PGG Wrightson announces first half result

27 February 2019

PGG Wrightson announces first half result

PGG Wrightson Limited (PGW)* Chief Executive Ian Glasson announced today that Operating EBITDA** for
the six months ending 31 December 2018 was $17.8 million (compared to the record $23.4 million for the
corresponding period last year).

Mr Glasson said, “While this result is back on the previous year it is slightly ahead of first half Operating EBITDA
for the Rural Services*** businesses for the 2017 financial year. The factors impacting performance have
been felt across the rural sector and we have confidence that we have held, and in some cases grown, our
market share. It is important to note that this Operating EBITDA result no longer includes any contribution
from the Seed and Grain business, which is in the process of being sold to DLF Seeds A/S. We are confident
the transaction will settle in the near future and accordingly the Seed and Grain business is now treated as a
discontinued operation in our financial reporting.”

PGW delivered a net profit after tax (NPAT) of $0.3 million for the period. This result includes a loss of $8.6
million from the discontinued Seed and Grain business.

On the basis of the Rural Services’ result the Board has resolved to pay a fully imputed interim dividend of
0.75 cents per share on 5 April 2019 to shareholders on PGW’s share register as at 5pm on 15 March 2019.

Rural Services

Mr Glasson said, “Late last year we advised that while our Rural Services businesses had been trading solidly
for the first six months of FY2019, we signalled that it was likely the half year result would be behind the same
period last year. That prediction has proven to be accurate. This softer result was largely due to a later start
to spring sales and a delayed recovery following an unseasonably wet period in the last few months of 2018
across the country.”

“In December 2018 the National Institute of Water and Atmospheric Research (NIWA) reported that many
eastern and inland parts of the South Island recorded double their normal rainfall for that time of the year. Wet
spring conditions throughout the country have favoured milk and beef production, with an increase in
production by six percent across both sectors due largely to strong pasture growth. In contrast, wet growing
conditions in most regions have delayed pasture renovation and the establishment of both arable and winter
feed crops. These wet conditions were felt across most of our Rural Services businesses impacting the sales
mix and some delayed spending.”

“Turning to the two operating groups within Rural Services.”

Retail and Water

“The Retail and Water group earnings are tracking broadly in line with last year. The first six months of the
financial year are key for the Retail and Water group as it generally delivers more than 85 percent of its full
year Operating EBITDA during this period. Despite some challenges with the weather and excluding the claim
event noted below, year-on-year gains continue to be made by the Rural Supplies, Fruitfed Supplies and
Agritrade businesses. However, the Water business continues to experience weak demand with the remainder
of the year also looking extremely challenging.”

“We have confidence that after this financial year Rural Supplies, Fruitfed Supplies and Agritrade will again
revert to growth.”

“Operating EBITDA was $23.0 million for the first half of FY2019, slightly back on last year’s record $23.6
million, but well ahead of the $18.9 million recorded in the first half of FY2017. In addition, a claim event
impacted the Retail and Water group’s otherwise excellent trading result. In September 2018 a settlement
was reached with a supplier and a number of growers in relation to a defective spray that was supplied to PGW
and resold to fruit growers. The settlement partially compensated PGW for the consequences arising from the
supply of the defective product with a financial impact of approximately $1.8 million that was not recovered.
Customers were fully compensated.”

“Our investment in the Retail business continues with key initiatives, such as the rollout of our new retail point
of sale system in the first quarter of FY2019. The next phase in this digital journey is the establishment of an

ecommerce solution which is currently in the discovery phase. In addition, our investment in technology
infrastructure, our people, technical training and tools for our team continues.”

Agency

“Our Agency business incorporates the Livestock, Wool, Real Estate, Insurance and Financial referral
commission businesses. Trading for this group is weighted towards the second half and contributed $1.6
million Operating EBITDA for the six months ended 31 December 2018. This is back, on the record first half
result for FY2018 of $4.6 million.”

“Our Livestock business benefited from the favourable conditions for farmers due to good feed supply across
most of the country which was buoyed by sustained high sheep and beef commodity pricing (with tallies for all
stock and all sales channels similar to the prior year). However, this was offset by continued caution in the
dairy sector due to the ongoing effect of Mycoplasma bovis and the lack of supply of good quality dairy
livestock. Investment in the future continues to be a focus for this business with a number of digital initiatives
and further supply chain developments scheduled to be implemented during FY2019. While Livestock is down
on earnings at the half year mark, it rebounded in January 2019 and is on track to match FY2018 full year
result.

“Despite holding its market share, our Wool business was materially impacted (circa $2.0 million) by several
factors during the first six months of FY2019; mainly the reduction in the number of bales sold compared with
the same period last year (a significant number of bales that had been stockpiled by growers were sold), wet
conditions delaying shearing and the export business was adversely affected by weaker global demand which
flowed through to soft international pricing for crossbred wools.”

“The Real Estate business again experienced a slow start to the spring and summer selling period overall, with
the horticultural and viticulture sectors proving to be the exception to this trend for the first half of FY2019.”

Seed and Grain

“As previously mentioned, the Seed and Grain business is now accounted for as a discontinued operation,
therefore its performance does not impact PGW’s Operating EBITDA. The Seed and Grain groups’
performance does impact net profit after tax, however. For the six months ending 31 December 2018 Seed
and Grain reported a loss of $8.6 million, compared with a profit of $2.7 million in the same period in FY2018.
This underperformance relates primarily to the South American operations, in particular the AgroCentro joint
venture, of which Seed and Grain acquired the remaining 50 percent during the period to now wholly own the
business. Conditions in the agricultural sector in Uruguay remain challenging given the continuing effects of
the droughts and floods experienced in the region, combined with lower commodity prices.”

“For PGW shareholders it is important to note that once the sale of the Seed and Grain business completes
the risks and rewards of this business will have passed to the purchaser effectively from 1 July 2018.”

Outlook

“Looking ahead at market conditions for the remainder of FY2019 and beyond the signals are somewhat
mixed.”

“Given the weather-affected spring we’ve had, there should be some pent-up demand for agricultural inputs to
come through this coming autumn and spring. Milk, beef and particularly lamb prices are strong versus long-
term averages, suggesting that farm profitability should remain robust. Horticulture continues to go from
strength to strength – for example in December the Ministry for Primary Industries expected horticulture to be
the fastest-growing export sector, increasing revenues 12 percent for the FY2019 year.”

“There are several counterpoints to these positive signals. Farmer confidence surveys in New Zealand
continue to reflect a degree of pessimism. Much of the country has been drier than usual for this time of year
– particularly Taranaki and Tasman. Mycoplasma bovis remains a risk factor for the beef and dairy sectors,
and abroad both Brexit and US-China trade relations have the potential to disrupt New Zealand’s exports and
therefore farmer returns.”

“On balance we are cautious for the remainder of the year. Weather and commodity prices will continue to be
risk factors for the business, particularly during the months of May and June, which are important contributors
to the earnings of our Livestock business.”

“With that in mind, we expect full year Operating EBITDA for FY2019 will be similar to FY2017, in the range of
$25 to $30 million,” said Mr Glasson.

Seed and Grain transaction update

The sale of Seed and Grain to DLF Seeds A/S is now only conditional upon Overseas Investment Office
approval and the completion of regulatory filings in Uruguay.

The agreed headline price of $434 million (including net debt of $21 million) will result in a purchase price of
$413 million for the Seed and Grain business. After sales proceeds are received on settlement and debt
repaid, PGW would be expected to have a cash surplus of circa $210 million (subject to transaction completion
timing, working capital requirements that can fluctuate materially through the annual cycle and other
transaction wash-up items).

Further guidance on the non-taxable capital distribution to shareholders will be provided after the remaining
conditions are confirmed. Factors impacting the capital return include; the ultimate cash surplus, desired
ongoing PGW debt profile, capital / cashflow requirements and alternative uses of funds to support growth etc.

Mr Glasson concluded, “We will continue to keep the market updated as the financial year progresses and as
matters develop in relation to the sale of the Seed and Grain business.”


