Annual Results Announcement to 30 June 2022
Template
Results announcement
(for Equity Security issuer/Equity and Debt Security issuer)
Updated as at 17 October 2019
Results for announcement to the market
Name of issuer PGG Wrightson Limited
Reporting Period 12 months to 30 June 2022
Previous Reporting Period 12 months to 30 June 2021
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$952,700 +12.4%
Total Revenue $953,034 +12.4%
Net profit/(loss) from
continuing operations
$24,286 +6.9%
Total net profit/(loss) $24,286 +6.9%
Final Dividend
Amount per Quoted Equity
Security
$0.16
Imputed amount per Quoted
Equity Security
$0.062
Record Date 9/9/2022
Dividend Payment Date 3/10/2022
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$1.986
$1.983
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Please refer to the accompanying market commentary and
consolidated financial statements.
Authority for this announcement
Name of person
authorised
to make this announcement
Julian Daly
Contact person for this
announcement
Julian Daly
Contact phone number 027 5533373
Contact email address jdaly@pggwrightson.co.nz
Date of release through MAP
16/08/2022
Audited financial statements accompany this announcement.
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Template
Distribution Notice
Updated as at June 2022
Please note: all cash amounts in this form should be provided to 8 decimal places, including zeros (ie 0.01001000)
Section 1: Issuer information
Name of issuer PGG Wrightson Limited
Financial product name/description Ordinary shares
NZX ticker code PGW
ISIN (If unknown, check on NZX
website)
NZREIE0001S4
Type of distribution
(Please mark with an X in the
relevant box/es)
Full Year X Quarterly
Half Year Special
DRP applies
Record date 09/09/2022
Ex-Date (one business day before the
Record Date)
08/09/2022
Payment date (and allotment date for
DRP)
03/10/2022
Total monies associated with the
distribution
1
$ 12,077,453.28000000
Source of distribution (for example,
retained earnings)
Retained earnings
Currency NZD
Section 2: Distribution amounts per financial product
Gross distribution
2
$ 0.22222222
Gross taxable amount
3
$ 0.22222222
Total cash distribution
4
$ 0.16000000
Excluded amount (applicable to listed
PIEs)
N/A
Supplementary distribution amount $ 0.02823529
Section 3: Imputation credits and Resident Withholding Tax
5
Is the distribution imputed Fully imputed
1
Continuous issuers should indicate that this is based on the number of units on issue at the date of the form
2
“Gross distribution” is the total cash distribution plus the amount of imputation credits, per financial product, before the deduction of
Resident Withholding Tax (RWT).
3
“Gross taxable amount” is the gross distribution minus any excluded income.
4
“Total cash distribution” is the cash distribution excluding imputation credits, per financial product, before the deduction of RWT.
This should include any excluded amounts, where applicable to listed PIEs.
5
The imputation credits plus the RWT amount is 33% of the gross taxable amount for the purposes of this form. If the distribution is
fully imputed the imputation credits will be 28% of the gross taxable amount with remaining 5% being RWT. This does not constitute
advice as to whether or not RWT needs to be withheld.
Partial imputation
No imputation
If fully or partially imputed, please
state imputation rate as % applied
6
28%
Imputation tax credits per financial
product
$ 0.06222222
Resident Withholding Tax per
financial product
$ 0.01111111
Section 4: Distribution re-investment plan (if applicable)
DRP % discount (if any)
%
Start date and end date for
determining market price for DRP
Date strike price to be announced (if
not available at this time)
Specify source of financial products to
be issued under DRP programme
(new issue or to be bought on market)
DRP strike price per financial product
$
Last date to submit a participation
notice for this distribution in
accordance with DRP participation
terms
Section 5: Authority for this announcement
Name of person
authorised to make
this announcement
Julian Daly
Contact person for this
announcement
Julian Daly
Contact phone number 027 5533373
Contact email address jdaly@pggwrightson.co.nz
Date of release through MAP
16/08/2022
6
Calculated as (imputation credits/gross taxable amount) x 100. Fully imputed dividends will be 28% as a % rate applied.
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Helping grow the country
PGG Wrightson Limited
Consolidated Financial
Statements
For the year ended 30 June 2022 | Mō te tau i mutu i te 30 Hune 2022
Ngā Tauākī ā-Pūtea Tōpū
PGG WRIGHTSON LIMITED
PGG WRIGHTSON LIMITED
DIRECTORS’ RESPONSIBILITY STATEMENT
FOR THE YEAR ENDED 30 JUNE 2022
The Directors are responsible for ensuring that the consolidated financial statements give a
true and fair view of the financial position of the Group as at 30 June 2022 and the financial
performance and cash flows for the year ended on that date.
The Directors consider that the consolidated financial statements of the Group have been
prepared using appropriate accounting policies, consistently applied and supported by
reasonable judgements and estimates and that all of the relevant financial reporting and
accounting standards have been followed.
The Directors believe that proper accounting records have been kept which enable, with
reasonable accuracy, the determination of the financial position of the Group and facilitate
compliance of the consolidated financial statements with the Financial Reporting Act 2013
and the Financial Markets Conduct Act 2013.
The Directors are pleased to present the consolidated financial statements for PGG Wrightson
Limited and its controlled entities (together the “Group”) set out on pages 1 to 43 for the year
ended 30 June 2022.
The consolidated financial statements contained on pages 1 to 43 have been authorised for
issue on 15 August 2022.
For and on behalf of the Board.
Joo Hai Lee Sarah Brown
Chairman Director and Audit Committee Chair
Cover image: PGG Wrightson Technical
Field Representative, Sarah Swinbourn,
monitors the number of diamond back
moth and white butterfly caterpillars in
a kale crop on the Foote Family Farm in
Lawrence, Otago, for the Shepherdess
magazine autumn 2022 edition.
KEY FINANCIAL DISCLOSURES
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Ngā Whakapuakanga Pūtea Hira
PGG WRIGHTSON LIMITED
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
For the year ended 30 June 2022
PGG WRIGHTSON LIMITED
|
1
2022 2021
NOTE $000 $000
Continuing operations
Operating revenue 1 952,700 847,815
Cost of sales 2 (704,181) (624,589)
Gross profit 248,519 223,226
Other income 334 366
Employee expenses (132,874) (119,828)
Other operating expenses 3 (48,826) (47,735)
Operating EBITDA
27(E) 67,153 56,029
Non-operating gains/(losses) 4 699 4,456
Impairment and fair value gains/(losses) 5 (2,182) 1,832
Depreciation and amortisation expense (28,024) (27,283)
EBIT
27(E) 37,646 35,034
Net interest and finance costs 6 (5,089) (5,621)
Profit from continuing operations before income tax 32,557 29,413
Income tax expense 7 (8,271) (6,693)
Profit from continuing operations, net of income tax 24,286 22,720
Discontinued operations
Results from discontinued operations, net of income tax – (7)
Profit/(loss) from discontinued operations, net of income tax – (7)
Net profit after tax attributable to Shareholders of the Company
24,286 22,713
Basic & diluted earnings per share (EPS)
2022 2021
NOTE $ $
Basic & diluted EPS 8 0.322 0.301
Basic & diluted EPS - continuing operations 8 0.322 0.301
The accompanying notes form an integral part of these consolidated financial statements.
KEY FINANCIAL DISCLOSURES
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Ngā Whakapuakanga Pūtea Hira
2
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PGG WRIGHTSON LIMITED
PGG WRIGHTSON LIMITED
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
For the year ended 30 June 2022
2022 2021
NOTE $000 $000
Net profit after tax attributable to Shareholders of the Company 24,286 22,713
Other comprehensive income/(loss)
Continuing operations
Items that will never be reclassified to profit or loss
Changes in fair value of equity instruments 7 136
Remeasurements of defined benefit asset/liability 18 (2,522) 9,620
Tax on remeasurements of defined benefit asset/liability 7 706 (2,694)
Total other comprehensive income/(loss) for the period (1,809) 7,062
Total comprehensive income for the period attributable to Shareholders of the Company 22,477 29,775
The accompanying notes form an integral part of these consolidated financial statements.
KEY FINANCIAL DISCLOSURES
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Ngā Whakapuakanga Pūtea Hira
PGG WRIGHTSON LIMITED
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3
PGG WRIGHTSON LIMITED
SEGMENT REPORT
For the year ended / as at 30 June 2022
A. Operating segments
The Group has two primary operating segments, Agency and Retail
& Water, which are the Group's strategic divisions. These operating
segments 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. 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 Chairman of the Board reviews internal management reports
on each strategic business unit on at least a monthly basis.
The Group's segments are described below:
– Agency: This segment derives its revenue primarily from
commissions in respect of rural Livestock, Wool and Real Estate
transactions. This segment also derives revenue from wool and
velvet product sales, and interest revenue from its Go livestock
receivables (refer to Note 12 Go Livestock Receivables for further
explanation regarding this programme).
– Retail & Water: This segment includes the Rural Supplies and
Fruitfed Supplies retail operations, Agritrade, PGG Wrightson
Water, PGW Consulting, ancillary sales support and supply chain
functions. This segment derives its revenue primarily from the
sale of goods as well as the design, installation and servicing of
irrigation solutions.
– Other (non-operating segment): Other relates to certain Group
Corporate activities including Governance, Finance, Treasury, Risk
and Assurance, and other support services (such as corporate
property services and marketing). The Marketing function
derives sales revenue from the Group's rewards and on-charging
programmes.
Assets and liabilities allocated to each business unit combine to form
total assets and liabilities for the Agency and Retail & Water business
segments. Certain other assets and liabilities are held at a Corporate
level including those for the Corporate functions noted above. Similarly,
the profit/loss for each business unit combines to form total profit/
loss of the Agency and Retail & Water business segments. Certain other
revenues and expenses are recorded at the Corporate level for the
Corporate functions noted above.
Corporate costs allocation
The Group allocates certain corporate costs to an operating segment
where they can be directly attributed to that segment or using the
following methods:
– IT hardware, support, licence and other costs are allocated on a per
user basis.
– Property costs which are not directly attributable are allocated on a
property space utilisation basis.
– Business operations costs (Accounts Payable, Accounts Receivable,
Call Centre) are allocated based on FTE usage by each operating
segment or transactional volumes. Credit Services costs are
allocated to the operating segment to which the overdue accounts
relate.
Other costs such as non-operating gains/losses, impairment and fair
value gains/losses, net interest and finance costs, income tax expense
and the results of discontinued operations are not fully allocated by the
Group across the operating segments. The Group Governance, Finance,
Treasury, and Risk and Assurance functions continue to be reported
outside of the operating segments.
B. Geographical segment
The Group operates within New Zealand only and its revenue is derived
primarily from New Zealand.
PGG WRIGHTSON LIMITED
SEGMENT REPORT CONTINUED
For the year ended / as at 30 June 2022
KEY FINANCIAL DISCLOSURES
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Ngā Whakapuakanga Pūtea Hira
4
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PGG WRIGHTSON LIMITED
C. Operating segment information
AGENCY RETAIL & WATER OTHER TOTA L
(NON OPERATING SEGMENT)
2022 2021 2022 2021 2022 2021 2022 2021
$000 $000 $000 $000 $000 $000 $000 $000
Sales revenue 75,061 74,022 746,093 638,622 1,327 2,250 822,481 714,894
Commission revenue 109,208 107,685 76 79 89 58 109,373 107,822
Construction contract revenue – – 14,235 18,950 – – 14,235 18,950
Interest revenue on Go receivables 4,254 3,805 – – – – 4,254 3,805
Debtor interest charges 438 615 556 848 (26) (24) 968 1,439
Sublease income 410 356 348 118 631 431 1,389 905
Total external operating revenues 189,371 186,483 761,308 658,617 2,021 2,715 952,700 847,815
Operating EBITDA 21,844 25,179 52,495 37,533 (7,186) (6,683) 67,153 56,029
Non-operating gains/(losses) 695 3,885 133 991 (129) (420) 699 4,456
Impairment and fair value gains/(losses) (2,970) 917 691 589 97 326 (2,182) 1,832
Depreciation and amortisation expense (8,521) (8,457) (16,067) (15,060) (3,436) (3,766) (28,024) (27,283)
EBIT 11,048 21,524 37,252 24,053 (10,654) (10,543) 37,646 35,034
Net interest and finance costs (2,843) (2,418) (1,665) (2,073) (581) (1,130) (5,089) (5,621)
Profit/(loss) from continuing operations before income tax 8,205 19,106 35,587 21,980 (11,235) (11,673) 32,557 29,413
Income tax benefit/(expense) (2,197) (3,976) (10,194) (6,360) 4,120 3,643 (8,271) (6,693)
Profit/(loss) from continuing operations, net of income tax 6,008 15,130 25,393 15,620 (7,115) (8,030) 24,286 22,720
Profit/(loss) from discontinued operations, net of income tax – – – – – (7) – (7)
Net profit/(loss) after tax 6,008 15,130 25,393 15,620 (7,115) (8,037) 24,286 22,713
Segment assets 206,204 184,177 280,458 245,131 23,290 23,686 509,952 452,994
Assets held for sale – – – 40 – – – 40
Total segment assets 206,204 184,177 280,458 245,171 23,290 23,686 509,952 453,034
Total segment liabilities (101,724) (101,147) (180,332) (155,907) (55,212) (22,442) (337,268) (279,496)
Capital expenditure (additions to non-current assets) 5,653 6,940 7,430 12,468 3,571 1,677 16,654 21,085
The accompanying notes form an integral part of these consolidated financial statements.
