ALF
31/08/2015 08:31
FLLYR
PRICE SENSITIVE
REL: 0831 HRS Allied Farmers Limited
FLLYR: ALF: Unaudited 2015 Full Year Result
ALLIED FARMERS UNAUDITED FULL YEAR RESULT TO 30 JUNE 2015
The Directors of Allied Farmers Ltd ("Allied") (ALF:NZX) report that Allied
has made an unaudited net profit before tax for the year to June 2015 of
$1.12m (2014 $1.16m).
Allied has had a satisfactory year with a steady result from the Livestock
Division, repaying a number of significant obligations including Crown Asset
Management Ltd and a successful capital raising. The result benefited from a
one off gain of $0.6m on the settlement of existing obligations (2014 $0.8m)
and the minimal impact of impairment of investments and loans that have been
significant in prior years.
The Livestock Division, which includes the operation of NZ Farmers Livestock
Ltd, owned 57% by Allied as at 30 June 2015, reported a pre-tax profit of
$1.48m (2014 $1.55m) on income that was slightly behind the prior year.
Livestock sales performed well in the first half with all regions ahead of
the corresponding prior period, however, with the uncertainty over the dairy
pay-out the second six months fell behind last year's record levels. Returns
from the meat processing operation were lower than the previous year, and
while headage was up, the high exchange rate impacted prices for the largely
exported product and margins were lower than the prior year
The Asset Management Services Division ("AMS"), has less than $0.1m of assets
to realise and reported a small profit of $0.23m for the year, (2014 $0.27m).
This reflects some small over-recovery on the disposal of assets and the
writeback of some provisions. There will be a continuing focus on attempting
to recover some of these assets that have previously been written off.
A significant step in the restructuring of the Group was the repayment of its
on-demand obligations to Crown Asset Management Ltd. This was largely funded
by a 3 year $1m bond issue and by selling 10% of the shares in NZ Farmers
Livestock Ltd to other shareholders. Subsequent to the successful capital
raising when $1.1m was raised via placements and a Share Purchase Plan,
further long term debt obligations were repaid. As a result Corporate
interest costs for the year reduced from $0.32m to $0.28m. Due to the
unwinding of some deferred tax benefits, coupled with the increased tax
liability of NZ Farmers Livestock, the group tax expense has increased
significantly.
As a result of changes to the Financial Reporting Act, the parent company is
no longer required to publish a separate Balance Sheet. As in last year's
accounts, the Group accounts reflect negative equity as the consolidated
result does not attribute the full market value of the investment in the NZ
Farmers Livestock subsidiary or the saleyard properties held. Reflecting
these adjustments, the listed entity, Allied Farmers Ltd still has positive
shareholders' funds which are higher than last year.
The focus for the coming year will be to look for opportunities to grow the
Livestock business in what will be a difficult year particularly for the
dairy industry. To this end, since 30 June NZ Farmers Livestock has acquired
a shareholding in the Hawkes Bay based livestock business of Redshaw
Livestock Ltd and other opportunities are being investigated. The effect of
the reduced dairy pay-out is likely to have some uncertain impact on dairy
livestock sales going forward. For the meat processing operation the recent
drop in the NZ dollar has already seen some beneficial impact on the returns
from meat exports at the early stage of this season.
In June Jeff Keenan resigned from the Board due to ill health. The Board
would like to thank him for his contribution over the past five years and
wish him well for his retirement.
The year has been one of restructuring the company to enable the future to be
more certain while at the same time ensuring the Livestock Division continues
to grow. The Directors wish to highlight the considerable support and loyalty
of all of the management and staff of Allied Farmers and its NZ Farmers
Livestock subsidiary, and the support of its many stakeholders, including the
Allied shareholders who showed their endorsement of the Group by investing in
the recent capital raising.
Garry Bluett
Chairman
End CA:00269320 For:ALF Type:FLLYR Time:2015-08-31 08:31:11
