Half Year Report to 31 December 2018
Helping grow the country
Helping grow the country
Half Year Report
For the six months ended 31 December 2018
PGG WRIGHTSON LIMITED
PGW Seeds Arable Representative Nicola
Lee inspects an RGT Planet barley crop at
J A Wright Ltd under the gaze of Mt Hutt
near Methven in December 2018.
Greg, Ali, Alexa and Ben Morresey
inspect one of Hunter Dairies herds with
PGW Livestock Upper South Island Dairy
Manager Barry Fox in South Canterbury
in January 2019.
HALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 1
Financial performance results
Net profit after tax of
$
0.3m
This result includes a profit of
$9.0 million from the Rural Services
businesses and a loss of $8.6 million
from the Seed and Grain business which
is recorded as a discontinued operation.
Operating EBITDA of
$
17.8m
Fully imputed interim
dividend of
0.75¢
per share.
This result is down from the
record $23.4 million for the
previous corresponding period,
but ahead of the first half of
FY2017.
2 | PGG WRIGHTSON LIMITED
PGG Wrightson Limited (“PGW”, “the Group” or “the Company”)
delivered Operating earnings before interest, tax, depreciation and
amortisation (Operating EBITDA) of $17.8 million for the six months
ending 31 December 2018 (compared to the record $23.4 million for
the corresponding period last year).
While this result is back on the previous year it is slightly ahead of the 2017
financial year first half Operating EBITDA for the Rural Services businesses,
which incorporates the Agency and Retail and Water operating groups, and
Other (supporting corporate services). 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 conditional
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 profit of $9.0 million from Rural Services and a loss of $8.6
million from the discontinued Seed and Grain business.
Deputy Chair and
Chief Executive Officer’s Report
Ian Glasson
CHIEF EXECUTIVE OFFICER
Trevor Burt
DEPUTY CHAIR
HALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 3
RURAL SERVICES
In December 2018 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.
The National Institute of Water and
Atmospheric Research (NIWA) reported
in December 2018 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.
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.
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 settlements
then reached with a number of growers,
in relation to a defective spray that was
supplied to PGW and resold to fruit
growers. The supplier settlement partially
compensated PGW for the customer
settlements arising from the supply of the
defective product with a financial impact
to PGW of approximately $1.8 million
that was not recovered from the supplier.
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 (M 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 the 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 sheep and beef, horticultural and
viticulture sectors proving to be the
exception to this trend for the first half
of FY2019. The lifestyle and residential
segments of the business remained
strong with the overall activity being
ahead of the previous year’s results.
SEED AND GRAIN
As previously noted, 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
group’s performance does impact net
profit after tax, however. For the six
months ending 31 December 2018 Seed
and Grain reported a net loss after tax
of $8.6 million, compared with
a net
profit after tax 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 and 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.
BALANCE SHEET
For this reporting period there has been
a number of technical changes due to
the financial reporting rules as a result
of the Seed and Grain sale.
In the balance sheet the assets and
liabilities of Seed and Grain are now
classified separately as held for sale.
4 | PGG WRIGHTSON LIMITED
The previous balance sheets as at 30 June
2018 and 31 December 2017 are not
adjusted in line with the accounting rules
so it is not possible to compare the latest
PGW balance sheet with previous balance
sheets on a like-for-like basis.
With that in mind, the cash flows of the
Rural Services businesses and therefore
the increase in debt, is broadly in line
with the cash flows of the six months to
December 2017.
We are a seasonal business and our
working capital requirements increase
significantly over spring and into summer
in line with the demand for farming
inputs in New Zealand. Over the six
months to December 2018, the Rural
Services businesses had a net outflow
of cash from operating activities of $63
million, including a net working capital
increase of $66 million. Net investment
in fixed assets and intangibles was $2.9
million, while dividends were $9.8 million.
Once the sale of the Seed and Grain
business completes and the proceeds
are received, the net debt position
will reverse into a net cash position
of around $210 million (subject to
transaction completion timing, working
capital requirements that can fluctuate
materially through the annual cycle and
other transaction wash-up items). The
capital return being contemplated by
the Board therefore allows PGW to reset
its debt position and right-size it for the
remaining business going forward.
