Friday, March 29, 2024

ALF now in growth mode

Avatar photo
Growth is the focus this year for livestock agency group Allied Farmers, chairman Garry Bluett told shareholders.
Reading Time: 2 minutes

After recovering back into profit in 2014 and fixing the balance sheet last year, it could now look to expand, he said at Tuesday’s annual meeting in Hawera.

ALF’s subsidiary New Zealand Farmers Livestock added stock agents in its South Island and Northland businesses and was now looking for more there and in other areas, either by recruitment or acquisition.

The 66%-owned NZFL would next year move to a 52% shareholding in Hawke’s Bay agency Redshaw Livestock, from the current 34%.

That shareholding would be similar to the NZFL model, where the group owned a majority stake but agents in the business also held significant minority stakes.

ALF’s new finance business had also started operations, funding farms buying bulls and now looking to move into other livestock financing.

The new business would “stick to its knitting” and stay well away from ventures such as Queenstown property development, Bluett said after the annual meeting.

The group has spent years recovering from its earlier finance sector expansion several years ago, which nearly caused its collapse.

The losses from that were now all over and there might be some small recoveries from assets that had been written off, he said.

“The new business is up and running and going reasonably well and it will be bigger next year.”

The core NZFL business had started the new financial year well, trading ahead of the same time last year and importantly dairy herd sales were ahead of last year.

“It’s going well. We’re quite happy with that.”

The Farmers Meat Export bobby calf business owned directly by ALF Rural was finding conditions slightly tougher going than last year, with prices lower and also affected by the exchange rate.

The company had quite a bit of stock still to sell at the end of October, with the selling season usually over by late December, in time for inclusion in the half-year accounts.

In terms of bobby calf supply, Bluett said the group thought it had picked up some market share but the overall tallies were down.

That reflected the heavy culling of dairy cows last year as dairy prices collapsed and farmers moved back to grass-feeding and away from supplementary feed to save costs.

The latest recovery in milk price forecasts, to about $6/kg MS, could stabilise numbers this year, allowing farmers to afford to buy more feed, he said.

Total
0
Shares
People are also reading