LIC an­nual re­sult all about growth

South Waikato News - - RURAL DELIVERY -

NZax-listed dairy farmer co-op­er­a­tive Live­stock Im­prove­ment Cor­po­ra­tion has posted an­other cream­topped an­nual per­for­mance with an 88 per cent jump in op­er­at­ing profit af­ter tax, a 21 per cent in­crease in rev­enue and a bumper div­i­dend to share­hold­ers.

In the past decade Hamil­ton-based LIC had dou­bled the size of its busi­ness and more than dou­bled the value of its shares, said chair­man Stu­art Bay.

Rev­enue for 2010-2011 at $166 mil­lion was a new high and achieved with­out in­creas­ing prices to farm­ers, he said.

To­tal div­i­dend paid to LIC’S 10,728 share­hold­ers – 560 more than last year – was $13.7m, com­pared to $12.3m last year. In the 10 years since LIC be­came a farmer co-op­er­a­tive it had de­liv­ered net div­i­dends of $65m, Mr Bay said.

Un­der­ly­ing net earn­ings of $17.1m were strongly up on last year’s $9.1m and op­er­at­ing cash flows of $21.3m funded net in­vest­ments of $22m.

Share value in the past five years had in­creased from $1.39 to $4.30 as at Novem­ber 15, Mr Bay said. Eq­uity at $185m rep­re­sented 78 per cent of to­tal as­sets of $237m.

Chief ex­ec­u­tive Mark Dewd­ney said earn­ings be­fore in­ter­est and tax were $24.3m. Sales growth had been achieved across all prod­ucts with high­lights be­ing a $1.1m in­crease in herd test­ing sam­ples and ge­net­ics ac­tiv­ity in­creas­ing by 250,000 se­men straws.

Re­turn on cap­i­tal was 9.25 per cent. LIC has no term debt. Mr Dewd­ney said it was crit­i­cal for LIC to turn in strong an­nual per­for­mances be­cause the com­pany ex­pected to in­vest be­tween $20m and $30m a year in fu­ture cap­i­tal de­vel­op­ment and other ma­jor projects. The board had ap­proved cap­i­tal ex­pen­di­ture of $17.8m in the year and $20m was spent, which in­cluded com­ple­tion of projects ap­proved the pre­vi­ous year.

Mr Dewd­ney noted a bal­ance sheet im­pair­ment of $1.5m, largely re­lated to the write-down of the value of its farm land fol­low­ing the global fi­nan­cial cri­sis and as­so­ci­ated re­ces­sion.

He said LIC es­ti­mated the New Zealand ar­ti­fi­cial in­sem­i­na­tion mar­ket dipped by about 3 per cent in 2009, re­cov­er­ing in 2010.

LIC had in­creased to­tal straws sales by 255,000, claw­ing back some of the mar­ket loss.

GOOD RE­SULT: Mark Dewd­ney says growth in sales and div­i­dends has been achieved with all prod­ucts.

Newspapers in English

Newspapers from New Zealand

© PressReader. All rights reserved.