HEALTH, SAFETY
AND WELL-BEING
We continue to make progress in the
transformation of our health, safety
and well-being culture. Our goal is
to continue to reduce injuries with a
focus on preventative measures and
initiatives that eliminate hazards and
risks. To this end we are; continuing the
Zero Incident Process (ZIP) programme
(which has been delivered to over
1,000 employees to date) across the
business, initiating hazard identification
and elimination processes, and
driving safety and engagement walks
conducted by leaders throughout
the
Company.
We have already seen favourable
outcomes from these initiatives. One
positive result is the year-on-year
reduction in our lost time injury
frequency rate (LTIFR) of 12.76 percent
(from 8.36 in 2017 to 7.31 in 2018).
While we are pleased with this result,
we are not complacent and will
continue to focus on preventative
measures.
Our concern for our people is not just
about safety, it is also about well-being,
particularly in the challenging rural
environment in which we operate. In
October 2018, we commenced a well-
being assessment initiative with Dr
Tom Mulholland and his KYND wellness
programme across New Zealand.
HOLIDAYS ACT
REMEDIATION PROJECT
In early 2019 we concluded the
Holidays Act remediation project.
The goals of the project were to;
comprehensively review calculations
over the last seven years, and to update
our systems and processes to ensure
future calculations are correct and
in line with the Holidays Act. A key
outcome is that we have updated our
systems and processes to ensure future
calculations are in accordance with the
legislation. As a result of this review
we have remediated any arrears owed
to employees and are now working
on the remediation for registered ex-
employees.
DIVIDENDS
On the basis of the Rural Services’ result,
on 26 February 2019, the Board of
Directors resolved to pay a fully imputed
interim dividend of 0.75 cents per share
to be paid to shareholders registered at
the record date of 15 March 2019. The
dividend will be paid to shareholders on
5 April 2019.
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.
HALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 5
The agreed headline price of $434 million
(including net debt of $21 million) will
result in a sale price of $413 million for
the Seed and Grain business. After sales
proceeds are received on settlement and
debt repaid, PGW would expect 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
condition is confirmed.
OUTLOOK
Looking ahead at market conditions for
the remainder of FY2019 and beyond, the
signals are somewhat mixed.
Given the weather-affected spring
we have had, there should be some
pent-up demand for agricultural inputs
to come through in the approaching
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. M 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.
GOVERNANCE AND
EXECUTIVE TEAM
The PGG Wrightson Limited Board had
one change in membership due to
retirement. On 30 October Guanglin
(Alan) Lai retired as Chair. In the
interim, existing Director Joo Hai Lee
was appointed as Chair effective from
31
October 2018.
There were no changes to the executive
team during the first six months of
FY2019.
ACKNOWLEDGEMENTS
Across the Company’s business units,
our people have worked with passion
and commitment to deliver the high
level of service and quality of products
that our valued customers have come
to expect.
On behalf of the Board and
management team, we extend our
thanks to the PGW team, our customers
and our suppliers for their continued
support and effort in contributing to
our
success.
Trevor Burt
Deputy Chair
Ian Glasson
Chief Executive Officer
Oranges at a De Costa Enterprises orchard near
Gisborne are ready to pick in November 2018.
6 | PGG WRIGHTSON LIMITED
A company as large and
diverse as PGG Wrightson
provides the opportunity
for its employees to
consider a range of
career pathways across
the organisation. Many
employees transfer their
skills across business
units as they progress
through their career.
The path that Livestock Upper South
Island Dairy Manager Barry Fox has
taken is one example of the career
opportunities that PGG Wrightson
(PGW ) offers.
Barry joined the company* in 2000
initially working in the Oamaru Rural
Supplies store, then moved to a field
role as a Technical Field Representative
servicing customers in North Otago. In
2005 he took up the role of Livestock
Dairy Agent servicing dairy farmers in
North Otago. The opportunity arose
for Barry to move into a management
role in 2017 and he now oversees the
dairy team from the Waitaki River north
including Canterbury, the West Coast
and Mid and South Canterbury.
Barry said, “I always saw myself as having
a career in the rural sector and I enjoy
working alongside farming families.
While my role at PGW has changed over
the years, I’ve been able to progress
my career while staying with the same
company. The long-term relationships
you build, both within PGW and with
customers, are hugely valuable.”
