Floodwaters wash away Richmond bottom line

By LIAM DANN

Flooding in the lower North Island in February has put a major dent in the half-year profit of listed meat company Richmond.

The company yesterday announced a profit of $433,000 for the six months to March 31 - down from $14.2 million in the same period a year earlier.

"We got absolutely whacked by the flooding," said chief executive Richard Carver.

Richmond's processing plant at Waitotara was out of action for two months after the closure of an access bridge.

The Shannon fellmongery, which suffered the worst damage, has been out of action for four months but is scheduled to reopen in June.

Richmond is expecting some compensation for loss of business from its insurers.

Making claims was a complicated process and the first would not be lodged for another week or two, Carver said.

The company had taken the full hit from the flooding in the accounts for the first six months, he said.

Before February's floods, storms on the East Coast last spring hit lamb numbers and helped force Richmond's margins down.

About half a million lambs were lost in the spring storms and consequently sales of chilled lamb for the UK Christmas market were down by about 50 per cent, Carver said.

Total revenue for the half year was down 11 per cent to $590 million.

Most of that drop was because of the high New Zealand dollar during the period, Carver said.

Given the difficult conditions it was pleasing to have a profit at the halfway stage.

On the plus side, Richmond was starting to benefit from restructuring.

Nearly $4 million in costs had been removed from the business.

As lamb numbers improved it now looked likely that the company would meet its target profit of $12.65 million for this year's 11-month period, Carver said.

Richmond is changing its balance date to August 31 to bring its full year into line with that of its parent company, PPCS.