No dividend coming for billionaire beef club AACO
AUSTRALIAN Agricultural Company, the nation’s biggest meat producer, is reaping the benefits from expanding deeper into branded products as the restaurant trade rebounds from almost three pandemic-plagued years.
AACO, which owns 1 per cent of Australia’s landmass, delivered a 28 per cent surge in operating profit to $38.3m in the six months to September 30. Its Westholme and Darling Downs branded products accounted for 88 per cent of meat sales, which surged 19 per cent to $122.3m.
But on a statutory basis, net profit sank 38 per cent to $51.6m, with chief executive David Harris citing a lower fair value adjustment as cattle prices in Australia normalise.
The group – the shareholder register of which has become a billionaires club with Tottenham Hotspur owner Joe Lewis and Andrew Forrest owning sizeable stakes – has also continued its 14-year dividend drought. But as the global economy teeters on recession, with inflation surging to its highest level in more than three decades, Mr Harris has a plan to ensure AACO’S steaks continue to be in demand.
“We’ve moved product around. There is still huge opportunity in some of the North American markets,” Mr Harris said.
The potential of China welcoming back Australian beef – with Beijing banning several producers in the past two years – could generate further flexibility for AACO. Hopes are high after Anthony Albanese held “constructive talks” with China’s Premier Xi Jinping in Bali at the G20 this week.
A free trade deal with the UK, which Mr Albanese could legislate as early as next week, would also help bolster the company’s fortunes.
The company’s share price fell almost 5 per cent on Thursday and has almost halved from its $3.24 high reached in 2008 – the last time it paid a dividend.