Optimistic outlook for rural services sector: PGW report

WELLINGTON: Rural service provider PGG Wrightson (PGW) says the outlook for the sector is positive heading into spring.

The company recently reported a 7% increase in its full year net profit to $24.3 million, reflecting strong performances in its retail and water business, farm and forestry sales, and horticulture supplies.

‘‘After a very wet winter, soil moisture levels are currently ranging from between normal to well above normal across much of the country,’’ the chairman and chief executive said in an update in its annual report.

‘‘On balance, this should be positive for the sector and PGW as we look towards the spring season,’’ they said, adding the company was well positioned to meet market demand.

‘‘To help mitigate supply chain risks, we have also sourced product earlier and carried more inventory than we have historically,’’ the executives said.

The report said inflationary pressures were persisting, input costs would likely reduce onfarm profits and exporters would still need to navigate high shipping costs and challenging logistics.

‘‘While input prices are increasing, rising food prices are expected to be beneficial overall for New Zealand’s agricultural sector,’’ they said in the report.

‘‘Overall, we consider that the macroeconomic indicators for the New Zealand agricultural sector are positive.’’

While the company said it remained cautiously optimistic about the current financial year ahead, it was too soon in the year to provide meaningful guidance.

An update would be provided at next month’s annual meeting.