Allied Farmers Limited has reported an audited net profit after tax for the year to June 30 of $5.2 million, an increase of 55.96% from the previous year.
The increase was driven by a one-off $4.2m gain on the book value of the sale and licence-back by New Zealand Farmers Livestock Limited of its interest in the Frankton saleyards, of which $2.8m was attributable to Allied Farmers’ shareholders.
Excluding this one-off gain, NZ Rural Land Management Limited earnings were significantly higher than FY23 on the back of management, performance and transaction fees from a number of NZ Rural Land Company Limited (NZL) transactions, but this was largely offset by lower earnings from NZ Farmers Livestock Limited.
NZ Farmers Livestock, 67.8% owned by AFL, grappled with a very challenging 2023/24 year, but reported a solid operating earnings result.
The veal operation and livestock agency both contributed positively to the result but were down on the previous year.
This reflected cost inflation in the face of a small reduction in agency revenues.
Poor sheep prices and tallies reflected current market challenges, but cattle pricing (and tallies) remained relatively strong.
Dairy herd forward sales performance was creditable and remains an important focus going forward.
The sale of NZFL’s interest in the Frankton saleyards was coupled with an access licence back to NZFL, and therefore NZFL’s access to and use of the yards is consistent with prior to the sale.
The recent recovery in sheep pricing and strengthening cattle pricing are encouraging for the current year.
In the face of cost inflation, the business has focused on improving productivity, cost structure, capital efficiency and driving our developing digital platform and presence. Work through the year should position us well within an improving agribusiness environment.
Livestock financing, based around the Heartland-supported and own lending offerings, continued the growth forecast in earlier market updates, and its support of the core business, to increase its contribution.
In Focus Podcast: Full Show | 23 August
Calls for a national food strategy are growing as the cost of living crisis leaves many unable to afford nutritious food here, despite living in a food producing powerhouse. Lincoln University’s Professor Alan Renwick says it will take a holistic approach as there are many aspects to consider.
Then, new data from Farm Focus highlights the significant financial challenges farmers have faced over the past year. The agri-business software platform supports $9 billion in farming annual income, an analysis of which paints a clear picture of what farming businesses are facing. Bryan speaks with Farm Focus CEO Auriga Martin.
And, Federated Farmers says the terms of reference announced for the upcoming inquiry into rural banking will leave the banks nowhere to hide. Its banking spokesperson Richard McIntyre says there had been a concern that the terms would limit the reach of the inquiry, but those fears have been allayed.
