Ann: ADDRESS: PGW: PGW Annual Meeting Announcemen

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					PGW
22/10/2013 14:11
ADDRESS

REL: 1411 HRS PGG Wrightson Limited

ADDRESS: PGW: PGW Annual Meeting Announcement

PGG Wrightson Limited
2013 Annual Meeting
Riccarton Park Function Centre
Christchurch
Wednesday 22 October 2013 at 2.30pm
________________________________________
Sir John Anderson, Chairman
Slide 2 - AGENDA
Welcome
Slide 3 - DIRECTORS INTRODUCTION
Slide 4 - SENIOR MANAGEMENT
Apologies
Slide 5 - FORMALITIES
Notice of Meeting
Minutes
Proxies
Annual Report
Slide 6 - CHAIRMAN'S ADDRESS
We now move to the main business of the meeting.
My role will be to lay the groundwork with a high level review of the past
financial year.  Our Chief Executive Mark Dewdney will provide the
operational insights into the underlying businesses and how they are tracking
in the current financial year.
Finally, Rob Woodgate, our Chief Financial Officer, will then run through the
financial headlines from the past year.
At that point there will be an opportunity for questions and I will outline
the procedure for that part of the meeting when the time comes.
Following question time the business of the meeting comprises of five
resolutions, which are outlined in the Notice of Meeting.  Similarly to last
year we have again offered shareholders the option to cast their votes on
meeting business by post or online.  This option provides shareholders with
more flexibility and convenience where they cannot attend in person or by
proxy but nevertheless wish to cast their votes on meeting business.  Given
that votes can be cast by shareholders not attending the meeting it makes
sense that all resolutions will be determined by way of a poll.  After the
business of the meeting those in attendance that have not yet cast their
votes prior to the meeting will have the opportunity to do so.
Slide 7 - OVERVIEW
During the year to 30 June 2013 PGG Wrightson* continued the process of
refocusing on our core business, enabling our staff to build on the
relationships they have with our customers and maximising the value created
by the wealth of expertise that the company, and our people, possess.
Many farmers found 2012/13 a tough year.  New Zealand suffered its most
severe drought in almost 70 years, with many farming regions receiving little
rainfall through the late summer and autumn.  As a company, our fortunes are
closely tied to those of our customers and this is reflected in our overall
results.
Operating earnings before interest, tax and depreciation (Operating EBITDA**)
for the year was $45.8 million, compared with $55.2 million for the year to
June 2012.
Despite Operating EBITDA declining this year, the company is committed to
providing a cash return to investors.  Accordingly, shareholders have
received a final dividend of one cent per share, making a total of 3.2 cents
per share paid for the year.
Slide 8 - GOODWILL WRITEDOWN
Related to our Operating EBITDA decline, this year the Board determined to
write off $321.1 million of goodwill that has been carried on our balance
sheet since 2005.  This goodwill asset was largely created as a consequence
of the accounting treatment used during the merger that established PGG
Wrightson.  Goodwill is an intangible asset and the write down has no effect
on the company's day-to-day business or banking arrangements, no bearing on
our ability to generate cash and no impact on our dividend policy.
Slide 9
The results of the past financial year were recorded during George Gould's
tenure and on behalf of the board of directors and personally, I would like
to pay tribute to his leadership of the company.  George was previously a
non-executive director of the company and at the request of the Board in
2011, he agreed to take on the challenge as managing director. With a
successful track record in rural servicing and an affinity for the business,
George helped to stabilise the company as it re-focussed on its core
offerings.  In a successful two and a half years, George did exactly what was
required to guide the company back to a position of strength.
In July 2013 Mark Dewdney assumed the role of the company's Chief Executive
Officer.  Mark's background and leadership credentials within the New Zealand
agri-business sector are of the highest order. We are confident he is the
right person to build on the excellent work done by his predecessor. Finally,
on behalf of the Board I would acknowledge the effort and commitment of our
staff across the PGG Wrightson business.
[Mark Dewdney - Chief Executive]
Slide 10 - OPERATIONAL REVIEW
Slide 11 - OPERATIONAL PERFORMANCE
For the year under review the company achieved Operating EBITDA of $45.8
million compared with $55 million last year, a decrease of 17%.  Excluding
the goodwill write-off, net profit would have been $14.6 million compared
with $24.4 million in the prior year.
Within the context of a challenging year for many farmers, the financial
performance indicates that our business is fundamentally sound.
Our business experienced both negative and positive impacts from the drought.
 Our livestock business closely tracks the fortunes of our customers and
lower livestock values led directly to reduced earnings for both farmers and
for us.
On the positive side, drought increases the demand for animal feed.  It also
negatively influences seed purchasing decisions.
While the company's retail, wool and irrigation businesses performed
strongly, our seeds, grain, livestock and real estate businesses faced
challenges.
Slide 12 - RURAL SERVICES
In a tough environment, our retail business, through our Rural Supplies
division and Fruitfed Supplies, had an excellent year, exceeding last year's
results.
Our store refreshment programme is well advanced, with the South Island
programme now complete and progress underway in the North Island.
Our livestock business directly reflects the fortunes of livestock farming in
New Zealand.  Lower export prices and the drought resulted in significantly
reduced sheep and lamb values, which impacted farm profitability and reduced
revenue for our livestock business.  Our livestock export business completed
a major dairy heifer contract to Vietnam early in the season, but has not
secured any additional export contracts.
Reintegration of our wool operations into the wider PGG Wrightson group is
now complete.  This, and a restructure of our wool logistics operation,
enabled the business to achieve improved performance through reduced costs.

