Declared profit was $121.6m because of the sale of the Polarcold business for a net $73m gain and the part-sale of Meateor pet foods to Alliance realising $9.8m.
Managing director Andy Borland said the company is committed to reinvesting the proceeds in New Zealand agribusinesses that provide a targeted return on capital of 15%.
“We think the whole sector is a very positive place to invest, where we can add value.”
Scales had a net cash position of $105m on December 31, which could be used for organic growth opportunities, acquisitions to strength existing businesses or investments in new sectors where Scales can add value through its resources, experience and export network.
Among the organic growth options are further redevelopment of existing apple orchards with new varieties and accommodation for seasonal workers.
A new $10m coolstore to be built next to the existing Whakatu pack house will improve centralisation of Mr Apple’s post-harvest operations.
Borland said the major horticultural division delivered a record $265m revenue in 2019, up 4%, and the Mr Apple export crop was 3.8m cartons.
For the first time following orchard redevelopment most apples (56%) were premium varieties including NZ Queen, Pink Lady, high-colour Fuji and Royal Gala and the first commercial crops for Dazzle and Posy varieties.
In 2019 they brought about $10 a carton premium over traditional varieties.
As the redeveloped orchards increase production the premium proportion of 4m-plus cartons is forecast to go over 60%.
Posy apples have already been picked this year and air-freighted to China for immediate sale through online platforms.
In 2019 China took 17% of apple exports by Scales versus 10% the year before.
Though the impact of the covid-19 virus is uncertain some mitigating factors included higher sales to Europe of larger fruit sizes, more sales through e-commerce and the actions of Chinese authorities to prioritise food deliveries.
Scales confirmed its underlying net profit guidance between $30m and $36m for 2020.
The directors will declare the final 2019 dividend in May, following an interim 9.5c a share in December.
Borland said the delay on dividend enables the company to assess the apple harvest.
Scales’ share price has fallen nearly a dollar during the past three months, to sit around $4.30.
Borland thought some of that might be caused by coronavirus uncertainties and dismissed any disappointment among shareholders that sales proceeds would not be distributed, saying the intention of the company to reinvest was clearly signalled.
