Elders delivers steady profit, invests for growth
In its 180th year, Elders has delivered a steady profit result, while positioning the business for future growth by continuing to invest in the future of regional Australia.
Underlying after-tax profit of $63.6 million was recorded, in line with the previous year.
Underlying earnings before interest and tax (EBIT) fell just 1% to $73.7 million.
Elders has announced a final dividend of 9 cents per share fully franked, taking the full-year dividend to 18 cents.
Chief Executive Officer and Managing Director, Mark Allison, said while business conditions for customers in many parts of rural Australia were tough, the result highlighted the strength of Elders’ business and geographic diversification.
“In 2014 we set out to refocus and refresh our business by playing to our competitive advantages, aiming to deliver sustainable earnings growth over the full agricultural cycle.”
“As we celebrate 180 years of supporting regional communities, I’m pleased to report a solid profit result for the year ending 30 September, despite reduced summer cropping in many areas and a lower wool clip.”
Allison said Elders continued to target acquisitions that met its strict investment criteria, with recent investments in Titan crop protection and Livestock in Transit delivery warranty products already proving their worth.
“In July this year, we announced the acquisition of Australian Independent Rural Retailers (AIRR) with completion scheduled for 13 November next.”
“AIRR is an excellent strategic fit, providing Elders with another growth channel through entry into the wholesale rural services market.”
“The AIRR acquisition has the potential to add 20-25% growth to Elders at the EBIT level on a full-year basis.”
“The opportunities presented by our investment in AIRR, together with the ongoing consolidation occurring in the rural supplies market position Elders well to grow earnings in FY20 and beyond, and deliver increased value to our shareholders.”
“We’ll also continue to invest in innovation and technology, with key private and public sector collaborations helping ensure the benefits of research and development reach the farm gate.”
“As a proudly Australian business, we look forward to continuing what we’ve been doing since 1839 – understanding and meeting the needs of our customers, and standing alongside rural communities in good times and in bad.”
You can read Elders FY19 Annual Report and ASX report here.