The bottom line loss for the year ending May 31 was $4 million. This was made up of an underlying after-tax loss of about $300,000 and a $3.7m writedown on the value of the company’s elite breeding bull team.
LIC earlier said the trading result would be about break-even.
Because there was a trading loss, neither the co-operative nor investment shareholders would receive a dividend, chairman Murray King said. The dairy sector downturn had pushed farmers into survival mode, and that was now expected to last longer than earlier predicted, adding to onfarm cash constraints.
LIC would continue with its capital expenditure and research and development spend because it believed its genetics services were more important than ever in the tough times.
The latest loss compared with an after-tax profit of $13.66m the previous year, from which $6.6m was paid in dividends.
Sales for the core artificial breeding services were steady in the latest year but there was a downturn in discretionary spend on herd testing and “big ticket” automation items, King said. However, herd testing sales were increasing because farmers realised they could not go a second season without them.
LIC ended the year with total assets of $323m, an increase of $21m on the previous year, and an equity ratio of 65%, down from 72.5%. Bank debt was $41m, up from $10.3m. The investment shares last traded at $2.60 on the NZAX; the latest net tangible asset backing is $4.44 a share.
