PGW
19/06/2014 16:10
FORECAST
REL: 1610 HRS PGG Wrightson Limited
FORECAST: PGW: PGG Wrightson Trading Update
PGG Wrightson Trading Update
Chief Executive, Mark Dewdney announced today that PGG Wrightson (PGW) is
forecasting that its full year Operating EBITDA* is expected to be in the $56
- $58 million range, slightly up on the guidance range indicated in February.
Mr. Dewdney said "The market and PGW's trading performance has held up well
in the past six months despite some localised challenges. The upper North
Island saw another summer drought develop with farmers looking for rains to
come mid-April. Just as this happened we also experienced a tough spell in
the South with very wet and cold weather conditions challenging arable
production and winter sowing activities.
In recent weeks the dairy forward herd sale contract settlements were
transacted to close out the season for Livestock. This saw the Livestock
business report a record month for May. Driving this was the large quantum
of dairy forward sales transacted in May along with the increasing values in
sheep and beef, and higher than forecasted auction cattle volumes yarded.
With this busy period behind us we are now better placed to provide a
guidance update for the current fiscal year."
The company also announced that it had acquired a property company, AG
Property Holdings Limited (AG Property) that owns a number of properties that
are leased by PGW. AG Property collectively owns 40 properties that are a
combination of retail stores, seed processing sites and livestock saleyards
located across New Zealand. AG Property has no other assets, staff or
operations and by acquiring the company, PGW obtains ownership of the 40
properties for consideration of approximately $30 million.
Shortly after the 2005 merger of Wrightson and Pyne Gould Guiness the company
sold these properties subject to a lease back to PGW. Mr. Dewdney said "The
decision to sell the properties was made at a different point in time, and
the company now has a completely different look to its balance sheet and we
are pleased to have been able to negotiate their acquisition."
"The business continues to evolve and this gives us the opportunity to
re-shape our property portfolio. A strategic review of the company's
property needs would be undertaken and some of the reacquired sites may
ultimately be divested. The important thing is that this acquisition
provides PGW with flexibility to review its property and lease needs and make
decisions that are right for the business today and moving into the future."
The transaction will see debt increase by a corresponding amount.
PGW expects to announce its full year results on 13 August 2014 with details
of the announcement to be confirmed closer to the time.
For further information:
Mark Dewdney
Tel: +64 27 248 3151
End CA:00251800 For:PGW Type:FORECAST Time:2014-06-19 16:10:24
