Dividends of $9m after $4.1m wage subsidy
Agricultural supplies business PGG Wrightson will pay shareholders $9 million in dividends less than a year after receiving a $4.1m taxpayer-funded handout via the wage subsidy scheme.
Chairman Rodger Finlay said the board was ‘‘delighted’’ with the company’s performance for the six months ended December 31, in which it posted an after-tax profit of $18m, up 41 per cent on the same period in 2019.
PGG Wrightson was well placed to deliver on its 2021 full-year profit guidance of about $57m, Finlay said.
The Covid-19 wage subsidy scheme was set up last year to help keep people in jobs in the early days of the coronavirus pandemic.
It paid out $14 billion to about 750,000 businesses, and at its peak supported 1.8 million jobs.
To access the first round of the wage subsidy, companies had to have experienced a 30 per cent revenue drop over a month between January and June compared with the same month in 2019, and that decline had to be Covid-19 related.
Many companies that claimed the wage subsidy later repaid it after realising they fared better than expected in the crisis.
The scheme has been widely criticised for being too broad in its scope and open to abuse.
A PGG Wrightson spokesman said it had no plans to repay the wage subsidy.
It was applied for in relation to PGG Wrightson businesses that were unable to operate or operate only partially during the first lockdown, and were down 30 per cent or more in the relevant period, he said. During that time PGG Wrightson paid all employees in full whether they were able to work or not.
No final dividend was paid for that period.
Finlay said the interim result reflected well on the health of the business.
International markets continued to support New Zealand’s primary exports, but international supply chains may pose some challenges in the short to medium term, Finlay said.
He was optimistic about the prospects for the sector.