PGG Wrightson Real Estate is a market leader in rural and farm sales
nationwide but the business had a tough year with turnover in the market
still below historical levels. We are now reinvigorating the business and we
were pleased to recently announce the appointment of Peter Newbold as General
Manager Real Estate.
Operating EBITDA for our insurance business was consistent with the previous
year.
The irrigation business performed well and achieved gains and an increase in
the number of irrigators sold resulting in a significant increase in revenue
growth.  The outlook for irrigation is positive.  A number of major
irrigation schemes are likely to come online over the next decade, supported
by a government focus on the importance of irrigation to our economy.
Consistent with this theme, we were pleased to announce last month the
acquisition by PGG Wrightson of the Water Dynamics and Aquaspec businesses
from Pentair.  These businesses are complementary to our existing irrigation
business and add additional strength to grow our reach across the broader
water management sector.
Agriculture New Zealand is a specialist provider of agriculture and
horticulture training courses. There have been changes to the Government
funding model which have negatively impacted the business.
PGG Wrightson's South American Rural Services businesses offer similar
services to our New Zealand offering.  While we enjoyed good growth in
irrigation, competition in the animal health sector increased, and turnover
in the real estate market remained subdued.
Slide 13 - SEED & GRAIN
Our New Zealand seed business continues to enjoy strong growth, underpinned
by our research development programme and the release of new products. A
notable contributor was our Clean Crop(TM) brassica system, which exceeded
target in its first full year of commercial sales.
Our Australian seed business was down on the previous year, mainly due to
weather issues.
Our international seed business continues to suffer from the strong New
Zealand dollar, especially in Europe where many of our customers are based.
During the year we continued to work with researchers in China to develop and
demonstrate cultivars suitable for the Chinese climate.
Our grain business was down on the previous year. While volumes were up,
there was pressure on margins - a number of these a consequence of the
drought as farmers used grain earlier than usual.
With operations in Uruguay, Argentina and Brazil, our South American seed
business is a major player in the region.  To add value to seed we
commissioned a seed coating facility in Uruguay whose results have exceeded
expectations.
At the start of the year Agri-feeds sold its molasses business into a new
joint venture. Profit for this part of the business is now reported as
earnings from associates rather than in operating EBITDA.
Slide 14 - Strategy
I've now been with the business for almost four months and I'd like to share
with you some of my observations on the business and our strategies for the
future.
Firstly, I've been very impressed with the quality of our people and their
commitment to the business.  This is something the business has been working
on and is measured annually through a staff survey.  The results of this are
very encouraging and show that over the last three years, staff engagement
and commitment to the business has steadily improved.  This is fundamental
because engaged staff will go the extra mile to support the business and our
customers.
Equally important is the commitment of customers to our business.  Again the
level of support we enjoy from customers is very good. We measure this
through customer satisfaction surveys and this too is improving year on year.