Ends


For all media enquiries please contact
Linda Chalmers
Group Communications and Brand Manager
PGG Wrightson Ltd
Mobile: +64 27 405 3241




*All references to PGG Wrightson Limited or the Group refer to the Company, its subsidiaries and interests in associates and jointly
controlled entities.

**Operating EBITDA: Earnings before net interest and finance costs, income tax, depreciation, amortisation, the results from
discontinued operations, fair value adjustments and non-operating items.

***Rural Services business incorporates Agency and Retail and Water operating groups, and Other (corporate services).

PGW has used non-GAAP profit measures when discussing financial performance in this document. For a comprehensive discussion
on the use of non-GAAP profit measures, please refer to the policy “Non-GAAP Accounting Information” available at
www.pggwrightson.co.nz

---

•The sale of PGG Wrightson Seeds Holdings Ltd (Seed and Grain) to DLF Seeds A/S is
considered to be highly probable.
•Accordingly, Seed and Grain is disclosed as a discontinued operation with its assets and
liabilities recorded separately as held for sale. The comparative periods profit or loss also
includes Seed and Grain as a discontinued operation.
•The risks and rewards of the Seeds and Grain business are effectively treated as having passed
to the purchaser, DLF Seeds A/S, from 1 July 2018.
Financial reporting changes
2

•Half year Operating EDITDA for Rural Services of $17.8 million (compared to the record $23.4
million in FY2018) impacted by a wet season and a claim event.
•The factors impacting performance have been felt across the rural sector and PGW has
confidence that we have held, and in some cases grown, our market share.
•Following settlement of the Seed and Grain transaction we would expect to report a capital gain
on sale in excess of $120 million which will flow through to net profit after tax.
*Rural Services incorporates Agency operating group, Retail and Water operating group, along with
Other (supporting corporate services).
Rural Services*
3

Rural Services Half year result
Operating EBITDA (three year summary)
HY 2017
($ million)
HY 2018
($ million)
HY 2019
($ million)
Retail and Water18.923.6
23.0
1
Agency2.04.6
1.6
2
Other-3.6-4.8-6.8 3
Rural Services17.323.417.8
1. A $1.8 million one-off claim event cost which was not recoverable.
2. Negatively impacted by Wool and Real Estate trading, and a first half timing delay for our Livestock business.
3. Increase due to strategic review costs and timing of inter-company eliminations.
4

•Seed and Grain is now accounted for as a discontinued operation, which does not impact
Operating EBITDA but does impact NPAT.
•For the six months ending 31 December 2019 Seed and Grain posted a net loss after tax of $8.6
million compared with a net profit after tax of $2.7 million for the same period in FY2018.
•This under performance relates primarily to the South American operations, in particular the
AgroCentro joint venture (of which Seed and Grain acquired the remaining 50 percent during this
period). Conditions in the agricultural sector in Uruguay remain challenging given the continuing
effects of the droughts and floods experienced in the region, combined with lower commodity
prices.
Seed and Grain
5

•An interim dividend of 0.75 cents per share has been declared.
•Dividend to be fully imputed.
•To be paid on 5 April 2019 to shareholders on the share register on 15 March 2019.
•Dividend declaration is based on the performance of the Rural Services businesses.
Interim dividend
6

•On balance PGW remains cautious for the remainder of the financial year
•Full year Operating EBITDA for FY2019 to be similar to FY2017, in the range of $25 to $30
million
•Final full year NPAT to be driven by gain on sale of Seed and Grain
Outlook for FY2019 (full year to 30 June 2019)
7

•The sale of Seeds and Grain to DLF Seeds A/S is now only conditional upon Overseas Investment
Office approval and the completion of regulatory filings in Uruguay.
•The agreed headline price of $434 million (including net debt of $21 million) for the Seed and Grain
business results in a purchase price of $413 million.
•After sales proceeds are received on settlement and debt repaid, PGW would be expected to have
a cash surplus of circa $210 million (subject to transaction completion timing, working capital
requirements that can fluctuate materially through the annual cycle and other transaction wash-up
items).
•Further guidance on the non-taxable capital distribution to shareholders will be provided after the
remaining conditions are confirmed. Factors impacting the capital return include; the ultimate cash
surplus, desired ongoing PGW debt profile, capital / cashflow requirements and alternative uses of
funds to support growth etc.
.
Seed and Grain transaction status update
8

---

The team at Peak Hill Station and PGW Livestock
agents prepare for its annual onfarm lamb sale in
January 2019 in the Rakaia Gorge.
The financial statements contained on
pages 2 – 23 have been approved by the
Board of Directors on 26 February 2019.
Trevor Burt
Deputy Chair
Bruce Irvine
Director and Audit
Committee Chair
Key Financial Disclosures
For the six months ended 31 December 2018

2 | PGG WRIGHTSON LIMITED
KEY FINANCIAL DISCLOSURES
UNAUDITED AUDITED UNAUDITED
D
EC 2018
J
UN 2018
D
EC 2017
NOTE $000 $000 $000
Continuing operations
Operating revenue 473,765 811,055 468,161
C
ost of sales (355,226) (590,960) (353,003)
Gross profit 118,539 220,095 115,158


Other income/(expense) (8) 221 4
Emplo
yee benefits expense
(63,812)

(117,935)

(57,559)
R
esearch and development (17) (97) (22)
Other operating expenses (36,863) (67,697) (34,202)
E
quity accounted earnings of investees
-

(21)

(19)
(100,700) (185,529) (91,798)
Operating EBITDA
17,839

34,566

23,360


Non-
operating items
(1,005)

136

1,041
Holida
ys Act 2003 remediation costs
2,478

(7,160)

-
F
air value adjustments
1

22

(1,086)

(18)
D
epreciation and amortisation expense
(4,205)

(6,918)

(3,204)
EBIT

15,129

19,538

21,179
Net int
erest and finance costs
2

(3,186)

(6,901)

(3,866)
P
rofit from continuing operations before income taxes
11,943

12,637

17,313
I
ncome tax expense
(2,920)

(3,582)

(5,374)
P
rofit from continuing operations
9,023

9,055

11,939


D
iscontinued operations
Profit/(loss) from discontinued operations (net of income taxes)

3

(8,703)

9,832

2,701
Net pr
ofit after tax
320

18,887

14,640
P
rofit attributable to:
Shareholders of the Company

140

17,964

14,488
Non-
controlling interest
180

923

152
Net pr
ofit after tax
320

18,887

14,640
Earnings per shar
e
Basic earnings per share (New Zealand Dollars)
4

0.000

0.025

0.019
C
ontinuing operations
Basic earnings per share (New Zealand Dollars)

4

0.012

0.012

0.016
T
he accompanying notes form an integral part of these financial statements.
PGG WRIGHTSON LIMITED
INTERIM STATEMENT OF PROFIT OR LOSS
For the six months ended 31 December 2018

HALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 3
PGG WRIGHTSON LIMITED
INTERIM STATEMENT OF OTHER COMPREHENSIVE INCOME
For the six months ended 31 December 2018
UNAUDITED AUDITED UNAUDITED
D
EC 2018
J
UN 2018
D
EC 2017
$000 $000 $000
Net profit after tax 320 18,887 14,640
Other comprehensive income/(loss) for the period
Items that will never be reclassified to profit or loss
Remeasurements of defined benefit liability (3,399) 2,746 1,992
D
eferred tax on remeasurements and change of defined benefit liability
803

(961)

(550)
(2,596) 1,785 1,442
I
tems that are or may be reclassified to profit or loss
Foreign currency translation differences for foreign operations (1,290) 6,408 3,885
(1,290) 6,408 3,885
O
ther comprehensive income/(loss) for the period, net of income tax
(3,886)

8,193

5,327
T
otal comprehensive income for the period (3,566) 27,080 19,967
Total comprehensive income/(loss) attributable to:
Shar
eholders of the Company
(3,875)

26,307

19,818
Non-
controlling interest
309

773

149
T
otal comprehensive income for the period
(3,566)

27,080

19,967
T
he accompanying notes form an integral part of these financial statements.

