- Release Date: 20/10/15 14:16
- Summary: FORECAST: LIC: LIC anticipates reduced earnings
- Price Sensitive: No
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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
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