The New Zealand Herald
NZ on track to beat cattle disease
Farmer-owned co-op LIC’s revenue rises 3.4% to $249m and it ends year debt-free
World-leading pastoral dairy genetics and genomics are a much more precise tool for farmers than the blunt instrument of reduced cow numbers. Livestock Improvement Corporation chairman Murray King
Listed dairy genetics business Livestock Improvement Corporation has posted a 31 per cent lift in net profit after tax for the 2021 financial year. Total revenue rose 3.4 per cent to $249 million and the farmer-owned co-operative ended the year with no debt.
The dividend to shareholders is slightly down at $17.8m compared with $18.1m in FY2020. Equating to 12.5c a share compared with 12.7c in 2020, it will be paid on August 20.
The company attributed the lower dividend to a drop in underlying earnings, which were down 1.9 per cent at $22.3m, after a one-off tax benefit the prior year.
The dividend represents 80 per cent of underlying earnings, consistent with previous years.
Chairman Murray King said the result was in line with market guidance and indicative of good growth across core business areas, particularly in the premium genetics range.
This range offered farmers young, genomically selected bulls to fasttrack genetic gain and deliver onfarm value through increased productivity and efficiency, including improved environmental efficiency.
The premium genetics range accounted for almost half the co-op’s total artificial breeding inseminations — more than double that of three years ago. “World-leading pastoral dairy genetics and genomics are a much more precise tool for farmers than the blunt instrument of reduced cow numbers,” King said.
The company invested $17.1m in research and development, up 15.4 per cent on the previous year.
It also spent $3m improving its Minda Live herd management system, with 66 new features added based on farmer demand.
During the year LIC sold its automation business to a US company for $38.1m. The board is considering options for the use of the resulting net assets of $23.8m now on the books.
King said underlying earnings in the 2021-2022 year were expected to be in the range of $19m-$25m, assuming no significant climate event or milk price change, and no major impacts from Mycoplasma bovis disease or the Covid-19 pandemic.
Recruitment of a chief executive to succeed Wayne McNee was a priority. McNee steps down at the end of November.
The 2021 annual report shows the remuneration of LIC’s top earner — presumably McNee — rose to a range of $1.01m-$1.019m from $1m-$1.009m in 2020. The number of staff on $100,000 and over rose by eight to 210. Total directors’ fees during the year were $620,000, down on last year’s $649,000.