“I began my career at PGW working in
the rural supplies team, which provided
me with a sound foundation in pasture
management, animal health and a
variety of farm systems. Having this
background was an advantage when
I joined the livestock team. If you
continue to deliver the best outcome for
your customers, you earn their trust over
time. It’s essential in our role, as farmers
are seeking knowledge and opportunity
as markets change and innovation is
introduced to the agricultural sector.”
“Over the last two years or so the dairy
industry has gone through significant
change, with an increased emphasis
on biosecurity, traceability of animal
movements and animal health. When
put in a situation like the dairy industry
is facing with M bovis, you call on all of
your industry knowledge and networks
to support your team and assist your
customers.”
Ensuring our customers
stay ahead of the game
PGW Livestock Upper South Island Dairy
Manager Barry Fox with Greg Morresey
of Hunter Dairies in South Canterbury in
January 2019.
AGENCY
HALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 7
“During this time of intense change,
our dairy team has adjusted how we
service our customers. We are still in
a transitional period, so there’s a new
normal now, but its status continues
to change. I’m very proud of the team
and how they demonstrated agility and
maintained a high standard of service
despite significant challenges.”
“We now have in place increased
biosecurity measures, which we
welcome. It gives our customers peace
of mind and we need to do whatever is
required to support the Government’s
goal of eradicating M bovis from New
Zealand,” said Barry.
Long term customers of Barry, primarily
through his tenure as a Livestock Dairy
Agent, are Greg and Ali Morresey of
Hunter Dairies Ltd.
Greg and Ali have progressed through
the industry from Greg’s early days
working on a Taranaki dairy farm, to
sharemilking in Southland and North
Otago. They are currently part equity
owners in a South Canterbury dairy
farm. Greg and Ali manage three Fraser
Group dairy operations, milking 2,500
cows, and they have a 33 percent equity
partnership in one of those farms.
Greg said, “our relationship with Barry
goes back about 10 years. Barry took
care of our livestock trading for us before
we took up the role at Fraser Group
about four years ago. Now that Barry is
in a management role, one of the local
Agents Neil Carter takes care of our
livestock trading for us.”
“We farm in the South Canterbury
area which was one of the first areas
where M bovis was detected. Our
herd has not been affected by M bovis.
In extraordinary situations like this
having someone to call on with Barry’s
experience and industry connections
was invaluable.”
“Farming is a family business. I manage
the team over the three farms. Ali and
the team, along with help from our kids
Alexa and Ben in the weekends, rear over
900 calves each year. So, we all have a
part to play in the future of this property. “
“We have an environmental farm plan
which includes fencing off waterways
and planting in key areas. The delivery of
this plan not only helps the environment
but provides for future generations.”
“Our philosophy has always been to
keep it simple and do it well. So that is
the approach we take for our business
and with the trusted advisors we choose
to work with, such as Barry. He’s not just
a company rep, he’s part of our team,”
concluded Greg.
*
T
he ‘company’ referred to is Reid Farmers
Ltd, an organisation which merged with
Pyne Gould Guinness Ltd in 2001, which
subsequently merged with Wrightson Ltd
in 2005 to form PGG Wrightson Ltd.
Hunter Dairies herd in South
Canterbury in January 2019.
RETAIL AND WATER
8 | PGG WRIGHTSON LIMITED
A trusted relationship
with benefits for the
environment
For decades, the region has continued
to increase wine production and in
recognition of this ongoing growth PGG
Wrightson opened a new purpose-built
store and office building in July 2016.
The site services the region’s agricultural
and horticultural businesses and
producers.
Fruitfed Supplies’ Phil Dasler has been
with the Company for 15 years and has
been in his current role of Marlborough
Area Sales Manager for five years.
Phil said, “The new site has allowed us to
better meet the needs of our customers
and future proof our business in this
thriving region. From the planning and
design phase through until we moved
into the building, we had a strong focus
on sustainability and environmental
impact. The consideration of building
materials, lighting choices, energy
sources, store layouts and how our team
works has all contributed to the positive
outcome we have had.”
“We take this sustainability focus out in
the field too. For example, in 2018 we
installed our Fruitfed Supplies delivery
trucks with global positioning system
tracker (GPS) to allow us to be more
efficient with delivery schedule and save
fuel. We are pleased with the positive
results we have achieved to date with
this initiative, so we are exploring other
ways to make savings in this area,”
said
Phil.