Committed staff, and loyal customers provide us with a solid foundation for
the business.  It doesn't insulate us from the external factors such as
weather, exchange rates and commodity prices which impact the sector, but it
gives me a great deal of optimism that, these other factors being equal, we
will continue to see our performance improve.
Over the last two months we've reviewed our strategies for each of our
operating businesses.  While each business must respond to its particular
market and challenges the common themes that recur across our businesses is
the continuing need to ensure:
o We have the best people - through developing the staff we have and
recruiting good people where necessary,
o That we keep a focus on adding value to customers by providing them a level
of service, expertise and product innovation that leads the market
o That we move faster to capture new opportunities within the market as they
emerge.  Illustrating this, we expanded our irrigation business last month as
I noted earlier with the acquisition of a smaller complementary business.
This is an area of importance for New Zealand agriculture and we want to make
sure that we are the market leaders in it.
For us to be able to capture these opportunities it is essential that we have
a profitable underlying business that generates good cash flows, this then
gives us options at different levels that can be good for all stakeholders.
From this platform we are then in a position to look for suitable investments
that build on our core competencies and at the same time deliver a
sustainable return to investors in PGW.
Within the next twelve months I expect that there will be growth options
within the domestic Seed & Grain business building on the requirements for
maize as a supplementary feed option for dairy farmers. Dairy also needs to
be a key focus across the business where we are still behind the longer term
trend and are not a major participant when it comes to this key market. We
have seen the market grow as the dairy sector becomes a key aspect of the NZ
farming landscape, a trend we can only see getting bigger.
South America is also on our development plan, we have been in that part of
the world for almost 20 years and have established a profitable business
predominantly built around our seed offering. Opportunities in Uruguay and
north into Brazil have the potential to be very positive for our temperate
and sub-tropical varietals, and with the footprint and people we have on the
ground there is sound logic to look to expand in this region.
We've also got an on-going programme of infrastructure investment to complete
- primarily this is about improving our IT systems, giving better tools to
our front line sales teams and ensuring our store network is fit for purpose.
 IT will be a crucial tool in giving our staff the right information that
will allow us to demonstrate how we can add value to our customer base, it
can also help attract and retain the right staff in the business. What I have
observed is that we can get much better when it comes to linking up the
respective parts of our business with the customer. In some instances we are
letting good opportunities slip through by not converting some of the leads
we intrinsically get through being close to our customers and their
operations.  The programme of works around the IT space has essentially been
underway for the last three years and has another 2-3 years to go.
The goal we have set as a management team is to lift profitability by
approximately 50% over the next few years.  It's not an easy goal but one
which we believe is achievable if we can execute our strategies and continue
to make improvements across all parts of the business.
Slide 15 - Water
While I am discussing strategy, I'd like to briefly talk about the
acquisition of Water Dynamics and Aquaspec that we announced in September.
That acquisition will be completed this Friday bringing those two businesses
into the PGG Wrightson tent as part of our existing irrigation and pumping
business.
We are rebranding the combined business to PGG Wrightson Water which reflects
our broader aspiration to be the clear market leaders in the provision of
water systems and solutions to our customers - be that irrigation, stock
water reticulation, farm effluent systems or household water supplies.
The businesses we have acquired are highly complementary to our existing
business, but help take us to that goal of market leadership.  They provide
us with nationwide footprint, fast-tracking our ability expand into the North
Island, and provide us with an improved wholesale capability - something we
were lacking in this space.
While the acquisition itself might not appear as a game changer, we are very
excited about as it completes our offering and gives us a platform from which
we can readily grow to a position of market leadership.
[Rob Woodgate, Chief Financial Officer]
Slide 16 - FINANCIAL REVIEW
As noted the operating EBITDA was $45.8 million - down on the prior year but
in line with expectations given the on-farm challenges experienced by our
customers
Slide 17 - FINANCIAL PERFORMANCE
The Chairman has briefly discussed the nature of the Goodwill write-down.
With the exception of this, our profit result was "straight-forward" in
general.  The non-operating adjustments which take us from Operating EBITDA
to profit are all largely the same as the prior year.  A significant
improvement is in our interest and finance costs which are a direct result of
carrying lower debt in the business.
It's worth noting that following the joint venturing of our Agri-feeds
molasses business last August, the profit from this business is now recorded
in earnings of associates, essentially moving from Operating EBITDA but
remaining in the Net Profit result.  We incurred a loss on the sale of this
business and also, recorded a loss from exiting a building which still had
several years to run on its lease, both of these showing up as non-operating
items.
Slide 18 - BALANCE SHEET and CASH FLOW
Operating cash flow was strong at $39.3 million.  This is generated both by
the operating profits of the business and also from improvements we have made
in our working capital - by focusing on our debtors and inventory decisions,
and proactively working with our creditors.  We've made good gains in this in
the previous year and have continued to make gains in the year just finished.
 We still see improvement possible in terms of working capital, however they
do get harder to deliver from here on.
The balance sheet is very sound.  Our debt levels continued to improve
through the year- down from $125 million a year ago to just over $100
million.  We're very comfortable with this level of debt and, while we look
to continue reducing it over time we are now back in a position where we are
looking to make the investments in the business Mark referred to earlier and
continue to support a regular dividend.
[Mark Dewdney - Chief Executive]
SLIDE 19 - OUTLOOK
The Board have reviewed our performance so far this season and conditions on
farm.  Spring and autumn are the two key periods for this business.  So,
while it is too early to have high levels of certainty around how the year
will play out, I'm pleased to advise that based on current conditions and
performance we are on track to deliver an operating EBITDA for the current
year of $52-$56 million. This will be firmed up at our half year
announcement.
[Sir John Anderson]
Questions and discussion on the Annual Report etc...
SLIDE 20 - CHAIRMAN
Before we move to the general business of the meeting, I'd like to invite
Alan Lai to address the meeting.  The Board today elected Alan to succeed me
as Chairman.
[Alan Lai to speak]
[Sir John Anderson]
Following my retirement as Chairman and Director of the company at the
conclusion of this meeting the Board intends to resolve to appoint John
Nichol to the Board.  A chartered accountant, John Nichol has held a number
of governance and executive management roles within the agricultural sector.
Among his many governance roles he was a director of the New Zealand Dairy
Board prior to the formation of Fonterra and was Chairman of the New Zealand
Merino Company until 2011.
The Board has determined that John Nichol would qualify as an Independent
Director and with his accounting and audit committee experience would be a
good addition to the PGG Wrightson Audit Committee.
As is conventionally the case, John will stand for election at the next
Annual Shareholders Meeting.
Ladies and Gentlemen, we will now take questions and discussion on the annual
report, and on the matters covered by the senior management team and myself.

