PGW holds up despite challenges

MARTA STEEMAN
Last updated 12:59 20/06/2014

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Rural services company PGG Wrightson has lifted its gross profit guidance "slightly" for the June 2014 year to a range of $56 million to $58m.

Chief executive Mark Dewdney said that was for the company's full-year operating ebitda (earnings before interest, tax, depreciation and amortisation).

The previous guidance was given in February.

Dewdney said the market in general and PGW's trading performance had held up well in the past six months despite some challenges.

The upper North Island had another summer drought, and PGW had a tough spell in the South Island, with wet and cold weather affecting arable production and winter sowing.

However, the livestock business had a record May. Many forward dairy sales were transacted and the business enjoyed higher values for sheep and beef.

"With this busy period behind us we are now better placed to provide a guidance update for the current fiscal year," Dewdney said.

He said PGW had bought AG Property Holdings, which had about 40 properties once owned by PGW, for about $30m, funded by debt.

Some had been leased by PGW.

The properties included retail stores, seed-processing sites and livestock saleyards across New Zealand.

AG Property did not have any other assets, staff or operations.

PGW had sold the properties and leased them back shortly after the 2005 merger of Wrightson and Pyne Gould Guiness.

Dewdney said the purchase would be followed by a review of PGW's property portfolio. Some of the repurchased sites might "ultimately" be sold.

However, the purchase gave PGW flexibility to review its property and lease needs and make decisions that were right for the business, Dewdney said.

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