The Southland-based co-operative also made about $8m on the sale of its former Makarewa venison processing site, increasing total pre-tax and rebate earnings to $28m for the year-ended September 30.
The shareholder suppliers would receive a total $11.8m in rebate payments, up from $9.8m last year. It was paid out on a per-head basis of stock supplied for processing.
Alliance had also made loyalty payments to suppliers and passed on significant gains in farmgate prices during the year, chairman Murray Taggart said.
The earnings improvement was very good given where Alliance had come from in the last few years but profits should be greater for a business of its size “so there’s a long way to go”.
Revenues for the year were $1.53 billion, up from $1.36b a year earlier.
The bottom-line after-tax profit wasn’t disclosed in the preliminary report but indications were the group could have $17m to $18m for reinvestment, after allowing for some of the rebate cash to be retained as under-shared suppliers were issued shares.
All meat markets were pretty strong and the fundamentals of supply and demand in the sheep meat and venison sectors were very strong, Taggart said.
In the North American market sheep meat supply competition from Australia was not as strong now as it usually was.
Offsetting the good meat markets, co-products were still a difficult export business though some parts were showing a bit of life.
Alliance had spoken for the last two years about major efforts to penetrate more deeply into markets and increase returns from existing markets and was now getting into the main part of that strategy, Taggart said. That includes the food service initiative in the United Kingdom and the recent acquisition of the Alliance Asia marketing business in Singapore.
The group strengthened its balance sheet over the year with core borrowings halved to $19m at balance date.
That was after major spending on plant upgrades, including robotic technologies.
Shareholders’ equity was 71%, up from 70% a year earlier.