Slide 21 - GENERAL BUSINESS OF THE MEETING
The proposed resolutions will now be considered by the meeting, with all five
resolutions to be determined by a poll that will be undertaken by our share
registrar, Computershare.  The company's auditors, KPMG are here to act as
scrutineers if required. The resolutions and accompanying explanatory notes
are set out in the notice of meeting.
Business - Election of Directors
The first four resolutions relate to the election of directors.  The notice
of meeting records that Trevor Burt, Ronald Seah, Patrick Tsang and Kean Seng
U were each appointed to the Board by the Directors subsequent to last year's
annual meeting.  As such, and in accordance with NZX listing rules each
retires and offers themselves for election.  Biographical notes for each of
the directors standing for election are set out in the notice of meeting.
These details are also briefly summarised on the presentation.
Slide 22 - TREVOR BURT
Trevor Burt is the chair of Ngai Tahu Holdings Corporation and the Lyttelton
Port Company.  He is also a director of a number of the well-known New
Zealand companies including; Silver Fern Farms, Landpower Holdings, Mainpower
NZ and is a commissioner on the Earthquake Commission.
Trevor is an associated person of Agria (Singapore) Pte Ltd - our cornerstone
shareholder.
[Trevor to speak]
Slide 23 - RONALD SEAH
Ronald Seah is a Singaporean national with a background in bank and funds
management, with an executive career in the AIG group of companies.  He is
director of a number of Singaporean listed companies including Yanlord Land
Group Ltd, Telechoice International Ltd and is a director of Invenio Holdings
Pte Ltd (a subsidiary of Olam International).
Ronald is an independent director.
[Ronald to speak]
Slide 24 - PATRICK TSANG
Patrick Tsang is the Chief Financial Officer of Agria Corporation and has
held finance roles in a number of companies listed on the Hong Kong Stock
Exchange.  He is currently a director of China Pipe Group Ltd which is itself
a Hong Kong listed company.
Patrick is an associated person of Agria (Singapore) Pte Ltd.
[Patrick to speak]
Slide 25 - KEAN SENG U
Kean Seng U is Head of Corporate and Legal Affairs for Agria Corporation.  He
was previously a partner at a Singaporean law firm, Shooklin and Bok LLP, and
has advised on investment in China and Chinese entities investing offshore.
He is also a director of several publicly listed corporations.
Kean Seng is an associated person of Agria (Singapore) Pty Ltd.
[Kean Seng to speak]
Slide 26 - RESOLUTION 5, AUDITOR'S REMUNERATION
I note the automatic reappointment of KPMG as the company's auditors under
section 200 of the Companies Act 1993.
The proposed ordinary resolution is to authorise the board of directors of
PGG Wrightson to set the auditors' remuneration.  As is usual with audit
fees, due to the complexity and changing nature of the company's affairs, it
is impractical to set the remuneration at the beginning of the year.
Accordingly, the board of directors are seeking authority from the
shareholders of the company to set the audit fees at the appropriate time.
Thank you.
I will now move each of the five motions separately as ordinary resolutions.
A poll will be conducted in respect of all five resolutions at the conclusion
of general business.  For those that have not cast postal votes already
please complete you ballot paper at the conclusion of general business and
hand this in to the Computershare desk at the back of the room.  The results
of the poll will be displayed on the projector screen following the
conclusion of the meeting.
Slide 27 - GENERAL BUSINESS
Ladies and gentlemen, the meeting is now open for general business.

