Wrightson lowers expected earnings to $16.2m

Wrightson Chairman Keith Smith. Herald file picture

Rural services firm Wrightson said today its full year earnings from continuing operations was likely to be about $16.2 million, or 10 per cent lower than previously indicated.

Wrightson earlier said its earnings from continuing operations would be about $18m, and a worse than expected performance in February and March was partially behind the downgrade.

Another factor was the short term costs linked to the Williams & Kettle acquisition, including one-off integration costs, Wrightson said in a statement to NZX.

The downgrade was based on unaudited financial figures for the nine months ended March 31, and a forecast for the June quarter.

But Wrightson said it would likely turn in a net profit after tax for the June year of $18.0m, from $10.3m in the previous same year.

Directors anticipated the total dividend to be 11.5c per share, the same as in 2004. The interim dividend for the June 2005 year was 3.5cps, against 2.5cps last year.

Chairman Keith Smith said the downgrade in earnings from continuing operations showed the impact of weather conditions on trading in February and March, plus a number of one-off items.

"The potential for weather and the exchange rate to affect earnings in the second half of the year was foreshadowed in our announcement on results for the first half," he said.

"That potential has now materialised."

However, he said the firm's net profit would still be 28 per cent higher than in the previous full year.

Meanwhile, Wrightson said the integration of Williams & Kettle was proceeding positively and would be substantially completed within the current financial year.

"The forecast for the current financial year does not include any synergy benefits from the integration," Wrightson said, adding such benefits would add about $4m to the firm's tax-paid profit in the 2006 financial year.

Wrightson is controlled by the Craig Norgate-led Rural Portfolio Investments.

- NZPA