The rural real estate market is particularly challenging at present, perhaps the quietest in 30 years, PGG Wrightson chief executive Stephen Guerin says.
He noted some signs of recovery in Southland and in the dairy industry nationwide, while horticultural properties are in demand but listings are fewer than expected.
“Momentum in this market remains subdued, with farm sales significantly down on the prior year,” PGW said in its annual results announcement.
“The economic climate has impacted farm and agricultural land prices and produced a mismatch between vendor and purchaser expectations.
“Interest rate and inflationary relief is expected to come as global economic conditions stabilise.
“This should lead to more manageable debt servicing costs and predictable inflation.’
Commenting on the results, Guerin said receivables have held up well, being mostly connected with the company’s Go-Stock livestock products for farmers.
Not counting the Go-Stock advances, PGW net debt is almost nil, he said.
Total group revenue was down 6% and was the lowest since 2017-18.
He said growth factors for the agency business over the past six years were higher commodity prices, sales of dairy herds and increased activity in the property markets during the covid pandemic years.
“Input costs for farmers were higher during those covid times, which generated margins and commissions, and they have now come down.”
Over the past year spending has been down in fencing, irrigation equipment and fertiliser, he said.
PGW highlighted the growth in its bidr online sales platform, saying that 13 saleyards are now livestreaming sales, and total auctions conducted over the year were just under 1000.
Guerin said there is room for more expansion, with Kaikohe yards coming on stream shortly and some prospects of wool being auctioned online.
