Big farm services group, Elders, has posted a nine per cent lift in its full year profit for 2021-22 to $162.9 million, and has begun searching for a candidate to replace managing director, Mark Allison.
Mr Allison, who has overseen much of Elders' spectacular recovery from a near-death experience after the global financial crisis, will retire from the top job before, or on, November 14 next year.
He initially joined Elders as board member in 2009, becoming chairman in 2012, and then temporarily was executive chairman when managing director, Malcolm Jackman, departed in 2013.
He subsequently made the unusual shift from the chairman's seat to taking on the MD's role himself in 2014, continuing the company's turnaround and rebuild, focussed solely on agribusiness.
Internal and external successor prospects will be considered by the board of directors in the new calendar year, with Mr Allison noting several of his executive team at Elders and its wholesale farm products business, Australian Independent Rural Retailers (AIRR), could potentially do the job.
"The timing is right now," Mr Allison said, confirming his planned departure.
"It will allow for a smooth transition and leadership refresh for Elders' next phase of growth."
Elders has reported a 39pc growth jump in earnings before interest and tax to $232 billion for the 2021-22 financial year.
Mr Allison said the company had enjoyed a "quite outstanding" financial result.
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Sales revenue of $3.4b (up 35pc) was helped by the past year's bullish seasonal conditions and agricultural commodity market returns to farmers, but the company's result also reflected its strongly expanding retail footprint and earnings growth from within existing operations.
Just over half Elders' growth came from organic market expansion or the addition of 21 new business locations to its national branch network and AIRR merchandise operations.
Financial performance improved across all geographic and product areas, with standout results from the rural products business which outperformed expectations, achieving a gross margin jump of 35pc to $383m.
Overall the company's gross margin lifted 23pc to $653m, while underlying profit before tax was up 42pc to $223.5m on the 2020-21 trading year.
Return on capital of 26.2pc was up 3.7pc on the previous year and again significantly exceeded the company's 15pc ROC goal, which has now averaged 26pc for the past five years.
Elders will pay a final dividend of 28 cents a share which takes total dividends declared for the year to 56c, 30pc franked, up from 42c, partially franked at 20pc, at the end of 2020-21.
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Andrew Marshall
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
