PGG Wrightson Limited Analysis

Overview

PGG Wrightson Limited (PGW) is an agricultural services business operating throughout New Zealand for more than 160 years. The company provides an extensive range of products and a full-service offering, complimented with the knowledge and expertise of our people, to the rural sector.

PGW's enduring relationships with the rural community, technical expertise, focus on innovation, along with its nationwide presence, place it in an enviable position of being one of the best-known and most respected agricultural brands in New Zealand. PGW is a market leader in many of the segments in which it operates including rural retail supplies, livestock, wool, pasture improvements, horticulture, animal health and nutrition, water, real estate, as well as technical advice and support.

To service the needs of its more than 60,000 customer accounts PGW employs over 1,800 people in over 100 locations throughout the country. PGW's people are key members of the rural communities in which they live and work alongside their customers, which in many cases results in a trusted advisor relationship often spanning a number of generations.

Performance

The following information was extracted from PGG Wrightson Limited's Half Year results, released on 25 February 2025:

GROUP PERFORMANCE

PGG Wrightson Limited1 (PGW) today announced its results for the first half of FY25. Key items for the first six months to 31 December 2024 include:

• Operating EBITDA2 of $41.4 million (up $4.7 million or 13%*).
• Operating Revenue of $570.3 million (up $9.4 million or 2%*).
• Net profit after tax of $16.0 million (up $3.2 million or 25%*).
• Interim dividend declared of 2.5 cents per share.
• Reaffirmed FY25 full year Operating EBITDA guidance of around $51 million.

(* compared to the prior corresponding six months to 31 December 2023)

PGW Chair, Garry Moore said “PGW started the first six months of the financial year with improved returns in Rural Supplies. Stronger demand for beef underpinned our Livestock results and there was a positive rebound in Real Estate. Continued focus by the business in the prudent control of operating expenses also assisted.

The sector is competitive, with customers remaining cost sensitive and limiting discretionary spend. However, our service offering and technical expertise are valued by our customers, and we continue to consolidate our position as leader in the markets where we operate.

Economic conditions are showing early signs of improvement, with several indicators pointing to a healthier outlook with lower inflation and interest rates easing. Agricultural input prices stabilised in the past six months but remain above historical norms. In addition, a higher forecast milk payout, strong beef export returns, and generally solid commodity prices are beginning to positively impact farmer and grower sentiment.”