There is only one 'crossover year' (FY2018) in the above referenced post with this one. However results for FY2018 in this post have been restated to include only those from the NZ based farm service business. The seed business, now sold, has been removed from the profit figures in this post.
Profit Normalisation table |
FY2022 |
FY2021 |
FY2020 |
FY2019 |
FY2018 |
Reference |
Declared Profit |
$24.286m |
$22.720m |
$7.133m |
$4.510m |
$9.004m |
less (add) Fair Value Gains (Losses) net of Impairments |
0.72x$2.182m |
0.72x($1.832m) |
0.72x$0.807m |
0.72x$3.187m |
0.72x$1.086m |
AR Note 5 |
less (add) Foreign Exchange Gains (Losses) |
0.72x($0.430m) |
0.72x$0.094m |
0.72x($0.178m) |
0.72x($0.812m) |
0.72x$1.035m |
AR Note 6 |
less (add) Standardbred Business Profit (closed business unit) |
|
|
|
|
($0.707m) |
Post 5341 |
less (add) IFRS16 adjustment |
0.72x($0.613m) |
0.72x($0.613m) |
0.72x($0.027m) |
|
|
Post 5347 |
less (add) Non operating gains (losses) |
0.72x($0.699m) |
0.72x($4.456m) |
0.72x($0.132m) |
0.72x$2.170m |
0.72x$7.024m |
AR Note 4 |
equals Normalised Profit |
$24.603m |
$17.819m |
$7.471m |
$7.782m |
$14.881m |
|
Notes
1/ I don't believe there is sufficient disclosure in AR2022 to allow us to calculate an IFRS16 profit adjustment for FY2022. In the absence of this, I have rolled forward the IFRS16 adjustment for FY2021 into FY2022, assuming it to be the same.
2/ Earnings per share calculations (below) have been adjusted to take into account the 9th August 2019 10:1 share consolidation, reducing the number of shares on issue to 75.484 million.
Earnings Per Share Calculations
FY2018: $14.881m / 75.484m = 19.7c
FY2019: $7.782m / 75.484m = 10.3c
FY2020: $7.471m / 75.484m = 9.9c
FY2021: $17.819m / 75.484m = 23.6c
FY2022: $24.603m / 75.484m = 32.6c
The extraordinary drop in profits between FY2018 and FY2019 had me diving back to my FY2019 annual report to see what went wrong.
From AR2019 p5.
"Reflecting on FY2019, we believe it was one of the most operationally challenging of recent years. Farmer confidence in parts of the agriculture sector remains subdued, constraining farm spending and therefore our revenue for the year. This has also been evident in recent months with a discernible tightening of the credit environment"
From AR2019 p6:
"The impact of mycoplasma bovis (present in NZ since mid-2017) was felt across the livestock and rural supplies business. Most particularly with reduced dairy herd settlements, a reduction in tallies, a softening in demand for dairy beef and and a more cautious approach to spending in the dairy sector across a range of farm inputs."
"Market conditions continued to challenge both our Real Estate and Wool businesses with results down on last year."
That all seems like a reasonable 'excuse'. But I guess it reflects the view that when the dairy industry catches a cold, it is hard for the rest of the farmers in NZ in other sectors to make up the lost income. Two down years in a row is enough to sink this test result.
Conclusion: Fail Test