Elders Limited (ASX: ELD) is an Australian agribusiness company. It is into providing a wide range of services that include financial services, farm business including grain, wool and livestock. The company aims to provide agribusiness knowledge and technical expertise to farmers, market players and others operating in the agriculture industry. Network, Feed and Processing, Elders Fine Foods and Live Exports are the major segments that the company operates through.
The company published a presentation being given by the Chief Executive Officer of Elders Limited, Mr Mark Allison, to an investor roundtable being hosted by Blue Ocean Equities.
The company has a balanced growth plan to FY20 which it seeks to achieve with a combination of acquisition, organic growth, and maintaining costs. On the acquisition front it continues to evaluate strategically aligned opportunities to expand its business, identify innovative solutions to target geographical and strategic gaps, maintain a disciplined approach to ensure acquisitions meet required financial hurdles, reallocate capital from nonperforming assets if financial and quality targets are not met and finally considering only transactions which are EPS accretive.
On the organic growth front, the management intends to drive continuous business improvement, captures growth opportunities across its product and services portfolio, explore opportunities to expand the offering and leverage the Elders brand into new markets to capture new clients and customers, continuously drive and resource values-based leadership through the organisation, and build a deeper understanding of its customers to deliver profitable value add products and services.
Further, to maintain costs it seeks to invest in resources to identify, integrate and support both organic and acquisition growth opportunities, derive efficiency gains through active cost management to offset inflationary increases, reallocate and reduce unproductive costs, develop and implement improved processes and approaches and Maintain robust and conservative financial discipline.
Further, the EBIT of the company since FY14 to FY18 has been on an increasing trend contributed by several factors like resetting of operational strategy, focusing on running a pure-play agribusiness, favourable livestock prices, footprint expansion, acquisitions and investments, such as Ace Ohlsson, Titan Ag, SDEA, Kerr & Co, CGX, Insurance and StockCo etc. Moreover, the company gained market share, improved on supplier terms and consolidation and increased feedlot utilisation at Killara.
The stock of Elders Limited is currently trading at $5.960 with ~0.67% decrease during the day’s trade, with a market capitalisation of $700.42 million (As on 18 March 2019). The stock has generated a negative YTD return of 14.29% and returns of -17.36%, -13.54% and 3.63% over the past six months, three months and one-month period respectively. It had a 52-week high price of $9.470 and a 52-week low price of $5.760, with an average trading volume of 569,276. The stock is trading at a PE multiple of 9.680x with an annual dividend yield of 3%.
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