PGG WRIGHTSON LIMITED
SEGMENT REPORT CONTINUED
For the year ended / as at 30 June 2022
PGG WRIGHTSON LIMITED
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5
C. Operating segment information
AGENCY RETAIL & WATER OTHER TOTA L
(NON OPERATING SEGMENT)
2022 2021 2022 2021 2022 2021 2022 2021
$000 $000 $000 $000 $000 $000 $000 $000
Sales revenue 75,061 74,022 746,093 638,622 1,327 2,250 822,481 714,894
Commission revenue 109,208 107,685 76 79 89 58 109,373 107,822
Construction contract revenue – – 14,235 18,950 – – 14,235 18,950
Interest revenue on Go receivables 4,254 3,805 – – – – 4,254 3,805
Debtor interest charges 438 615 556 848 (26) (24) 968 1,439
Sublease income 410 356 348 118 631 431 1,389 905
Total external operating revenues 189,371 186,483 761,308 658,617 2,021 2,715 952,700 847,815
Operating EBITDA 21,844 25,179 52,495 37,533 (7,186) (6,683) 67,153 56,029
Non-operating gains/(losses) 695 3,885 133 991 (129) (420) 699 4,456
Impairment and fair value gains/(losses) (2,970) 917 691 589 97 326 (2,182) 1,832
Depreciation and amortisation expense (8,521) (8,457) (16,067) (15,060) (3,436) (3,766) (28,024) (27,283)
EBIT 11,048 21,524 37,252 24,053 (10,654) (10,543) 37,646 35,034
Net interest and finance costs (2,843) (2,418) (1,665) (2,073) (581) (1,130) (5,089) (5,621)
Profit/(loss) from continuing operations before income tax 8,205 19,106 35,587 21,980 (11,235) (11,673) 32,557 29,413
Income tax benefit/(expense) (2,197) (3,976) (10,194) (6,360) 4,120 3,643 (8,271) (6,693)
Profit/(loss) from continuing operations, net of income tax 6,008 15,130 25,393 15,620 (7,115) (8,030) 24,286 22,720
Profit/(loss) from discontinued operations, net of income tax – – – – – (7) – (7)
Net profit/(loss) after tax 6,008 15,130 25,393 15,620 (7,115) (8,037) 24,286 22,713
Segment assets 206,204 184,177 280,458 245,131 23,290 23,686 509,952 452,994
Assets held for sale – – – 40 – – – 40
Total segment assets 206,204 184,177 280,458 245,171 23,290 23,686 509,952 453,034
Total segment liabilities (101,724) (101,147) (180,332) (155,907) (55,212) (22,442) (337,268) (279,496)
Capital expenditure (additions to non-current assets) 5,653 6,940 7,430 12,468 3,571 1,677 16,654 21,085
The accompanying notes form an integral part of these consolidated financial statements.
PGG WRIGHTSON LIMITED
SEGMENT REPORT CONTINUED
For the year ended / as at 30 June 2022
PGG WRIGHTSON LIMITED
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5
C. Operating segment information
AGENCY RETAIL & WATER OTHER TOTA L
(NON OPERATING SEGMENT)
2022 2021 2022 2021 2022 2021 2022 2021
$000 $000 $000 $000 $000 $000 $000 $000
Sales revenue 75,061 74,022 746,093 638,622 1,327 2,250 822,481 714,894
Commission revenue 109,208 107,685 76 79 89 58 109,373 107,822
Construction contract revenue – – 14,235 18,950 – – 14,235 18,950
Interest revenue on Go receivables 4,254 3,805 – – – – 4,254 3,805
Debtor interest charges 438 615 556 848 (26) (24) 968 1,439
Sublease income 410 356 348 118 631 431 1,389 905
Total external operating revenues 189,371 186,483 761,308 658,617 2,021 2,715 952,700 847,815
Operating EBITDA 21,844 25,179 52,495 37,533 (7,186) (6,683) 67,153 56,029
Non-operating gains/(losses) 695 3,885 133 991 (129) (420) 699 4,456
Impairment and fair value gains/(losses) (2,970) 917 691 589 97 326 (2,182) 1,832
Depreciation and amortisation expense (8,521) (8,457) (16,067) (15,060) (3,436) (3,766) (28,024) (27,283)
EBIT 11,048 21,524 37,252 24,053 (10,654) (10,543) 37,646 35,034
Net interest and finance costs (2,843) (2,418) (1,665) (2,073) (581) (1,130) (5,089) (5,621)
Profit/(loss) from continuing operations before income tax 8,205 19,106 35,587 21,980 (11,235) (11,673) 32,557 29,413
Income tax benefit/(expense) (2,197) (3,976) (10,194) (6,360) 4,120 3,643 (8,271) (6,693)
Profit/(loss) from continuing operations, net of income tax 6,008 15,130 25,393 15,620 (7,115) (8,030) 24,286 22,720
Profit/(loss) from discontinued operations, net of income tax – – – – – (7) – (7)
Net profit/(loss) after tax 6,008 15,130 25,393 15,620 (7,115) (8,037) 24,286 22,713
Segment assets 206,204 184,177 280,458 245,131 23,290 23,686 509,952 452,994
Assets held for sale – – – 40 – – – 40
Total segment assets 206,204 184,177 280,458 245,171 23,290 23,686 509,952 453,034
Total segment liabilities (101,724) (101,147) (180,332) (155,907) (55,212) (22,442) (337,268) (279,496)
Capital expenditure (additions to non-current assets) 5,653 6,940 7,430 12,468 3,571 1,677 16,654 21,085
The accompanying notes form an integral part of these consolidated financial statements.
KEY FINANCIAL DISCLOSURES
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Ngā Whakapuakanga Pūtea Hira
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PGG WRIGHTSON LIMITED
PGG WRIGHTSON LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2022
2022 2021
NOTE $000 $000
Cash flows from operating activities
Cash was provided from:
Receipts from customers 913,260 818,914
Receipt for the termination of partnering contract, net of costs – 3,934
Dividends received 5 1
Interest received 5,321 5,307
918,586 828,156
Cash was applied to:
Payments to suppliers and employees (884,560) (765,212)
Interest paid (957) (646)
Interest paid on lease liabilities (3,786) (4,036)
Income tax paid (5,623) (28)
Lump sum contributions to defined benefit plan (ESCT inclusive) – (563)
(894,926) (770,485)
Net cash inflow/(outflow) from operating activities 23,660 57,671
Cash flows from investing activities
Cash was provided from:
Proceeds from sale of property, plant and equipment and assets held for sale 1,053 3,294
Proceeds from sale of investments 7 136
1,060 3,430
Cash was applied to:
Purchase of property, plant and equipment (5,926) (5,500)
Purchase of intangibles (2,881) (1,309)
Investment sale costs – (51)
(8,807) (6,860)
Net cash inflow/(outflow) from investing activities (7,747) (3,430)
Cash flows from financing activities
Cash was provided from:
Increase in external borrowings and bank overdraft 30,000 –
30,000 –
Cash was applied to:
Dividends paid to shareholders (23,331) (9,343)
Repayment of external borrowings and bank overdraft (2,400) (40,100)
Repayment of principal portion of lease liabilities (18,873) (18,299)
(44,604) (67,742)
Net cash inflow/(outflow) from financing activities (14,604) (67,742)
Net increase/(decrease) in cash held 1,309 (13,501)
Opening cash 3,367 16,868
Cash and cash equivalents 9 4,676 3,367
The accompanying notes form an integral part of these consolidated financial statements.
KEY FINANCIAL DISCLOSURES
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Ngā Whakapuakanga Pūtea Hira
PGG WRIGHTSON LIMITED
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7
PGG WRIGHTSON LIMITED
RECONCILIATION OF PROFIT AFTER TAX
WITH NET CASH FLOW FROM OPERATING ACTIVITIES
For the year ended 30 June 2022
2022 2021
$000 $000
Net profit after tax 24,286 22,713
Add/(deduct) non-cash/non-operating items:
Depreciation and amortisation 28,027 27,283
Impairment and fair value losses/(gains) 2,182 (1,832)
Reversal of software capital projects expensed in the current period - 750
Bad debts written off (net) (633) 67
Loss/(profit) on sale of assets and investments, and lease terminations (763) (909)
Foreign exchange loss/(gain) (9) 333
Deferred tax expense/(benefit) (1,797) (258)
Defined benefit expense/(gain) (85) 35
Pension contributions not expensed through profit or loss - (563)
Other non-cash/non-operating items 108 83
Add/(deduct) movement in working capital items:
Change in inventories (20,766) 759
Change in accounts receivable, Go livestock receivables and prepayments (41,909) (22,694)
Change in trade creditors, provisions and accruals 26,799 26,468
Change in income tax payable 4,444 6,917
Change in other current assets/liabilities 3,776 (1,481)
Net cash flow from operating activities 23,660 57,671
Cash Flows Accounting Policies
In the statement of cash flows, cash receipts and payments on behalf of customers which reflect the activities of the customers rather than
those of the Group are reported on a net basis.
The accompanying notes form an integral part of these consolidated financial statements.
KEY FINANCIAL DISCLOSURES
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Ngā Whakapuakanga Pūtea Hira
8
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PGG WRIGHTSON LIMITED
PGG WRIGHTSON LIMITED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2022
2022 2021
NOTE $000 $000
ASSETS
Current
Cash and cash equivalents 9 4,676 3,367
Short-term derivative assets 10 1,547 843
Trade and other receivables 11 170,336 148,171
Go livestock receivables 12 65,405 45,869
Inventories 13 102,048 81,498
Assets classified as held for sale – 40
Other current assets 3,130 2,842
Total current assets 347,142 282,630
Non-current
Long-term derivative assets 10 17 –
Deferred tax asset 7 10,676 8,173
Investments in equity accounted investees 102 92
Go livestock receivables 12 704 –
Other investments 479 474
Intangible assets 14 12,101 15,663
Right-of-use assets 15 93,074 101,064
Property, plant and equipment 16 45,657 44,627
Defined benefit asset 18 – 311
Total non-current assets 162,810 170,404
Total assets
509,952 453,034
LIABILITIES
Current
Debt due within one year 9 7,500 9,900
Short-term derivative liabilities 10 1,009 242
Accounts payable and accruals 17 189,290 158,883
Short-term lease liabilities 15 18,229 17,631
Income tax payable 7,910 3,466
Total current liabilities 223,938 190,122
Non-current
Long-term debt 9 30,000 –
Long-term derivative liabilities 10 152 143
Long-term lease liabilities 15 78,290 86,387
Long-term provisions 17 2,762 2,844
Defined benefit liability 18 2,126 –
Total non-current liabilities 113,330 89,374
Total liabilities
337,268 279,496
EQUITY
Share capital 28 372,318 372,318
Reserves 28 12,973 14,782
Retained earnings/(deficit) 28 (212,607) (213,562)
Total equity attributable to Shareholders of the Company 172,684 173,538
Total liabilities and equity
509,952 453,034
The accompanying notes form an integral part of these consolidated financial statements.
PGG WRIGHTSON LIMITED 2022
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9
PGG Wrightson Technical Field
Representative, Simon Dodds,
checks cob development and dry
matter percentage to determine an
estimated silage harvest date with
Brad Payne at Payne Farm Limited,
near Cambridge, Waikato.
PGG Wrightson Limited
Additional Financial
Disclosures
Including Notes to the Consolidated Financial Statements for the year ended 30 June 2022
Tae atu ki Ngā Pitopito Kōrero ki Ngā Tauākī Pūtea Tōpū mō te tau i mutu i te 30 Hune 2022
Ngā Whakapuakanga Pūtea Tāpiri
10
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PGG WRIGHTSON LIMITED
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2022
ADDITIONAL FINANCIAL DISCLOSURES
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Ngā Whakapuakanga Pūtea Tāpiri
1 OPERATING REVENUE
2022 2021
$000 $000
Revenue from contracts with customers
Sales revenue 822,481 714,894
Commission revenue 109,373 107,822
Construction contract revenue 14,235 18,950
Other operating revenue
Interest revenue on Go livestock receivables 4,254 3,805
Debtor interest charges 968 1,439
Sublease income 1,389 905
952,700 847,815
Income Recognition Accounting Policies
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably
measured. The following specific recognition criteria must also be met before revenue is recognised.
Sales revenue
Sales revenue comprises the sale value of transactions where the Group acts as a principal; for example, retail store sales, and sales of wool
and velvet products. Revenue is measured at the transaction price when control is transferred to which an entity expects to be entitled
in exchange for transferring goods or services to a customer. For sale of goods, the transfer of control occurs when the risks and rewards,
physical possession and the legal title of the goods have been transferred and accepted by the customer and the customer has a present
obligation to make the payment.
Our customers may be entitled to discounts or rebates for certain items and/or volumes purchased, under varying categories. These
discounts or rebates are defined as variable consideration and are included in the transaction price as a component of operating revenue
upon the completion of our performance obligations. These discounts/rebates are contractual in nature and known at balance date,
therefore no assumptions or estimates are required.
The Group offers a range of payment terms, and in some cases can be up to 12 months. The Group does not recognise a financing element
for contracts with terms of 12 months or less.
When part of the Group's performance obligation in selling its products is to arrange freight and/or insurance, the Group is considered to
be acting as an agent and these costs are recognised net against freight recoveries.
The Group offers warranties as required by New Zealand law and/or per the terms and conditions of the contracts with customers. The
Group recognises the obligations under these warranties as a provision.
Commission revenue
Commission revenue comprises commission for transactions where the Group acts as an agent. For agency commissions, the Group
does not take inventory risk or title for inventories, or for the Group's Livestock and Real Estate businesses, biological assets and properties
respectively. The Group generates commissions from acting as an agent for organising the sale of livestock or real estate, and from the
successful referral of clients to an unrelated insurance partner.
Revenue is recognised at a point in time upon completion of service.
Construction contract revenue
Construction services are provided to customers in the Water business to construct pivots and irrigation systems. Most contracts contain a
single performance obligation. The size and duration of the contracts can vary significantly, and customers are invoiced as work progresses.
Most contracts are completed within 12 months; therefore, the unearned revenue on these contracts has not been disclosed.
The Group accounts for revenue over time, which best depicts the pattern of transfer of the construction services to the customer. The
Group uses an input method to recognise revenue based on a percentage of cost completed. This method involves judgements relating to
a contract's expected margin and its stage of completion.
Interest and similar income and expense
The Group recognises the fixed fees charged to customers under its Go programme as interest revenue. Refer to Note 12 Go Livestock
Receivables for further explanation regarding this programme. This interest revenue is recognised over the term of the Go contracts which
can be for a term of up to 540 days.
The Group also recognises interest revenue on an accruals basis when the services are rendered using the effective interest method. Refer
to the accounting policies under Note 6 Net Interest and Finance Costs for further explanation on the effective interest method.
Sublease income
The Group recognises lease payments received under subleases as income on a straight-line basis over the lease term. Refer to Note 15
Right-of-Use Assets and Lease Liabilities for further explanation.