4 | PGG WRIGHTSON LIMITEDHALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 5
KEY FINANCIAL DISCLOSURES
(a) Operating Segments
Following the reclassification of Seed and Grain to discontinued operations, the Group has two primary operating segments: Agency and Retail
and Water which are the Group’s strategic divisions.
Agency and Retail and Water operate within New Zealand.
The two operating segments offer different products and services, and are managed separately because they require different skills, technology
and marketing strategies. There is also a Group General Manager for each segment. Within each segment, further business unit analysis may
be provided to management where there are significant differences in the nature of activities. The Chief Executive Officer or Chair of the Board
reviews internal management reports on each strategic business unit on at least a monthly basis.
–
Agency. Includes rural Livestock trading activities, Wool, Insurance, Real Estate and Finance Commission.
–
Retail
and Water. Includes the Rural Supplies and Fruitfed retail operations, PGG Wrightson Water, PGW Consulting, Agritrade and ancillary
sales support, supply chain and marketing functions.
–
O
ther. Other non-segmented amounts relate to certain Group Corporate activities including Finance, Treasury, HR and other support services
including corporate property services and include consolidation/elimination adjustments.
–

D
iscontinued operations. The discontinued operations pertain to PGG Wrightson Seeds Holdings Limited together with its subsidiaries
and investments in jointly controlled entities (formerly the Seed and Grain segment), and PGW Rural Capital Limited. Seed and Grain includes
Australasia Seed (New Zealand and Australian manufacturing and distribution of forage seed and turf, sale of cereal seed and grain trading,
international trading and seed production), South America (various related activities in the developing seeds markets including the sale of
pasture and crop seed and farm inputs, together with operations in the areas of livestock, real estate and irrigation), and other Seed and Grain
(research and development and corporate seeds).
PGG WRIGHTSON LIMITED
INTERIM SEGMENT REPORT
For the six months ended / as at 31 December 2018
Assets allocated to each business unit combine to form total assets for the Agency and Retail and Water business segments. Certain other
assets are held at a Corporate level including those for the Corporate functions noted above.
The profit/(loss) for each business unit combines to form total profit/(loss) of the Agency and Retail and Water segments. Certain other
revenues and expenses are held at the Corporate level for the Corporate functions noted above.
Other cost allocation
The Group has adopted an allocation methodology which allocates certain corporate costs where they can be directly attributed to the
operating segment or attributed based on the use of the following methods:
–

IT har
dware, support, licence and other costs attributed on a per user basis.
–
P
roperty costs allocated, where not directly attributable, on a property space utilisation basis.
– Business operations costs (Accounts Payable, Accounts Receivable, Credit Services, Call Centre) allocated based on FTE usage by each
operating segment, transactional volumes or for Credit Services allocated based on the operating segment to which overdue accounts
relate to.
Other costs including non-operating items, fair value adjustments, net interest and finance costs, income tax expense as well as the reporting
of discontinued operations are not fully allocated by the Group. Accordingly, these items have not been fully allocated across the operating
segments. The Group Finance, Risk and Assurance, Treasury, HR, Credit and the Executive Team functions continue to be reported outside of
the operating segments.
(b) Operating Segment Information
AGENCY RETAIL AND WATER OTHER DISCONTINUED OPERATIONS TOTAL
UNA
UDITED
A
UDITED
UNA
UDITED
UNA
UDITED
A
UDITED

UNAUDITED
UNA
UDITED
A
UDITED

UNAUDITED

UNAUDITED
A
UDITED

UNAUDITED

UNAUDITED
A
UDITED

UNAUDITED
DEC 2018 JUN 2018 DEC 2017 DEC 2018 JUN 2018 DEC 2017 DEC 2018 JUN 2018 DEC 2017 DEC 2018 JUN 2018 DEC 2017 DEC 2018 JUN 2018 DEC 2017
$000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000
Total external operating revenues 85,767 200,574 84,304 385,866 606,176 381,732 2,132 4,305 2,125 – – – 473,765 811,055 468,161
Operating EBITDA 1,614 20,112 4,633 22,970 23,810 23,621 (6,745) (9,356) (4,894) – – – 17,839 34,566 23,360
Non–
operating items
(10)

688

350

151

590

600

(1,146)

(1,142)

92

–

–

–

(1,005)

136

1,041
Holida
ys Act 2003 remediation costs
752

(2,441)

–

1,724

(3,422)

–

2

(1,297)

–

–

–

–

2,478

(7,160)

–
F
air value adjustments 22 (1,087) (18) – – – – 1 – – – – 22 (1,086) (18)
D
epreciation and amortisation expense
(715)

(1,086)

(513)

(1,793)

(3,097)

(1,445)

(1,697)

(2,735)

(1,246)

–

–

–

(4,205)

(6,918)

(3,204)
EBIT

1,663

16,186

4,452

23,052

17,881

22,776

(9,586)

(14,529)

(6,048)

–

–

–

15,129

19,538

21,179
Net int
erest and finance costs
1,145

(1,388)

(1,370)

(321)

385

291

(4,010)

(5,898)

(2,787)

–

–

–

(3,186)

(6,901)

(3,866)
P
rofit/(loss) from continuing operations before income taxes
2,808

14,798

3,082

22,731

18,266

23,067

(13,596)

(20,427)

(8,834)

–

–

–

11,943

12,637

17,314
I
ncome tax (expense)/income
(559)

(4,366)

(584)

(6,003)

(4,680)

(6,354)

3,642

5,464

1,565

–

–

–

(2,920)

(3,582)

(5,373)
P
rofit/(loss) from continuing operations
2,249

10,432

2,498

16,728

13,586

16,712

(9,954)

(14,963)

(7,271)

–

–

–


9,023
9,055

11,939
P
rofit/(loss) from discontinued operations (net of income taxes)
–

–

–

–

–

–

–

–

–

(8,703)

9,832

2,701

(8,703)

9,832

2,701
Net pr
ofit/(loss) after tax
2,249

10,432

2,498

16,728

13,586

16,712

(9,954)

(14,963)

(7,271)

(8,703)

9,832

2,701

320

18,887

14,640
S
egment assets
144,546

161,378

142,539

314,375

149,107

275,372

22,207

16,599

39,429

1,209

414,603

361,062

482,337

741,687

818,402
Investment in equity accounted investees – – – – – – 59 59 62 – 14,264 24,234 59 14,323 24,296
A
ssets held for sale – – – 218 218 218 2,290 2,398 2,398 446,451 – – 448,959 2,616 2,616
Total segment assets
144,546

161,378

142,539

314,593

149,325

275,590

24,556

19,056

41,890

447,660

428,867

385,296

931,355

758,626

845,314
S
egment liabilities
(49,367)

(87,182)

(39,283)

(194,439)

(82,109)

(171,920)

(223,917)

(137,427)

(168,128)

–

(164,446)

(171,849)


(467,723)
(471,164)

(551,180)
Liabilities held f
or sale
–

–

–

–

–

–

–

–

–

(189,562)

–

–

(189,562)

–

–
T
otal segment liabilities
(49,367)

(87,182)

(39,283)

(194,439)

(82,109)

(171,920)

(223,917)

(137,427)

(168,128)

(189,562)

(164,446)

(171,849)

(657,285)

(471,164)

(551,180)
T
he accompanying notes form an integral part of these financial statements.