Constellation Brands New Zealand
Limited is one of Fruitfed Supplies’
customers which has a focus on
sustainability. Stephen Cheadle, VP
Operations for Constellation, leads the
viticulture, winemaking and production
functions for one of the largest New
Zealand wine companies.
Stephen said, “Our New Zealand
business has a continuous improvement
sustainability strategy, with a particular
focus on water usage and waste
management. This includes a lofty goal
of zero percent landfill waste. Starting
on this journey, we soon realised that in
order to continue to improve we need
an ongoing approach of chipping away
at the small stuff around the outside.”
Marlborough is
New Zealand’s largest
winegrowing region
and has the variable
soils and enviable
climate that see it
recognised as one of
the premium wine
regions of the world.
HALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 9
Fruitfed Supplies’ Marlborough Area Sales
Manager Phil Dasler undertakes a site visit
with Jacqueline MacLaurin, Regional Vineyard
Manager at Constellation Brands NZ Ltd in
October 2018 at the Giffords Creek Lane Vineyard
where steel posts are used.
Constellation Brands
New Zealand Limited
Constellation Brands
New Zealand Limited is a
wholly owned subsidiary of
Constellation Brands Inc which
is a Fortune 500 company and
listed on the New York Stock
Exchange.
The company operates three
wineries in Marlborough and
Hawke’s Bay, and grows grapes
in Marlborough, Hawke’s Bay and
Central Otago.
“We believe that Fruitfed Supplies have
similar goals. They work hard for us
and in recognition of the strength of
that relationship they now provide the
majority of our vineyard and winery
supplies, agchem, fertiliser and
hardware. “
“We have undertaken 300 hectares of
development over the last few years.
Some of that development included the
installation of steel posts, rather than
the traditional treated wooden posts, to
avoid leaching of possible toxins into the
soil.” An example of this is at the Giffords
Creek Lane vineyard (pictured).
“We are also moving away from single
use packaging to allow for 100 percent
recycling of packaging material received.
To assist us in achieving this goal Fruitfed
Supplies are having conversations
with supplier partners to get them to
consider repackaging to avoid single
use, non-recyclable packaging. Some
products we use such as sulphur and
yeast are in tinfoil packaging which we
cannot recycle, but we would like to be
able to,” said Stephen.
Phil added, “Constellation Brands NZ is
a large-scale business and an important
customer for us. They rely on us to be
there for them. We fit alongside their
operation providing good technology,
good product and good people.”
“About two years ago Constellation
Brands NZ switched to being solely
reliant on us for agchem and farm
supplies. This changed the dynamic of
the relationship. It was a relationship
no longer based on tender or price, but
rather on trust. Our team must always
be ahead of the game and we need to
be working hard to provide solutions
including auditing, disposal, storage
solutions and stock management. We
take a wider team approach calling on
expertise across our business - if we
don’t have a solution, we need to find
one,” concluded Phil.
10 | PGG WRIGHTSON LIMITED
Hawke’s Bay is renowned
for its highly productive
plains and hill country.
An outstanding example
of a highly successful
pastoral farm in this
region is the Williams
family’s Otupae Station
and Longacre Farm – a
large-scale sheep and
beef farming operation.
Otupae Station has been in the Williams
family since the 1930’s. Located
between Taihape and Napier, the 8,632
hectare Station (with 5,100 hectares of
pasture) is hard high country with cold
bleak winters, and a short damp but
highly productive summer depending
on favourable weather conditions.
Longacre Farm, located under the gaze
of Te Mata Peak, was purchased by
Leonard and Janet Williams (current
owner Oscar’s grandparents) in 1957.
The 800 hectare farm combines steep
hill country and flat paddocks.
They run Romney sheep and Angus
cattle across both properties. On
Otupae Station they run 21,000
Romney breeding ewes and 2,400
Angus breeding cows and heifers. The
Station’s ewes are shorn once a year in
early February and the ewe hoggets are
shorn in October and again in March,
with lambs shorn at the end of January.
Longacre Farm shears the farm’s hoggets
in September and the ewes and lambs
in
November.
The two farms, with their distinct and
contrasting topography, complement
each other operationally with Otupae
Station primarily a breeding property
and Longacre Farm a finishing unit.