PGG WRIGHTSON LIMITED
|
11
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2022
ADDITIONAL FINANCIAL DISCLOSURES
|
Ngā Whakapuakanga Pūtea Tāpiri
2 COST OF SALES
2022 2021
NOTE $000 $000
Depreciation and amortisation 189 187
Employee benefits (including commissions) 32,541 34,245
Inventories and consumables 13 632,250 553,473
Freight 12,438 9,814
Other 26,763 26,870
704,181 624,589
3 OTHER OPERATING EXPENSES
2022 2021
$000 $000
Audit of annual financial statements of the Company by EY 266 240
Other Advisory Services provided by EY:
Facilitation of sustainability materiality assessment 21 –
Cloud computing project assistance 18 –
Directors' fees 565 552
Donations 7 8
Increase/(decrease) in provision for impaired trade receivables, Go livestock receivables and contract assets (1,109) (774)
Net bad debts written off / (recovered) 476 841
IT & telecommunication costs 13,372 12,981
Marketing 4,665 3,820
Motor vehicle costs 7,012 5,713
Travel costs 2,317 2,858
Rental and operating lease costs 901 460
Occupancy costs (excluding rental and operating lease) 5,672 5,110
Other staff costs 7,442 6,104
Other expenses 7,201 9,822
48,826 47,735
4 NON-OPERATING GAINS/(LOSSES)
2022 2021
$000 $000
Receipt for the termination of partnering contract, net of costs – 3,934
Gain on sale of property, plant and equipment 763 960
Other non-operating gains/(losses) (64) (438)
699 4,456
12
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PGG WRIGHTSON LIMITED
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2022
ADDITIONAL FINANCIAL DISCLOSURES
|
Ngā Whakapuakanga Pūtea Tāpiri
5 IMPAIRMENT AND FAIR VALUE GAINS/(LOSSES)
2022 2021
NOTE $000 $000
Net impairment reversal/(impairment) – Property, plant and equipment 5(A) 414 906
Net impairment reversal/(impairment) – Right-of-use assets 5(B) 695 910
Net impairment reversal/(impairment) – Software Assets 5(C) (3,384) –
Other fair value gains/(losses) 93 16
(2,182) 1,832
A. Saleyards
At balance date, the Group reviewed its saleyard assets for indicators of impairment and for any indication that a previously recognised impairment
loss may have reversed. The Group recognised a net reversal of $0.41 million of previously recognised impairment losses on two saleyards (2021:
$0.91 million net reversal). This was based on indicative external market valuations for the saleyards.
B. Right-of-use assets
At balance date, the Group reviewed its right-of-use assets for indicators of impairment and for any indication that a previously recognised
impairment loss may have reversed. As a result of this review, the Group reversed $0.7 million of previously recognised impairment losses relating
to the Water business CGU (2021: $0.91 million reversal). The impairment reversal resulted from changes in key assumptions applied to the
discounted cash flow model utilised to determine the value in use for impairment testing. The change in assumptions included improved current
and estimated future earnings following the 2021 restructure of the business. The discount rate applicable for the Water business and used in the
discounted cashflow model was 12.1%.
C. Software Assets
At balance date, certain intangible assets held within the Agency Segment were impaired following impairment review. Indicators of impairment
were identified following analysis of the financial performance of the CGU including historic losses generated and completion of the CGU's future
budgets. Impairment testing was performed using a discounted cash flow calculation to determine the value-in-use based on anticipated future
earnings to be derived from the CGU. An impairment loss in the amount of $3.4 million has been recognised in the Statement of Profit or Loss
(within impairment and fair value gains/(losses). The discount rate applied in the discounted cashflow calculation was 15%. All other assets held by
the CGU have a recoverable amount that is higher than the carrying amount and consequently have not been impaired.
Impairment Accounting Policies
The carrying value of the Group's assets are reviewed at each reporting date to determine whether there is any objective evidence of
impairment. An impairment loss is recognised whenever the carrying amount exceeds its recoverable amount. Impairment losses directly
reduce the carrying value of assets and are recognised in profit or loss unless the asset is carried at a revalued amount in accordance with
another standard.
Non-financial assets
The carrying amounts of the Group's non-financial assets (other than inventories and deferred tax assets) are reviewed at each reporting
date to determine whether there is any indication of impairment. If any such indication exists, then the recoverable amount of the asset or
the cash-generating unit (CGU) to which the asset relates is estimated. A CGU is the smallest identifiable asset group that generates cash
flows that are largely independent from other assets and groups.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the
estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset or CGU.
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount. Impairment losses are
recognised in profit or loss.
An assessment is made at each reporting date to determine whether there is an indication that previously recognised impairment losses
no longer exist or have decreased. If such indication exists, the Group estimates the asset’s or CGU’s recoverable amount. A previously
recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable
amount since the last impairment loss was recognised.
An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have
been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
PGG WRIGHTSON LIMITED
|
13
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2022
ADDITIONAL FINANCIAL DISCLOSURES
|
Ngā Whakapuakanga Pūtea Tāpiri
6 NET INTEREST AND FINANCE COSTS
2022 2021
$000 $000
Interest income 99 63
Interest funding expense
Bank interest on loans and overdrafts (957) (646)
Bank facility fees (875) (908)
(1,832) (1,554)
Net interest income/(expense) excluding interest on lease liabilities (1,733) (1,491)
Interest on lease liabilities (3,786) (4,036)
Foreign exchange gain/(loss)
Net gain/(loss) on foreign denominated items 485 (217)
Fair value gain/(loss) on foreign exchange derivatives (55) 123
430 (94)
Net interest and finance income/(expense) (5,089) (5,621)
Interest and Finance Income/Expense Accounting Policies
Interest and similar income and expense
For all financial instruments measured at amortised cost, interest income or expense is recorded at the effective interest rate, which is the
rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument or a shorter
period, where appropriate, to the net carrying amount of the financial asset or financial liability. The calculation takes into account all
contractual terms of the financial instrument (for example, prepayment options) and includes any fees or incremental costs that are directly
attributable to the instrument and are an integral part of the effective interest rate, but not future credit losses. Once the recorded value of a
financial asset or a group of similar financial assets has been reduced due to an impairment loss, interest income continues to be recognised
using the original effective interest rate applied to the new carrying amount.
Fair value change on foreign exchange derivatives
The Group undertakes transactions denominated in foreign currencies and exposure to movements in foreign currency arises from these
activities. The Group uses forward foreign exchange contracts to manage these exposures. These derivatives are recorded at their fair value
with mark-to-market fair value movements flowing through fair value gain/(loss) on foreign exchange derivatives in the profit or loss. A
portion of the underlying hedged future sale or purchase transactions have not yet been recognised by the Group. For this portion, no
corresponding offsetting net gain/(loss) on foreign denominated items has been recognised.
14
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PGG WRIGHTSON LIMITED
Refer to
Accounting
Policies
– page 15.
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2022
ADDITIONAL FINANCIAL DISCLOSURES
|
Ngā Whakapuakanga Pūtea Tāpiri
7 INCOME TAXES
A. Income tax recognised in profit or loss
2022 2021
$000 $000
Current tax benefit/(expense)
Current year (10,159) (7,395)
Adjustments for prior years 91 443
(10,068) (6,952)
Deferred tax benefit/(expense)
Origination and reversal of temporary differences 1,888 727
Adjustments for prior years (91) (468)
1,797 259
Income tax benefit/(expense)
(8,271) (6,693)
Reconciliation
Profit from continuing operations before income tax 32,557 29,413
Income tax using the Company's tax rate (28%) (9,116) (8,236)
Non-deductible expenditure (79) (478)
Non-assessable income 211 1,784
Tax credits 686 285
Over/(under) provided in prior years (3) (25)
Other 30 (23)
Income tax benefit/(expense) (8,271) (6,693)
B. Income tax recognised directly in equity
2022 2021
$000 $000
Deferred tax on movement of actuarial gains/losses on employee benefit plans 706 (2,746)
Current tax on movement of actuarial gains/losses on employee benefit plans – 52
Income tax benefit/(expense) recognised directly in equity 706 (2,694)
C. Recognised deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
ASSETS ASSETS LIABILITIES LIABILITIES NET NET
2022 2021 2022 2021 2022 2021
$000 $000 $000 $000 $000 $000
Property, plant and equipment 706 565 – – 706 565
Intangible assets – – (1,541) (2,277) (1,541) (2,277)
Right-of-use assets – – (26,061) (28,298) (26,061) (28,298)
Lease liabilities 27,026 29,125 – – 27,026 29,125
Employee benefits 7,173 4,762 – – 7,173 4,762
Provisions 3,373 4,296 – – 3,373 4,296
Deferred tax asset/(liability) 38,278 38,748 (27,602) (30,575) 10,676 8,173
PGG WRIGHTSON LIMITED
|
15
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2022
ADDITIONAL FINANCIAL DISCLOSURES
|
Ngā Whakapuakanga Pūtea Tāpiri
7 INCOME TAXES (CONTINUED)
C. Recognised deferred tax assets and liabilities (continued)
RECOGNISED IN RECOGNISED IN
RECOGNISED OTHER RECOGNISED OTHER
BALANCE IN PROFIT COMPREHENSIVE BALANCE IN PROFIT COMPREHENSIVE BALANCE
1 JUL 2020 OR LOSS INCOME 30 JUN 2021 OR LOSS INCOME 30 JUN 2022
$000 $000 $000 $000 $000 $000 $000
Property, plant 616 (51) – 565 141 – 706
and equipment
Intangible assets (1,181) (1,096) – (2,277) 736 – (1,541)
Right-of-use assets (29,350) 1,052 – (28,298) 2,237 – (26,061)
Lease liabilities 29,987 (862) – 29,125 (2,099) – 27,026
Employee benefits 6,361 1,147 (2,746) 4,762 1,705 706 7,173
Provisions 4,227 69 – 4,296 (923) – 3,373
10,660 259 (2,746) 8,173 1,797 706 10,676
D. Unrecognised tax losses and temporary differences
At 30 June 2022, the Group has no unrecognised deferred tax assets relating to tax losses and temporary differences (2021: Nil).
E. Imputation credits
The Group has $8.1 million imputation credits as at 30 June 2022 (2021: $6.2 million).
Income Tax Accounting Policies
Income tax expense comprises current and deferred taxation and is recognised in profit or loss except to the extent that it relates to items
recognised directly in other comprehensive income or equity, in which case it is recognised directly in other comprehensive income or
equity.
Current tax
Current tax is the expected tax payable on the taxable income for the year, calculated using tax rates enacted or substantively enacted at
the reporting date. Current tax includes any adjustment to tax payable with respect to previous periods. Current tax assets and liabilities are
offset only if certain criteria are met.
Deferred tax
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to the
temporary differences when they reverse, based on the laws that have been enacted or substantially enacted at the reporting date.
Deferred tax is not recognised for:
– taxable temporary differences arising on the initial recognition of goodwill;
– temporary differences relating to subsidiaries, associates and jointly controlled entities to the extent that the Group is able to control the
timing of the reversal of the temporary differences and it is probable they will not reverse in the foreseeable future;
– temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects
neither accounting nor taxable profit or loss.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary
differences can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer
probable that the related tax benefit will be recognised.
Deferred tax assets and liabilities are offset only if certain criteria are met.
16
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PGG WRIGHTSON LIMITED
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2022
ADDITIONAL FINANCIAL DISCLOSURES
|
Ngā Whakapuakanga Pūtea Tāpiri
8 EARNINGS PER SHARE AND NET TANGIBLE ASSETS
A. Earnings per share (EPS)
The calculation of EPS is based on the following profit figures and number of authorised shares.
WEIGHTED AVERAGE
ISSUED ORDINARY SHARES NUMBER OF ORDINARY SHARES
2022 2021 2022 2021
000 000 000 000
Issued ordinary shares at 1 July 75,484 75,484 75,484 75,484
Balance at 30 June 75,484 75,484 75,484 75,484
There are no dilutive shares or options (2021: Nil).
2022 2021
$000 $000
Profit (net of tax) attributable to Shareholders of the Company 24,286 22,713
Profit from continuing operations (net of tax) attributable to Shareholders of the Company 24,286 22,720
2022 2021
$ $
Basic & diluted EPS 0.322 0.301
Basic & diluted EPS – continuing operations 0.322 0.301
B. Net tangible assets (NTA)
The calculation of NTA per share, which is a required NZX disclosure, is based on the following NTA figure and the Company's issued ordinary
shares at the end of the period.
2022 2021
$000 $000
Total assets 509,952 453,034
Total liabilities (337,268) (279,496)
less Intangible assets (12,101) (15,663)
less Deferred tax asset (10,676) (8,173)
Net tangible assets 149,907 149,702
2022 2021
$ $
NTA per issued ordinary shares at the end of period 1.986 1.983
Earnings Per Share Accounting Policies
The Group presents basic and diluted EPS data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to
shareholders by the weighted average number of shares outstanding during the period. Diluted EPS is determined by adjusting the profit or
loss attributable to shareholders and the number of shares outstanding to include the effects of all potential dilutive shares.
PGG WRIGHTSON LIMITED
|
17
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2022
ADDITIONAL FINANCIAL DISCLOSURES
|
Ngā Whakapuakanga Pūtea Tāpiri
9 CASH AND FINANCING FACILITIES
2022 2021
NOTE $000 $000
Cash and cash equivalents 4,676 3,367
Current financing facilities 9(A) (7,500) (9,900)
Term financing facilities 9(A) (30,000) –
Net interest-bearing (debt)/cash and cash equivalents (32,824) (6,533)
Go livestock receivables 12 65,405 45,869
Net interest-bearing (debt)/cash and cash equivalents after adjusting for Go livestock receivables 32,581 39,336
A. Financing facilities
During the year, the Company amended and extended its syndicated bank facility. The amended facility, which commenced on 13 December
2021, provides the following:
– Term debt facility of $60.00 million maturing on 6 December 2024. This facility had $30.00 million drawn at 30 June 2022.
– Working capital facilities of up to $70.00 million maturing on 6 December 2024 (subject to an annual Clean Down).
The syndicated facilities fund the general corporate activities of the Group, the seasonal fluctuations in working capital and Go livestock
receivables.
The Company has granted a general security deed and mortgage over all its wholly-owned New Zealand assets to a security trust. Bank of New
Zealand acts as facility agent and security trustee for the banking syndicate, which comprises Bank of New Zealand, Cooperatieve Rabobank
U.A. (New Zealand branch) and Westpac New Zealand Limited. The agreement contains various financial covenants and restrictions, including
maximum permissible ratios for debt leverage and operating leverage, together with limits for Go livestock receivables, capital expenditure and
asset disposals.
The syndicated facility agreement allows the Group, subject to certain conditions, to enter into additional facilities outside of the Company's
syndicated facility. The additional facilities are guaranteed by the security trust. These facilities amounted to $6.58 million as at 30 June 2022 (2021:
$6.53 million).
– Overdraft facilities of $3.00 million.
– Guarantee, letters of credit and trade finance facilities of $3.58 million.
18
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PGG WRIGHTSON LIMITED
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2022
ADDITIONAL FINANCIAL DISCLOSURES
|
Ngā Whakapuakanga Pūtea Tāpiri
10 DERIVATIVE FINANCIAL INSTRUMENTS
The Group uses forward foreign exchange contracts to manage its exposure to foreign currency fluctuations. In accordance with the Group's
treasury policy, the Group does not hold any of these derivative instruments for trading purposes.