6 | PGG WRIGHTSON LIMITEDHALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 7
KEY FINANCIAL DISCLOSURES
PGG WRIGHTSON LIMITED
INTERIM STATEMENT OF CASH FLOWS
For the six months ended 31 December 2018
UNAUDITED AUDITED UNAUDITED
D
EC 2018
J
UN 2018
D
EC 2017
NOTE $000 $000 $000
Cash flows from operating activities
Cash was provided from:
Receipts from customers
644,442 1,214,939 543,007
Dividends received
2

3

2
I
nterest received 2,525 5,225 2,403
646,969

1,220,167

545,412
C
ash was applied to:
Payments to suppliers and employees

(686,660)

(1,190,563)

(582,712)
C
ontributions to defined benefit plans (ESCT inclusive) (1,481) (2,842) (1,340)
Interest paid
(4,894)

(8,550)

(4,049)
I
ncome tax paid (12,535) (12,446) (7,090)
(705,570)

(1,214,401)

(595,191)
Net c
ash inflow/(outflow) from operating activities
(58,601)

5,766

(49,779)
C
ash flows from investing activities
Cash was provided from:
P
roceeds from sale of property, plant and equipment and assets held for sale
612

3,407

2,426
C
ash acquired on purchase of investment
1,523

–

–
Net pr
oceeds from sale of investments
–

111

111
2,135 3,518 2,537
Cash was applied to:
Purchase of property, plant and equipment
(5,446)

(15,183)

(5,268)
P
urchase of intangibles
(1,964)

(7,974)

(3,940)
Net cash paid f
or purchase of investments – (1,215) (1,056)
(7,410)

(24,372)

(10,264)
Net c
ash flow from investing activities
(5,275)

(20,854)

(7,727)
Cash flows from financing activities
Cash was provided from:
Increase in external borrowings and bank overdraft
83,857

42,499

84,298
R
epayment of loans from related parties
–

3,441

3,596
83,857

45,940

87,894
C
ash was applied to:
Dividends paid to shareholders
(9,688)

(28,570)

(15,234)
Dividends paid t
o minority interests
(138)

(759)

(310)
(9,826)

(29,329)

(15,544)
Net c
ash flow from financing activities 74,031 16,611 72,350
Net incr
ease in cash held
10,155

1,523

14,844
Opening cash

10,926

9,403

9,403
C
ash and cash equivalents
5

21,081

10,926

24,247
C
ash and cash equivalents attributable to continuing operations
5

3,884

10,926

24,247
C
ash and cash equivalents attributable to assets held for sale
6

17,197

–

–


21,081

10,926

24,247
T
he accompanying notes form an integral part of these financial statements.

6 | PGG WRIGHTSON LIMITEDHALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 7
PGG WRIGHTSON LIMITED
RECONCILIATION OF PROFIT AFTER TAX
WITH NET CASH FLOW FROM OPERATING ACTIVITIES
For the six months ended 31 December 2018
UNAUDITED AUDITED UNAUDITED
D
EC 2018
J
UN 2018
D
EC 2017
$000 $000 $000
Profit after taxation 320 18,887 14,640
Add/(deduct) non-cash/non operating items:
Depreciation, amortisation and impairment
7,786 12,974 6,115
Fair value adjustments 2,028 3,877 106
Net (pr
ofit)/loss on sale of assets/investments
(282)

(1,746)

(1,327)
Bad debts wr
itten off (net) 925 429 561
Change in def
erred taxation
(5,714)

(1,114)

(3,834)
Ear
nings of equity accounted investees 6,243 1,885 312
Discontinued operations – (492) 3
E
ffect of foreign exchange movements
(2,389)

3,618

(98)
P
ension contributions (operating cash) not expensed through profit and loss (1,481) (2,842) (1,340)
Other non-cash/non-operating items
(2,002)

(1,857)

117
5,434

33,619

15,255
A
dd/(deduct) movement in working capital items:
Change in working capital due to sale/purchase of businesses
5,741

(2,683)

(2,683)
Change in inventories and biological assets (25,998) (7,374) 10,634
Change in accounts receivable and prepayments
(116,337)

(45,081)

(132,215)
Change in trade cr
editors, provisions and accruals
86,293

19,360

53,479
Change in income tax pa
yable/receivable
(10,939)

3,326

4,357
Change in other current assets/liabilities (2,795) 4,599 1,394
(64,035) (27,853) (65,034)
Net cash flow from operating activities (58,601) 5,766 (49,779)
The accompanying notes form an integral part of these financial statements.

KEY FINANCIAL DISCLOSURES
8 | PGG WRIGHTSON LIMITED
PGG WRIGHTSON LIMITED
INTERIM STATEMENT OF FINANCIAL POSITION
As at 31 December 2018
UNAUDITED AUDITED UNAUDITED
DEC 2018 JUN 2018 DEC 2017
NOTE $000 $000 $000
ASSETS
Current
Cash and cash equivalents 5 3,884 10,926 24,247
Short–term derivative assets
464

827

1,501
T
rade and other receivables 256,118 267,627 365,924
Go livestock receivables
30,958

39,419

28,683
F
inance receivables – 733 –
Income tax receivable
4,139

–

–
A
ssets classified as held for sale
6

448,959

2,615

2,616
Biolog
ical assets
264

911

1,897
I
nventories 114,313 262,538 242,677
Other investments
7

30

30

30
I
ntangible assets
1,637

2,641

–
T
otal current assets
860,766

588,267

667,575
Non–current
Long–term derivative assets 400 20 122
Biological assets
31

–

78
D
eferred tax asset 11,566 16,259 18,979
Investments in equity accounted investees
59

14,323

24,296
O
ther investments 7 465 2,520 2,140
I
ntangible assets
12,545

13,017

11,162
P
roperty, plant and equipment
8

45,523

124,220

120,962
T
otal non–current assets
70,589

170,359

177,739
T
otal assets
931,355

758,626

845,314

LIABILITIES
C
urrent
D
ebt due within one year
5

79,635

30,806

91,215
Shor
t–term derivative liabilities 476 3,645 2,724
Accounts payable and accruals
244,385

267,096

301,837
I
ncome tax payable
–

6,751

8,115
Liabilities classified as held for sale
6

189,562

–

–
D
efined benefit liability
10

969

905

1,046
T
otal current liabilities 515,027 309,203 404,937
Non–current
Long–term debt 5 130,000 149,205 130,634
L
ong–term derivative liabilities
492

966

824
O
ther long–term liabilities
200

2,121

3,107
D
efined benefit liability 10 11,566 9,669 11,678
Total non–current liabilities 142,258 161,961 146,243
Total liabilities
657,285

471,164

551,180
EQUITY
Shar
e capital
606,324

606,324

606,324
R
eserves 5,162 8,647 4,980
Retained earnings
(340,065)

(329,987)

(319,473)
T
otal equity attributable to shareholders of the Company
271,421

284,984

291,831
Non–
controlling interest
2,649

2,478

2,303
T
otal equity
274,070

287,462

294,134
T
otal liabilities and equity
931,355

758,626

845,314
T
he accompanying notes form an integral part of these financial statements.

HALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 9
Additional Financial Disclosures
including Notes to the Financial Statements for the
six months ended 31 December 2018

10 | PGG WRIGHTSON LIMITEDHALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 11
ADDITIONAL FINANCIAL DISCLOSURES
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the six months ended 31 December 2018
1 FAIR VALUE ADJUSTMENTS
UNAUDITED AUDITED UNAUDITED
DEC 2018 JUN 2018 DEC 2017
$000 $000 $000
Property, plant and equipment impairment – (1,070) –
Biological assets 22 (16) (18)
22 (1,086) (18)
2 NET INTEREST AND FINANCE COSTS
UNAUDITED AUDITED UNAUDITED
DEC 2018 JUN 2018 DEC 2017

$000 $000
$000
Finance income contains the following items:
Other interest income 42 214 177
Finance income 42 214 177
I
nterest funding contains the following items:
Interest on loans and overdrafts
(2,827)

(4,257)

(1,778)
Net int
erest on interest rate derivatives
(182)

(533)

(338)
F
air value change on interest rate derivatives 59 (42) (75)
Effective interest on expected defined benefit pension ESCT payments (166) (401) (208)
Other interest expense (61) 369 (16)
Bank facilit
y fees
(975)

(1,215)

(373)
In
terest funding expense
(4,152)

(6,079)

(2,788)
F
oreign exchange contains the following items:
Net gain/(loss) on foreign denominated items (23) 12 (327)
F
air value change on foreign exchange derivatives
947

(1,048)

(928)
Foreign exchange income/(expense) 924 (1,036) (1,255)
Net in
terest and finance costs
(3,186)

(6,901)

(3,866)
3 DISCONTINUED OPERATIONS
Seed and Grain segment
In August 2018, the Group announced that it had signed a sale and purchase agreement for the sale of its subsidiary, PGG Wrightson Seeds
Holdings Limited (PGW Seeds). The agreement represents the sale of the Group’s Seed and Grain segment. The sale price was approximately
$413 million subject to various adjustments until settlement. The sale is conditional on various approvals including:
–
Ne
w Zealand Overseas Investment Act approval
–
New Zealand Commerce Commission clearance, Australian Competition and Consumer Commission approval and receipt of applicable
regulatory approvals in South America
–
Change of contr
ol consents from several of PGW Seeds’ joint venture partners

