- Release Date: 24/07/14 10:31
- Summary: FLLYR: LIC: Livestock Improvement announces year end result 2013/2014
- Price Sensitive: No
- Download Document 8.47KB
LIC 24/07/2014 10:31 FLLYR REL: 1031 HRS Livestock Improvement Corporation Limited (NS) FLLYR: LIC: Livestock Improvement announces year end result 2013/2014 Strong farming year drives good result for LIC and its farmer owners Increasing demand for solutions to improve the prosperity and productivity of New Zealand dairy farms has resulted in a strong year of revenue growth and on-farm innovation for farmer-owned co-operative LIC. Chairman Murray King said the result reflects a great season for dairying, with high demand for LIC's herd testing and artificial breeding services and an increasing number of farmers investing in technology which drive efficiency gains on-farm. "Today's farmers manage more animals and land than ever before, and they are also very high users of technology that helps them run their businesses more efficiently. "As their co-operative, it's our job to provide our farmers with solutions they need - now and into the future - to address the challenges they face, make their daily working lives easier, and improve their overall productivity and prosperity." He said LIC does this with its growing range of information management and automation systems and the uptake of its three smartphone apps, which have been downloaded more than 11,000 times, is a great example of farmer-demand for technology. The use of automation also continues to grow, and as part of plans to deliver more innovations which fit the co-operative's new strategy, LIC purchased Dairy Automation Limited (DAL) in February, a Waikato-based company which manufactures sensor technology for the real-time analysis of milk on-farm. Murray King said the co-op is also investing more than $40 million in its own information systems, to ensure improved service can be provided as well as faster delivery of new products, and this is reflected in the lower year-on-year profit resulting from increased depreciation costs and accelerated new product development. Work to upgrade LIC's back-end database technology during 2013/2014 improved synchronisation times for farmers updating their records and uploading information to the LIC database, he said. LIC is working closely with DairyNZ to ensure the successful transfer of the Core Database later this year and work is also under way to identify scope and timeframes for the second phase of this four phase project which involves the transfer of the Animal Evaluation Unit operations to DairyNZ in approximately mid-2015. LIC's ongoing commitment to research and development was also reflected in the year-end result, with $14.9 million of direct R&D expenditure, and combined with other new product development totalling approximately $22 million, representing over 10% of revenue. "Our work in DNA sequencing continues and over the last year it has been responsible for the discovery of two genetic variations in dairy cows, one which causes loss of pregnancy and another which impacts milk composition and the amount of fat a cow produces. "These findings are now being used in our genomics programme, to improve the accuracy of sire selection and allow for further isolation of negative genes and traits from the national herd." Murray King said two new genetics solutions were launched to farmers this year, after many years of R&D investment. These are fresh sexed semen with near normal conception rates and a new team of AB bulls, known as SGL, that will shorten the period of dairy cow gestation by an average 10 days on-farm. "We are thrilled to launch these two new genetics solutions this year. Both will have a huge impact on the industry over the coming years. "LIC's fresh sexed semen is the only of its kind in the world with near normal conception rates, and farmers who use it this spring can expect to see more heifer calves born next year. Those who use SGL will see more days in milk the next season, from the earlier calving cows." Murray King said the appointment of LIC's new CEO, Wayne McNee, in July was a highlight for the year and for LIC's future as it signals a change in step for the co-op. "Wayne brought a wealth of experience to LIC, and was tasked with completing a thorough analysis of the co-operative, and developing a new strategy to grow the business and improve the service and solutions we provide to farmers." Murray King says the LIC board is both supportive of and encouraged by the aspiration of the new strategy, which aims to deliver $1 billion revenue by 2025. "It's an ambitious target, but one that represents a significant opportunity for LIC, our shareholders, and for New Zealand agribusiness." The current high level of capital investment in information systems and technology will continue for 2-3 more years and this, coupled with the new growth strategy and potential for more M&A activity, has meant the directors are declaring a dividend of 60% of net underlying earnings this year compared to 80% last year. Murray King said the 2013/2014 year presented challenges for the co-op's international business but this will be addressed as a key theme of the new strategy, with a deeper focus on growing key markets, particularly UK, Ireland, Brazil and China, and looking at what businesses could be acquired to align with the co-op and its growth aspirations. Revenue LIC revenue and other income for 2013/2014 was $211 million, 6% ahead of the $199 million achieved during 2012/2013. All profit is returned to LIC's 10,500 New Zealand dairy farmer owners/shareholders as products, research and development or dividends. NPAT LIC net profit after tax was $18.0 million, down $5.6 million from the previous year. This decrease largely reflects the large spend on core technology and infrastructure to ensure the co-op's technology is up-to-date, supported and able to provide a stable platform for delivering new products to farmers. Net profit after tax for LIC includes the annual revaluation to fair value of the biological elite bull team which, this year, was a decrease net of tax of $0.57 million compared to an increase of $2.7 million last year. The fluctuations on fair value of the elite bull team are excluded for the purposes of dividend for LIC and are not considered as a key indicator of trading performance. For this reason LIC also reports: Underlying Net Earnings LIC Underlying Net Earnings (NPAT excluding the increase or decrease on fair value of elite biological assets and the related tax effect) decreased from $20.93 million to $18.6 million this year, which flows through to a dividend to farmer shareholders of $11.168 million compared to $16.75 million last year. EBIT excluding elite biological assets Improved sales volumes across most business areas was offset by higher investment in technology and new product development, and resulted in earnings, before interest, taxation and fair value adjustments on elite biological assets, decreasing by 7.2% to $25.32 million, compared to $27.29 million in 2012/2013. Strength of balance sheet LIC continues to operate a strong balance sheet with total assets including cash, software, land and buildings and bull teams of $283.8 million, an increase of $8 million over the previous year with a stable equity ratio of 75%. Cash flow Cash flows from operations were very strong for the 2013/2014 year generating $37.0 million, compared to $25.8 million in 2012/2013, with higher sales and strong cashflows on-farm from the high milk payout. Purchases of both tangible and intangible assets increased from $23.9 million to $34.6 million as the co-operative ramped up its investment in development of innovative products for farmers and technology upgrades. Dividend LIC will pay a dividend of $11.17 million, representing 60% of underlying earnings, to its Co-operative and Investment Shareholders. This contrasts with the dividend paid in 2013 at 80% of $16.75 million, and $11.9 million in 2012. The 2013/2014 dividend translates to 8.65 cents per Co-operative Control Share and a net 35.90 cents per Investment Share and represents a gross yield of 6.94% on Investment Shares compared to 13.2% last year. The fully imputed dividend payments will be made to shareholders on 22 August 2014. Ends For further information, contact Ashleigh Sattler LIC Senior Communications Advisor 027 617 1942, [email protected]. 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 2013/2014 are now available at www.lic.co.nz/publications. End CA:00253034 For:LIC Type:FLLYR Time:2014-07-24 10:31:47
- Forums
- NZX - By Stock
- LIC
- Ann: FLLYR: LIC: Livestock Improvement announces year end result 2013/2014
Ann: FLLYR: LIC: Livestock Improvement announces year end result 2013/2014
Featured News
Add LIC (NZSX) to my watchlist
|
|||||
Last
$1.10 |
Change
0.000(0.00%) |
Mkt cap ! n/a |
Open | High | Low | Value | Volume |
0.0¢ | 0.0¢ | 0.0¢ | $0 | 0 |
Featured News
LIC (NZSX) Chart |
Day chart unavailable
The Watchlist
1CG
ONE CLICK GROUP LIMITED
Mark Waller, MD
Mark Waller
MD
Previous Video
Next Video
SPONSORED BY The Market Online