2022 2021
$000 $000
Derivative assets held for risk management
Current 1,547 843
Non-current 17 –
1,564 843
Derivative liabilities held for risk management
Current (1,009) (242)
Non-current (152) (143)
(1,161) (385)
Net derivative asset/(liability) held for risk management 403 458
Derivative Financial Instruments Accounting Policies
Derivative financial instruments are recognised initially at fair value and transaction costs are expensed immediately. Subsequent to initial
recognition, derivative financial instruments are stated at fair value, and changes therein are generally recognised in profit or loss. The fair
value of forward exchange contracts is based on broker quotes.
Where the Group enters into derivative transactions, these agreements do not meet the criteria for offsetting in the consolidated statement
of financial position. The fair value amounts recognised in the consolidated statement of financial position are recorded on a gross basis.
The Group does not currently apply hedge accounting.
PGG WRIGHTSON LIMITED
|
19
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2022
ADDITIONAL FINANCIAL DISCLOSURES
|
Ngā Whakapuakanga Pūtea Tāpiri
11 TRADE AND OTHER RECEIVABLES
2022 2021
$000 $000
Accounts receivable due from unrelated parties 141,689 124,364
Accounts receivable due from related parties – 3
Gross accounts receivable 141,689 124,367
less Provision for impaired debtors (2,023) (2,895)
Net accounts receivable 139,666 121,472
Contract assets 3,132 2,083
less Provision for impaired contract assets (119) (356)
Other receivables 22,217 22,631
Prepayments 5,440 2,341
Trade and other receivables 170,336 148,171
Analysis of movements in provisions for impaired debtors & contract assets
Balance at beginning of year (3,251) (4,025)
Movement in provision 1,109 774
Balance at end of year
(2,142) (3,251)
The ageing status of the accounts receivable at the reporting date is as follows:
TOTA L TOTA L
DEBTORS PROVISION DEBTORS PROVISION
2022 2022 2021 2021
$000 $000 $000 $000
Not past due 133,914 (205) 114,336 (824)
Past due 1– 30 days 5,450 (5) 5,636 (14)
Past due 31– 60 days 370 (22) 894 (27)
Past due 61– 90 days 182 (18) 717 (59)
Past due 90 plus days 1,773 (1,773) 2,784 (1,971)
141,689 (2,023) 124,367 (2,895)
20
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PGG WRIGHTSON LIMITED
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2022
ADDITIONAL FINANCIAL DISCLOSURES
|
Ngā Whakapuakanga Pūtea Tāpiri
12 GO LIVESTOCK RECEIVABLES
The Group holds receivables in respect of its Go range of livestock products. The Go range allows farmers to defer payment for the purchase of
livestock. The counterparty farmer to the Go product is fully exposed to the risks and rewards of ownership of the livestock. To mitigate credit risk,
the Group retains legal title to the livestock until its sale. Fee income received in respect of the Go livestock receivables is recognised by the Group
as interest income over the respective contract period and is included within operating revenue (refer to Note 1 Operating Revenue). Accrued
interest income in respect of the Go livestock receivables is included within Other Receivables (refer to Note 11 Trade and Other Receivables) and
amounts to $1.75 million as at the balance date (2021: $1.20 million).
2022 2021
$000 $000
Go livestock receivables – Current 65,921 46,011
Go livestock receivables – Non Current 704 –
66,625 46,011
less Provision for impairment – Go livestock receivables (516) (142)
66,109 45,869
Analysis of movements in provisions for impaired Go livestock receivables
Balance at beginning of year (142) –
Movement in provision (374) (142)
Balance at end of year
(516) (142)
The ageing status of the Go livestock receivables at the reporting date is as follows:
GO LIVESTOCK GO LIVESTOCK
RECEIVABLES PROVISION RECEIVABLES PROVISION
2022 2022 2021 2021
$000 $000 $000 $000
Not past due 66,304 (195) 45,884 (15)
Past due 1 – 30 days 16 (16) 17 (17)
Past due 31 – 60 days 9 (9) – –
Past due 61 – 90 days 3 (3) 2 (2)
Past due 90 plus days 293 (293) 108 (108)
66,625 (516) 46,011 (142)
Trade and Other Receivables and Go Livestock Receivables Accounting Policies
Recognition and measurement
A receivable without a significant financing component is initially measured at the transaction price and classified as financial assets
measured at amortised cost. Accounts receivable includes accrued interest.
Impairment
Specific provisions are maintained to cover identified impaired debtors. Judgement is required in determining the impairment provision.
The Group recognises loss allowances for the expected credit loss (ECL) on Trade and Go livestock receivables. The Group measures loss
allowances for trade and Go livestock receivables at an amount equal to lifetime ECL.
When estimating ECLs, the Group considers reasonable and supportable information that is relevant and available without undue cost and
effort. This includes both qualitative and quantitative information and analysis, based on the Group's historical experience and informed
credit assessment, that includes forward-looking information. The Group assumes that the credit risk has increased significantly if it is more
than 60 days past due. The Group considers a financial asset to be in default when the debtor is unlikely to pay its credit obligations to the
Group in full, without recourse by the Group to actions such as realising security (if any is held).
On a monthly basis, the Group via its Credit Committee, assesses whether Trade and Go livestock receivables are credit-impaired. All
individual instruments that are considered significant are subject to this approach. A financial asset is credit-impaired when one or more
events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial
asset is credit-impaired includes observable data such as significant financial difficulty of the debtor.
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets. The gross
carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering a financial asset in its
entirety or a portion thereof.
PGG WRIGHTSON LIMITED
|
21
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2022
ADDITIONAL FINANCIAL DISCLOSURES
|
Ngā Whakapuakanga Pūtea Tāpiri
13 INVENTORY
2022 2021
$000 $000
Merchandise 83,421 64,935
Wool & velvet inventory 20,188 18,199
less Provision for inventory write down (1,561) (1,636)
102,048 81,498
During the year, inventories of $632.25 million (2021: $553.47 million) are included in cost of sales in the profit or loss (refer to Note 2 Cost of Sales).
Included within this amount are write-down of inventories of $1.02 million (2021: $0.55 million) to net realisable value and reversals of write-down
of $0.16 million (2021: $0.10 million).
Inventories Accounting Policies
Raw materials and finished goods are stated at the lower of cost or net realisable value. Cost is determined on a weighted average cost
basis. In the case of manufactured goods, cost includes direct materials, labour and production overheads. Judgement is required in
determining the net realisable value for inventories.
22
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PGG WRIGHTSON LIMITED
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2022
ADDITIONAL FINANCIAL DISCLOSURES
|
Ngā Whakapuakanga Pūtea Tāpiri
14 INTANGIBLE ASSETS
RIGHTS & CAPITAL WORK
SOFTWARE TRADEMARKS IN PROGRESS TOTAL
$000 $000 $000 $000
Cost
Balance at 1 July 2020 26,775 1,916 1,498 30,189
Additions – – 3,278 3,278
Transfers 429 – (429) –
Disposals (310) – (1,095) (1,405)
Balance at 30 June 2021 26,894 1,916 3,252 32,062
Balance at 1 July 2021 26,894 1,916 3,252 32,062
Additions – 477 3,234 3,711
Transfers 2,382 528 (2,910) –
Disposals (1,804) – – (1,804)
Balance at 30 June 2022 27,472 2,921 3,576 33,969
Amortisation and impairment losses
Balance at 1 July 2020 12,932 1,391 – 14,323
Amortisation for the year 2,156 60 – 2,216
Disposals (140) – – (140)
Balance at 30 June 2021 14,948 1,451 – 16,399
Balance at 1 July 2021 14,948 1,451 – 16,399
Amortisation for the year 2,843 496 – 3,339
Disposals (1,254) – – (1,254)
Impairment / (Impairment Reversal) 3,384 – – 3,384
Balance at 30 June 2022 19,921 1,947 – 21,868
Carrying amounts
At 30 June 2021 11,946 465 3,252 15,663
At 30 June 2022 7,551 974 3,576 12,101
Intangible Assets Accounting Policies
Software
Software is a finite life intangible and is recorded at cost less accumulated amortisation and impairment. Amortisation is charged on a
straight line basis over an estimated useful life between 1 and 15 years. The estimated useful life and amortisation method is reviewed at the
end of each annual reporting period and adjusted if appropriate.
Rights
Manufacturing and production rights are finite life intangibles and are recorded at cost less accumulated amortisation and impairment.
Amortisation is charged on a straight line basis over an estimated useful life between 2 and 10 years. The estimated useful life and
amortisation method is reviewed at the end of each annual reporting period and adjusted if appropriate.
Impairment
The carrying amounts of the Group's intangible assets are reviewed at each reporting date to determine whether there is any indication of
impairment. If any such indication exists, then the recoverable amount of the asset is estimated. For intangible assets that have indefinite
lives, the recoverable amount is estimated at each reporting date. An impairment loss is recognised in the profit or loss if the carrying
amount of an asset exceeds the recoverable amount. Refer to the accounting policy under Note 5 Impairment and Fair Value Gains/(Losses)
for further explanation.
PGG WRIGHTSON LIMITED
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Accounting
Policies
– page 24.
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2022
ADDITIONAL FINANCIAL DISCLOSURES
|
Ngā Whakapuakanga Pūtea Tāpiri
15 RIGHT-OF-USE ASSETS AND LEASE LIABILITIES
Group as a lessee
The Group leases many assets, including:
– leases of land and buildings from which it conducts operations. These leases range in length from one to fifteen years with various rights of
renewal. Where surplus properties are unable to be exited, the Group subleases these properties where possible and derives sublease revenue
on a short-term temporary basis.
– leases of motor vehicles and forklifts for use by employees, agents and representatives. These leases range for a period of between three and
seven years.
– leases of office and IT equipment. These leases are typically for a period of up to four years.
The Group elects not to recognise right-of-use assets and lease liabilities for short-term or low-value leases, such as leases of office and IT
equipment. The Group continues to expense lease payments associated with these leases on a straight-line basis.
A. Right-of-use assets
PROPERTY VEHICLES TOTAL
NOTE $000 $000 $000
Balance at 1 July 2020 93,226 11,399 104,625
Additions 7,755 5,705 13,460
Depreciation charge for the period (13,391) (6,288) (19,679)
Reassessments, modifications and terminations 1,590 158 1,748
Net impairment reversal / (impairment) 5(B) 910 – 910
Balance at 30 June 2021 90,090 10,974 101,064
Balance at 1 July 2021 90,090 10,974 101,064
Additions 648 6,733 7,381
Depreciation charge for the period (14,083) (5,924) (20,007)
Reassessments, modifications and terminations 3,253 688 3,941
Net impairment reversal / (impairment) 5(B) 695 – 695
Balance at 30 June 2022 80,603 12,471 93,074
B. Lease liabilities
PROPERTY VEHICLES TOTAL
$000 $000 $000
Balance at 1 July 2020 95,347 11,557 106,904
Additions, reassessments, modifications and terminations 9,553 5,860 15,413
Interest on lease liabilities 3,633 403 4,036
Lease payments (15,719) (6,616) (22,335)
Balance at 30 June 2021 92,814 11,204 104,018
Balance at 1 July 2021 92,814 11,204 104,018
Additions, reassessments, modifications and terminations 3,963 7,412 11,375
Interest on lease liabilities 3,356 429 3,785
Lease payments (16,358) (6,301) (22,659)
Balance at 30 June 2022 83,775 12,744 96,519
A maturity analysis of lease liabilities is included in Note 19 Financial Instruments – Fair Values and Risk Management.
24
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PGG WRIGHTSON LIMITED
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2022
ADDITIONAL FINANCIAL DISCLOSURES
|
Ngā Whakapuakanga Pūtea Tāpiri
15 RIGHT-OF-USE ASSETS AND LEASE LIABILITIES (CONTINUED)
B. Lease liabilities (Continued)
Where practicable, the Group seeks to include extension options in new leases to provide operational flexibility. Some of the Group's property
leases contain extension options exercisable by the Group up to one year before the end of the non-cancellable contract period. The extension
options are exercisable only by the Group and not by the lessors. The Group assesses at lease commencement date whether it is reasonably certain
to exercise the extension options. A reassessment is made subsequently if there is any significant event or significant changes in circumstances
within the Group's control. The Group estimates that the potential future lease payments, should it exercise all the extension options, would result
in an increase in lease liability of $93.2 million (2021: $85.2 million).
C. Other disclosures
2022 2021
NOTE $000 $000
Amount in the consolidated statement of profit or loss
Depreciation on right-of-use assets – continuing operations (20,007) (19,679)
Interest on lease liabilities 6 (3,786) (4,036)
Short-term or low-value lease expenses (1,081) (860)
Variable lease payments not included in the measurement of lease liabilities (168) (153)
Income from sub-leasing right-of-use assets 1,389 905
Gain/(loss) arising from sale and leaseback transactions 82 339
Amounts in the consolidated statement of cashflows
Total cash outflow for leases (22,659) (22,335)
Lease Accounting Policies
The Group adopted NZ IFRS 16 Leases from 1 July 2019. The Group assesses at the inception of a contract as to whether the contract is, or
contains, a lease as defined in NZ IFRS 16 Leases.
(i) As a lessee
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The Group elects not to recognise right-of-
use assets and lease liabilities for short-term or low-value leases, such as leases of office and IT equipment. The Group continues to expense
lease payments associated with these leases on a straight-line basis.
A number of judgements and estimates are made in calculating the right-of-use asset and lease liability amounts. The judgements and
estimates include the applicable lease terms (including any rights of renewal expected to be exercised) and the Group's incremental
borrowing rate.
Right-of-use assets
Right-of-use assets are initially measured at cost, which comprises the initial amount of lease liability adjusted for any prepaid lease
payments, plus any initial direct costs incurred and any estimated restoration costs, and less any lease incentives received. These assets are
depreciated using the straight-line method from the commencement date to the earlier of the end of the lease term or the asset's useful
life. Right-of-use assets are periodically reduced by impairment losses (if any) and adjusted for certain remeasurements of the lease liabilities.
Lease liabilities
Lease liabilities are initially measured at the present value of the lease payments that are not paid at the commencement date. Lease
payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that are based on an index
or a rate, amounts expected to be payable under a residual value guarantee, and any exercise price the Group is reasonably certain to
exercise. The lease payments are discounted using the Group's incremental borrowing rate, being the rate that the Group would have to
pay to borrow the fund necessary to obtain an asset of similar value in a similar environment under similar terms and conditions.
After the commencement date, lease liabilities are increased to reflect interest on the lease liabilities and reduced to reflect the lease
payments made. Interest on lease liabilities is charged to the profit and loss and is the amount that produces a constant periodic rate of
interest on the remaining balance of the lease liabilities.