10 | PGG WRIGHTSON LIMITEDHALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 11
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the six months ended 31 December 2018
3 DISCONTINUED OPERATIONS (CONTINUED)
As at 31 December 2018 and based on progress of the approvals, management is of the view that the sale is considered highly probable, with the
sale expected to be settled before 30 June 2019. The Group has therefore reclassified the Seed and Grain segment as a disposal group and treated
its assets and liabilities as held for sale as at 31 December 2018 (refer to Note 6).
The Group has also reclassified the Seed and Grain segment as a discontinued operation. The statement of profit or loss for the current and
comparative periods have been restated to show the Seed and Grain segment within discontinued operations, disclosed separately from
continuing operations.
PGW Rural Capital Limited (PGWRC)
The discontinued operations also pertain to the Group’s wholly owned subsidiary PGWRC which was established during 2012 to hold and recover
certain excluded loans related to the sale of the Group’s finance subsidiary, PGG Wrightson Finance Limited.
Results from discontinued operations were as follows:
SEED AND GRAIN PGWRC TOTAL
UNAUDITED AUDITED UNAUDITED UNAUDITED AUDITED UNAUDITED UNAUDITED AUDITED UNAUDITED
DEC 2018 JUN 2018 DEC 2017 DEC 2018 JUN 2018 DEC 2017 DEC 2018 JUN 2018 DEC 2017
$000 $000 $000 $000 $000 $000 $000 $000 $000
Results of discontinued operations
Total segment revenue 233,052 449,495 208,790 – 1 – 233,052 449,496 208,790
Intersegment revenue (44,045) (63,532) (46,954) – – – (44,045) (63,532) (46,954)
T
otal external operating revenue
189,007

385,963

161,836

–

1

–

189,007

385,964

161,836
T
otal external cost of sales (127,488) (256,369) (104,237) – – – (127,488) (256,369) (104,237)
Gross profit 61,519 129,594 57,599 – 1 – 61,519 129,595 57,599
O
ther operating expenses
(54,068)

(92,123)

(47,117)

(110)

690

4

(54,178)

(91,433)

(47,113)
E
quity accounted earnings of investees (6,242) (1,864) 331 (6,242) (1,864) 331
O
perating EBITDA
1,209

35,607

10,813

(110)

691

4

1,099

36,298

10,817
Non–
operating items
(612)

(217)

253

–

–

–

(612)

(217)

253
Holida
ys Act 2003 remediation costs 323 (1,066) – – – – 323 (1,066) –
Fair value adjustments (2,050) (2,790) (88) – – – (2,050) (2,790) (88)
D
epreciation and amortisation expense
(3,581)

(6,056)

(2,912)

–

–

–

(3,581)

(6,056)

(2,912)
EBIT
(4,711) 25,478 8,066 (110) 691 4 (4,821) 26,169 8,070
Net interest and finance costs
(2,191)

(7,261)

(4,131)

–

–

–

(2,191)

(7,261)

(4,131)
Profit/(loss) from discontinued
activities before tax
(6,902)

18,217

3,935

(110)

691

4

(7,012)

18,908

3,939
Income tax expense (1,722) (8,878) (1,231) 31 (199) (7) (1,691) (9,077) (1,238)
P
rofit/(loss) from discontinued
activities, net of tax

(8,624)

9,339

2,704

(79)

492

(3)

(8,703)

9,831

2,701
Basic and diluted earnings per share
(New Zealand dollars)
(0.011)

0.012

0.004

(0.000)

0.001

(0.000)

(0.012)

0.013

0.004
C
ash flows from discontinued operations
Net cash from operating activities

4,203

(29,465)

(8,887)
Net cash fr
om investing activities
(2,334)

(9,181)

(3,528)
Net cash fr
om financing activities
7,064

38,866

15,860
Net c
ash from/(used in) discontinued operations
8,933

220

3,445

12 | PGG WRIGHTSON LIMITEDHALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 13
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the six months ended 31 December 2018
ADDITIONAL FINANCIAL DISCLOSURES
4 EARNINGS PER SHARE AND NET TANGIBLE ASSETS
UNAUDITED AUDITED UNAUDITED
DEC 2018 JUN 2018 DEC 2017
000 000 000
Number of shares
Weighted average number of ordinary shares 754,849 754,849 754,849
Number of or
dinary shares 754,849 754,849 754,849
UNAUDITED AUDITED UNAUDITED
DEC 2018 JUN 2018 DEC 2017
$000 $000 $000
Net Tangible Assets
Total assets 931,355 758,626 845,314
T
otal liabilities (657,285) (471,164) (551,180)
less intang
ible assets (27,886) (13,017) (11,162)
less deferred tax (22,775) (16,259) (18,979)
223,409 258,186 263,993
UNAUDITED AUDITED UNAUDITED
DEC 2018 JUN 2018 DEC 2017
$ $ $
Net tangible assets per share 0.296 0.342 0.350
Earnings per share 0.000 0.025 0.019

12 | PGG WRIGHTSON LIMITEDHALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 13
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the six months ended 31 December 2018
5 CASH AND FINANCING FACILITIES
UNAUDITED AUDITED UNAUDITED
DEC 2018 JUN 2018 DEC 2017
$000 $000 $000
Cash and cash equivalents 3,884 10,926 24,247
Current financing facilities (79,635) (30,806) (91,215)
T
erm financing facilities (130,000) (149,205) (130,634)
Net interest bearing debt (205,751) (169,085) (197,602)
Go range of liv
estock product receivables
30,958

39,419

28,683
Net in
terest–bearing debt less Go livestock receivables
(174,793)

(129,666)

(168,919)
Ne
w Zealand facilities
The Company has a syndicated facility agreement which provides bank facilities of $210.00 million. The agreement contains various financial
covenants and restrictions that are standard for facilities of this nature, including maximum permissible ratios for debt leverage and operating
leverage. The Company has granted a general security deed and mortgage over all its wholly–owned New Zealand and Australian assets to a
security trust. These assets include the shares held in South American subsidiaries and equity accounted investees. ANZ Bank New Zealand
Limited acts as security trustee for the banking syndicate (ANZ Bank New Zealand Limited, Bank of China (New Zealand) Limited, Bank of New
Zealand, MUFG Bank Ltd and Westpac New Zealand Limited).
The Company’s bank syndicate facilities include:
–

T
erm debt facilities of $150.00 million maturing on 31 July 2020
– A working capital facility of up to $60.00 million maturing on 31 July 2020
T
he syndicated facility agreement also allows the Group, subject to certain conditions, to enter into additional facilities outside of the Company
syndicated facility. The additional facilities are guaranteed by the security trust. Excluding the finance facilities of the Seed and Grain segment
classified as held for sale, these facilities amounted to $45.18 million as at 31 December 2018 providing:
– Overdraft facilities of $8.50 million
–

A r
evolving credit facility of $30.00 million
– Guarantee and trade finance facilities of $6.68 million
T
he syndicated facilities fund the general corporate activities of the Group, the seasonal fluctuations in working capital, and the Go range of
livestock product receivables.
The Company intends to repay and cancel the syndicated facilities using the sale proceeds of approximately $413.00 million (refer to Note 3) from
the conditional sale of the Seed and Grain segment. Settlement is expected by 30 June 2019.

