Shares in agribusiness company Elders surged 7.9 per cent to $5.60 after it announced it had more than doubled its profit to $116 million, up from $51 million the year before, and was paying out a dividend for the first time in nearly 10 years.
Elders reported underlying profit had risen by $16.5 million to $57.7 million.
The increased profit came on the back of the strategic acquisitions of Ace Ohlsson, a New South Wales based horticultural operation, Southern Districts Estate Agency in Western Australia, buying a 30 per cent stake in the StockCo livestock financing business and an additional 10 per cent of Elders Insurance, taking Elders’ total ownership of Elders Insurance to 20 per cent.
It was also the result of improved profitability across its products with strong sheep and cattle prices, underlying profit in the company’s feed and processing services rising by 17 per cent or $1 million and margins for Elders real estate business improving by $2.7 million.
The lift in profit comes with Elders moving out of the first three years of its Eight Point Plan which has seen the company exiting from the non-core live export business to help drive cost efficiencies.
Elders’ chief executive officer Mark Allison said this allowed the company to focus on growth.
“Exiting from the non-core Live Export business while maintaining our important involvement in the trade through the sourcing of livestock is not only driving cost efficiencies but has allowed us to invest in areas, such as technical and digital services, which are much more aligned with our growth agenda,” Mr Allison said.
And in good news for investors, Elders has announced it has started paying out a dividend for the first time since 2008.
“It is pleasing that we have been able to declare a final and special dividend, which are Elders’ first shareholder dividends since 2008.” Mr Allison said.