No dividend again for patient shareholders in Australian Agricultural Company which yesterday revealed it has ridden the beef boom very nicely in the year to March 31.
The company revealed a sevenfold jump in earnings to $67.8 million following its shift toward selling packaged meat and away from just being a pure cattle producer and exporter of live beasts.
In fact net profit for the 12 months to March 31 rose by $58.2 million from $9.6 million for the prior corresponding period, with the amount of beef sold almost doubling.
That saw group revenue jump 45% to $489 million in the 12 months to March 31. The value of meat sales jumped 160% over the year to $428 million.
Directors said meat sales rose "due to increased demand from established Grainfed Wagyu and Shortfed/other markets, as well as manufacturing beef markets supplied through the Livingstone Beef Processing Plant. Average sales price per kg CW for the group fell by 16% as the introduction of Livingstone Beef manufacturing meat into the sales mix diluted price increases in the Wagyu and Shortfed/other markets.”
Over the past three years, AA Co has transformed from a cattle producer into an integrated beef producer and exporter, after opening a large abattoir in Darwin and focusing on extracting the maximum value out of its own herd, instead of selling the cattle to others to extract value.
“Live sales of cattle to third parties has reduced in line with the Company’s strategy of maximising value through the entire supply chain,” directors explained.
“Our strategic decision to own cattle right through our supply chain has increased revenue and margin,” chief executive Jason Strong said in a statement to the ASX yesterday.
"While the board has not declared a dividend, the company remains committed to the reinstatement of dividends and has previously indicated that on a return to sustainable and significant positive operational cashflows, directors will review dividend policy and payments,” directors said.
Mr Strong said total kilograms of beef sold was up by 96%.
“The increased volumes included production growth at our Livingstone Beef processing facility at Darwin as well as a 15 per cent increase in the sales volumes of our premium Wagyu brands,” Mr Strong said.
“Our strategic decision to own cattle right through our supply chain has increased revenue and margin. In the past year our premium Wagyu brands have been recognised as some of the best in the world – including being named as Grand Champion at the World Wagyu Conference.
‘We’re going to step up our differentiated branding strategy to tell the story of why AACo beef is so good – sharing the experience from our iconic cattle properties in the North to some of the world’s finest restaurant.
“We are also investing in cutting edge technological innovation to improve the consistency and predictability of beef production through data analytics, pasture mapping, grazing management and genetics,” he added.
The shares rose 12.3% to $1.68.
