LIC
26/07/2012 09:28
FLLYR
REL: 0928 HRS Livestock Improvement Corporation Limited (NS)
FLLYR: LIC: LIC announces year end result
Strong year of innovation and growth
for farmer cooperative
The 2011/12 was one of strong performance for dairy farmer owned LIC, with
growth in activity confirming the increasing value that farmers see in the
products and services provided by their Cooperative.
LIC Chairman, Murray King, said the volatility of the dairy industry saw an
increasing number of farmers invest in innovations that make it easier and
more efficient to farm.
"LIC's Protrack farm automation range and GeneMark DNA parentage verification
products, for example, enjoyed record sales.
"Our web based software products, MINDA Milk, MINDA Weights and MINDA Land &
Feed, also gained significant customer uptake reflecting the value that
farmers place on dairy cow performance and being able to make better, more
informed decisions on farm."
Murray King said the price freeze which LIC applied to all products in the
2009/2010 season, in recognition of the tough financial conditions being
experienced on farm, remained in place for Premier Sires in 2010/2011 and
2011/2012 with only a slight increase in the price of MINDA and herd testing.
"These increases were, however, offset by the launch of innovative free
products like MINDA Milk, MINDA Weights and Land & Feed."
Financial result
Partnership with farmer shareholders is reflected in the cooperative values
which under-score LIC's financial result for the 2011-2012 year.
Record demand for a growing range of innovative products and services
generated total revenue growth of 10% offset by a $4.7 million credit issued
to members of the Cooperative who were early adopters of genomic technology.
The science of genomic technology has developed rapidly since its
introduction in 2008, with LIC now demonstrating the gains in genetic merit
the fledgling technology promised, but did not deliver when first introduced.
Revenue
LIC revenue for 2011/2012 was $177 million being 7% ahead of the $166 million
achieved during 2010/2011.
All profit is returned to LIC's 10,500 New Zealand dairy farmer
owners/shareholders in either products, research and development or
dividends.
NPAT
LIC net profit after tax was $24.4 million up $6.8 million from last year
reflecting the increase in fair value for the year of the elite biological
assets.
Underlying net earnings
LIC underlying net earnings (NPAT excluding the profit on fair value of elite
biological assets and the related tax effect) decreased from $17.65 million
to $14.99 million which flow through to a net dividend to farmer shareholders
of $11.99 million.
EBIT excluding elite biological assets
Improved sales volumes were offset by additional operating costs, resulting
in earnings before interest, taxation and fair value adjustments on elite
biological assets of $19.25 million, compared to $25.17 million in 2010/2011.
Strength of balance sheet
LIC continues to report a strong balance sheet with total assets including
cash, software, land and buildings and bull teams of $260.5 million, an
increase of $23.6 million over the previous year with an equity ratio of 75%.
Cash flow
Cash flows from operations were strong for the 2011/2012 year generating
$27.7 million, up from $21.4 million in 2010/2011. Investments during the
year were $14.8 million, down $7.5 million on the prior year.
Dividend
LIC will pay a dividend of $11.99 million, representing 80% of underlying
earnings, to its Cooperative and Investment Shareholders. This contrasts
with the dividend paid in 2011 of $13.6 million, and $7.3 million in 2010.
The 2011/2012 net dividend translates to 8.4 cents per Cooperative Control
Share and 39.2 cents per Investment Share and represents a gross yield of
11.1% on Investment Shares compared to 17.6% last year. The fully imputed
dividend payments will be made to shareholders on 24 August 2012.
Core Database
LIC is pleased with the agreement, reached with DairyNZ and Government, that
will see the New Zealand Dairy Core Database transfer from LIC's stewardship
to DairyNZ.
Summary
Murray King said the primary focus of LIC's refreshed strategy is the
delivery of superior dairy cow performance and helping farmers make better
decisions to improve farm prosperity. This commitment will be complemented
with exceptional solutions and service.
"LIC has been around for more than 100 years, and our closeness with our
farmer owners has always been our success factor and our reason for being.
Over the years we've delivered a huge range of innovations which have changed
and accelerated the New Zealand dairy industry - things like commercial
artificial breeding, sire proving, herd recording, Long Last Liquid semen,
farm automation systems, DNA parentage just to name a few.
"What is unique about LIC's offering is that it's delivered from a
Cooperative philosophy, which means that all products are uniquely aligned
meaning simplicity and efficiency on farm.
"We've achieved a lot in the past, and we're going to speed up that rate of
innovation and delivery in the future, wrapped in a customer service model no
other organisation can match. We'll do that through the support of our
farmer owners, the support and dedication of our Board and Shareholder
Council and the expertise and passion of our staff," Murray King said.
Ends
Note
Annual Report
In accordance with the Companies Act, companies are no longer required to
automatically mail printed copies of the Annual Report to shareholders. The
LIC Annual Report and financial statements for 2011-2012 are now available on
its website www.lic.co.nz/publications.
End CA:00225320 For:LIC Type:FLLYR Time:2012-07-26 09:28:27
(20min delay)