PGG Wrightson said earnings growth will stall this year after a wet winter and spring and said it will embark on a strategic review following the appointment of new chief executive Ian Glasson.
Operating earnings before interest, tax, depreciation and amortisation for the coming year are expected to be in line with the $64.5 million reported for the year ended June 30, the Christchurch-based company said in a statement. Net profit would fall about 30 percent, mainly reflecting one-time gains from property sales in 2017 that won't be repeated in the current financial year, it said.
"Generally wet conditions through winter and early spring is delaying the key spring sales season," the statement from deputy chair Trevor Burt said. "While the delay is not yet significant enough to suggest lost sales, the risk of a poorer spring for PGW is somewhat heightened compared to a few months ago. Currently, PGW is around $2m behind the same time last year but there is confidence of making up this ground as the spring season accelerates."
Wrightson named Glasson as chief executive last week and he begins in the role tomorrow. Burt said with Glasson in place, "the board considers that the time is right to commence a strategic review and has made a joint appointment of Credit Suisse (Australia) Ltd and First NZ Capital Ltd as financial advisers. At our annual shareholders' meeting today we will be providing further details about the review."
"Notwithstanding that the business is performing well, the board believes it is timely to review the overall PGW business, its growth opportunities, capital and balance sheet requirements, and potentially shareholding structure," Burt said. "PGW has a very strong foundation and is well positioned to explore how it should go about pursuing the opportunities available."