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 result was bettered only by last year’s record result.
While revenue rose 2% over last year to reach $975 million, EBITDA fell 9% to $61m and net profit 28% to $17.5m.
PGW acting chair, U Kean Seng, noted that the resilient performance of the rural service company in volatile market conditions was the most pleasing aspect of the result.
“Strong operating performance was generated by most business units with livestock, wool, and water all experiencing solid demand. Rural supplies and Fruitfed Supplies again experienced a standout performance,” Seng says.
“The exception was our real estate business which continues to operate in difficult market conditions.”
PGW chief executive Stephen Guerin told Rural News that the last financial year was challenging for the real estate team.
He expects the number of listed properties to rise in spring but says there won’t be too many buyers.
Gurien puts the lack of buyer interest down to high interest rates, stricter regulatory requirements, softening commodity prices, and uncertainty regarding the outcome of the general election in October 2023.
“The real estate market has experienced one of the toughest years in some time with all contributing to negative sentiment,” he added.
Guerin says on the positive side, PGW maintained its market share and increased share in some regions.
The real estate business is part of the Agency Group, which also includes livestock and wool. Operating EBITDA was down 26% to $16m while revenue held up at around $188m.
Guerin says the livestock business achieved a solid performance in a difficult market.
