Profit doubles for Wrightson

Keith Smith is confident. Picture / Fotopress

Wrightson delivered a strong full-year result to a packed house in Auckland yesterday.

Brokers and financial analysts turned out in droves to hear how the suddenly sexy rural services company is progressing in its mission to transform the sector.

The result - which saw net profit doubled to $20.5 million - marks the first full year since Craig Norgate's Rural Portfolio Investments took the company over.

It is also likely to be the 160-year-old company's last result as a stand-alone entity.

A deal that will see it merge with South Island rival Pyne Gould Guinness is expected to be completed by the end of September.

The profit announced yesterday was boosted by the sale of assets such as a potato business and a cornerstone stake in biotech company Genesis.

It also included four months of trading by Williams & Kettle (W&K) - the Hawkes Bay-based rural services company taken over by Wrightson in March.

Chief financial officer Mike Sang said W&K's profit contribution for the period was neutral but there were ongoing expenses related to the merger.

Sang said the normalised profit - when the revenue from asset sales was factored in and balanced against merger costs - was $16.5 million.

That still represented a significant improvement on the previous year's result - which had also been boosted by one-off gains.

Chairman Keith Smith said operating conditions had been generally favourable, with continuing strength in commodity prices offsetting the high value of the dollar.

He described the merger process with W&K as near-perfect and said he had a great deal of confidence that the September target for the Pyne Gould Guinness merger would be met.

"If someone wanted to write a thesis, it would be a model for how to do a merger," he said.

Planning for the Pyne Gould merger was already under way.

The merged company, PGG Wrightson, will have revenue of more than $1 billion and will rank among the top 20 companies on the stock exchange, with a market capitalisation of $510 million.