T&G tips stronger results this year

Tony Gibbs

Listed fruit and produce exporter Turners & Growers is expecting a stronger performance this year, says chairman Tony Gibbs.

The company also saw an increasingly global focus as the "logical growth response to our relatively static domestic population", Gibbs told shareholders at the annual meeting in Auckland yesterday.

"The company's increasing horticultural partnerships around the world confirm its determination to be a quality supplier of fresh products to markets in both hemispheres."

He said the company had asset backing of $2.91 a share at the end of last year, compared to a current trading price of around $2.60.

Gibbs, a director of Turners & Growers' majority shareholder GPG, gave a cautiously upbeat assessment of apple exports - an area where the company's Enza operation dominates.

An export price "bloodbath" meant last year was extremely difficult for New Zealand apple growers, leading to trees being ripped out. This and other factors have slashed the expected export crop this year.

Gibbs said yesterday: "Our apple export business is felt to be achieving better than at the same time last year on the back of a reduced national crop, of which we believe we have something in the region of 40 per cent market share."

While he was cautious with much fruit still to be sold, he said: "Depending on apple export outcomes, the best I can say today is we would be very disappointed if our group-wide performance did not exceed that of 2005."

Last year Turners & Growers increased net profits by 26 per cent to just under $13 million, even though the apple export problems helped cause a 12 per cent slump in operating revenue to $490 million.

On the $2.91 asset backing per share at year's end, Gibbs said this was "virtually 100 per cent represented by hard core property assets".

The property portfolio had been "extensively cleaned up" in recent years. The assets were all good quality commercial properties in desirable locations and leased almost exclusively to Turners & Growers at commercial arms-length rates. "This fact will I am sure be a comfort to all shareholders. The balance sheet is very secure."

Gibbs said the full separation of juicing operation EnzaFoods remained on the agenda.

"We want any listing of Foods to be highly successful and must ensure it is fully sustainable in the light of the present volatility in the apple growing industry."

Turners & Growers shares were steady yesterday at $2.60.