PGG Wrightson (PGW) will be first of the listed rural companies to report its annual results in what is expected to be a fruitful financial year for primary production, processing and servicing.
However, there will be notable exceptions with bad results, namely A2 Milk (ATM) and cohort Synlait (SML).
Synlait has already announced that it will make an after-tax loss between $20 million and $30m.
A2 has made repeated downgrades of its revenue and earnings potential, the most recent in May, and its share price has fallen 70% during the past 12 months.
PGW’s latest market guidance said it expected earnings before interest, tax, depreciation and amortisation (Ebitda) to be $56m, about 25% higher than FY2020.
Chair Rodger Finlay said the rural servicing company had performed strongly in the second half after good results in the first half, Ebitda up 21% and net profit up 41% to $18m.
Shareholders will be expecting a full-year dividend around 20 cents after 12c as the interim payment in March.
Its share price has risen 25% over the past year and now sits at $3.45, which seems a long way above the covid-induced and temporary $1.60 in March 2020.
But that share price growth pales in comparison with Skellerup Holdings (SKP), up 113% over the past year and now sitting at $5.45.
Indeed, Skellerup has put on $4 since the covid rock bottom 18 months back.
It now has a market capitalisation over $1 billion and its shareholders will be expecting a yield that improves upon last year’s 13c dividend and, if possible, keeps pace with the share price.
Skellerup’s latest guidance, made in April, said the expectation was for net profit between $37m and $39m, about 50% more than the previous year.
A minnow in comparison with PGW and Skellerup is Allied Farmers (ALF), with a market capitalisation of $17m and a share price of 58c, up 4c over the past year.
On revenue of $20m it made a net profit of $1.2m in FY20 and this year it has taken on half of the management company of NZ Rural Land Company (NZL), from which it stands to make performance fees and a minor share of capital gains.
That earnings stream is forecast between $500,000 and $600,000 in FY21.
Major wine company Delegat Group (DGL) will report on August 27 and its latest guidance was for an unaudited net operating profit after tax of $64.6m, up 6%.
Case sales were down 3% because of shipping disruption and it also forecast a 10% reduction in FY22 profit because of a smaller grape harvest earlier this year.
Dividend should be steady on the previous two financial years at 17c fully imputed, not much better than 1% yield on the current share price of $12.90, which gives the leading wine exporter a market capitalisation of $1.3 billion.
A number of horticultural companies will report their first-half results because their financial years are also calendar years.
Seeka (SEK) has had strong share price growth over the past year, rising from $3.70 to $5.05 and a $200m market capitalisation.
If it follows form, then a 10c interim dividend can be expected and the rise in share price would indicate a gross dividend yield for the full year, around 4-5%.
The larger Scales Corporation (SCL), with a market capitalisation of $658m, should be on track to repeat its interim dividend last year of 9.5c and the same again in April.
This would yield around 4% on the current share price of $4.67, but Scales is unusual in the primary sector at present for having a falling share price, down 50c or about 10% over the past year.
Some of that loss of value would be investor disappointment that the company has not paid out any of the $80m received in FY19 from the sale of Polarcold and part of Meateor pet foods.
During the past year, Scales did due diligence on Villa Maria but pulled out of the possible purchase.
Comvita (CVT) expects an improvement of Ebitda from $19m in FY20 to something in the range $22.5m to $25.5m.
The owners of 70m shares in the mānuka honey producer and marketer will be hoping that directors can return to paying a dividend, however modest.
At the other end of the scale, Zespri (ZGL) paid its shareholders a final dividend for the 2020-21 season of 27c per share on August 13, which brought the total dividend for the season to 133c.
It also paid an interim dividend for the 2022 season of 144c, to distribute most of the funds generated from the recent sale of Gold3 and Red19 licences.
At the current share price of $11 on the Unlisted Securities Exchange, Zespri had a gross dividend yield over the past 12 months of 14%.
That is one of the highest yields of any company in NZ and is a very attractive return on capital for what kiwifruit growers have invested in their industry co-operative.
During the past year, Zespri shares have risen in price from $8.50 to $11 and it has a market capitalisation of $2b.
The reporting season will close in late September with Fonterra, Synlait and Tatua, three very different dairy companies.
Fonterra (FCG and FSF) has stayed on track to deliver a farm gate milk price of around $7.55/kg milksolids and its earnings guidance of 25-35c a share, from which it is likely to declare a full-year dividend between 10c and 15c.
Synlait said it will match Fonterra’s milk price, despite foreshadowing a trading loss.
Tatua Co-operative may declare a record payout over $10/kg, but it remains to be seen if it retains more than last year’s record $1.26.
