TUR
26/02/2015 09:00
FLLYR
PRICE SENSITIVE
REL: 0900 HRS Turners & Growers Limited
FLLYR: TUR: 2014 Full Year Results
Turners & Growers Limited and subsidiary companies
Results for announcement to the market
(Unaudited)
Reporting period 12 months to 31 December 2014
Previous reporting period 12 months to 31 December 2013
Amount ($'000s) Percentage change
Revenue from ordinary activities $727,022 -0.7%
Profit after tax from ordinary activities after tax attributable to security
holders $15,858 -1.9%
Net profit attributable to security holders $15,858 -1.9%
Dividend to shareholders Amount per security Imputed amount per security
N/A N/A N/A
Record date N/A
Dividend payment date N/A
On 29 May 2014 a dividend of $5,850,528 was paid to the ordinary shareholders
of Turners & Growers Limited.
2014 Preliminary Announcement
For the year ended 31 December 2014 the Turners & Growers Group announces a
profit before income tax of $24.9m and an after tax profit (after
non-controlling interests) of $15.9m.
At 1 January 2014, the T&G Group changed the structure of its internal
organisation, resulting in a change to the composition of its reportable
segments. Segment information for the prior period has been restated to
reflect the change in the reportable segments.
Pipfruit
T&G Pipfruit's result was ahead of 2013 Operating Profit by $1.8m.
New Zealand export volumes for 2014 were in line with the prior year. The
anticipated volume growth did not eventuate in 2014 due largely to a number
of hail events in late December 2013. Despite price pressure across most
markets, and a difficult European environment due to economic sanctions
against Russia, T&G Pipfruit achieved a solid result for its New Zealand
programme. The challenging market conditions resulted in lower grower returns
on average compared with 2013. It was pleasing to see that Jazz(TM) returns
were held close to 2013 levels and there was a notable increase in the
Envy(TM) return for 2014. This was also supported by an on-going focus on
efficiency improvements in the supply chain and further overhead cost
reductions. The Northern Hemisphere growing and marketing programmes in North
America and Europe continued to expand both in sales and volumes produced.
Delica, T&G's pipfruit exporter to Asia, enjoyed continued sales and profit
growth with more fruit available for the Asian markets, especially Envy(TM).
Overall Pipfruit has been the main contributor to T&G's profitability. The
segment profit has increased from $21.2m in 2013 to $23.0m in 2014.
International Produce Trading
The International segment achieved an Operating Profit of $1.9m in 2014, with
the Diversified Produce Trading and Grapes business unit performing ahead of
2013 while Kiwifruit fell behind their 2013 result.
Main profit contribution came from strong trading results in North America in
berries, citrus and stone fruit. Furthermore the Diversified Produce Trading
business unit benefitted from continued growth in Fiji and steady exports
into the Pacific Islands. Supply shortages in New Zealand, Australia and
South America in the first half year were offset by a strong finish in the
last quarter of 2014. The Grape category experienced a challenging year.
Despite lower pricing levels in Asia than expected and set-up costs for
establishing a grape growing operation in Northern Peru the business unit's
Operating Profit met expectations. Both New Zealand and South America had
issues with supplying kiwifruit in 2014 due to a lower annual volume and
frost damage, respectively. Consequently T&G could not reach its 2013
Operating Profit level for the kiwifruit business. During 2014 T&G opened a
service and marketing office in Shanghai, China. The setup costs for the year
were substantial, yet T&G is now strategically well placed to support the
future growth in that important market.
Overall the International Produce Trading's Operating Profit has declined
from $4.7m in 2013 to $1.9m in 2014.
New Zealand Produce Trading
The Operating Profit of the New Zealand Produce segment was $3.3m down on
2013.
The Tomato business unit experienced a difficult trading year and profit was
significantly reduced. Due to large volume of fruit on the market in the
summer periods and imports of Australian fruit during winter prices achieved
were lower than prior years. T&G's citrus business had a mixed result. The
mandarin crop in Kerikeri was down, however the overall volume of mandarins
sold during the year was higher than 2013 due to additional supply from
partner growers. The major focus for lemon orchards during the year was an
increase in quality. A controlled drop in production meant that T&G only
benefitted from the particularly high lemon prices in the second half of the
year. The New Zealand banana market was particularly volatile during 2014.
Supply issues experienced by a major competitor early in the year meant T&G's
Bonita bananas were in high demand. However, in the latter part of the year
the volumes of bananas imported by various market entrants meant that T&G had
to sell at discounted values. For the full year, profitability was at a
similar level to 2013.
Overall the New Zealand Produce Trading segment incurred a Operating Loss of
$3.2m in 2014 after breaking even in 2013.
Processed Foods
The Operating Profit of the Processed Foods segment Group was $6.0m down on
2013.
The 2014 financial performance of EnzaFoods, T&G's apple juice concentrate
(AJC) and apple solids producer, was dramatically impacted by two major
effects. The fruit volume available for processing was 25% down on a normal
year resulting in high costs of capacity underutilisation. The NZD/AUD
exchange rate was unfavourable for exports which reduced margins in the AJC
business. Combined with restructuring costs this resulted in a significant
loss for that business. On contrary Fruitmark performed profitably only
falling slightly short of last year as a result of the downward price
pressure on commodity fruit juice in 2014. This was countered by growth in
the dehydrated products and strong margins in traded frozen fruits.
Overall the Processed Foods segment incurred a loss of $5.50m in 2014
compared to a profit of $0.52m in 2013.
Other
The Operating Profit of this segment was $11.7m up on 2013.
Floramax, T&G's flower auctioneer, has gradually improved its performance
throughout the year. Whilst profitability was marginally down on prior year
the positive trends in revenue and profitability bode well for 2015.
Management has recovered from the loss of supply in mid-2013 with improved
profitability in the second half of 2014 compared to 2013, aided by strong
prices and improving volumes. T&G Transport, the leading fresh produce
transport service provider in New Zealand invested in a new fleet of trucks
to consolidate its market-leading position. With revenue growth, stable
margins and lower operating costs the Group's transport business more than
doubled its profitability from last year. FCC, the Fruit Case Company,
provides crates for growers on a hireage basis. A slight reduction in
revenues, due to a lack of crate supply, was more than offset by lower costs,
and resulted in an improved Operating Profit compared to the prior year.
Corporate Overheads incurred more costs than 2013 mainly in professional fees
due to the high level of acquisition activity and investments in improved
information technology.
In 2014 T&G acquired the assets of Apollo Apples Ltd effective from 1 January
2014. However, due to the delay in obtaining approval from the New Zealand
Overseas Investment Office (OIO), settlement did not occur until 19 December.
The valuation of the acquired assets at 31 December 2014 resulted in a gain
on acquisition of $13.3m included in Other Operating Income for the Group.
Investments
T&G acquired the assets of Apollo Apples Ltd for a purchase consideration of
$51.6m. Also in December T&G signed Sale and Purchase Agreements with Great
Lake Tomatoes Limited and Rianto Limited, two glasshouse tomato growers in
New Zealand. Both acquisitions are subject to OIO approval.
Basic earnings per share were 13.5 cents, compared to 13.8 cents in 2013. The
Group paid a dividend of $5.9m to its shareholders in 2014.
Authorised by:
Klaus Josef Lutz
Chairman
ENDS
Media queries:
Kylie Horomia, Corporate Communications Manager
(E) [email protected]
(+64) 9 573 4750 or (+64) 21 563 531
WEBSITE: www.turnersandgrowers.com
End CA:00261161 For:TUR Type:FLLYR Time:2015-02-26 09:00:32
