Patience tested at Westland Milk
Westland Milk Products chief executive Toni Brendish admits the co-op has tested its shareholders’ patience and she can’t ask them to hold on any longer.
The co-op last week announced a final payout of $8.10/kgMS to farmer suppliers, after retaining 52c/kgMS.
It finishes well ahead of the rest of the major processors; Fonterra suppliers will get a final payout of $6.79/kgMS including a 10c dividend.
Maori-owned Miraka will pay $6.80/kgMS and Synlait $6.78/kgMS, respectively; both payouts include 13c in incentive payments.
Open Country Dairy, the second-largest processor, will pay out on average $6.71/kgMS to its suppliers.
Struggling Westland Milk, Hokitika, holds the wooden spoon after announcing a final payout of $6.07/kgMS (after retaining 5c).
Tatua chairman Stephen Allen says the co-op had a good year, achieving record group revenues of $357 million and earnings of $127m.
“Our focus on growing our value-add businesses has contributed significant additional revenue and our bulk ingredient product mix has served us well,” he says.
Allen says in deciding the payout Tatua has sought to balance between supporting its shareholders and its need to reinvest for its future.
“Our gearing (debt divided by debt plus equity) at year-end lifted slightly from 35% last year to 37%, but will normalise back to around 35% or less as we move further into the current season.
While Tatua shareholders rejoice, shareholders of Westland Milk endure the lowest payout of all.
Westland Milk chairman Pete Morrison says the co-op achieved $3.3m gross profit last season on the back of the 5c retention.
Morrison says the Westland board acknowledges its milk payout isn’t competitive and is focussed on achieving parity in future.