14 | PGG WRIGHTSON LIMITEDHALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 15
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the six months ended 31 December 2018
ADDITIONAL FINANCIAL DISCLOSURES
6 ASSETS AND LIABILITIES HELD FOR SALE
Properties
The Group currently has four properties classified as held for sale. These properties are on the market and are valued at the lower of their carrying
amount and fair value less costs to sell. The total value of the relevant properties is $2.51 million (30 June 2018: $2.62 million, 31 December 2017:
$2.62 million).
Seed and Grain segment
In August 2018, the Group announced that it had signed a sale and purchase agreement for the sale of its subsidiary, PGG Wrightson Seeds
Holdings Limited (PGW Seeds). The agreement represents the sale of the Group’s Seed and Grain segment (refer to Note 3). Accordingly, the assets
and liabilities of that segment are presented as a disposal group held for sale.
UNAUDITED AUDITED UNAUDITED
DEC 2018 JUN 2018 DEC 2017

$000 $000
$000
Assets classified as held for sale
Properties 2,508 2,616 2,616
2,508 2,616 2,616
S
eed and Grain segment
Cash and cash equivalents
17,197

–

–
D
erivatives 1,731 – –
Trade and other receivables 135,383 – –
Biological assets 7,784 – –
I
nventories
167,374

–

–
Investments 4,509 – –
I
ntangibles
13,704

–

–
P
roperty, plant and equipment 87,043 – –
Other assets 11,726 – –
446,451 – –
Total assets classified as held for sale 448,959 2,616 2,616
Liabilities classified as held f
or sale
Seed and Grain segment
Debt

(68,956)

–

–
D
erivatives
(1,571)

–

–
A
ccounts payable and accruals
(109,187)

–

–
O
ther liabilities
(9,848)

–

–
(189,562)

–

–
T
otal liabilities classified as held for sale
(189,562)

–

–

14 | PGG WRIGHTSON LIMITEDHALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 15
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the six months ended 31 December 2018
6 ASSETS AND LIABILITIES HELD FOR SALE (CONTINUED)
Acquisition of Agimol Corporation S.A. (AgroCentro Uruguay Group)
Included within the assets and liabilities of the Seed and Grain segment above are all assets and liabilities pertaining to Agimol Corporation S.A.
(AgroCentro Uruguay Group).
On 31 August 2018, the Group increased its investment in the AgroCentro Uruguay Group from 50% to 100% and obtained control of the
AgroCentro Uruguay Group. The Group previously equity accounted its investment in the AgroCentro Uruguay Group. As a result of obtaining
control of the company from 31 August 2018, the Group has consolidated the AgroCentro Uruguay Group.
Following an impairment of $6.00 million (USD 3.64 million) the fair value of the Group’s pre–existing equity accounted interest in the AgroCentro
Uruguay Group was $5.83 million (USD 3.95 million). This fair value was supported by the value attributed to the AgroCentro Uruguay Group as
part of the conditional sale of PGG Wrightson Seeds Holdings Limited. Consideration provided for the remaining 50% of the investment amounted
to $1.25 million (USD 0.85 million).
Upon consolidation, the Group recorded goodwill of $13.74 million (USD 9.27 million), representing the difference between the fair value of
the net liability acquired of $6.66 million (USD 4.47 million), the pre–existing equity interest held of $5.83 million (USD 3.95 million) and the
consideration provided of $1.25 million (USD 0.85 million). An impairment of $1.19 million (USD 0.85 million) was then recorded against the
goodwill to align the carrying value of the AgroCentro Uruguay Group to that supported by the conditional sale of PGG Wrightson Seeds Holdings
Limited of $5.83 million (USD 3.95 million). Goodwill of $12.55 million (USD 8.42 million) is included within the intangible assets held for sale above.
Financing facilities
The following financing facilities relate to the assets and liabilities classified as held for sale above:
South American facilities
Two of the Group’s wholly–owned Uruguayan subsidiaries (Wrightson Pas S.A. and Agrosan S.A.) are jointly and severally financed by a club
structure. The club facilities contain various financial covenants and restrictions that are standard for facilities of this nature. The club facilities
are denominated in USD, secured by a mortgage over the logistics centre in Uruguay and provide:
–

An amor
tising logistics centre facility of $11.18 million (USD 7.50 million) maturing on 17 September 2022
–
A committed facility of $17.89 million (USD 12.00 million) maturing on 29 June 2021
–

F
inance lease facilities of $0.17 million
Separate to the club facility, the Group’s South American operations have various financing facilities that amounted to $36.96 million (USD
24.80 million) as at 31 December 2018.
New Zealand and Australia facilities
The New Zealand and Australia facilities provide:
–
An o
verdraft facility of $1.05 million.
–

Guarant
ees of $15.91 million.
–

F
inance lease facilities of $2.76 million.

Other investments
During the period, the Group recorded an impairment of $1.57 million (USD 1.06 million) against the carrying value of its investments in the South
American entities Arauca Seeds Sociedad Anonima and Patagonia Seeds Sociedad Anonima. These investments are held within the Seed and Grain
segment and are included within the assets classified as held for sale above.

16 | PGG WRIGHTSON LIMITEDHALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 17
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the six months ended 31 December 2018
ADDITIONAL FINANCIAL DISCLOSURES
6 ASSETS AND LIABILITIES HELD FOR SALE (CONTINUED)
Property Plant and Equipment
Acquisitions and disposals
During the period to 31 December 2018, the disposal group acquired assets with a cost of $4.76 million, together with assets acquired through a
business combination of $9.25 million. These assets are included within the assets classified as held for sale above.
Assets with a net book value of $0.12 million were disposed of by the disposal group during the period to 31 December 2018, resulting in a gain
on disposal of $0.18 million.
Commitments
UNAUDITED AUDITED UNAUDITED
DEC 2018 JUN 2018 DEC 2017
$000 $000 $000
There are commitments with respect to:
Capital expenditure not provided for 2,092 2,463 2,631
Contributions to Primary Growth Partnership 517 277 572
2,609 2,740 3,203
P
rimary Growth Partnership – seed and nutritional technology development
The Group announced on 18 February 2013 that it had completed the contracting process for the Primary Growth Partnership (PGP)
programme with the Ministry of Primary Industries. The PGP programme is a Seed and Nutritional Technology Development Programme that
aims to deliver innovative forages for New Zealand farms. The programme, which was expected to end on 31 December 2018, has been varied
and extended to 31 December 2019 during the period.
The extension to the programme resulted in an increase of the total contribution commitments to the partnership from $3.61 million to $4.11
million. As at 31 December 2018, total contributions of $3.59 million (30 June 2018: $3.33 million, 31 December 2017: $3.04 million) have been
made to the programme.
Forward purchase commitments
The Seed and Grain segment, as part of its ordinary course of business, enters into forward purchase agreements with seed growers. These
commitments extend for periods of up to 3 years. These commitments are at varying stage of execution, therefore uncertainty exists with
respect to yield, quality and market price. The Group is unable to sufficiently quantify the value of these commitments.
Contingent liabilities
UNAUDITED AUDITED UNAUDITED
DEC 2018 JUN 2018 DEC 2017

$000 $000
$000
There are contingent liabilities with respect to:
Guarantees 15,910 3,693 3,487
15,910 3,693 3,487
The guarantees pertain to standby letters of credit issued by the Seed and Grain segment in respect of its New Zealand and South American
operations.

16 | PGG WRIGHTSON LIMITEDHALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 17
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the six months ended 31 December 2018
7 OTHER INVESTMENTS
UNAUDITED AUDITED UNAUDITED
DEC 2018 JUN 2018 DEC 2017
NOTE $000 $000 $000
Current investments
BioPacificVentures 11 30 30 30
30 30 30
Non–
current investments
Sundry investments including saleyards

465

2,370

2,140
A
dvances to equity accounted investees
–

150

–


465

2,520

2,140
Sundr
y investments including saleyards
Saleyard investments, which do not have a market price in an active market and whose fair value can not be reliably determined, are carried at
cost. The comparative period sundry investments include investments which have been reclassified to assets held for sale as at 31 December 2018
(refer to Note 6).
8 PROPERTY, PLANT AND EQUIPMENT
Acquisitions and disposals
During the period to 31 December 2018, the Group acquired assets with a cost of $7.25 million (30 June 2018: $15.18 million, 31 December 2017:
$4.64 million), together with assets acquired through business combinations of $nil (30 June 2018: nil, 31 December 2017: $0.66 million). Refer to
Note 6 for information on acquisitions and disposals of property, plant and equipment during the period to 31 December 2018 for the Seed and
Grain disposal group.
Assets with a net book value of $0.19 million were disposed during the period to 31 December 2018 (30 June 2018: $0.90 million, 31 December
2017: $0.02 million), resulting in a gain on disposal of $0.27 million (30 June 2018 Gain: $1.69 million, 31 December 2017 Gain: $1.48 million).
9 SEASONALITY OF OPERATIONS
The Group is subject to significant seasonal fluctuations. The Retail business is weighted towards the first half of the financial year as demand
for New Zealand farming inputs are generally weighted towards the Spring season. Livestock and the Australian and South American Seed and
Grain activities are significantly weighted to the second half of the financial year. Seed and Grain revenues reflect the fact the Group operates in
geographical zones that suit Autumn harvesting and sowing. New Zealand generally has spring calving and lambing and so Livestock trading is
weighted towards the second half of the financial year in order for farmers to maximise their income. Other business units have similar but less
material cycles. The Group recognises that this seasonality is the nature of the industry and plans and manages its business accordingly. The Seed
and Grain segment is presented as a discontinued operation and as assets held for sale as at 31 December 2018 (refer to Note 3).
10 DEFINED BENEFIT ASSET / LIABILITY
The Group made lump sum cash contributions of $1.48 million (gross including employer superannuation contribution tax) to the PGG Wrightson
Employee Benefits Plan during the period (30 June 2018: $2.84 million, 31 December 2017: $1.34 million).

18 | PGG WRIGHTSON LIMITEDHALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 19
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the six months ended 31 December 2018
ADDITIONAL FINANCIAL DISCLOSURES
11 COMMITMENTS
UNAUDITED AUDITED UNAUDITED
DEC 2018 JUN 2018 DEC 2017
NOTE $000 $000 $000
There are commitments with respect to:
Capital expenditure not provided for 45 – 650
I
nvestment in BioPacificVentures 7 51 51 51
96 51 701
Forward purchase commitments
The Group as part of its ordinary course of business enters into forward purchase agreements with wool growers. These commitments extend
for periods of up to 3 years. These commitments are at varying stages of execution, therefore uncertainty exists with respect to yield, quality and
market price. The Group is unable to sufficiently quantify the value of these commitments.
Refer to Note 6 for commitments in relation to the Seed and Grain segment.
12 CONTINGENT LIABILITIES
UNAUDITED AUDITED UNAUDITED
DEC 2018 JUN 2018 DEC 2017
$000 $000 $000
There are contingent liabilities with respect to:
PGG Wrightson Loyalty Reward Programme 92 102 100
92

102

100
Guarantees
Refer to Note 6 for contingent liabilities in relation to the Seed and Grain segment.
PGG Wrightson Loyalty Reward Programme
PGG Wrightson operates the Max Rewards loyalty programme. A provision is retained for the expected level of points redemption. A contingent
liability of $0.09 million represents the balance of unexpired points that do not form part of the provision (30 June 2018: $0.10 million,
31 December 2017: $0.10 million). Losses are not expected to arise from this contingent liability.
13 RELATED PARTIES
Parent and ultimate controlling party
The immediate parent of the Group is Agria (Singapore) Pte Limited and the ultimate controlling party of the Group is Agria Corporation.
Transactions with key management personnel
UNAUDITED AUDITED UNAUDITED
D
EC 2018
J
UN 2018
D
EC 2017
$000 $000 $000
Key management personnel compensation comprised:
Short–term employee benefits
3,761

6,079

5,018
P
ost–employment benefits 73 151 95
T
ermination benefits
–

–

–


3,834

6,230

5,113

18 | PGG WRIGHTSON LIMITEDHALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 19
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the six months ended 31 December 2018
14 EVENT SUBSEQUENT TO END OF INTERIM PERIOD
Dividend
On 26 February 2019 the Directors of PGG Wrightson Limited resolved to pay an interim dividend of 0.75 cents per share on 5 April 2019 to the
shareholders on the Company's share register as at 5.00pm on 15 March 2019. This dividend will be fully imputed.
Conditional sale of PGG Wrightson Seeds Holdings Limited
On 13 February 2019 the New Zealand Commerce Commission issued clearance for DLF Seeds A/S to acquire PGG Wrightson Seeds Holdings
Limited (PGW Seeds). On 14 February 2019 the Australian Competition and Consumer Commission (ACCC) released a statement noting that they
had decided that they will not oppose DLF Seeds A/S proposed acquisition of PGW Seeds. On 15 February 2019 DLF Seeds A/S confirmed that
counterparty consents required from research and development joint venture partners have been obtained.
The transaction for the sale of PGW Seeds now only remains conditional upon New Zealand Overseas Investment Office approval and the
completion of required regulatory filings in Uruguay.
15 REPORTING ENTITY
PGG Wrightson Limited (the “Company”) is a company domiciled in New Zealand, registered under the Companies Act 1993 and listed on the New
Zealand Stock Exchange. The Company is an FMC Entity in terms of the Financial Markets Conduct Act 2013.
The interim financial statements of PGG Wrightson Limited for the six months ended 31 December 2018 comprise the Company and its
subsidiaries (together referred to as the “Group”) and the Group’s interest in associates and jointly controlled entities. Financial statements have
been prepared in accordance with the requirements of the Financial Markets Conduct Act 2013 and the Financial Reporting Act 2013.
The Group is primarily involved in the provision of goods and services within the agricultural sector.
16 BASIS OF PREPARATION
Statement of Compliance
The interim financial statements have been prepared in accordance with New Zealand Generally Accepted Accounting Practice (“NZ GAAP”). They
comply with the New Zealand equivalents to International Financial Reporting Standards (“NZ IFRS”) and other applicable Financial Reporting
Standards as applicable for profit oriented entities, and in particular NZ IAS 34. The interim financial statements comply with International Financial
Reporting Standards as issued by the International Accounting Standards Board, as applicable for profit oriented entities.
The interim financial statements do not include all of the information required for full annual financial statements. The same accounting policies
and methods of computation are followed in the interim financial statements as applied in the Group’s latest annual audited financial statements.
Certain comparative amounts have been reclassified to conform with the current period’s presentation.
Standards and Interpretations That Have Been Issued or Amended But Are Not Yet Effective
A number of new standards and interpretations are not yet effective for the period ended 31 December 2018 and have not been applied in
preparing these interim financial statements. The impact of these new standards and interpretations to the Group is as follows:
–

IFRS 16 L
eases has been issued. This standard eliminates the classification of leases as either operating leases or finance leases. The standard
uses a single lessee model which requires a lessee to recognise on the Statement of Financial Position assets and liabilities for all leases with
a term of more than 12 months. The standard is effective for annual periods beginning on or after 1 January 2019. The Group does not plan
to adopt IFRS 16 early. Initial review has determined that this new standard will likely have a significant financial impact on both the balance
sheet and profit and loss given the extent of operating leases the Group is exposed to.
–

A var
iety of minor improvements to standards have been made in order to clarify various treatments of specific transactions. These are not
expected to have an impact on the Group’s financial results.
These statements were approved by the Board of Directors on 26 February 2019.

