Despite Tough Climate Conditions, Ruralco Beats Estimates

  • Nov 13, 2018 AEDT
  • Team Kalkine
Despite Tough Climate Conditions, Ruralco Beats Estimates

Ruralco has beaten estimates despite the drought and announced post-tax profit to $28.8 million, a 10 percent increase in it for the full year ending September 30, 2018. It will pay a fully franked dividend of 6 cents per share and the underlying earnings per share increased to 27.5 cents by up by 0.3 percent.

Travis Dillon chief executive tells the market on November 13, 2018 morning "That after the difficult seasonal conditions, the feat that the company has achieved in terms of profit growth has confirmed the sustainability of Ruralco's business model". Company’s three strategic priorities: Integration, Investment and Innovation deliver diversification in Ruralco’s earnings and provide a platform for growth. The drought this year has reinforced and tested the success of this strategic focus.

With analyst’s expectation of $1.88 billion, revenue for the year is up to $1.9 billion up by 5 percent. With analysts expecting $67 million, underlying earnings are up 7 percent to $70.1 million. Increased scale in Water Services has delivered 63% growth in underlying EBITDA, with water gross profit now representing 22% of total Ruralco gross profit. There has been significant improvement in operating cash inflow to $34.6 million compared to increase of $20.4 million or 144% in the prior corresponding period.

Declines in Livestock Agency gross profit in Rural Services was offset by, resilient Rural Supplies result and excellent cost control. The company has 10 new points of presence, filling strategic footprint gaps in Rural Supplies, Real Estate and Water Services including 2 new greenfield sites. The company has made first cash investments in AgTech start-ups to deliver innovation to their customers.

For further results the company did not give specific guidance but quoted that "what supports the positive outlook for the business is the continued resilience in the wool markets and sheep and current stable cattle prices, with recent spring rainfall, it remains cautious about short-term seasonal conditions”.

Ruralco announced it has made a strategic investment in Toowoomba-based Agtech startup; Data Farming. In what has been a challenging year for the customers and many parts of the business, the diversification of company’s footprint and activities have eased the impact of mixed seasonal conditions.

Ruralco Holdings Limited (ASX: RHL) is trading at a market price of $3.510 and has seen a performance change of 0.69% over the past 12 months.


Disclaimer

The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkinemedia.com and associated websites are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.

 

 

All pictures are copyright to their respective owner(s).Kalkinemedia.com does not claim ownership of any of the pictures displayed on this website unless stated otherwise. Some of the images used on this website are taken from the web and are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it below the image.

 

There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.

Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.

As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.

CLICK HERE FOR YOUR FREE REPORT!
   
x
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK