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Alliance chair Murray Taggart.
Alliance Group has announced a record profit of $117.2 million for the year ending 30 September 2022.
This is a 186% increase on the previous year. The meat co-op says it is based on a record turnover of $2.2 billion and will be making an $11.3m profit distribution to its farmer shareholders. An additional $10 million bonus share issue of one share per qualifying stock unit will also be paid out.
Alliance Group chair Murray Taggart says 2022 has been a positive year for the company.
“Our record operating profit reflects strong global demand for our products, a reward for our success in capturing greater value from our markets, the hard work and dedication of our people and our farmers’ passion for producing the world’s best beef, lamb and venison.”
Taggart concedes that Alliance had faced significant volatility during the year – including from the ongoing impact of COVID-19, global supply chain disruption, labour constraints and inflationary pressures.
“However, our strategy and investment programme meant we were able to successfully navigate the challenges.”
He says the meat co-op ended the year with a sound balance sheet and reduced inventory levels compared to the previous year.
“We are mindful of the volatility in our global markets and the uncertain economic outlook. The profit distribution allows Alliance Group to return value to our shareholders whilst at the same time continue to invest in the future of the company and retain sufficient funds to manage through any potential future economic uncertainty.”
Chief executive David Surveyor – who leaves the company next March – says the financial performance is the result of hard work and dedication from employees and support from loyal farmer-shareholders.
“Alliance Group continued to experience significant challenges around global logistics with poor vessel adherence to shipping schedules and high freight costs.”
He added that significant investment in improving the co-op’s operational performance also contributed positively to the record profit result.
“We have invested across our plant network in recent years and this played a key role in significantly improving our performance. We’re already seeing gains from the new generation primal cutter and middles machine installed at our largest plant at Lorneville near Invercargill and our product quality and yield have improved across the board.”
Surveyor concedes that the disruption caused by the COVID-19 pandemic, rising farm input costs, a wave of regulatory reform, extreme dry conditions and flooding in parts of the country meant farmers had faced difficult times.
“These events certainly tested the sector’s resilience and fortitude. However, it also showed the value of belonging to a co-operative. This year, we welcomed a record number of new shareholders to Alliance Group as more farmers recognised how the co-operative has their back during difficult times.”
Alliance’s annual meeting will be held in Timaru on December 15.
Alliance Group’s Annual Report can be viewed here: https://www.alliance.co.nz/about-us/annual-reports/
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