Lease liabilities are remeasured when there is a change in future lease payments arising from a change in an index or rate, a change in the
Group's estimate of any amount payable under a residual value guarantee, or if the Group changes its assessment of whether it will exercise
a purchase, extension or termination option. When the lease liabilities are remeasured, a corresponding adjustment is made to the carrying
amount of the right-of-use assets, or recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
(ii) As a lessor
When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sublease separately. It assesses the lease
classification of a sub-lease with reference to the right-of-use asset arising from the head lease.
The Group recognises lease payments received under operating leases as income on a straight-line basis over the lease term.
PGG WRIGHTSON LIMITED
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Accounting
Policies
– page 26.
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2022
ADDITIONAL FINANCIAL DISCLOSURES
|
Ngā Whakapuakanga Pūtea Tāpiri
16 PROPERTY, PLANT AND EQUIPMENT
PLANT AND CAPITAL WORK
LAND BUILDINGS EQUIPMENT IN PROGRESS TOTAL
$000 $000 $000 $000 $000
Cost
Balance at 1 July 2020 13,502 15,343 51,995 2,742 83,582
Additions – 279 4,013 746 5,038
Transfers – – 834 (834) –
Disposals (772) (1,293) (763) – (2,828)
Balance at 30 June 2021 12,730 14,329 56,079 2,654 85,792
Balance at 1 July 2021 12,730 14,329 56,079 2,654 85,792
Additions 5 510 3,752 1,698 5,965
Transfers – – 343 (343) –
Disposals (6) (104) (582) – (692)
Balance at 30 June 2022 12,729 14,735 59,592 4,009 91,065
Depreciation and impairment losses
Balance at 1 July 2020 – 5,610 31,642 – 37,252
Depreciation for the year – 312 5,037 – 5,349
Depreciation recovered to COGS – – 187 – 187
Disposals and transfers – (141) (443) – (584)
Impairment / (impairment reversal) – (906) (133) – (1,039)
Balance at 30 June 2021 – 4,875 36,290 – 41,165
Balance at 1 July 2021 – 4,875 36,290 – 41,165
Depreciation for the year – 309 4,682 – 4,991
Depreciation recovered to COGS – – 189 – 189
Disposals and transfers – (4) (519) – (523)
Impairment / (impairment reversal) – (414) – – (414)
Balance at 30 June 2022 – 4,766 40,642 – 45,408
Carrying amounts
At 30 June 2021 12,730 9,454 19,789 2,654 44,627
At 30 June 2022 12,729 9,969 18,950 4,009 45,657
Capital gains on the sale of property, plant and equipment of $0.76 million were recognised in non-operating items in the current year
(2021: $0.96 million gain).
26
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PGG WRIGHTSON LIMITED
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2022
ADDITIONAL FINANCIAL DISCLOSURES
|
Ngā Whakapuakanga Pūtea Tāpiri
16 PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Property, Plant & Equipment Accounting Policies
Recognition and measurement
Items of property, plant and equipment are stated at cost less accumulated depreciation and impairment. Cost includes expenditure that
is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any
other costs directly attributable to bringing the asset to a working condition for its intended use, and the cost of dismantling and removing
the items and restoring the site on which they are located. Purchased software that is integral to the functionality of the related equipment
is capitalised as part of that equipment. When parts of an item of property, plant and equipment have different useful lives, they are
accounted for as separate items (major components) of property, plant and equipment.
Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss.
Subsequent expenditure
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to
the Group and the cost can be measured reliably. The costs of day-to-day servicing of property, plant and equipment is recognised in profit
or loss as incurred.
Depreciation
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each item of property, buildings, plant
and equipment. Leasehold assets are depreciated over the shorter of the lease term and their useful lives. Land is not depreciated. The
estimated useful lives for the current and comparative periods are between 2 and 40 years for plant and equipment and 50 years for
buildings. Depreciation methods, useful lives and residual values are reassessed at each reporting date and adjusted if appropriate.
Impairment
The carrying amounts of the Group's property, plant & equipment assets are reviewed at each reporting date to determine whether there
is any indication of impairment. If any such indication exists, then the recoverable amount of the asset is estimated. An impairment loss
is recognised in the profit or loss if the carrying amount of an asset exceeds the recoverable amount. Refer the accounting policy under
Note 5 Impairment and Fair Value Gains/(Losses) for further explanation.
17 TRADE AND OTHER PAYABLES
2022 2021
NOTE $000 $000
Trade creditors 123,444 109,162
Goods received but not invoiced 4,891 5,249
Deposits received in advance 4,752 960
Employee entitlements 24,643 18,015
Accruals and other liabilities 28,610 21,161
Loyalty reward programme 21 1,190 1,073
Other provisions (including product warranty, client claim and make good provisions) 17(A), 17(B) 4,522 6,107
192,052 161,727
Payable within 12 months 189,290 158,883
Payable beyond 12 months 2,762 2,844
192,052 161,727
A. Make good provision on leased properties
During the year, the Group recognised an additional provision of $0.07 million (2021: $0.19 million) in respect of new leased properties which it
signed up to. These costs have been capitalised to the right-of-use assets and are amortised over the life of the right-of-use assets. The Group also
released $0.14 million (2021: $0.15 million) of provision in respect to leased properties which it exited. At balance date, the balance of the make
good provision is $2.64 million (2021: $2.71 million). The Group expects to settle this liability over the next 10-15 years as the leases expire.
PGG WRIGHTSON LIMITED
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Accounting
Policies
– page 29.
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2022
ADDITIONAL FINANCIAL DISCLOSURES
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Ngā Whakapuakanga Pūtea Tāpiri
17 TRADE AND OTHER PAYABLES (CONTINUED)
B. Client claims provision
The Group receives client claims from time to time as part of the ordinary course of business and these claims are reviewed on a case by case basis
to determine validity. As at balance date, the Group was in the process of reviewing certain claims for the supply of goods which are typically the
responsibility of suppliers under terms of trade. The Group recognises a provision for its best estimate of any obligation. The information usually
required by NZ IAS 37 Provisions, Contingent Liabilities and Contingent Assets is not disclosed on the grounds of commercial sensitivity, i.e. disclosure
may impact the commercial position of the Group.
18 DEFINED BENEFIT ASSET/LIABILITY
The Group makes contributions to the PGG Wrightson Employee Benefits Plan (the Plan), a defined benefit plan that provides a range of
superannuation and insurance benefits for employees and former employees. The Plan is registered under the Financial Markets Conduct Act
2013. The Plan is not open to new members. The Plan's retired employees are entitled to receive an annual pension payment payable for their
remaining life, and in some cases, for the remaining life of a surviving spouse.
The actuarial calculations for the Plan are undertaken by Michael Chamberlain, a fellow of the New Zealand Society of Actuaries, for MCA NZ
Limited.
2022 2021 2020 2019 2018
$000 $000 $000 $000 $000
Present value of funded obligations (49,165) (56,172) (62,563) (61,624) (66,814)
Fair value of plan assets 47,039 56,483 52,725 55,741 59,092
Total defined benefit asset/(liability) (2,126) 311 (9,838) (5,883) (7,722)
A. Movement in net defined benefit asset/(liability)
NET DEFINED BENEFIT ASSET/
DEFINED BENEFIT OBLIGATION FAIR VALUE OF PLAN ASSETS (LIABILITY)
2022 2021 2022 2021 2022 2021
$000 $000 $000 $000 $000 $000
Balance at 1 July (56,172) (62,563) 56,483 52,725 311 (9,838)
Included in profit or loss:
Current service costs (489) (529) – – (489) (529)
Interest costs (1,098) (558) 1,105 470 7 (88)
Included in other comprehensive income:
Gains/(losses) from change in demographic assumptions (1,418) – – – (1,418) –
Gains/(losses) from change in financial assumptions 5,324 3,323 – – 5,324 3,323
Experience gains/(losses) 2,239 1,130 – – 2,239 1,130
Expected return on plan assets – – (8,667) 5,353 (8,667) 5,353
Other:
Employer contributions – – 567 960 567 960
Member contributions (816) (782) 816 782 – –
Benefits paid by the plan 3,265 3,807 (3,265) (3,807) – –
Balance at 30 June (49,165) (56,172) 47,039 56,483 (2,126) 311
The Group expects to pay $0.47 million in contributions to the Plan in 2023 (2022: expected $0.78 million and paid $0.57 million). Member
contributions are expected to be $0.56 million in 2023 (2022: expected $0.56 million and paid $0.82 million).
As at 30 June 2022, the weighted average duration of the defined benefit obligation (DBO) is 12.0 years for the Plan (2021: 12.2 years).
28
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PGG WRIGHTSON LIMITED
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Accounting
Policies
– page 29.
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2022
ADDITIONAL FINANCIAL DISCLOSURES
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Ngā Whakapuakanga Pūtea Tāpiri
18 DEFINED BENEFIT ASSET/LIABILITY (CONTINUED)
B. Plan assets
2022 2021
% %
Consist of:
Equities 63 63
Fixed interest 29 28
Cash 8 9
100 100
Plan assets do not include any exposure to the Company's ordinary shares (2021: Nil).
C. Actuarial assumptions at the reporting date
2022 2021
% %
Discount rate used – Implied 12.0 year New Zealand Government Bond rate
(2021: Implied 12.2 year New Zealand Government Bond rate) 3.97 1.99
Inflation 2.00 1.50
Future salary increases 2.50 2.00
Future pension increases 1.65 1.50
2022 2022 2021 2021
MALE FEMALE MALE FEMALE
YEARS YEARS YEARS YEARS
Assumptions regarding future mortality rates based on published statistics and experience:
Longevity at age 65 for current pensioners 21 24 21 24
Longevity at age 65 for current members aged 45 23 25 24 28
D. Sensitivity analysis
The sensitivity of the DBO to changes in the weighted principal assumptions is:
2022 2022 2021 2021
DBO (INCREASE) DBO (INCREASE) DBO (INCREASE) DBO (INCREASE)
/ DECREASE WITH / DECREASE WITH / DECREASE WITH / DECREASE WITH
INCREASE IN DECREASE IN INCREASE IN DECREASE IN
ASSUMPTION ASSUMPTION ASSUMPTION ASSUMPTION
$000 $000 $000 $000
Discount rate (0.50% movement) 1,082 (1,180) 1,348 (1,460)
Salary growth rate (0.50% movement) (49) 49 (112) 112
Pension growth rate (0.25% movement) (541) 492 (674) 337
Life expectancy (1 year movement) (1,475) 1,524 (1,741) 1,798
PGG WRIGHTSON LIMITED
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29
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2022
ADDITIONAL FINANCIAL DISCLOSURES
|
Ngā Whakapuakanga Pūtea Tāpiri
18 DEFINED BENEFIT ASSET/LIABILITY (CONTINUED)
Employee Benefits Accounting Policies
Defined benefit plans
The Group's net obligation with respect to defined benefit plans is calculated by estimating the amount of future benefit that employees
have earned in return for their service in the current and prior periods, discounting that amount and deducting the fair value of any plan
assets is deducted. The discount rate is the yield at the reporting date on bonds that have maturity dates approximating the terms of the
Group's obligations. The calculation is performed by a qualified actuary using the projected unit credit method. When the calculation
results in a potential asset for the Group, the recognised asset is limited to the lower of the net assets of the plan or the current value of
the contributions holiday that is expected to be generated.
Remeasurement of the net defined benefit asset/liability, which comprise actuarial gains and losses and the return on plan assets, are
recognised directly in other comprehensive income and the defined benefit plan reserve in equity. Net interest expense and other
expenses related to defined benefit plans are recognised in profit or loss.
Short-term employee benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the undiscounted amount of
short-term employee benefits expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a
result of past service provided by the employee and the obligation can be estimated reliably.
Long-term employee benefits
Provisions made with respect to employee benefits which are not expected to be settled within twelve months are measured as the
present value of the estimated future cash outflows to be made by the Group with respect to services provided by employees up to
reporting date. Remeasurements are recognised in profit or loss in the period in which they arise.
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PGG WRIGHTSON LIMITED
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Accounting
Policies
– page 35.
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2022
ADDITIONAL FINANCIAL DISCLOSURES
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Ngā Whakapuakanga Pūtea Tāpiri
19 FINANCIAL INSTRUMENTS – FAIR VALUES AND RISK MANAGEMENT
A. Accounting classifications and fair values
The tables below set out the Group's classification of each class of financial assets and liabilities, and their fair values.
FAIR VALUE
THROUGH AT AMORTISED TOTAL CARRYING
PROFIT OR LOSS COST AMOUNT FAIR VALUE
$000 $000 $000 $000
2022
Financial assets
Cash and cash equivalents – 4,676 4,676 4,676
Derivative assets 1,564 – 1,564 1,564
Trade receivables – 139,666 139,666 139,666
Go livestock receivables – 66,109 66,109 66,109
Other investments – 479 479 479
1,564 210,930 212,494
Financial liabilities
Debt – (37,500) (37,500) (37,500)
Derivative liabilities (1,161) – (1,161) (1,161)
Trade creditors – (123,444) (123,444) (123,444)
Lease liabilities – (96,519) (96,519)
(1,161) (257,463) (258,624)
2021
Financial assets
Cash and cash equivalents – 3,367 3,367 3,367
Derivative assets 843 – 843 843
Trade receivables – 121,472 121,472 121,472
Go livestock receivables – 45,869 45,869 45,869
Other investments – 474 474 474
843 171,182 172,025
Financial liabilities
Debt – (9,900) (9,900) (9,900)
Derivative liabilities (385) – (385) (385)
Trade creditors – (109,162) (109,162) (109,162)
Lease liabilities – (104,018) (104,018)
(385) (223,080) (223,465)
The Group's banking facilities are based on floating interest rates. Therefore, the fair value of the banking facilities equals the carrying value.
PGG WRIGHTSON LIMITED
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Accounting
Policies
– page 35.
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2022
ADDITIONAL FINANCIAL DISCLOSURES
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Ngā Whakapuakanga Pūtea Tāpiri
19 FINANCIAL INSTRUMENTS – FAIR VALUES AND RISK MANAGEMENT (CONTINUED)
A. Accounting classifications and fair values (continued)
Fair value hierarchy
The table below analyses financial instruments carried at fair value by valuation method. The different levels have been defined as follows:
– Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
– Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (ie. as prices) or
indirectly (ie. derived from prices)
– Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs)
LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
$000 $000 $000 $000
2022
Derivative assets – 1,564 – 1,564
Derivative liabilities – (1,161) – (1,161)
2021
Derivative assets – 843 – 843
Derivative liabilities – (385) – (385)
B. Financial management risk
The Group's primary risks are those of liquidity and funding, credit and market (foreign currency, price and interest rate) risks.
