Elders Limited’s Stock Sky Rocketed On Fiscal 2018 Financial Results

  • Nov 12, 2018 AEDT
  • Team Kalkine
Elders Limited’s Stock Sky Rocketed On Fiscal 2018 Financial Results

Agribusiness operator Elders Limited (ASX: ELD) today announced the financial results for the full year ended 30 September 2018.

The company has posted substantial growth of 9% in the underlying net profit after tax of $63.7 million in Fiscal 2018, up $5.3 million from the previous corresponding period, i.e. FY17. Notwithstanding dry winter cropping condition, the company has shown continued strong performance in the Retail Business segment because of which Elders’ underlying EBIT has increased by 5% to $74.6 million for the year ended 30 September 2018. Improvement in retail business has recorded a margin growth of $14.5 million reportedly driven by organic increase in Southern Australia and acquisition growth in horticulture. 

But the statutory net profit of the company has declined sharply from $116 million in FY17 to $71.6 million in Fiscal 2018. It reflects the reversal of brand name impairment charges of $38.3 million in previous year FY17.

On cash front, the company has posted an operating cash outflow of $12.1 million, down from  the inflow of $81.5 million last year. This reflects an upward shift in Retail debtors underpinned by strong sales in the season. Further the considerable delay of receipts due to public holidays over the year end has been another contributing factor to the outflow.

Elders’ Financial Services earnings were boosted by acquisitions and organic growth in loan book balances, rising from $35.1 million in FY17 to $38.3 million in the reporting period. Further, during financial year 2018 company’s costs increased to $280.4 million, up by $13.8 million due to initiatives taken under company’s Eight Point Plan, that includes acquisition and organic footprint growth.

The Board has declared a final dividend of 9.0 cents per share, fully franked, that has taken total FY18’s full year dividend to 18 cents. Moreover, underlying EPS of the company was 55 cents per share, higher than 51 cps in previous corresponding period, i.e. FY17.

The return on capital was well above the company’s target of 20%, at 24.2% for the Fiscal year 2018, reflecting a year-on-year improvement in Retail segment along with continued strong performance in Livestock.

On the basis of past performance of recently acquired TitanAg, Elders expects to generate approximately $7 million more EBIT in Fiscal Year 2019. Further, the company aims to achieve growth through its Eight Point Plan, announced in 2014. As per this plan the company recognizes sustainable competitive advantages as a pure-play agribusiness, by geography and product, and then anchors its future growth and development on these advantages.

As the company released the robust financial performance for the year 2018, the share price of Elders jumped as much as 19.703% to close at $8.870 on 12 November 2018. In the past one year, the stock has seen a performance change of attractive 41.57%.


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