Elders profit jumps 56pc to $38m

Elders' six month profit jumps 56pc to $38m


Elders says its half-year results reflect a company-wide focus on organic growth and business acquisitions growth.

Elders says its half-year results reflect a company-wide focus on organic growth and business acquisitions growth.

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Profits are up 56 per cent to $38.3 million for farm services business Elders Limited for the first half of 2016-17

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Profits jumped 56 per cent to $38.3 million for farm services business Elders Limited in the first half of 2016-17 as the company makes steady progress to an expected full-year profit about the $60m mark.

The statutory net profit after tax compares with a $24.6m result for the same period to March 31 last year.

Underlying net profit improved $12.3m on the prior corresponding period to $34.9m.

Elders’ managing director, Mark Allison, said the half year results reflected the progress of a company-wide focus on organic growth and business acquisitions growth, in line with the company’s eight point plan and return on capital objectives.

“Our focus has been to ensure we’re continuing to grow our service to clients through strategic initiatives, including an extension of our current product offerings and expansion of our geographical footprint,” Mr Allison said.

“Our retail arm has again outperformed the prior corresponding period, with a $6.5m improvement in earnings,” he said.

“Performance was driven by normalised summer conditions and geographical expansion, including the recruitment of high performing staff in Tasmania and NSW.

“Earnings from our agency services business improved on the prior corresponding period with an increase of $5.8 million, driven by record livestock and wool prices across the country, and benefits from footprint growth.”

Underlying earnings before interest and tax (EBIT) of $41.3m were primarily driven by improved seasonal conditions, and benefits from geographical growth.

High livestock prices, coupled with low interest rates, proved favourable for the real estate business, generating increased demand for large cattle farming and broadacre cropping properties.

Elders increased its turnover of farmland real estate by $76m or 15pc compared with the prior corresponding period.

Acquisitions including the 30pc equity stake of livestock financing company StockCo,and an additional 10pc of the equity in Elders Insurance, boosted financial services earnings for the first half.

The addition of new real estate business in Western Australia is set to help solid growth in that business in the second half. 

Net debt was $170.4m, but average net debt over the period fell by $2m to $142m.

Mr Allison said the agribusiness company’s balance sheet remained strong and key ratios were stable.

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