20 | PGG WRIGHTSON LIMITEDHALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 21
ADDITIONAL FINANCIAL DISCLOSURES
PGG WRIGHTSON LIMITED
INTERIM STATEMENT OF CHANGES IN EQUITY
For the six months ended 31 December 2018
FOREIGN CURRENCY REALISED CAPITAL
SHARE TR
ANSLATION
AND
OTHER
RE
VALUATION
HEDGING DEFINED
BENEFIT
F
AIR VALUE
RE
TAINED
NON–C
ONTROLLING
T
OTAL
CAPITAL RESERVE RESERVES RESERVE RESERVE PLAN RESERVE RESERVE EARNINGS INTEREST EQUITY
$000
$000
$000

$000

$000
$000
$000

$000

$000

$000
Balance at 1 July 2017 606,324 (10,281) 23,443 556 – (14,087) (2,587) (316,121) 2,464 289,711
Total comprehensive income for the period
Profit or loss

–

–

–

–

–

–

–

14,488

152

14,640
O
ther comprehensive income –
F
oreign currency translation differences
–

3,888

–

–

–

–

–

–

(3)

3,885
D
efined benefit plan actuarial gains and losses, net of tax
–

–

–

–

–

1,442

–

–

–

1,442
T
otal other comprehensive income – 3,888 – – – 1,442 – – (3) 5,327
Total comprehensive income for the period
–

3,888

–

–

–

1,442

–

14,488

149

19,967
T
ransactions with shareholders, recorded directly in equity
Contributions by and distributions to shareholders
Dividends to shareholders – – – – – – – (15,234) (310) (15,544)
T
otal contributions by and distributions to shareholders
–

–

–

–

–

–

–

(15,234)

(310)

(15,544)
Transfer to retained earnings
–

–

–

–

–

2,606

–

(2,606)

–

–
Balanc
e at 31 December 2017 606,324 (6,393) 23,443 556 – (10,039) (2,587) (319,473) 2,303 294,134
Balance at 1 January 2018
606,324

(6,393)

23,443

556

–

(10,039)

(2,587)

(319,473)

2,303

294,134
T
otal comprehensive income for the period
Profit or loss

–

–

–

–

–

–

–

3,476

771

4,247
O
ther comprehensive income
Foreign currency translation differences
–

2,670

–

–

–

–

–

–

(147)

2,523
D
efined benefit plan actuarial gains and losses, net of tax – – – – – 343 – – – 343
T
otal other comprehensive income
–

2,670

–

–

–

343

–

–

(147)

2,866
T
otal comprehensive income for the period – 2,670 – – – 343 – 3,476 624 7,113
Transactions with shareholders, recorded directly in equity
Contributions by and distributions to shareholders
Dividends to shareholders

–

–

–

–

–

–

–

(13,336)

(449)

(13,785)
T
otal contributions by and distributions to shareholders – – – – – – – (13,336) (449) (13,785)
T
ransfer to retained earnings
–

–

–

–

–

654

–

(654)

–

–
Balanc
e at 30 June 2018 606,324 (3,723) 23,443 556 – (9,042) (2,587) (329,987) 2,478 287,462

22 | PGG WRIGHTSON LIMITEDHALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 23
PGG WRIGHTSON LIMITED
INTERIM STATEMENT OF CHANGES IN EQUITY (CONTINUED)
For the six months ended 31 December 2018
ADDITIONAL FINANCIAL DISCLOSURES
FOREIGN CURRENCY REALISED CAPITAL
SHARE TRANSLATION AND OTHER REVALUATION HEDGING DEFINED BENEFIT FAIR VALUE RETAINED NON–CONTROLLING TOTAL
CAPITAL RESERVE RESERVES RESERVE RESERVE PLAN RESERVE RESERVE EARNINGS INTEREST EQUITY
$000 $000 $000 $000 $000 $000 $000 $000 $000 $000
Balance at 1 July 2018 606,324 (3,723) 23,443 556 – (9,042) (2,587) (329,987) 2,478 287,462
Total comprehensive income for the period
Profit or loss

–

–

–

–

–

–

–

140

180

320
O
ther comprehensive income
Foreign currency translation differences – (1,419) – – – – – – 129 (1,290)
D
efined benefit plan actuarial gains and losses, net of tax
–

–

–

–

–

(2,596)

–

–

–

(2,596)
T
otal other comprehensive income
–


(1,419)
–

–

–

(2,596)

–

–

129

(3,886)
T
otal comprehensive income for the period
–


(1,419)
–

–

–

(2,596)

–

140

309

(3,566)
T
ransactions with shareholders, recorded directly in equity
Contributions by and distributions to shareholders
Dividends to shareholders – – – – – – – (9,688) (138) (9,826)
T
otal contributions by and distributions to shareholders
–

–

–

–

–

–

–

(9,688)

(138)

(9,826)
Transfer to retained earnings
–

–

–

–

–

530

–

(530)

–

–
Balanc
e at 31 December 2018 606,324 (5,142) 23,443 556 – (11,108) (2,587) (340,065) 2,649 274,070

---

APPENDIX 7 – NZSX Listing Rules
Number of pages including this one
(Please provide any other relevant
NZSX Listing Rule 7.12.2. For rights, NZSX Listing Rules 7.10.9 and 7.10.10. details on additional pages)
For change to allotment, NZSX Listing Rule 7.12.1, a separate advice is required.
Full name
of Issuer
Name of officer authorised to
Authority for event,
make this notice
e.g. Directors' resolution
Contact phone
Contact fax
numbernumberDate
Nature of event
BonusIf ticked,Rights Issue
Tick as appropriateIssuestate whether:Taxable/ Non TaxableConversionInterestRenouncable
Rights IssueCapitalCallDividend
If ticked, stateFull
non-renouncable
change
x
whether:
Interim
x
YearSpecialDRP Applies
EXISTING securities affected by this
If more than one security is affected by the event, use a separate form.
Description of theISIN
class of securities
If unknown, contact NZX
Details of securities issued pursuant to this eventIf more than one class of security is to be issued, use a separate form for each class.
Description of theISIN
class of securities
If unknown, contact NZX
Number of Securities toMinimum
Ratio, e.g
be issued following eventEntitlement
1 for 2 for
Conversion, Maturity, Call
Treatment of Fractions
Payable or Exercise Date
Tick if
provide an
pari passu
ORexplanation
Strike price per security for any issue in lieu or date
of the
Strike Price available.
ranking
Monies Associated with Event
Dividend payable, Call payable, Exercise price, Conversion price, Redemption price, Application money.
Source of
Amount per securityPayment
(does not include any excluded income)
Excluded income per security
(only applicable to listed PIEs)
SupplementaryAmount per security
Currencydividendin dollars and cents
details -
NZSX Listing Rule 7.12.7
Total monies (estimated)
TaxationAmount per Security in Dollars and cents to six decimal places
In the case of a taxable bonusResident
Imputation Credits
issue state strike priceWithholding Tax(Give details)
Foreign
FDP Credits
Withholding Tax(Give details)
Timing
(Refer Appendix 8 in the NZSX Listing Rules)
Record Date 5pmApplication Date
For calculation of entitlements -Also, Call Payable, Dividend /
Interest Payable, Exercise Date,
Conversion Date. In the case
of applications this must be the
last business day of the week.
Notice DateAllotment Date
Entitlement letters, call notices,For the issue of new securities.
conversion notices mailedMust be within 5 business days
of application closing date.
OFFICE USE ONLY
Ex Date:
Commence Quoting Rights:Security Code:
Cease Quoting Rights 5pm:
Commence Quoting New Securities:Security Code:
Cease Quoting Old Security 5pm:
EMAIL: announce@nzx.com
Notice of event affecting securities
1
PGG Wrightson Limited
Julian DalyDirectors Resolution
027 5533373 03 349 617626022019
Ordinary sharesNZREIE0001S4
In dollars and cents
Retained earnings
$0.0075
Enter N/A if not
applicable
$$0.000521$0.002917
$
NZD$0.001324
$5,661,293
Date Payable
5 April, 2019
15 March, 20195/4/2019

---

PGG Wrightson Limited
Results for announcement to the market
Reporting PeriodSix Months ended 31 December 2018
Previous Reporting PeriodSix Months ended 31 December 2017
Amount (000s)Percentage change
Revenue from ordinary activities
$NZ 473,765+ 1.2%
Profit (loss) from ordinary activities after
tax attributable to security holder.
$NZ 140-99.0%
Net profit (loss) attributable to security
holders.
$NZ 140-99.0%
Interim/Final DividendAmount per securityImputed amount per security
Interim$NZ 0.0075$NZ 0.002917
Record Date
15 March 2019
Dividend Payment Date
5 April 2019
CommentsRefer to results release and financial statements.
Net Tangible Assets per security: 31 December 2018 $0.296,
30 June 2018 $0.342, 31 December 2017 $0.350
Profit (loss) from ordinary activities after tax attributable to
security holders calculated as Profit attributable to Shareholders of
the Company as disclosed in the Interim Statement of Profit or
Loss.
Net profit (loss) attributable to security holders calculated as Profit
attributable to Shareholders of the Company as disclosed in the
Interim Statement of Profit or Loss.