Tuesday, 26 March 2019

Announcement

HALFYR: LIC: LIC announces half year result

01 Apr 2008 08:32NZX
Farmer co-operative, LIC, today announced operating revenue of $89 million
for the six months to 30 November, 2007.  This represents an increase of
15.9% when compared to $77 million for the same period last year.

Chairman, Stuart Bay, said the results have been prepared under the
International Financial Reporting Standards (IFRS) with the comparatives
restated to provide a valid comparison.

The Net Surplus before income tax increased by 15.1% to $28.5 million.

The tax expense increased significantly because LIC no longer has tax losses
available.

Stuart Bay said "the winter and spring of 2007 were buoyant, as much a result
of forecast payout, as by the favourable growing conditions around the
country.

"This saw farmers invest in their farming and herd infrastructures with
increases in expenditure across the range of LIC products and services."

Stuart Bay said the company will not pay an interim dividend.

"The amount of the interim dividend tends to be small and this, offset by a
significant cost in paying it to farmers, lead to the Board reviewing the
policy in favour of one, annual dividend at year end."

The Board expects to confirm the full year dividend for this season in July
2008.

ends

LIC Half Yearly Review
For six months ended 30 November 2007

Buoyant economic and farm conditions during the spring of 2007, coupled with
farmer confidence in the range and depth of our product range, saw record
sales across the board, in particular AB, herd recording and farm automation
products.

The first six months of 2007/08 saw the company invest time and resource into
upgrading its IT infrastructure to deliver the levels of technology and
expertise demanded by its ever growing range of products and services.

Financial
The company concluded the first half of the season with operating revenues of
$89 million, an increase of 15.9% from $77 million in the same period last
year.

The financial results were, for the first time, prepared under the
International Financial Reporting Standards (IFRS), and the comparatives have
therefore been restated to provide a valid comparison.

Under IFRS LIC has revalued a number of significant biological assets (eg
bull and stag teams) and this has resulted in an uplift in total asset
values.

The Net Surplus, before income tax, increased by 15.1% to $25.8 million.

Tax expense has increased significantly because the company no longer has tax
losses available.

LIC''s business is extremely seasonal. The half year result contains the bulk
of annual genetics revenue and is therefore not indicative of the full year
result.

Dividend
The LIC Board decided not to pay an interim dividend because the amount,
tends to be relatively small for many shareholders, compared to the
significant cost of transmission, deferring instead to one annual dividend,
paid at year end.

The Board expects to confirm the full year dividend for this season in July
2008.

Operations, Performance and Growth
There was good cause for optimism, on farm, during the winter and spring of
2007, with forecasted record payouts, and favourable growing conditions
on-farm.

Farmers responded, investing significantly in their farm and herd
infrastructure, generating record sales in AB, and greater than expected
sales across the range of products and services.

Farmers have long recognised the value of herd testing, and demand was in
line with expectations.  LIC''s new single test option has proven very popular
with more than 25% of customers adopting this new service.

LIC''s Protrack range of farm automation systems saw a new era, with greater
after-sales resource, and innovation driven by farmer demand, generating new
and improved enhancements to the range.

In November 2007, LIC acquired a farm mapping software program, FarmKeeper,
which is already adding a new and valued dimension to extracting profit from
farmland.

International returns in our key markets of Ireland and the United Kingdom
suffered a set-back with the EU setting new requirements for the importation
of semen, but market access is being addressed and will, hopefully lead to
growth in sales in the markets where demand is strong for LIC genetics.

In Australia, the drought affected sales of our genetics products.

Summary
The Board has pleasure in reporting to shareholders that the company has
generated very strong results during the first half of this financial year.

Stuart Bay                                              Mark Dewdney
Chairman                                                Chief Executive

Half Year Report to 30 November 2006
final
End CA:00162543 For:LIC    Type:HALFYR     Time:2008-04-01:08:32:12
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Livestock Improvement Corporation Ltd
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