The operating profit, Ebitda, for the year ended June 30 was $70.2 million, well ahead of the previous year’s $64.6m, and the same as the record 2016 figure.
It was at the top-end of guidance provided through the year.
Record trading results were achieved by its livestock-led agency group and the combined retail and water division.
Seed and grain performed well in New Zealand but the division was dragged back by difficult conditions in Australia and South America.
The after-tax profit was always going to be lower than the previous year’s $46.3m because of the absence of that period’s gains on property sales.
However, the bottom-line figure of $18.88m also accounts for the $8m in provision for holiday pay entitlements to staff for previous years and unrealised losses on foreign currency hedges as the NZ dollar fell in value, as the company warned in mid-June.
The net dollar impact of just over $4m was included in the finance costs where ordinary interest costs were also about $3.45m higher on increased borrowing levels.
There were also negative fair-value adjustments on investments and depreciation was higher on increased capital expenditure.
The directors reduced the final dividend to 1.25c a share from 2c a year earlier. That makes the total payout 3c for the year, fully imputed, which is more than the earnings a share of 2.5c.
Deputy chairman Trevor Burt said the board had balanced the one-off nature of the factors affecting the after-tax profit and the strong underlying trading performance against the reinvestment opportunities available to the business.
“We felt it prudent to reduce the final dividend.”
The group also signalled a significant return of capital to shareholders from the announced sale of the seeds and grains business to Danish group DLF Seeds.
At the $421m sale price Wrightson will have a gain on the sale of more than $120m, chief executive Ian Glasson said.
The sale is subject to a number of conditions, including Overseas Investment Office approval.
Glasson said the group achieved an excellent trading result, showing the strength of the broad-based rural servicing business in a very strong NZ agriculture sector.
Total revenues rose to $1.19 billion from $1.13b a year earlier.
The agency business lifted Ebitda by 12% to $20.1m from nearly $18m though the after-tax figure was lower because of the holidays provision, fair-value adjustments and higher interest costs.
Retail and water lifted Ebitda by 30% to $23.8m from $18.3m, with the water business improving its result in spite of ongoing challenges in the irrigation sector. The division was also affected by the holidays provision but the after-tax profit rose to $13.58m from $11.56m.
Seeds and grain Ebitda fell to $35.6m from $37m and the impact of holidays provisions, fair-value adjustments and higher finance costs pushed the division’s after-tax profit down to $9.3m from $27.16m.
Group operating cashflows fell to $5.76m from $20.46m because of increased working capital needs.
Glasson said most of it was for the Go products funding client livestock investment, which are achieving good growth.
PGW spent $20.9m on Capex and investment during the year and the dividend payments of $29.3 were also debt-funded.
At balance date, the group had a total debt to total debt plus equity ratio of 62%, with the ratio of borrowings alone being 23.7%.
After the seeds and grain business is sold PGW will still have a strong rural services business with revenues of more than $800m and good profitability, he said.
It will have a distribution agreement with DLF to continue its seeds offering to farmers.
