NZFarmer : January 13th 2009
www.straightfurrow.co.nz Rural Real Estate Bronwyn Savage real estate writer earnings forecast by $5 million. The rural services and real estate company warned shareholders profits could be as much as 23.5% lower than expected. The board now believes that net earnings are likely to be within the range from $39m to $45m. The previous earnings guidance, provided at the annual shareholders meeting in October 2008, was for a range from $46m to $51m. In the year ended June 30, 2008 PGG Wrightson A recorded net earnings of $39.2m. The key factor for the revised outlook was an anticipated loss in the group’s real estate busi- ness, given the impact of economic conditions on demand for rural and other properties. “Real estate performance is now expected to be $11m below budget and last year,” directors said. They said that farm sales by number were down 39% for the year to the end of November and lifestyle property sales were 40% lower. “In November alone rural sales were down 64%,” directors said. PGG Wrightson said the market outlook for the rest of the season was relatively uncertain. It was dependent on rural sector performance, interest rates, lenders’ appetites for rural lending, curren- cy exchange rates and other factors. The board believes the real estate business is performing as well as could be expected in extremely difficult conditions, with continuing growth in market share and substantial cost reductions being implemented. Beyond the current season, real estate earnings are expected to recover given the impact of these factors. Strong demand and prices for store lambs LENTY of feed and a general shortage of lambs led to a vast improvement in store lamb prices in the south last week. Sale prices were stable at between $2 and $2.20 a kilogram liveweight, giving a return of $61.60 for an average 28kg lamb, a significant increase on last season when similar lambs sold for as little as $30 a head. Widespread rain throughout Otago and Southland has eased the threat of a dry summer and the feed situation looks better than it did before Christmas, stock agents agree. With plenty of feed around, farmers are hanging on to lambs to finish them, which has led to a shortage on the market and strong demand for lim- ited numbers offered through southern saleyards and on-farm sales. With 23% fewer lambs available this season, agents are confident store lambs will continue to sell at current levels. A small yarding of 850 lambs was offered at the P Temuka saleyards on January 5. Top lambs (28- 30kgs) ranged from $60 to $65, medium (23-27kgs) sold for $50-$57 and tailenders between 17 and 22kgs fetched $36-$46. There was a strong demand for about 1000 store lambs offered at Lorneville on January 6. Top lambs (28-32kgs) fetched $60 to $68 a head, medi- ums (25-26kgs) sold for $53-$58 and smaller lambs sold for $40-$45. There was a very strong demand for prime ewes and lambs and store lambs at the first stock sale of the year at Balclutha on Wednesday. Lamb prices were $5 a head stronger than they were before Christmas, according to PGG Wrightson livestock agent Peter Grieve. A very good yarding of prime lambs (24-26kgs carcase weight) sold for $105-$111 a head, medi- ums fetched $90-98, and lighter lambs sold for $70- $84. Top store lambs (30-31kgs liveweight) fetched $70-$73, mediums (26-28kgs) sold for $58-$66, lighter stores fetched $40-$47 and tail enders sold for $27-$34. There was also a very strong demand for 750 prime ewes of offer. Top ewes fetched $70 a head, mediums $55-$62 and the bottom group sold for $47-$50. — Rob Tipa N expected downturn in rural property sales [farm sales are already down 39%] has caused PGG Wrightson to drop its net PGG Wrightson said net earnings for the half year ending December 31 would also be affected by a writedown in the value of its 11% shareholding in NZ Farming Systems Uruguay Ltd, costs associated with the ter- mination of the partnership agreement with Silver Fern Farms Ltd and the “marking to market” of interest rate hedges and adjust- ment of defined benefit superannuation scheme surpluses under International Financial Reporting Standards. The operating performance of most of the group’s other businesses remained strong despite the difficult economic environment. While there has been a reduction in the price outlook for some key agricultural com- modities, this has not as yet had a significant impact on purchasing and other activity by PGG Wrightson’s farmer clients. firstname.lastname@example.org Straight Furrow • January 13, 2009 11 Downturn pushes down forecast earnings by The legendary father and son team from Balclutha, Stewart and Jason Rutter, who scooped multiple awards at PGG Wrightson’s awards dinner in 2008.
January 20th 2009