KEY POINTS:
Rural services company PGG Wrightson has more than doubled its first half net profit, as it begins to see the benefits of its merger in October 2005.
The company also forecast a higher annual profit, and said it expected to benefit further when market conditions improved.
"With the merger complete and the benefits delivered, the focus of management has now shifted to improving operating performance and creating business growth," chairman Bill Baylis said.
After-tax profit for the six months ended December 31 rose to $12.9 million from $5m a year earlier, a comparable result despite the previous period not featuring the full six months' earnings from both Wrightson and Pyne Gould Guinness.
Sales rose 40 per cent to $524m, although margins were squeezed and costs were rising in a difficult trading environment, Mr Baylis said.
"In general terms, the rural sector has lost confidence as the 2006-07 year has unfolded and the strengthening New Zealand dollar has reduced product prices at the farm gate," he said.
Among its three main divisions, rural services had earnings before interest, tax, and amortisation (Ebita) of $15.8m, and regained some of the market share lost following the merger.
Financial services' Ebita was $8.6m, increasing its market share in real estate and boosting its finance loan book by 12 per cent to $370m.
Technology services -- which includes seeds and grain, nutrition and South America -- posted Ebita of $13.1m.
PGG Wrightson forecast a full-year net profit after tax and before amortisation of between $39 million and $45m, including one-off gains of $8m.
The company posted an annual net profit last year of $29m.
Shares in PGG Wrightson, which has a market capitalisation of $439m, were steady at $1.56.
- NZPA