The Group is committed to the management of risk to achieve sustainability of service, employment and profits, and therefore, takes on controlled
amounts of risk when considered appropriate. The Board of Directors is responsible for the review and ratification of the Group's systems of risk
management, internal compliance and control, code of conduct and legal compliance. The Board maintains a formal set of delegated authorities
(including policies for credit and treasury) that clearly define the responsibilities delegated to Management and those retained by the Board. The
Board approves these delegated authorities and reviews them annually.
The following management committees review and manage key risks:
– The Senior Management Team meets regularly to consider new and emerging risks, review actions required to manage and mitigate key risks,
and to monitor progress.
– The Credit Committee, comprising of management appointees, meets regularly to review credit risk, account limits and provisioning.
Management formally reports on all aspects of key risks to the Audit Committee at least two times each year.
(i) Liquidity and funding risks
Liquidity risk is the risk that the Group will encounter difficulties in raising funds at short notice to meet commitments associated with financial
instruments. Funding risk is the risk of over-reliance on a funding source to the extent that a change in that funding source could increase overall
funding costs or cause difficulty in raising funds.
The Group manages liquidity risk by forecasting daily cash requirements and future funding requirements, and maintaining an adequate liquidity
headroom. The Group monitors its liquidity daily, weekly and monthly and maintains appropriate liquid assets and committed bank funding
facilities to meet all obligations in a timely and cost efficient manner. The Group has a policy of funding diversification and utilises a banking
syndicate to limit concentration risk in relation to liquidity and funding. The funding policy augments the Group's liquidity policy with its aim to
ensure the Group has a stable diversified funding base without over-reliance on any one market sector.
The objectives of the Group's funding and liquidity policy is to:
– Ensure all financial obligations are met when due;
– Provide adequate protection, even under crisis scenarios; and
– Achieve competitive funding within the limitations of liquidity requirements.
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PGG WRIGHTSON LIMITED
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Accounting
Policies
– page 35.
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2022
ADDITIONAL FINANCIAL DISCLOSURES
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Ngā Whakapuakanga Pūtea Tāpiri
19 FINANCIAL INSTRUMENTS – FAIR VALUES AND RISK MANAGEMENT (CONTINUED)
B. Financial management risk (continued)
(i) Liquidity and funding risks (continued)
Contractual maturity analysis
The following schedule analyses the Group's financial liabilities into relevant maturity groupings based on the remaining period at the balance
date to the contractual maturity date (reported on an undiscounted basis). History demonstrates that such accounts provide a stable source of
long term funding for the Group.
CONTRACTUAL CASH FLOW
WITHIN BEYOND AMOUNT IN
12 MONTHS 1 TO 5 YEARS 5 YEARS TOTAL BALANCE SHEET
$000 $000 $000 $000 $000
2022
Debt 7,942 30,037 – 37,979 37,500
Derivative liabilities 1,009 152 – 1,161 1,161
Trade creditors 123,444 – – 123,444 123,444
Lease liabilities 21,655 58,210 32,396 112,261 96,519
154,050 88,399 32,396 274,845 258,624
2021
Debt 11,068 – – 11,068 9,900
Derivative liabilities 242 143 – 385 385
Trade creditors 109,162 – – 109,162 109,162
Lease liabilities 21,164 57,399 41,094 119,657 104,018
141,636 57,542 41,094 240,272 223,465
Changes in liabilities arising from financing activities
CHANGES IN LEASE
1 JUL 2021 CASHFLOW FAIR VALUE MODIFICATIONS 30 JUN 2022
$000 $000 $000 $000 $000
Debt 9,900 27,600 – – 37,500
Lease liabilities 104,018 (18,873) – 11,374 96,519
Total liabilities from financing activities 113,918 8,727 – 11,374 134,019
CHANGES IN LEASE
1 JUL 2020 CASHFLOW FAIR VALUE MODIFICATIONS 30 JUN 2021
$000 $000 $000 $000 $000
Debt 50,000 (40,100) – – 9,900
Lease liabilities 106,904 (18,299) – 15,413 104,018
Total liabilities from financing activities 156,904 (58,399) – 15,413 113,918
(ii) Credit risk
Credit risk is the potential for loss that could occur as a result of a counterparty failing to discharge its obligations. This may be due to drought, bio-
security issues or volatility in commodity prices.
Concentrations of credit risk
Financial instruments which potentially subject the Group to concentrations of credit risk principally consist of bank balances, trade receivables,
Go livestock receivables and forward foreign exchange contracts. The Group places its cash and short term investments with three major trading
banks. Concentrations of credit risk with respect to trade and Go livestock receivables are limited due to the large number of customers included in
the Group's farming customer base in New Zealand.
PGG WRIGHTSON LIMITED
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33
Refer to
Accounting
Policies
– page 35.
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2022
ADDITIONAL FINANCIAL DISCLOSURES
|
Ngā Whakapuakanga Pūtea Tāpiri
19 FINANCIAL INSTRUMENTS – FAIR VALUES AND RISK MANAGEMENT (CONTINUED)
B. Financial management risk (continued)
(iii) Market risk
Market risk is the potential for change in the value of balance sheet positions caused by a change in the value, volatility or relationship between
market risks and prices. Market risk arises from the mismatch between assets and liabilities, both on and off balance sheet. Market risk includes
price, foreign currency and interest rate risk which are explained as follows.
Concentrations of market risk
The Group has exposure to commodity pricing risk on Wool/Velvet inventories and forward Wool/Velvet sales and purchase contracts. This is
mitigated by the Group having policies around unmatched positions. Other inventory is of merchandise nature and the Group has a range of
suppliers or has entered into long-term supply agreements.
Foreign currency risk
The Group undertakes transactions denominated in foreign currencies and exposure to movements in foreign currency arises from these activities.
The Group manages this risk by using forward foreign exchange contracts to hedge foreign currency risks as they arise
Foreign currency exposure risk
The Group's exposure to foreign currency risk is summarised below. The notional forward exchange cover includes forward foreign exchange
contracts entered into to economically hedge forward sale and purchase commitments.
GBP USD AUD EURO
NZ$000 NZ$000 NZ$000 NZ$000
2022
Cash and cash equivalents – 2 – –
Trade receivables 938 2,008 899 4,175
Trade creditors (1,198) (17,018) (1,561) (2,091)
Net balance sheet position
(259) (15,008) (662) 2,084
Forward exchange contracts on balance sheet items
and forward sale and purchase commitments
Notional forward exchange cover (5,239) 8,591 (547) (14,006)
Net unhedged position
4,980 (23,599) (115) 16,090
2021
Cash and cash equivalents – 61 – 127
Trade receivables 12 1,104 155 3,842
Trade creditors (1,141) (14,780) (1,664) (3,855)
Net balance sheet position
(1,129) (13,614) (1,509) 113
Forward exchange contracts on balance sheet items
and forward sale and purchase commitments
Notional forward exchange cover (5,708) 7,783 1,491 (14,655)
Net unhedged position
4,579 (21,398) (3,001) 14,768
34
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PGG WRIGHTSON LIMITED
Refer to
Accounting
Policies
– page 35.
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2022
ADDITIONAL FINANCIAL DISCLOSURES
|
Ngā Whakapuakanga Pūtea Tāpiri
19 FINANCIAL INSTRUMENTS – FAIR VALUES AND RISK MANAGEMENT (CONTINUED)
B. Financial management risk (continued)
(iii) Market risk (continued)
Interest rate risk
Floating rate borrowings are used for general funding activities. Interest rate risk is the risk that the value of financial instruments and the interest
margin will fluctuate as a result of changes in market interest rates. The risk is that financial assets may be repriced at a different time and/or by a
different amount than financial liabilities.
This risk is managed by operating within approved policy limits using an interest rate duration approach. Interest rate swaps, interest rate options
and forward rate agreements may be used to hedge the floating rate exposure as deemed appropriate. The Group had no interest rate derivatives
at balance date (2021: Nil)
Interest rate repricing schedule
The following tables include the Group's liabilities at their carrying amounts, categorised by the earlier of contractual repricing or maturity dates.
WITHIN 1 TO 2 OVER NON INTEREST
12 MONTHS YEARS 2 YEARS BEARING TOTAL
$000 $000 $000 $000 $000
2022
Debt 7,500 30,000 – – 37,500
Derivative liabilities – – – 1,161 1,161
Trade creditors – – – 123,444 123,444
7,500 30,000 – 124,605 162,105
2021
Debt 9,900 – – – 9,900
Derivative liabilities – – – 385 385
Trade creditors – – – 109,162 109,162
9,900 – – 109,547 119,447
Sensitivity analysis
The Group's treasury policy effectively insulates earnings from the effect of short-term fluctuations in either foreign exchange or interest rates. Over
the longer term however, permanent changes in foreign exchange rates and interest rates will have an impact on profit. A 2% change in interest
rate has been applied as it is considered a reasonably possible change (2021: 1%). The sensitivity of net profit after tax for the period to 30 June
2022 and 30 June 2021, and shareholders equity at that date, to reasonably possible changes in conditions is shown below.
INTEREST RATES INTEREST RATES INTEREST RATES INTEREST RATES
INCREASE BY 2% INCREASE BY 1% DECREASE BY 2% DECREASE BY 1%
2022 2021 2022 2021
$000 $000 $000 $000
Increase/(decrease) in net profit after tax and shareholders' equity (608) (235) 494 321
Other market risks such as pricing and foreign exchange are not considered likely to lead to material change over the next reporting period. The
Group's financial assets and liabilities are predominantly held in NZD. For this reason, a sensitivity analysis of these market risks is not included.
C. Capital management
The capital of the Group consists of share capital, reserves, and retained earnings. The policy of the Group is to maintain a strong capital base so
as to maintain investor, creditor and market confidence while providing the ability to develop future business initiatives. This policy has not been
changed during the period.
PGG WRIGHTSON LIMITED
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35
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2022
ADDITIONAL FINANCIAL DISCLOSURES
|
Ngā Whakapuakanga Pūtea Tāpiri
19 FINANCIAL INSTRUMENTS - FAIR VALUES AND RISK MANAGEMENT (CONTINUED)
Non-Derivative Financial Instruments Accounting Policies
(i) Non-derivative financial assets
Non-derivative financial assets comprise cash and cash equivalents, trade and other receivables, Go livestock receivables and investments in
equity and debt securities.
The Group initially recognises financial assets on the date at which the Group becomes a party to the contractual provisions of the
instrument, although trade receivables are initially recognised when they are originated.
Financial assets are initially measured at fair value. If the financial asset is not subsequently measured at fair value through profit or loss, the
initial investment includes transaction costs that are directly attributable to the asset's acquisition or origination. The Group subsequently
measures financial assets at either fair value or amortised cost.
Financial assets measured at amortised cost
A financial asset is subsequently measured at amortised cost using the effective interest method and net of any impairment loss, if:
– the asset is held within a business model with an objective to hold assets in order to collect contractual cash flows; and
– the contractual terms of the financial asset give rise, on specified dates, to cash flows that are solely payments of principal and interest.
Financial assets measured at fair value
Financial assets other than those classified as financial assets measured at amortised cost are subsequently measured at fair value with all
changes recognised in profit or loss.
However, for investments in equity instruments that are not held for trading, the Group may elect at initial recognition to present gains
and losses through other comprehensive income. For instruments measured at fair value through other comprehensive income gains
and losses are never reclassified to profit and loss and no impairments are recognised in profit and loss. Dividends earned from such
investments are recognised in profit and loss unless the dividends clearly represent a repayment of part of the cost of investment.
Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short term highly liquid investments with maturities
of three months or less. Bank overdrafts that are repayable on demand and form an integral part of the Group's cash management are
included as a component of cash and cash equivalents.
Trade and other receivables and Go livestock receivables
Trade and other receivables and Go livestock receivables are stated at their amortised cost less impairment losses.
(ii) Non-derivative financial liabilities
Interest-bearing borrowings
Interest-bearing borrowings are classified as other financial liabilities and are initially recognised at fair value plus any directly attributable
transaction costs. Subsequent to initial recognition, these liabilities are measured at amortised cost using the effective interest method.
Trade and other payables
Trade and other payables are stated at cost.
(iii) Determination of fair values for non-derivative financial instruments
Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows,
discounted at the market rate of interest at the reporting date.
36
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PGG WRIGHTSON LIMITED
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2022
ADDITIONAL FINANCIAL DISCLOSURES
|
Ngā Whakapuakanga Pūtea Tāpiri
20 COMMITMENTS
A. Capital expenditure not provided for
The Group does not have any capital commitments as at 30 June 2022 (2021: $Nil).
B. Forward purchase commitments
The Group as part of its ordinary course of business enters into forward purchase agreements with wool and velvet growers. These commitments
extend for periods of up to three years and are at varying stages of execution. There remains uncertainty associated with yield, quality and market
price. Therefore, the Group is unable to sufficiently quantify the value of these commitments.
C. Forward sales commitments
The Group as part of its ordinary course of business enters into forward sales agreements with wool and velvet customers. These commitments
extend for periods of up to three years and are at varying stages of execution. There remains uncertainty associated with yield, quality and market
price. Therefore, the Group is unable to sufficiently quantify the value of these commitments.
21 CONTINGENT LIABILITIES
A. PGG Wrightson Loyalty Reward Programme
The Group recognises a provision for the expected level of points redemption from the PGG Wrightson Loyalty Reward Programme. As at balance
date, the balance of live points which does not form part of the recognised provision total $0.10 million (2021: $0.09 million). Losses are not
expected to arise from this contingent liability. Revenue is deferred until such time as the reward is claimed by the customer.
B. Contingent liabilities
The Group receives client claims as part of the ordinary course of business in the supply of goods and services. The Group will pursue recovery
of claims with suppliers where appropriate under terms of trade. Accordingly, the amount of any potential obligation in respect of these claims
cannot be estimated with sufficient reliability.
22 SEASONALITY OF OPERATIONS
The Group is subject to significant seasonal fluctuations. The Group's earnings are weighted towards the first half of the financial year and are
primarily related to the Retail business, as demand for New Zealand farming inputs are generally weighted towards the spring season. The second
half earnings predominantly relate to Livestock trading as farmers seek to maximise their income following New Zealand's spring calving and
lambing season. Other business units have similar but less material seasonal fluctuations. The Group recognises that this seasonality is the nature
of the industry and plans and manages its business accordingly.
PGG WRIGHTSON LIMITED
|
37
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2022
ADDITIONAL FINANCIAL DISCLOSURES
|
Ngā Whakapuakanga Pūtea Tāpiri
23 SUBSEQUENT EVENTS
Dividend
On 15 August 2022, the Directors of PGG Wrightson Limited resolved to pay a final dividend of 16 cents per share on 3 October 2022 to
shareholders on the Company's share register as at 5.00pm on 9 September 2022. This dividend will be fully imputed.
