PGW revises earnings guidance as farmer spending drops
Rural trader PGG Wrightson has revised its operating earnings guidance, saying trading conditions have deteriorated since the last market update in February.
The company issued guidance, ahead of its annual meeting, forecasting operating earnings before interest, tax, depreciation and amortisation (Ebitda) of around $52m – down from the $61.2m it reported in the 12 months to June 30, 2023.
PGW noted that trading in the first quarter was “back” on last year, influenced by the macroeconomic environment and a subdued real estate market. Its retail and water business made up 80% of the company’s revenue in the last financial year, with its agency group – which includes real estate – making up the balance.
The rural sector is under pressure – particularly red meat and dairy – with prices at low levels and on-farm inflation sitting at near 40-year highs. Farmer confidence has hit a record low, according to Rabobank’s most recent rural confidence survey.
PGW acting chair U Kean Seng says farmers have tightened their belts and there was a “significant degree” of volatility in the global economy and international markets.
The company says it was still early in the financial year and they would be in a better position to assess the full-year forecast after the spring trading period.
