Ruralco Holdings released its half year results for the six months to 31 March today, delivering net profit of $10.8 million, up 3 percent on the same period last year.
Revenue rose 8pc to $803.7 million, while pre-tax earnings were $27.5 million, up 2pc year-on-year. the market was told.
Strong growth in Ruralco’s agency services and livestock business was a key driver.
Chairman Richard England said the record result reflected the maturing of new businesses in the Ruralco network and highlighted the strength of the group’s earnings platform and its geographical diversity in balancing the effect of the tough seasonal conditions that had been experienced in the first half.
Key highlights included:
Agency – Strong livestock prices and higher real estate volumes contributed to a 10pc increase in agency gross profit. Real estate gross profit growth of 19pc year-on-year was driven by higher volumes sold and the impact of real estate network growth acquisitions. Livestock prices were expected to remain high in the short to medium term driven by continuing global demand and tight supply. Low interest rates and continuing interest from domestic and foreign buyers was expected to continue to drive growth in real estate.
Rural Supplies – Successful integration of geographically diverse retail network acquisitions and pursuit of the group’s water and chemicals proprietary product portfolio delivered an 8pc increase in Rural Supplies gross profit.
Live Export – An increase in volumes of cattle exported to key target markets has grown Ruralco’s live export business, Frontier’s half-year gross profit lifted by 18pc year-on-year, to $4 million. With greater control over vessel scheduling and associated costs through the lease of two vessels, the Frontier business was well positioned for the northern dry season, although short-haul margins are currently under pressure.
As part of Ruralco’s vertical integration strategy, Frontier has moved into cattle backgrounding and finishing programs in Northern Australia, while Ruralco has undertaken grain feedlot trials for domestic supermarket and export processors in a leased feedlot in Southern Australia. The combined total capacity of these positions is approximately 20,000 head.
Ruralco’s chief executive Travis Dillone said the company was focusing on what it could control as a business.
“The quality of the people in our network and our diverse geographies and activities has delivered strong results,” he said.
“Our agency result is a testament to the investments we have made in developing our network. Our focus on working together to leverage opportunities across the business has allowed us to take advantage of the strong market conditions.”
“We want to be investing in sustainable growth opportunities for the business to ensure we leverage our broader product offering,” Mr Dillon said.
We also continue to explore innovative technologies to provide efficiencies and profitable outcomes for our customers,” he said.