24 RELATED PARTIES
A. Key management personnel compensation
2022 2021
$000 $000
Key management personnel compensation comprised:
Short-term employee benefits 4,647 4,234
Post-employment benefits 126 87
4,773 4,321
Directors fees incurred during the year are disclosed in Note 3 Other Operating Expenses.
B. Other transactions with key management personnel
Senior Executives or their related parties hold positions in other entities that result in them having control or significant influence over the
financial or operating policies of these entities. A number of these Senior Executives and their related parties transacted with the Group during the
reporting period.
The aggregate value of transactions and outstanding balances (on a GST inclusive basis) relating to the Senior Executives and entities over which
they have control or significant influence were as follows:
TRANSACTION BALANCE TRANSACTION BALANCE
VALUE OUTSTANDING VALUE OUTSTANDING
2022 2022 2021 2021
$000 $000 $000 $000
Key management
personnel / Director Transaction
Nick Berry Purchase of retail goods
and fuel on-charge transactions 2 – 1 –
David Cushing
(retired 30 April 2021) Purchase of retail goods, livestock and wool
transactions. Includes real estate
commission on a property sale – – 1,640 –
Julian Daly Purchase of retail goods 1 – – –
Stephen Guerin Purchase of retail goods and livestock transactions 21 – 26 –
Peter Moore Purchase of retail goods
and fuel on-charge transactions 3 – 5 –
Peter Newbold Purchase of retail goods
and fuel on-charge transactions 22 – 22 2
Peter Scott Purchase of retail goods
and fuel on-charge transactions 5 – 5 1
38
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PGG WRIGHTSON LIMITED
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2022
ADDITIONAL FINANCIAL DISCLOSURES
|
Ngā Whakapuakanga Pūtea Tāpiri
25 REPORTING ENTITY
PGG Wrightson Limited (the "Company") is a company domiciled in New Zealand and registered under the Companies Act 1993 in New Zealand.
The Company's registered office is at 1 Robin Mann Place, Christchurch. The Company is listed on the New Zealand Stock Exchange and is an FMC
Reporting Entity for the purposes of the Financial Markets Conduct Act 2013.
The consolidated financial statements of PGG Wrightson for the year ended 30 June 2022 comprise the Company and its subsidiaries (together
referred to as the "Group"). The Group is primarily involved in the provision of goods and services within the agricultural and horticultural sectors.
OWNERSHIP INTEREST
COUNTRY OF 2022 2021
SIGNIFICANT SUBSIDIARIES INCORPORATION DIRECT PARENT % %
Bidr Limited New Zealand PGG Wrightson Limited 100% 100%
Bloch & Behrens Wool (NZ) Limited New Zealand PGG Wrightson Limited 100% 100%
NZ Agritrade Limited New Zealand PGG Wrightson Limited 100% 100%
PGG Wrightson Investments Limited New Zealand PGG Wrightson Limited 100% 100%
PGG Wrightson Real Estate Limited New Zealand PGG Wrightson Limited 100% 100%
PGG Wrightson Trustee Limited New Zealand PGG Wrightson Limited 100% 100%
PGG Wrightson Employee Benefits Plan Trustee Limited New Zealand PGG Wrightson Limited 100% 100%
PGG WRIGHTSON LIMITED
|
39
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2022
ADDITIONAL FINANCIAL DISCLOSURES
|
Ngā Whakapuakanga Pūtea Tāpiri
26 BASIS OF PREPARATION
A. Statement of compliance
These consolidated financial statements have been prepared in accordance with New Zealand Generally Accepted Accounting Practice ("NZ
GAAP"). They comply with International Financial Reporting Standards ("IFRS") issued by the International Accounting Standards Board, the New
Zealand equivalents to International Financial Reporting Standards ("NZ IFRS") and other applicable Financial Reporting Standards, as appropriate
for a Tier 1 for-profit entity. These consolidated financial statements have also been prepared in accordance with the requirements of the Financial
Markets Conduct Act 2013 and the Financial Reporting Act 2013.
B. Basis of measurement
The consolidated financial statements have been prepared on the historical cost basis except for the following:
– Derivative financial instruments are measured at fair value.
– Financial instruments at fair value through profit or loss are measured at fair value.
– Assets classified as held for sale are measured at the lower of their carrying amount and fair value less cost to sell.
C. Functional and presentation currency
These consolidated financial statements are presented in New Zealand dollars ($), which is the functional currency of each of the group entities. All
amounts have been rounded to the nearest thousand, unless otherwise indicated.
D. Use of estimates and judgements
In preparing these consolidated financial statements, management has made judgements, estimates and assumptions that affect the application
of the Group's accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these
estimates and assumptions.
Estimates and assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively.
Information about critical judgements made in applying accounting policies, assumptions and estimation uncertainties that have the most
significant effect on the amounts recognised in the financial statements is included in the following notes:
Note
5 Impairment and Impairment reversals
11 Carrying value of trade and other receivables
12 Carrying value of Go livestock receivables
13 Carrying value of inventories
18 Measurement of defined benefit asset/liability – Key actuarial assumptions
Management has determined that the COVID-19 pandemic has not significantly impacted the estimates and judgements used on the
consolidated statement of financial position as at 30 June 2022. Management will continue to monitor and assess the impacts of future
developments of COVID-19, which are highly uncertain and cannot be predicted, on its judgements and estimates.
E. Comparative information:
Certain comparative amounts have been reclassified to conform with the current period’s presentation.
40
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PGG WRIGHTSON LIMITED
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2022
ADDITIONAL FINANCIAL DISCLOSURES
|
Ngā Whakapuakanga Pūtea Tāpiri
27 OTHER SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out in these consolidated financial statements have been applied consistently to all periods presented in these
consolidated financial statements, and have been applied consistently by Group entities.
A. Basis of consolidation
Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are
included in the consolidated financial statements from the date on which control commences until the date on which control ceases.
Transactions eliminated on consolidation
Intra-group balances, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated
financial statements. Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to the
extent of the Group's interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there
is no evidence of impairment.
B. Foreign currency
Transactions in foreign currencies are translated to the respective functional currencies of the group entities at the exchange rates at the dates of
the transactions.
Monetary assets and liabilities denominated in foreign currencies are translated to the functional currency at the exchange rate at the reporting
date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated to the functional currency at the
exchange rate at the date that fair value was determined. Non-monetary items that are measured based on historical cost in a foreign currency
are translated to the functional currency at the exchange rate at the date of the transaction. Foreign currency differences arising are recognised in
profit or loss.
C. Discontinued operations
A discontinued operation is a component of the Group's business, the operations and cash flows of which can be clearly distinguished from the
rest of the Group and which:
– represents a separate major line of business or geographic area of operations;
– is part of a single co-ordinated plan to dispose of a separate major line of business or geographic area of operations; or
– is a subsidiary acquired exclusively with a view to resale.
When an operation is classified as a discontinued operation, the comparative statement of profit or loss and OCI is re-presented as if the operation
had been discontinued from the start of the comparative year.
D. Asset held for sale
Non-current assets, or disposal groups comprising assets and liabilities, are classified as held-for-sale if it is highly probable that they will be
recovered primarily through sale rather than through continuing use. Such assets, or disposal groups, are generally measured at the lower of
their carrying amount and fair value less costs to sell. Impairment losses on initial classification as held-for-sale and subsequent gains or losses
on remeasurement are recognised in profit or loss. Once classified as held-for-sale, property, plant and equipment are no longer amortised or
depreciated.
PGG WRIGHTSON LIMITED
|
41
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2022
ADDITIONAL FINANCIAL DISCLOSURES
|
Ngā Whakapuakanga Pūtea Tāpiri
27 OTHER SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
E. Disclosure of non-GAAP financial information
Non-GAAP reporting measures have been presented in the consolidated statement of profit or loss or referenced to in the notes to the
consolidated financial statements. The following non-GAAP measures are relevant to the understanding of the Group's financial performance:
– Operating EBITDA represents earnings before net interest and finance costs, income tax, depreciation, amortisation, the results from
discontinued operations, impairment and fair value adjustments and non-operating items.
– EBIT represents earnings before net interest and finance costs, income tax expense and the results from discontinued operations.
The Directors and management believe the Operating EBITDA and EBIT measures provide useful information as they provide valuable insight
on the underlying performance of the business. They are used internally to evaluate the underlying performance of the business and to analyse
trends.
These measures are not uniformly defined or utilised by all companies. Accordingly, these measures may not be comparable with similarly titled
measures used by other companies. Non-GAAP financial measures should not be viewed in isolation nor considered as a substitute for measures
reported in accordance with NZ IFRS.
F. Standards issued but not yet effective
There are a number of new standards and interpretations that are issued, but not yet effective, for the year ended 30 June 2022 and have not been
applied in preparing these consolidated financial statements. The Group expects to adopt these when they become mandatory. While the impact
of these new standards and interpretations have not yet been fully quantified, none are expected to materially impact the Group's consolidated
financial statements.
42
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PGG WRIGHTSON LIMITED
PGG WRIGHTSON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
For the year ended 30 June 2022
ADDITIONAL FINANCIAL DISCLOSURES
|
Ngā Whakapuakanga Pūtea Tāpiri
28 CAPITAL AND RESERVES
Share capital
All shares are ordinary fully paid shares with no par value, carry equal voting rights and share equally in any profit on the winding up of the Group.
Realised capital and revaluation reserve
The realised capital reserve comprises the cumulative net capital gains that have been realised. The revaluation reserve relates to historic
revaluations of property, plant and equipment.
Defined benefit plan reserve
The defined benefit plan reserve contains actuarial gains and losses on plan assets and defined benefit obligations.
Fair value reserve
The fair value reserve comprises the cumulative net change in the fair value of equity investments elected at fair value through other
comprehensive income until the investments are derecognised or impaired.
Retained earnings/deficit
The retained earnings deficit equals accumulated undistributed profits/losses.
Dividends
The following dividends were declared and paid by the Company.
PAYMENT DATE $ PER SHARE
2022 interim dividend – fully imputed 1 April 2022 0.140
2021 final dividend – fully imputed 4 October 2021 0.160
2021 interim dividend – fully imputed 24 March 2021 0.120
Share Capital Accounting Policies
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction
from equity.
Repurchase of ordinary shares
When shares recognised as equity are repurchased, the amount of the consideration paid, including directly attributable costs, is recognised
as a deduction from equity. Repurchased shares are cancelled. However, treasury stock for which unrestricted ownership has not yet been
transferred are not cancelled.
ADDITIONAL FINANCIAL DISCLOSURES
|
Ngā Whakapuakanga Pūtea Tāpiri
PGG WRIGHTSON LIMITED
|
43
Balance at 1 July 2020 372,318 24,662 (14,510) (2,566) (226,798) 153,106
Total comprehensive income for the period
Profit or loss – – – – 22,713 22,713
Other comprehensive income
Changes in fair value of equity instruments, net of tax – – – 136 – 136
Defined benefit plan actuarial gain/(loss), net of tax – – 6,926 – – 6,926
Total other comprehensive income – – 6,926 136 – 7,062
Total comprehensive income for the period – – 6,926 136 22,713 29,775
Transactions with shareholders recorded directly in equity
Contributions by and distributions to shareholders
Dividends to shareholders – – – – (9,343) (9,343)
Total contributions by and distributions to shareholders – – – – (9,343) (9,343)
Transfer to retained earnings – – 134 – (134) –
Balance at 30 June 2021 372,318 24,662 (7,450) (2,430) (213,562) 173,538
Balance at 1 July 2021 372,318 24,662 (7,450) (2,430) (213,562) 173,538
Total comprehensive income for the period
Profit or loss – – – – 24,286 24,286
Other comprehensive income
Changes in fair value of equity instruments, net of tax – – – 7 – 7
Defined benefit plan actuarial gain/(loss), net of tax – – (1,816) – – (1,816)
Total other comprehensive income – – (1,816) 7 – (1,809)
Total comprehensive income for the period – – (1,816) 7 24,286 22,477
Transactions with shareholders recorded directly in equity
Contributions by and distributions to shareholders
Dividends to shareholders – – – – (23,331) (23,331)
Total contributions by and distributions to shareholders – – – – (23,331) (23,331)
Balance at 30 June 2022 372,318 24,662 (9,266) (2,423) (212,607) 172,684
The accompanying notes form an integral part of these consolidated financial statements.
PGG WRIGHTSON LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2022
REALISED
CAPITAL AND DEFINED RETAINED
SHARE REVALUATION BENEFIT PLAN FAIR VALUE EARNINGS/ TOTAL
CAPITAL RESERVES RESERVE RESERVE (DEFICIT) EQUITY
$000 $000 $000 $000 $000 $000
A member firm of Ernst & Young Global Limited
Independent auditor’s report to the Shareholders of PGG Wrightson Limited
Opinion
We have audited the financial statements of PGG Wrightson Limited (“the Company”) and its
subsidiaries (together “the Group”) on pages 1 to 43 which comprise the consolidated statement of
financial position of the Group as at 30 June 2022, and the consolidated statement of profit or loss,
consolidated statement of other comprehensive income, consolidated statement of changes in equity
and consolidated statement of cash flows for the year then ended of the Group, and the notes to the
consolidated financial statements including a summary of significant accounting policies.
In our opinion, the consolidated financial statements on pages 1 to 43 present fairly, in all material
respects, the consolidated financial position of the Group as at 30 June 2022 and its consolidated
financial performance and cash flows for the year then ended in accordance with New Zealand
equivalents to International Financial Reporting Standards and International Financial Reporting
Standards.
This report is made solely to the Company's shareholders, as a body. Our audit has been undertaken so
that we might state to the Company's shareholders those matters we are required to state to them in an
auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company and the Company's shareholders, as a body,
for our audit work, for this report, or for the opinions we have formed.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand). Our
responsibilities under those standards are further described in theAuditor’s Responsibilities for the
Audit of the Financial Statementssection of our report.
We are independent of the Group in accordance with Professional and Ethical Standard 1International
Code of Ethics for Assurance Practitioners (including International Independence Standards) (New
Zealand) issued by the New Zealand Auditing and Assurance Standards Board, and we have fulfilled our
other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Ernst & Young provides environmental, social, and governance reporting services and accounting
advisory services to the Group. Partners and employees of our firm may deal with the Group on normal
terms within the ordinary course of trading activities of the business of the Group. We have no other
relationship with, or interest in, the Group.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements of the current year. These matters were addressed in the
context of our audit of the consolidated financial statements as a whole, and in forming our opinion
thereon, but we do not provide a separate opinion on these matters. For each matter below, our
description of how our audit addressed the matter is provided in that context.
