PGGW will still pay dividend
AUCKLAND: PGG Wrightson will pay its upcoming dividend but says the Covid19 pandemic has made the outlook too murky to keep its annual earnings guidance.
The country’s biggest rural services firm said its strong balance sheet and solid firsthalf result meant it still had the capacity to pay a 9cpershare dividend, or $6.8 million, on April 3. Its net debt was drawn down to $59.3 million at December 31, giving it about $60 million of headroom under its $50 million core facility and $70 million working capital facility.
‘‘We also consider that the company has an important role to play in continuing to serve our farming and grower customers through the lockdown as a provider of essential services to the agricultural sector,’’ chairman Rodger Finlay said in a statement.
Last month, Wrightson chief executive Stephen Guerin said he was wary of the shortterm effect the Covid19 outbreak could have on the rural sector, although he remained upbeat about the longterm prospects of New Zealand’s agricultural industry.
At the time, Wrightson forecast operating earnings before interest, tax, depreciation and amortisation of about $30 million for the 12 months ending June 30. However, the company withdrew that guidance yesterday, saying the national lockdown and international response to the pandemic made it too hard to predict the flowon effects to its trading performance.
Mr Guerin said the company would continue to operate its network of Rural Supplies and Fruitfed Supplies stores, its essential warehouse supplies facility, Agritrade, and other supporting functions.
Wrightson’s livestock saleyards are closed, but the bidr online trading platform will continue operating. The firm’s wool and real estate businesses are also closed.
Mr Finlay paid tribute to Wrightson’s frontline staff who were working through the lockdown as essential services, and how they were adapting to support the agricultural and horticultural sectors safely.
‘‘I don’t doubt that agriculture and horticulture will play a key role in how New Zealand comes through this challenging period and it will also be a critical part of the economic recovery on the other side, and PGW will have an important role throughout that story,’’ he said. — BusinessDesk