The company said future dividend payments were expected to be 65-80 per cent of net profit excluding amortisation.

Chief executive Barry Brook said the climate and economic conditions had been less favourable during the period than during the same time the previous year.

Tallies for the company's livestock agency business were reduced by about 12 per cent, as farmers decided to hang on to stock for finishing.

The high New Zealand dollar also reduced prices for wool and livestock.

Looking ahead to the second half of the year PGG Wrightson's Mr Brook said the merger would have a positive impact on the company's financial results.

He said forecasts for the full year remained consistent with figures in the merger disclosure documents of an annual net profit of around $30 million.

The company said the integration of operating systems, the merger of back office functions and other streamlining was progressing well, and annual synergies from the merger were now expected to be in excess of $25 million.

The company's finance loan book grew to $318 million, which was 27 per cent higher than the combined total for PGG and Wrightson as at December 31.

Shares in PGG Wrightson last traded yesterday at $1.96.

- NZPA