FARM services network Ruralco Holdings Limited has posted a record net profit after tax (NPAT) of $14.1 million for its trading year to September 30 thanks to strong support from its new water businesses and solid agency market results.
Record profits in both the first and second half of the year reflected the diversity and quality of Ruralco's business, according to new managing director Travis Dillon who was confirmed in the role on Monday after six months in an acting capacity.
Recent strategic growth acquisitions and an 18 per cent rise in its agency business gross profit had bolstered the group's results despite "some challenging seasonal conditions".
"The increased contribution from Ruralco's water activities reflects a full-year contribution from Total Eden and strong demand for water broking services," he said.
Ruralco Holdings includes the CRT merchandise network, livestock and real estate agencies and farm inputs suppliers spanning more than 500 outlets, many of which run as joint ventures.
Mr Dillon said the company's new live export business Frontier International had grown with sales to Vietnam mitigating the impact of the reduced Indonesian permit allocations for feeder cattle and the collapse in the export dairy market.
Live export contributed $10 million in gross profit compared to $4.5 million in the prior year.
More than 132,000 head of cattle and sheep were exported, giving the Ruralco agency business a steady pipeline of sales for livestock agents across the network.
The live export business would scale up to a second vessel in January to take advantage of new markets into China, growth in Vietnam and a less volatile Indonesian market.
However, offsetting the export business' profit result for the past year were mark-to-market fair value livestock adjustments and the impact of foreign exchange movements.
Ruralco has declared a fully franked final dividend of seven cents a share, bringing the total dividend for the year to 16c.
Total sales revenue for the year of $1.6 billion represented an 18pc rise on the previous year, contributing to a gross profit of $307m, which was up 19pc.
Livestock sales gross profit jumped 26pc on 2013-14 results, powered by increases in volumes, strong prices and improved customer numbers.
Andrew Marshall
National agribusiness writer for Fairfax Agricultural Media.
National agribusiness writer for Fairfax Agricultural Media.