Slide 28 - MEETING END
________________________________________
Notes:
*All references to PGG Wrightson Limited or the Company refer to the Company,
its subsidiaries and interests in associates and jointly controlled entities.

**Disclosure Statement: Non-GAAP profit reporting measures:
PGW's standard profit measure prepared under New Zealand GAAP is net profit.
PGW has used non-GAAP profit measures when discussing financial performance
in this document.  The directors and management believe that these measures
provide useful information as they are used internally to evaluate
performance of business units, to establish operational goals and to allocate
resources.  They also represent some of the performance measures required by
PGW's debt providers.  For a more comprehensive discussion on the use of
non-GAAP profit measures, please refer to the policy "Non-GAAP Financial
Information" available on our website (www.pggwrightson.co.nz).
Non-GAAP profit measures are not prepared in accordance with NZ IFRS and are
not uniformly defined, therefore the non-GAAP profit measures reported in
this document may not be comparable with those that other companies report
and should not be viewed in isolation or considered as a substitute for
measures reported by PGW in accordance with NZ IFRS.
PGW's definition of non-GAAP profit measures used in this document:
Operating EBITDA: Earnings before net finance costs, income tax,
depreciation, amortisation, fair value adjustments, non-operating items and
equity accounted earnings of associates
GAAP to non-GAAP reconciliation:
($'000) 2013 2012
Profit/(loss) for the year (GAAP) (306,505) 24,453
Add Profit/(loss) from discontinued operations (net of income taxes)
1,584  809
Add Income tax (expense)/income 5,029 3,341
Add Net interest and finance costs     6,102 13,835
Add Depreciation and amortisation expense     7,642 8,323
Add Fair value adjustments 5,151 2,560
Add Non operating items 7,134 1,941
Add Impairment losses on goodwill 321,143 -
Deduct Equity accounted earnings of associates     (1,483)  (101)
Operating EBITDA  45,797     55,161
End CA:00242711 For:PGW    Type:ADDRESS    Time:2013-10-22 14:11:41