Wrightson promises best yet to come

Chief executive Barry Brooks says staff morale at Wrightson has improved dramatically as the company is reshaped. Picture / Martin Sykes

The full benefits of the Craig Norgate-led shake-up at rural services company Wrightson would not flow through to the bottom line until the second half of the year, the company said yesterday.

But chief executive Barry Brooks said new business initiatives already under way had helped to offset the impact of poor December weather and the high dollar on the company's first-half result.

For the six months to December 31 Wrightson posted a profit of $2.4 million - excluding one-off gains - up on $1.4 million for the same period last year.

A one-off gain of $5 million for the sale of its insurance business was included in yesterday's result - taking the bottom-line profit to $7.4 million. There was $1.3 million of one-off gains in the 2003 first-half result.

Deputy chairman Norgate, whose company Rural Portfolio Investments (RPI) now controls Wrightson, steered clear of the limelight yesterday, leaving the talking to his new management team - although he was at the results presentation.

Mike Sang, general manager finance and operations, said the result was one of the best first-half performances in several years.

He said strong livestock prices had helped the numbers but this had been offset by poor weather and the high dollar.

Brooks said the first half of the year was traditionally the weakest for Wrightson and this had been exacerbated as the wet December delayed stock sales and the high dollar prompted some farmers to hold back wool from auction.

But Wrightson has high hopes for the next six months.

It is sticking to forecasts of an $18 million full-year profit from its ongoing activities and a further $8 million in one-off gains.

The wait appeared to scare some investors yesterday as shares closed down 4c at $1.86.

But Brooks said the good weather around the country now had the rural sector playing catch up and a backlog of livestock sales and the purchase of items like fertiliser would help boost returns.

The benefits of first-half spending such as about $600,000 in costs related to redundancies and other operational changes would flow through in the second half.

Brooks - who has been with Wrightson for 19 years but took on the top job after the RPI takeover - said morale at the company had improved dramatically in the past year as staff focused on the task of revamping operations.

"There is fundamental change going to come in this business," Brooks said.

The rural supplies business remained extremely competitive, with constant pressure on revenue through reduced margins on fertiliser and falling through-store turnover.

Changes were being implemented to put more focus on on-farm sales.