Agriculture services provider Ruralco, which is part of the Soul Patts-Brickworks corporate group – lifted first-half profit 29% to $16.1 million in the six months to March 31, despite tough trading conditions in the live export business.
Net profit for the six months to March 31 rose on the back of stronger performances by its rural services, water services and financial services units. Directors have set an unchanged dividend for the half year or 9 cents a share.
Revenue rose 7% to nearly $920 million despite the group’s live export business which provides marketing services for the sheep, dairy and beef exporters making a loss of $800,000.
“It is pleasing to see the benefits of the diversification strategy at play with the group able to cycle the tough trading conditions in live export and declining earnings from livestock agency activity as cattle prices continue to soften,” chief executive Travis Dillon said in yesterday’s statement to the ASX.
Mr Dillon said the delay in the autumn season break was likely to put pressure on crop protection sales and there is potential for seasonal and market volatility in the second half.
He said the focus remains on business efficiency, the diversity of activities, expanding the client offer and the geographic mix of operations will mitigate seasonal volatility.
The result follows a solid performance by rival Elders in same period.
The question now for investors is the extent of damage from the big dry autumn across much of the country and the latest problems with live sheep exports and whether hat cascades back down through the rural services chain.
Shares in Ruralco were up 3.4% to $3.195 at one stage before fading to end up 0.3% at $3.10 thanks to a 10 cent slide in the last 8 minutes of trading.