James Williams oversees Otupae Station,
with his son Oscar running Longacre
Farm and Gary Mead managing
Otupae
Station.
Together both farms produce
approximately 175,000 kg (about 1,000
bales) of crossbred wool. The main shear
produces 36 micron wool, hogget shear
is 32-34 microns and the lamb shear is
28 microns.
James, Oscar and their teams work
alongside the Napier based PGG
Wrightson (PGW ) Wool team to manage
their wool clip.
James said, “We work hard to produce
high quality crossbred wool but the
marketing and selling of wool hasn’t
been straightforward for a while. Selling
meat is highly profitable in comparison.
In the 1950’s wool was pound for a
pound and was the primary contributor
Flexi-Wool contract:
providing price certainty
AGENCY
HALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 11
to the farm’s income, but now wool’s
contribution to our annual revenue is
minimal.”
“Wool is a wonderful natural material
and has a very viable reputation. The
traditional use of wool has been
compromised due to the increased use
of petroleum-based products. Recently
it has been heartening to see some
interesting uses of wool, including
protein and niche markets such as
fabrication for surfboards, so there are
many possibilities to explore,” said James.
Otupae Station undertook its annual
hogget shear on 24 October 2018.
The
hogget shear produced 16,240 kg
of 32.5 micron wool. The 91 bales were
auctioned in Napier on 8 November
2018.
PGW Wool Representative and North
Island Auctioneer Steve Fussell has
worked with the Williams family for
over
five years.
Steve said, “James and his team have a
reputation for producing high quality
crossbred wool. So despite challenging
market conditions it came as no surprise
that his wool was highly contested at the
auction on 8 November 2018.”
“Good quality, large individual lines of
wool are favoured by buyers for the
consistency over the offering. Hogget
wool demand is very much micron
driven and the 32 level is at the fine
end of the crossbred range so is highly
sought after.”
“At the sale on 8 November the Otupae
Station wool sold to strong bidding from
the floor under what could be described
as very trying conditions. The wool was
presented with very good colour and 3-4
inches in length. The greasy price sold
for $3.08 per kg. The wool was purchased
by PGW Wool’s export arm Bloch &
Behrens Wool (NZ) Ltd (Bloch & Behrens)
at auction and is destined for Sweden to
be made into felted blankets,” said Steve.
The PGW Wool team offers a range
of contracts for wool producers. For
example, the Otupae Station hogget
wool was sold via auction, but James
Williams has the Station’s ewe wool
signed up to a three-year Flexi-Wool
contract.
Steve said, “It has been tough in recent
years for crossbred wool producers and
James is no exception. To assist James
with planning and to provide him with
greater price certainty for part of his
wool clip, I offered him a long-term
contract. As a result of those discussions,
James signed up for a three-year Flexi-
Wool contract for the Otupae Station
ewe wool (which commenced in July
2018). There are only a limited number
of three-year contracts available and
the contracts are linked to selected
international customers – thus providing
all parties with supply chain price
certainty. The contract price, as at the
end of November 2018, is about 100
cents/kg above the current market.”
James added, “When Steve suggested
the Flexi-Wool contract for our wool
clip it came at just the right time. I was
getting pretty frustrated with the prices
we were getting at auction over the last
PGG Wrightson Wool Representative and North
Island Auctioneer Steve Fussell with James and
Oscar Williams at Longacre Farm , inspect shorn
hoggets, under the gaze of Te Mata Peak in
Hawke’s Bay in October 2018.
Changes to financial reporting
Our financial reporting has changed as a result
of the sale of the Seed and Grain business to
DLF Seeds A/S.
The two key changes are:
For the statement of profit and loss, we
have removed the impact of Seed and
Grain from the respective profit and loss
lines and disclosed Seed and Grain’s result
in a separate discontinued operations line.
Note that this treatment also applies to the
comparative periods.
For the statement of financial position
(balance sheet) we have reclassified all of
the Seed and Grain assets and liabilities to
separate assets and liabilities in held for
sale lines. It is important to note that this
treatment only applies to the 31 December
2018 balance sheet, the comparative
balance sheet lines include both the Rural
Services and Seed and Grain businesses.
Please note that the statement of cash flows
includes the Seed and Grain business.