A member firm of Ernst & Young Global Limited
We have fulfilled the responsibilities described in theAuditor’s responsibilities for the audit of the
financial statements section of the audit report, including in relation to these matters. Accordingly, our
audit included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial statements. The results of our audit procedures, including the
procedures performed to address the matters below, provide the basis for our audit opinion on the
accompanying consolidated financial statements.
Collectability of trade andGoreceivables
Why significantHow our audit addressed the key audit matter
At 30 June 2022trade andGoreceivables
totalled $205.8m, representing 40% of Group
total assets. This amount is net of the
provision for impaired trade andGo
receivables of $2.54m.
We consider this to be a key audit matter
because trade andGo receivables are a
significant component of Group assets and the
provision for impaired receivables involves
significant judgement.
Disclosures in relation to trade andGo
receivables and their provisions for
impairment are included in notes 11 and 12 to
the Group financial statements.
Our audit procedures included the following:
•obtained an understanding of management’s
receivables provisioning process;
•assessed management’s provisioning methods
and whether they comply with NZ IFRS 9;
•considered the inputs, assumptions and
estimates used or made by management;
•tested the ageing of receivables by agreeing
the recorded ageing of a sample of trade
receivables to sales documentation;
•considered beef and sheep meat commodity
price movements up to and after balance date
to assess whether these changes, which are
indicative of changes in the value of livestock
security held forGo receivables, indicated any
material increase in the credit risk ofGo
receivables;
•considered the appropriateness and
sufficiency of the disclosures related to trade
andGo receivables and the related
provisioning.
Inventory valuation
Why significantHow our auditaddressed the key audit matter
Inventory is carried at the lower of cost and
net realisable value. At 30 June 2022
inventory totalled $102m, representing 20%
of the Group’s total assets. This amount is net
of a provision for inventory write down of
$1.56m.
We consider this to be a key audit matter
because inventory is a significant component
of Group total assets and the assessment of
the net realisable value of slow moving, excess
Our audit procedures included the following:
•compared a sample of recorded inventory cost
to supplier invoices;
•assessed the inputs into, and calculation of,
adjustments to inventory value to take
account of variable pricing arrangements with
suppliers;
•considered the methods, models, and
assumptions used by management in
estimating the net realisable value of slow
moving, excess, and obsolete inventory;
A member firm of Ernst & Young Global Limited
Why significantHow our auditaddressed the key audit matter
andobsolete inventory involves significant
judgement.
Disclosures in relation to inventory and
inventory provisions are included in note 13 to
the Group financial statements.
•consideredthe key inputs into the provision
calculation including last purchase date, last
sale date and volume of sales in the year for
selected product lines. We tested these inputs
into the provision calculation, including for a
sample of inventory items:
•agreeing the last purchase date and last
sale date to supporting invoices;
•recalculating the annual sales volumes
recorded in the inventory system;
•compared the cost of a sample of inventory
items to their most recent selling price;
•considered the extent of inventory items sold
at negative margins in the year;
•considered the appropriateness and
sufficiency of disclosures related to the
valuation of inventory.
Information other than the financial statements and auditor’s report
The Directors of the Company are responsible for the Annual Report, which includes information other
than the consolidated financial statements and auditor’s report which is expected to be made available
to us after the date of this auditor’s report.
Our opinion on the consolidated financial statements does not cover the other information and we do
not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially inconsistent
with the consolidated financial statements or our knowledge obtained during the audit, or otherwise
appears to be materially misstated.
When we read the Annual Report, if we conclude that there is a material misstatement therein, we are
required to communicate the matter to those charged with governance and, if uncorrected, to take
appropriate action to bring the matter to the attention of users for whom our auditor’s report was
prepared.
Directors’ responsibilities for the financial statements
The Directors are responsible, on behalf of the entity, for the preparation and fair presentation of the
consolidated financial statements in accordance with New Zealand equivalents to International Financial
Reporting Standards and International Financial Reporting Standards, and for such internal control as
the Directors determine is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the Directors are responsible for assessing on behalf
of the entity the Group’s ability to continue as a going concern, disclosing, as applicable, matters
A member firm of Ernst & Young Global Limited
related to going concern and using the going concern basis of accounting unless the Directors either
intend to liquidate the Group or cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance but is not a
guarantee that an audit conducted in accordance with International Standards on Auditing (New
Zealand) will always detect a material misstatement when it exists. Misstatements can arise from fraud
or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these consolidated financial
statements.
A further description of the auditor’s responsibilities for the audit of the financial statements is located
at the External Reporting Board’s website: https://www.xrb.govt.nz/standards-for-assurance-
practitioners/auditors-responsibilities/audit-report-1/. This description forms part of our auditor’s
report.
The engagement partner on the audit resulting in this independent auditor’s report is Bruce Loader.
Chartered Accountants
Christchurch
15 August 2022
---
PGG Wrightson Ltd | NZX Announcement 1
16 AUGUST 2022
PGG Wrightson delivers
exceptional FY22 result
Group Performance
PGG Wrightson Limited* (PGW) today announced its results for the financial year ended 30 June 2022.
Key highlights of the financial year to 30 June 2022 included:
❖ Operating EBITDA** of $67.2 million (up $11.1 million or 20%)
❖ Net profit after tax of $24.3 million (up $1.6 million or 7%)
❖ Revenue of $952.7 million (up $104.9 million or 12%)
❖ Fully imputed dividend of 16 cents per share
❖ PGW Group Strategic Measures:
o Financial Growth Measures
▪ Achieved +38% Total Shareholder Return (exceeding our 10% target)
▪ Achieved CPI normalised EBIT growth of 29%
o Safety Measure
▪ Achieved Total Recordable Injury Frequency Rate (TRIFR) reduction of 3% since the FY20
baseline
o Customer Experience Measure
▪ Achieved a positive 5-point improvement in PGW Group’s Net Promotor Score from last year’s
customer research
PGW Chairman, Joo Hai Lee said that “Our exceptional financial year results are a record for the business
and is a result the PGW team is very proud of, especially after a challenging year at many levels. Like all
businesses we have had to navigate managing COVID-19 protocols, dealing with a high proportion of
health-related staff absences, responding to supply chain challenges, and resourcing the business in an
extremely tight labour market.
$67.2m $24.3m 16 cents
Operating EBITA Net Profit After Tax
Per Share, Fully Imputed
Final Dividend
PGG Wrightson Ltd | NZX Announcement 2
NPAT in this financial year was $24.3 million which was up $1.6 million or 7 per cent on last year.
Importantly, these results were achieved as a consequence of significantly higher revenue growth (up $105
million or 12 per cent from FY21) with margins broadly in line with last year.
The Board is delighted with this year’s financial results and declared a fully imputed final dividend of 16
cents per share. The dividend will be paid on 3 October 2022 to shareholders on PGW’s share register as
at 5pm on 9 September 2022. This will effectively bring the total fully imputed dividends for the year up to
30 cents per share.”
Retail & Water Group
PGW CEO, Stephen Guerin said, “Our Retail & Water businesses performed extremely well and
achieved outstanding results with new highs. Operating EBITDA was an impressive $52.5 million and
up $15.0 million on the prior year.
Our core focus remains to add value to our clients’ businesses and much of this is through the superior
technical ability of our people. During the year we continued to invest in training for our people from both
a technical and sales perspective. Our commitment to the personal development and upskilling of staff
supports a very stable and knowledgeable rep force. As clients see the value in the expertise of our people,
we continue to see new clients coming into stores and asking reps to come on-farm and orchard. This is
in turn continues to be reflected in the incremental market share gains.
Supply chain disruption has continued and has impacted timelines in sourcing products. Being able to get
the right products to our clients at the right time has highlighted the importance of the strong relationships
we have with our suppliers. To help mitigate supply chain risks, we have also sourced product earlier and
carried more inventory that we have historically.
It was an outstanding year for our Rural Supplies business. Through our client focused offering, we have
seen growth in a relatively tough market. Rural Supplies has sustained the momentum of recent years
and has investigated opportunities to expand into adjacencies and categories where there is unmet client
demand.
Our reps continue to increase their usage of technical platforms which streamline their day-to-day activities
and make their interactions with clients more efficient.
Fruitfed Supplies had another excellent year, with new Operating EBITDA and revenue records. We
maintain a high market share across most horticultural sector categories and continue to build relationships
as a key supplier of winery inputs into the viticulture industry.
We continue to see significant investment by clients in large horticultural developments. Fruitfed Supplies
has been well placed to benefit from these developments in supporting the supply of a significant amount
of capital development. Many of the developments that we have assisted with over the past few years are
now coming into production and Fruitfed Supplies is generally seen as the logical partner for clients as
their investments transition from development projects into production.
Our Technical Team conducted a number of trials during the period looking for new products and
chemistry that will help support our clients. A focused sales training programme was also rolled out to
increase the knowledge of our frontline staff.
Agritrade, our wholesale business division, manufactures, sells, and distributes products to improve
farmer and grower production. Agritrade has continued to perform well over the year. This was despite
COVID-19 and supply chain challenges causing volatility in sourcing products and price increases that
have been borne by the total supply chain. During the year 12 products that are new to the New Zealand
market were commercialised.
Implementation of our Water Strategy has contributed to improved business performance. Technology
initiatives included improving our client asset management system and online tracking of builds to
increase efficiencies in project delivery. Product shortages and shipping disruptions caused delays in
project delivery and are expected to hinder project completion for the near term.
PGG Wrightson Ltd | NZX Announcement 3
Agency Group
Our Agency group incorporates the Livestock, Wool and Real Estate businesses. Operating EBITDA
was $21.8 million and was down $3.3 million on the prior year’s strong result.
Our Livestock business performed well in a challenging climate with higher revenue and Operating
EBITDA achieved. In particular, the South Island recorded its strongest trading performance in a decade.
Solid values were reached in all categories, especially cattle and sheep, which compensated for reduced
volumes through meat processors.
During the year GO-STOCK DAIRY was launched. GO-STOCK DAIRY is an extension of our GO-
STOCK grazing contracts which are continuing to grow with increased uptake with transacted stock
volumes at their highest levels.
PGW’s online trading platform, bidr®, continued to grow its database of buyers. This was bolstered by
the successful launch of the livestreaming of cattle sales at a number of saleyards, as well as continued
demand for on-farm hybrid auction coverage.
Although the velvet business experienced shipping delays and port closures in China, the outlook is
positive with further sales growth predicted in Asian markets. During the year PGW’s velvet team
exported the first ever dry (processed) shipment of velvet to China.
The Deer Team had a successful year with both live sale numbers and prices on the rise. Venison
prices are now recovering back to near the five-year average and are forecast to lift as logistical
challenges on the chilled markets in the United States and European Union (EU) reduce.
Strong and cross-bred wool market prices remain challenging and have been accentuated by pandemic
related disruption negatively impacting on demand. Fine wool prices remain solid, with merino being
supported by high value grower contracts and healthy auction values.
Our wool contract business grew, and our grower client base benefited from fine wools, organic wools,
and crossbred lambswool contracts delivering good premiums.
The Real Estate business has enjoyed another successful year. Whilst returns in the residential and
lifestyle channels have been challenging, sale volumes of rural properties have been strong.
We anticipate continued solid performance in the rural property market segment with favourable spring
appraisals and listings due to continued horticulture growth and carbon / forestry interest in sheep and
beef properties.”
Cashflow and Debt
Mr Lee said that “PGW recorded operating cash flows during the year of $23.7 million which benefited
from our strong Operating EBITDA performance.
PGW Group has invested in working capital during the year including growing the range of GO-STOCK
receivables which was $66.1 million on 30 June 2022, an increase of $20.2 million or 44 per cent from
30 June 2021. In addition, inventories were $20.6 million higher than 30 June 2021 which reflects a
conscious decision to have product available for clients and higher inventory levels.
Capital expenditure of $8.8 million was $2.0 million higher than 30 June 2021 which was impacted by a
slowing in the implementation of projects as a consequence of COVID-19 related disruption.
Our net interest-bearing debt was $32.8 million as of 30 June 2022. PGW renewed and extended its
bank facilities for a three-year term in late 2021.”
Outlook
Mr Lee noted, “The profitable run for most New Zealand agri sectors looks likely to continue through the
remainder of 2022 and into the coming year. However, inflationary pressures on input costs will likely
translate into reduced on-farm profits, and exporters will still need to navigate high shipping costs and
challenging logistics.
While input prices are increasing, rising food prices are expected to be beneficial overall for New
Zealand’s agricultural sector. With a predominance of pasture-based production, New Zealand’s dairy,
sheep and beef farmers are relatively less exposed than international peers to the disruptions to grain
PGG Wrightson Ltd | NZX Announcement 4
markets from geopolitical unrest. In the near term, most agricultural industries are facing similar
pressures to other businesses, including a tight labour market and disruption to production from ongoing
challenges presented by the pandemic. Labour shortages are constraining production, including limiting
fruit harvesting and leading to delays in meat processing.
These macro-economic factors, coupled with concerns relating to the raft of regulatory and compliance
change impacting the sector have resulted in recent poll results that show record lows in New Zealand
farmer sentiment.
After a very wet winter so far, soil moisture levels are currently ranging from between normal to well
above normal across much of the country. On balance, this should be positive for the sector and PGW
as we look towards the approaching spring season. PGW are well positioned to assist our farming and
grower clients with their cultivation needs as they gear up their operations for production as we move
towards the warmer production months.
Taking into consideration these issues we remain cautiously optimistic about the financial year ahead.
Consumers in countries that have and continue to remove restrictions, want high-quality and safe food
that our farmer and grower clients produce. The reopening of New Zealand’s borders to travellers should
over time help to ease the tight labour market. The war in Ukraine has tightened the global commodity
market and although there have been recent drops in the global dairy auction, elevated dairy prices are
expected to remain. The negotiations for the United Kingdom and EU Free Trade Agreements have
concluded and provide further clarity for our exporters.
New Zealand producers are renowned for their technical innovations to improve the quality of their
produce and PGW is well placed to support our farmer and grower clients.
Overall, we consider that the macroeconomic indicators for the New Zealand agricultural sector are
positive. It is too soon in the year to provide meaningful guidance, but the Board intends to update
expectations for FY23 at our Annual Shareholders’ Meeting in October.”
All media enquiries to:
Julian Daly
General Manager Corporate Affairs
PGG Wrightson Limited
Mobile: +64 27 553 3373
*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, impairment and fair value adjustments and non-operating items. PGW has used non-GAAP profit
measures when discussing financial performance in this document. Please refer to our full accounts for details of how Operating
EBITDA relates to GAAP. For a comprehensive discussion on the use of non-GAAP profit measures, please refer to the policy
“Non-GAAP Accounting Information” available on our website www.pggwrightson.co.nz
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.
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