News

$9.6m profit for AA Co, as shift from ‘livestock producer’ to ‘beef company’ gains pace

Beef Central, 13/05/2015

 

AACo_P7407DELIVERING A solid $9.6 million net profit to shareholders this morning, the Australian Agricultural Co has signalled that its transition from cattle producer to fully integrated branded

beef producer is now largely complete.

The company has increased its boxed beef revenue by 42 percent in the first full year of its transformational strategy.

The company’s net profit after tax of $9.6 million for the year ended 31 March represents a significant $49.5m improvement on the previous corresponding period, despite the ongoing affects of drought in some regions of company operations.

AA Co Managing Director Jason Strong said the result showed significant progress in transforming the company.

“We are implementing the strategy we announced in July last year,” he said.

“Sales of boxed beef now account for 77pc of revenue, up from 59pc in the previous corresponding period.”

In the last six months, this included the first sales of boxed beef from our new Livingstone Beef processing facility at Darwin.

“These sales are into global markets where our traceable supply chains, sustainable practices and unique Australian heritage can command premium prices. Building our brands is the next stage of transforming and growing our business,” Mr Strong said.

He said AA Co had established customer-focused supply chains which drive production and improve margins.

The implementation of the strategy has resulted in:

  • Cash flows from operations decreasing by $94.3m to $(75.9) million as the company made a significant investment in working capital
  • Net tangible assets per share of $1.43 as at 31 March, compared to $1.40 last year.
  • Gearing ratio increasing to 32.7pc as at 31 March 2015 compared to 23.3pc as at 31 March 2014

Statutory EBITDA was a profit of $44.9m in FY15 ($19.9m loss in FY14), while Operating EBITDA was a loss of $3.6m ($0.2m profit in FY14). The major difference between the two measures is due to Operating EBITDA not including mark-to-market movements, while Statutory EBITDA recognised these unrealised gains.

The AA Co board has not declared a dividend. The company is committed to the reinstatement of dividends and has previously foreshadowed that on a return to sustainable and significant positive operational cashflows the directors will review dividend policy and payments.

 

  • Updates after this morning’s investor briefing is completed.
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Comments

  1. Peter Bishop, 14/05/2015

    Mike Buchanan, the question should be, where would Wagyu be without AA Co.? AA were the first of a few members to submit quality performance data for the establishment of Wagyu Breed Plan.

  2. Peter Gilmour, 13/05/2015

    Great result for AA Co, shareholders will be happy. Many thanks to all at Goonoo for hosting the World Wagyu Outback Tour 110 members. We went on to Hughes Pastoral Co today and saw some great Wagyu purebred weaner steers about to enter the AA Co supply chain. Very very impressive operation and looks like Wagyu infused cattle will be about 40pc of revenue.

  3. andrew rodgers, 13/05/2015

    A great result across the board, congratulations to all involved! Significant achievements like this need to be recognized! Well done A A co.

  4. David McNally, 13/05/2015

    It is fantastic to see such a significant turn around and shows the long-term positive future for Australian agricultural products in the world markets. Lets hope the Australian Government keeps supporting the industry into the future and expand our Northern region such as the AA Co Darwin abattoir.

  5. Mike Buchanan, 13/05/2015

    But where would they have been without Wagyu ?

  6. peter groves, 13/05/2015

    What an outstanding turn around for AA Co, and for the beef industry ! A good general rain will allow the great news to continue to open up our Northern food bowl !

  7. Michael Taylor, 13/05/2015

    Would love to see this initiative and ultimate label expansion underpinned by Grazing BMP environmental and ethical standards – it would be the only one be able to prove the ‘green’ in ‘clean and green’.

  8. David Carew, 13/05/2015

    Great to hear positive outcome, well done AACO

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