12
| PGG WRIGHTSON LIMITED
few years. It is tough on the team when
they work hard to produce high quality
wool
and we get such low prices at auction.
The contract also provides us with a bit
more price certainty which allows us to plan
long-term with more confidence. We are in
our first year of the three-year contract for
Otupae Station’s ewe wool and I am happy
with how it is going so far. Steve knows
what he is doing and we know our wool,
so
it works well,” said James.
While crossbred wool has had mixed
fortunes in the global market in recent
years, New Zealand wool producers are
highly respected and are recognised
throughout the world for producing high
quality crossbred and fine wools. Wool is
recognised as a natural insulator, naturally
fire-retardant, naturally breathable,
sustainable and biodegradable. With the
New Zealand wool industry focused on
innovative uses of the fibre, members of
the wool supply chain including PGW Wool,
remain optimistic for the future of this
exceptional natural product.
PGW Flexi-Wool Contract
PGW introduced the three-year Flexi-
Wool contract in 2014 for producers
who were becoming increasingly
frustrated with receiving low prices for
their crossbred wool despite the high
quality of the wool being offered. The
contracts, which are limited in number,
are closely linked to sales made
by Bloch & Behrens with their key
international customers who were also
welcoming the stabilising effect of the
three-year flexi contracts, making the
price of their raw material cost much
less volatile. The clean wool price is
set, based on a three-year moving
average. This long-term contract has
been well received by PGW Wool’s
crossbred wool growers due to the
provision of greater price certainty.
HALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 13
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 14 – 35 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
14 | 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 | 15
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.
16 | PGG WRIGHTSON LIMITEDHALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 17
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.
– Other. 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.
– Discontinued 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 hardware, support, licence and other costs attributed on a per user basis.
– Property 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
UNAUDITED AUDITED UNAUDITED UNAUDITED AUDITED UNAUDITED 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 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
Holidays Act 2003 remediation costs 752 (2,441) – 1,724 (3,422) – 2 (1,297) – – – – 2,478 (7,160) –
Fair value adjustments 22 (1,087) (18) – – – – 1 – – – – 22 (1,086) (18)
Depreciation 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 interest and finance costs 1,145 (1,388) (1,370) (321) 385 291 (4,010) (5,898) (2,787) – – – (3,186) (6,901) (3,866)
Profit/(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
Income 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)
Profit/(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
Profit/(loss) from discontinued operations (net of income taxes) – – – – – – – – – (8,703) 9,832 2,701 (8,703) 9,832 2,701
Net profit/(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
Segment 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
Assets 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
Segment 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 for sale – – – – – – – – – (189,562) – – (189,562) – –
Total 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)
The accompanying notes form an integral part of these financial statements.
18 | PGG WRIGHTSON LIMITEDHALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 19
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.
18 | PGG WRIGHTSON LIMITEDHALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 19
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
20 | 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.
Grapes at an Indevin vineyard
in Hawke's Bay are ready to be
harvested in March 2018.
HALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 21
Additional Financial Disclosures
including Notes to the Financial Statements for the
six months ended 31 December 2018
22 | PGG WRIGHTSON LIMITEDHALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 23
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
22 | PGG WRIGHTSON LIMITEDHALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 23
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
24 | PGG WRIGHTSON LIMITEDHALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 25
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
24 | PGG WRIGHTSON LIMITEDHALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 25
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.
26 | PGG WRIGHTSON LIMITEDHALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 27
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)
–
–
26 | PGG WRIGHTSON LIMITEDHALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 27
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.
28 | PGG WRIGHTSON LIMITEDHALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 29
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.
28 | PGG WRIGHTSON LIMITEDHALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 29
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).
30 | PGG WRIGHTSON LIMITEDHALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 31
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
30 | PGG WRIGHTSON LIMITEDHALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 31
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.
