PPCS posts $17.46m half-year profit

PPCS Chairman Jim Pringle

New Zealand's biggest meat company PPCS today reported a half-year after-tax profit of $17.46 million, boosted by the sale of a processing plant and a month's trading from its recently acquired rival Richmond.

PPCS said the result for the six months to February 27 was well ahead of the previous corresponding period.

Farmer-owned co-operative PPCS' pre-tax profit for the period was $19.67m, but that included an $11.84m gain on the sale of its Islington plant in Christchurch.

Dunedin-based PPCS said in a statement its underlying pre-tax trading profit was $7.83m.

"This trading result is ahead of the equivalent period last year."

PPCS last year completed a seven-year takeover battle for rival meat company Richmond. Legally, the two companies became a single entity on January 31.

Today's result included one month of trading for the combined operation and was not "strictly comparable" with the previous year's results.

Nevertheless, PPCS chairman Jim Pringle said the company's directors were comfortable with the result, "given this season's climatic conditions, which have resulted in the season running later than usual".

"The climate is a significant factor in how any given season progresses. This season we have seen a delay in the processing of stock as farmers have taken advantage of an extended feed season.

"The stock is still there and we are therefore anticipating a higher than normal proportion of business being transacted in the second six-month period of this year."

PPCS chief executive Stewart Barnett said demand for the company's products remained high in spite of the strong New Zealand dollar.

Although the kiwi's strength was a concern, that had been offset by relatively high market prices, particularly PPCS' two main products, beef and lamb.

"New Zealand beef markets continue to benefit from international food safety related border closures, although the scheduled re-opening of borders later this year will impact on this sector."

Mr Barnett said the full integration of Richmond was progressing well and was on track and would be "substantially complete" by the end of the financial year.

- NZPA