T&G Global Limited Analysis

Overview

T&G Global Limited is engaged in distributing, marketing and exporting fresh produce. The business was started as a fruit and flower shop by Edward Turner in 1897. He was later joined by nine sons and the business grew to became E Turner & Sons Ltd. This amalgamated with a grower co-operative in 1921 to form Turners & Growers Ltd.

In December 2002 the group acquired 100% of pipfruit exporter ENZA Ltd, owned by Guinness Peat Group, in return for 44.2m of Turners shares worth $101.9m. This transaction resulted in GPG gaining control of the merged entity.

In 2004 TUR separated the ENZA Foods manufacturing operations into a stand-alone company, owned independently by TUR shareholders. In September 2004 it made a compliance listing on the NZX, with no new shares being issued. Major divisions are: Turners and Growers Fresh Ltd - fruit & produce & flower wholesalers, auctioneers and distributors, importers, exporters, transport operators, prepackers and produce container hirers; Status Produce Ltd - glasshouse tomato production and other covered crops; packhouse operators; ENZA Ltd - world-wide pipfruit exporters and coolstore operators.

In February 2008 the company declared its takeover bid for Kerifresh Ltd unconditional. Kerifresh is a major lemon, mandarin and kiwifruit grower/packer in Kerikeri. TUR said the purchase will strengthen its standing in the citrus fruit category.

In 2012 BayWa, a German investment company purchased 72.5 percent of Turners & Growers.

The company launched its current corporate brand in 2014.

T&G is listed on NZX in May 2015 under the name of Turners & Growers Limited ("TUR"). It changed its current name and code in May 2015.

Performance

The following information was extracted from T&G Global Limited's Half Year Results, released 09 August 2024:

Cyclone-related loss clouds positive strategic progress

At a glance

• Revenue: $820.1 million, up from $765.3 million
• Operating loss: $2.6 million, compared to a loss of $11.6 million
• Net loss before tax: $8.2 million, compared to a loss of $21.4 million
• Net loss after tax: $18.6 million, compared to a loss of $15.7 million

T&G Global today released its interim results for the six months ending 30 June 2024 which show solid progress delivering its strategy as the Company continues to recover from the impact of Cyclone Gabrielle.

Total revenue for the Group increased 7% to $820.1 million, compared to $765.3 million in the prior year. Operating loss was $2.6 million, compared to a loss of $11.6 million in 2023, and there was a loss before income tax of $8.2 million compared to a loss of $21.4 million in the year prior. Net loss after tax for the period was $18.6 million, including a tax expense of $10.4 million. Tax expense as of 30 June 2024 includes a one-off, non-cash adjustment for deferred tax on buildings of $12.7 million, which relates to New Zealand Government legislation changes.

Chief Executive Officer Gareth Edgecombe said, “Over the last five years, significant investment and mahi has gone in to building the foundations for our future growth. In the first half of the year, we’ve seen the benefits of this as we navigated and adjusted to the economic conditions and made progress executing our strategy. It has however been a slower than expected start to the year.

“This season’s apples are high quality, with great flavour and storability, however the lingering impact of Cyclone Gabrielle has reduced this season’s Hawke’s Bay apple volumes. While this is commensurate with the industry-wide experience, it has impacted our financial results. We have also experienced weak fruit and vegetable pricing in the domestic market due to plentiful supply combined with subdued consumer sentiment.”

Notwithstanding this, T&G’s Apples business increased its revenue 14% to $589 million, compared to $518 million in 2023.