Thursday, 21 July 2022 15:55

LIC set to deliver strong dividend

Written by  Staff Reporters
LIC board chair Murray King. LIC board chair Murray King.

LIC has announced its financial result for the 2021-22 year, driven by increased farmer spend on premium genetics and herd improvement services.

Reporting a 15.3% increase in underlying earnings, the farmer-owned co-operative will return $26.2 million in dividend to shareholders. This equates to 18.43 cents per share with a 18.5% gross yield on the current share price. It will be paid on 19 August.

LIC board chair Murray King says the board is pleased to present the result, especially considering the financial year was hampered by numerous factors including the Covid-19 pandemic, inflationary pressures, and supply challenges.

 “I want to thank our farmer shareholders for their ongoing support, many of whom faced similar challenges as us. Delivering value for our farmers is at the centre of everything we do and it’s results like this that enable us to do just that – through our herd improvement products and services, a solid dividend, and, importantly, the right R&D investment to keep their herds profitable and sustainable into the future.”

King says the result was driven by more farmers opting to use the co-op’s premium bull teams to breed high genetic merit cows which produce more milk, more efficiently – resulting in a lower environmental footprint per kilogram of milk solids produced.

“The dairy industry needs to keep evolving to meet the challenges posed by climate change. Consumers expect a more sustainable approach to farming and this result reaffirms our farmers are well dialled into this.

“The production efficiency of every cow in our national dairy herd has never been more important; farmers know that all cows aren’t created equal and they are investing in solutions to breed the best cows, faster.

“These breeding decisions will serve them well into the future to build a more profitable and sustainable dairy sector and meet climate goals.”

During the 2021-22 financial year, 71% of fresh semen straws used for breeding replacements were from LIC’s premium bull teams (2.1 million straws), up from 60% in the 2020-21 year (1.8 million straws).

King says the co-op invested heavily in genomics over the past three decades and new research has confirmed farmers are reaping the rewards.

“Long term users of LIC genetics have almost doubled the speed of improvement in their herds over the last decade. They are not only breeding genetically superior cows which are more emissions efficient, they’re also breeding them at a much faster rate and genomics is the key contributor to this.

“We don’t need to milk more cows, we just need to milk the best cows and we’re really pleased that our farmers are making solid progress in this space.”

Summary of financials

  • Total Revenue from Continuing Operations: $263.2 million (up 5.7%)
  • Net Profit After Tax (NPAT): $26.7 million (up 16.5%)
  • Underlying Earnings: $25.7 million (up 15.3%)
  • Strong balance sheet, no debt at year-end and total assets $385.6 million (up 1.2%)
  • Dividend: $26.2 million, or 18.43 cents per share
  • R&D investment: $18.2 million or 6.9% of revenue (up 6.2% from $17.1 million)

More like this

LIC ends year with $30.6m profit

Herd improvement company LIC has ended the 2024-25 financial year in a strong position - debt-free and almost quadrupling its net profit.

Featured

'One more push' to eliminate FE

Beef + Lamb New Zealand (B+LNZ) is calling on farmers from all regions to take part in the final season of the Sheep Poo Study aiming to build a clearer picture of how facial eczema (FE) affects farms across New Zealand.

Winston Peters questions Fonterra divestment plan

Foreign Affairs Minister Winston Peters has joined the debate around the proposed sale of Fonterra’s consumer and related businesses, demanding answers from the co-operative around its milk supply deal with the buyer, Lactalis.

National

Machinery & Products

» Latest Print Issues Online

The Hound

Quid prod quo?

OPINION: Ageing lefty Chris Trotter reckons that the decision to delay recognition of Palestinian statehood is more than just a fit…

Deadwood

OPINION: A mate of yours truly recently met someone at a BBQ who works at a big consulting firm who spent…

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter