Elders records $52 million first-half profit
Beef Central (AU)
May 18, 2020
In the final year of its second eight-point plan Elders Limited has pushed through drought, bushfire and the early impacts of COVID-19 to record a solid $52 million statutory net profit after tax for the six months to March 31, 2020, a 90 percent increase on the prior corresponding period.
A 55 percent lift in underlying earnings before interest and tax (EBIT) to $52.8 million was boosted by recent winter crop confidence, high prices for both cattle and sheep, and steady earnings in real estate and financial services, CEO and managing director Mark Allison told a half year 2020 results briefing this morning.
Revenue was also boosted by the acquisition in November of Australian Independent Rural Retailers (AIRR) contributed $8.6 million to EBIT.
Operating cash inflow of $27.4 million reflected EBITDA of $60.0 million.
This was offset by increased working capital in AIRR post settlement and higher retail product debtors due to increased sales activity. Elders expects a higher cash conversion in the second half as debtors are collected.
Mr Allison said Elders’ business model is now diversified by product and service, by commercial model, by market segment, by geography and now by channel with last year’s acquisition of AIRR.
“This provides significant diversificaiton which when coupled with the strong financial discipline around our costs and capital base allows us to make good money in bad seasons, as we saw last year with the near record profitability through one of the worst droughts in eastern Australia in 100 years,” he told today’s market briefing.
Under its first two eight-point plans Elders had looked to access further margin pools particularly in its rural products area by backward integration into key product portfolios, such as with its acquisition of Titan in the crop protection portfolio and the acqusition of AIRR, which has enabled it to access additional margin pools in veterinary products and also significantly enhanced purchasing power across the total business in general merchandise products, he said...
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