Alliance's annual result is always first in the big three's financial results, and in the last few years has been the most impressive. They have delivered a solid result once again this year for their loyal shareholders.
With low debt and good profits, Alliance lamb producers with yield payments and pool surpluses received over $7 a lamb, so its not surprising they are reluctant to merge with Silver Fern Farms.
However they need to think about the big picture and future processing efficency with lower numbers. They also need to remember the rationisation in the 80's where Alliance was the most indebted company, and many believed was only saved by the "too big to fail"card, and other companies bore the brunt of the bankers wish to rationalise the industry.
Farmers will await with interest Silver Fern Farms, and AFFCO's 2009/10 financial results.
Alliance Group has reported an operating surplus of $29.6 million from a turnover of $1.4 billion for the year ending 30 September 2010. Distributions to shareholders include pool surplus payments of $12.6 million and a 5% fully imputed dividend. The combined pool surplus and dividend distribution to shareholders totals $16.5 million. These payments continue the company’s consistent record of shareholders participating in the company’s profit over the last 10 years through pool surplus payments, dividends and bonus issues.
In announcing the result the Chairman of Alliance Group, Owen Poole, said “the company has recorded a solid profit in what has been a challenging year”. The company has performed well operationally and in-market prices for sheepmeats at record levels resulted in the second highest lamb prices in history when converted to New Zealand dollars. Despite these achievements, on-farm profitability remains difficult.
Shareholders participating in the company’s Yield Quality Contract and pool surplus distributions received on average an additional $7.19 per lamb above full schedule for qualifying stock. Mr Poole said he was pleased “the company has been able to deliver a balance between returns to suppliers throughout the year and distributions to shareholders at year-end”. Equity and cash flow were strong and the company had nil bank debt at balance date. Summary of key financial items -
Turnover $1.4 billion
Operating surplus before pools $29.6 million
Operating cash flow surplus $110.4 million
Equity ratio at balance date 81.5 per cent
Pool surplus distributions $12.6 million
Dividend $3.8 million
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