Seeka made a guidance of net profit towards the upper end of a range $22m to $24m, assuming the Crown kiwifruit settlement would be paid.
While its farming customers worked over the Christmas-New Year holiday period for the majority of New Zealanders, PGG Wrightson’s share price rose by nearly 20%.
It capped a very strong calendar year for the rural servicing company during which its share price rose 50% and its performance reflected the strength of the primary sector, especially dairying, sheepmeat and beef.
On December 6 at the annual general meeting, chair Rodger Finlay announced an upgraded earnings guidance to $59 million in the current financial year, compared with $56m in FY2021 and with $53m as the previous guidance.
He observed that total shareholder return for the financial year ended June 2021 was 30%, including a dividend of 28c a share, a yield of 6% and the rise in share price.
“This represents impressive value creation for shareholders and reflects well on the health of the business and our trading performance,” Finlay said.
He spoke as the share price sat at $4.40, having been around $3 at the start of 2021.
It has since put on 75c between December 6 and January 12 and is now around $5.15.
PGG Wrightson will report on its first half towards the end of February and Finlay has already commented on the excellent spring trading period and the resilience of the company’s staff members in adapting to ever-changing covid-19 protocols.
Equities analysts said the PGG Wrightson earnings upgrade was further evidence of good performance from a rural agency now sticking to the basics and serving farmers and orchardists well in a buoyant primary sector.
Elsewhere among the listed primary sector companies during the holiday period, Scales Corporation also upgraded its guidance to the upper end of a net profit range of $32m to $37m.
Directors announced an interim dividend of 9.5c to be paid on January 14 and a repeated commitment to no less than 19c fully imputed for the 2021 financial and calendar year, to be confirmed towards the end of April.
They said fruit prices were expected to be steady on 2021, adequate labour would be available at harvest and that demand for pet food would continue to grow.
Fellow horticultural company Seeka made a guidance of net profit towards the upper end of a range $22m to $24m, assuming the Crown kiwifruit settlement would be paid.
It will report its FY2021 results towards the end of February.
In the meantime, it has proposed spending $21m to bring Gisborne-based post-harvest company NZ Fruits Ltd into the Seeka fold during February, subject to due diligence and shareholder approval.
Local owners of NZ Fruits will be paid $78 a share, half in Seeka shares and half in cash.
It will be the third expansion for Seeka in the past 12 months, after it took over Opotiki Packing and Cool Storage and the Bay of Islands-based packhouse Orangewood.
Skellerup is another rural supplier that said FY22 has started strongly and its guidance for a net profit in the first half is 10% better than the previous corresponding period. The interim results will be out in mid-February.
Its share price has risen during the holiday period and at around $6.40 stands 70% higher than at the beginning of 2021.
Among the poorer performers has been Delegat Group, the wine company, that advised a lower profit expectation in the range $57m to $61m compared with FY21’s $65m, despite an 8% volume growth this year.
Founder Jim Delegat, stepping down as chair on February 1 to be replaced by independent director Alan Jackson, said the profit fall was caused by a lower 2001 harvest and higher grape prices.
Delegats welcomes former Pamu (Landcorp) chief executive Steve Carden to the position of managing director on the same day.
The a2 Milk Company (ATM) and part-supplier Synlait will look to 2022 for performance recovery as their share prices fell by 50% and 30% respectively during 2021.
A huge transaction in ATM shares occurred on November 30 when MSCI World Index sold 50m shares at around $6.10 because the dairy marketer dropped out of its index of more than 1500 leading companies from 23 countries.
Accounting for over 6% of the issued shares, the sale was well-signalled and didn’t depress the ATM price on the day or soon after.
