LIC
20/10/2015 14:16
FORECAST
PRICE SENSITIVE
REL: 1416 HRS Livestock Improvement Corporation Limited (NS)
FORECAST: LIC: LIC anticipates reduced earnings
20 October 2015
Market statement
LIC anticipates reduced earnings
Livestock Improvement Corporation (NZX: LIC) anticipates reduced earnings for
the 2015-2016 season as a result of the lower dairy payout and farmers
reducing spending with the co-operative.
Chairman Murray King said revenue is still expected to exceed 2014-2015,
however earnings were anticipated to be lower than last season reflecting
LIC's commitment to ensuring that service to farmers is not compromised and
to allow its essential capital investment programme to continue.
"Although it is still early in the season for the LIC business, this season's
lower forecast milk payout has created challenging financial situations for
many of the country's dairy farmers, and as a co-op LIC is also linked to the
industry's volatility. The LIC Board is committed to protecting the long
term sustainability of the co-op and ensuring that our farmers continue to
receive a high quality service. It will also allow LIC to maintain its
planned investment into R&D, new product development already underway and to
minimise the impact on staffing levels. This will result in lower earnings.
"Farms of the future will require improved data capture and decision support.
LIC will continue to invest in technology and is looking to enhance
governance capability in technology and commercialisation capability.
"Our farmers are reviewing their cost structures and assessing what
discretionary spend is non-critical, and as their co-operative we are doing
the same. We have looked very closely at our own discretionary spending and
will continue to actively manage and minimise costs where possible."
LIC is offering farmers a range of extended credit and payment support
options this season, to help ensure investment in good genetics and future
productivity is not compromised.
With no long term debt on the balance sheet currently, the co-operative
remains in a strong position for the year with solid support from banks.
ENDS
NOTE TO MEDIA: Due to LIC's Annual Meeting being held today (in Ashburton),
the board and senior management will be available for comment after 5pm.
Contact: Ashleigh Sattler, [email protected] 027 617 1942
End CA:00272042 For:LIC Type:FORECAST Time:2015-10-20 14:16:01
(20min delay)