I do not hold Elders shares but have followed its shareprice...

I do not hold Elders shares but have followed its shareprice down from lofty days. I came across an interesting article recently that potential investors should review for their own peace of mind. I will remain on sidelines especially on Elders until seasonal conditions and management performance improves as well as generally across the rural landscape.

Note in the article Elders Rural Services, the core business of Elders, had a 15 per cent decline in revenue and 36 per cent decline in underlying EBIT. Elders reported a loss of $218 million following a loss of $433 million last year.


Quote from article;
As for Elders, its problem is finding the right formula in its Rural Services business. Clearly, the restructure into twelve regions a couple of years ago has not delivered, and neither has the so-called go-to-market strategy, repeatedly raised in shareholder briefings.

This years annual report notes that the company is being reconfigured for the low-price, low-margin farm supplies environment that emerged during 2010. That is not reassuring farm supplies have been low cost and low margin for many years. If Elders has only just realised that, it has a lot more coping to do.

But there are more companies like Agrium around, so its fate may be decided by acquisition too. Elders has a great branch network, many fine staff and a great brand franchise, plus some anxious bankers which would like their money back. What it needs is leadership that can cope with droughts and the other variables of agriculture.


http://www.businessspectator.com.au/bs.nsf/Article/Elders-AWB-Nufarm-RuralCo-Incitec-Pivot-pd20101206-BV32Y?OpenDocument&src=srch