PGW forecasts 30% lift in earnings

BLENHEIM: Rural services firm PGG Wrightson says it is wellplaced to deliver a 30% lift in operating earnings in the current financial year, and it intends to pay regular dividends.

Chairman Rodger Finlay said although a decision on the interim dividend would not be made until the company's halfyear results in February, the board expected an interim dividend of not less than 8c a share.

In notes to yesterday’s annual meeting in Blenheim, Mr Finlay said while it was too soon to provide firm guidance about expectations for 2021, given the uncertainty posed by the Covid19 pandemic global markets, the board expected a lift in earnings.

‘‘Based on our current assessment, the board considers that PGW is wellplaced to deliver an operating Ebitda result of around $52 million (or around $30 million excluding the impact of the new lease accounting standard [IFRS16] ).’’

That would represent a 15% improvement on the prior year on an NZIFRS 16 inclusive basis, or a 30% rise, excluding the accounting standard.

PGG Wrightson shares rose 6c to $3 after the announcement, but ended the day down 1c at $2.93. The price has risen about 20% in the past year.

Mr Finlay said the business was trading well and in line with expectations during the first quarter, including good demand in both the Rural Supplies and Fruitfed Supplies retail businesses in spring.

Livestock trading volumes in saleyards had also been sound.

Rural and lifestyle real estate sectors had shown increased buyer interest but the wool market was challenging, Mr Finlay said. — The New Zealand Herald