AN air of positivity was noticeable at the Elders annual general meeting, held in Adelaide on Friday, with the company announcing it expects to begin paying dividends to its shareholders by December 2017.
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Elders’ statutory and underlying net profits improved substantially on last year – a hallmark of a strong financial performance, according to Elders managing director Mark Allison.
“Statutory net profit after tax of $51.6 million compares with a $38.3m profit in the previous year,” he said.
“Our underlying net profit improved $13.2m on the prior corresponding period to $41.2m.”
Mr Allison said positive seasonal conditions lifted winter crop demand and sales activity, resulting in retail products posting a $15.1m improvement in underlying profit.
High cattle prices drove higher livestock earnings and also increased real estate demand for large cattle properties.
“This contributed to a $5.2m underlying profit improvement for agency services, and a $1.7m underlying profit improvement in real estate services,” Mr Allison said.
Elders held its term debt at zero and net debt was reduced by $50.1m.
Elders chairman Hutch Ranck said reduced inventory in live export, and improved supplier trading terms in retail led to a strong operating cash inflow of $48.7m.
He noted Elders’ readmittance into the S&P/ASX 300 index after three years, and a surge toward the top 200 as positives, but said there was still much work to do.
“We are well aware that until the business is in a position to be distributing dividends to our shareholders, we have not achieved success,” Mr Ranck said.
“With that said, our capital structure is no longer an impediment to this, and so it is our goal to start paying dividends in December 2017.”
The launch of the new Killara Black Angus brand in Jakarta and Bali, Indonesia, and the opening of an Elders Bali sales office were some of Mr Allison’s highlights for 2016, as well as the expansion of the company’s presence in Tas and the launch of the new Elders Grain platform.
Mr Allison said recent high Australian cattle prices adversely impacted margins within feed and processing services and, in combination with increased maintenance investment in Killara, resulted in reduced occupancy for the feedlot.
Deepening client relationships, particularly through the use of digital mediums, will be a major focus for the company in 2017.
“We are focused on ensuring new information is at the fingertips of our clients,” Mr Allison said.
“As shareholders you can be confident that Elders is in a strong position for growth, focused on the future, and delivering greater value for our key stakeholders.”