32 | PGG WRIGHTSON LIMITEDHALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 33
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 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 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
Other comprehensive income –
Foreign currency translation differences – 3,888 – – – – – – (3) 3,885
Defined benefit plan actuarial gains and losses, net of tax – – – – – 1,442 – – – 1,442
Total 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
Transactions with shareholders, recorded directly in equity
Contributions by and distributions to shareholders
Dividends to shareholders – – – – – – – (15,234) (310) (15,544)
Total contributions by and distributions to shareholders – – – – – – – (15,234) (310) (15,544)
Transfer to retained earnings – – – – – 2,606 – (2,606) – –
Balance 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
Total comprehensive income for the period
Profit or loss – – – – – – – 3,476 771 4,247
Other comprehensive income
Foreign currency translation differences – 2,670 – – – – – – (147) 2,523
Defined benefit plan actuarial gains and losses, net of tax – – – – – 343 – – – 343
Total other comprehensive income – 2,670 – – – 343 – – (147) 2,866
Total 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)
Total contributions by and distributions to shareholders – – – – – – – (13,336) (449) (13,785)
Transfer to retained earnings – – – – – 654 – (654) – –
Balance at 30 June 2018 606,324 (3,723) 23,443 556 – (9,042) (2,587) (329,987) 2,478 287,462
34 | PGG WRIGHTSON LIMITEDHALF YEAR REPORT FOR PERIOD ENDED 31 DECEMBER 2018 | 35
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
Other comprehensive income
Foreign currency translation differences – (1,419) – – – – – – 129 (1,290)
Defined benefit plan actuarial gains and losses, net of tax – – – – – (2,596) – – – (2,596)
Total other comprehensive income – (1,419) – – – (2,596) – – 129 (3,886)
Total comprehensive income for the period – (1,419) – – – (2,596) – 140 309 (3,566)
Transactions with shareholders, recorded directly in equity
Contributions by and distributions to shareholders
Dividends to shareholders – – – – – – – (9,688) (138) (9,826)
Total contributions by and distributions to shareholders – – – – – – – (9,688) (138) (9,826)
Transfer to retained earnings – – – – – 530 – (530) – –
Balance at 31 December 2018 606,324 (5,142) 23,443 556 – (11,108) (2,587) (340,065) 2,649 274,070
Managing your shareholding online:
To change your address, update your payment
instructions and to view your investment portfolio,
including transactions, please visit:
www.investorcentre.com/nz
General enquiries can be directed to:
Computershare Investor Services Limited
Level 2, 159 Hurstmere Road
Takapuna, Auckland 0622
8
enquiry@computershare.co.nz
* Private Bag 92119, Auckland 1142,
New Zealand
Telephone +64 9 488 8777
6
Facsimile +64 9 488 8787
Please assist our registrar by quoting your CSN
or shareholder number.
36 | PGG WRIGHTSON LIMITED
PGG WRIGHTSON LIMITED
CORPORATE DIRECTORY
Board of Directors
for the six months ended
31 December 2018
Joo Hai Lee
Chair
(appointed Chair 31 October 2018)
John Fulton is an Alternate Director for
Joo Hai Lee
Trevor Burt
Deputy Chair
Bruce Irvine
John Nichol
Lim Siang (Ronald) Seah
Kean Seng U
Guanglin (Alan) Lai
(retired 30 October 2018)
Executive Team
for the six months ended
31 December 2018
Ian Glasson
Chief Executive Officer
Julian Daly
General Manager Strategy and
Corporate Affairs / Company Secretary
Grant Edwards
General Manager Wool
David Green
General Manager New Zealand Seeds
Stephen Guerin
Group General Manager Retail and Water
John McKenzie
Group General Manager Seed and Grain
Peter Moore
General Manager Livestock
Peter Newbold
General Manager Real Estate
Peter Scott
Chief Financial Officer
Rachel Shearer
General Manager Human Resources
Brent Sycamore
General Manager Grain
Registered Office
PGG Wrightson Limited
57 Waterloo Road
Hornby
Christchurch 8042
PO Box 292
Christchurch 8140
Telephone:
0800 10 22 76 (NZ only)
+64 3 372 0800 (International)
Email: enquiries@pggwrightson.co.nz
Auditors
KPMG
Level 5
79 Cashel Street
PO Box 1739
Christchurch 8140
Telephone +64 3 363 5600
Company number 142962
NZBN 9429040323497
PGW Chief Executive Ian Glasson on farm with Andy Innes
of Innes Fields Ltd in Mid Canterbury in July 2018.
“The factors impacting
PGW’s performance
have been felt across
the rural sector and
we have confidence
that we have held, and
in some cases grown,
our
market share.“
Ian Glasson
Chief Executive Officer
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