Agria gives up bid to wrest control of PGW board
A move by PGG Wrightson Limited’s biggest shareholder to take control of the board has fizzled out.
The listed company now expects operating earnings before interest, taxes, depreciation and amortisation (EBITDA) for year ending June 30, 2024, to be $43 million, $7m below the previous forecast.
PGW chair, Garry Moore says market conditions are impacting the whole of the agricultural sector.
He says farmers are spending less because of several factors - drought conditions across much of the East Coast, Tasman and Northland over the first quarter of 2024, weak sheep meat demand from China and increased supply culminating in lower farmgate returns and higher interest rates and elevated input costs impacting on-farm and on-orchard profitability.
Moore notes that although the harvest season has been broadly positive there is a time lag in the conversion cycle before farmers and growers see the financial benefits from their harvest production.
“Whilst we have seen a slight uptick in farmer and grower confidence in recent months, this is off a low base and sentiment in the sector remains subdued.
“This manifests in reduced investment and spend decisions on farm and orchard. Consequently, we are seeing some clients defer spend where they can and hold off on discretionary items. In this context PGW’s outlook for the remainder of the financial year remains cautious,” says Moore.
However, despite the present difficult market conditions, Moore remains positive about the prospects for the sector over the medium to longer term.
“We have confidence that PGW is well placed to support our clients through these challenging times and beyond. As a business, PGW does well when our clients prosper and consequently the converse is true that when times are tough for our clients this also impacts our performance. Notwithstanding the difficult trading conditions, PGW continues to maintain and grow share in the markets in which we operate.”
