PGW Wrightson's retail operation had a strong first half. Photo / Supplied
PGW Wrightson's retail operation had a strong first half. Photo / Supplied
Rural services group PGG Wrightson (PGW) said strong performances from its retail and real estate businesses, supported by strong commodity prices, helped drive its net profit up by 32 per cent to a record $22.5 million in the first half.
The company raised its interim dividend to 14 cents from 12c and upgraded its earnings guidance for the year to June to an operating EBITDA of $62m from $58m.
PGW's share price rallied on the back of the result.
By early afternoon, the stock was up 21c, or 4 per cent, at $5.41.
For the six months to December, PGW reported operating EBITDA of $47.4m, up $7.8m or 20 per cent on the prior corresponding period.
Revenue was $552.4m, up $53.0m or 11 per cent.
Chief executive Stephen Guerin said commodity prices in general and across the sector for New Zealand primary exports remained positive.
"Whilst a degree of volatility in international markets continues with disrupted supply chains, inflationary pressures and a global pandemic, our business is diversified and continues to adapt to our clients' and market needs," he said in a statement.
PGW's retail and water business had its strongest result to date.
Operating EBITDA for the retail and water group was $43.7m, up 30 per cent, and revenue was $469.0m, up 13 per cent on the strong performance in the first half of last year.
PGW's agency group delivered EBITDA of $7.4m, down $1.9m, and revenue was slightly lower at $82.2m.
Livestock activity for the first six months has been impacted by wet weather conditions in the North Island and Covid-19 restrictions including saleyard closures during Covid-19 alert level 4.
PGW Wrightson chief executive Stephen Guerin (left) and chair, Rodger Finlay. Photo / Supplied
There had been substantial growth in rural real estate sales.
"It is the best result for rural sales we have seen in many years and has been significant in heartland rural areas," Guerin said. PGW's market share increased throughout the country - noticeably in the South Island.
Chair Rodger Finlay said directors were encouraged by the positive outlook for the New Zealand agricultural and horticultural sectors.
"There continues to be high overseas demand for red meat, a record pay-out forecast for dairy, and demand for horticultural exports remain buoyant," he said.
The Ministry for Primary Industries expects New Zealand's food and fibre export values to exceed a new high of $50 billion in the year to June.
"This context at a macro level provides us with confidence that our clients and the sector are well placed as we look towards the remainder of this financial year and in the medium term," Finlay said.
