Turners and Growers Limited
Results for announcement to the market
Reporting Period 6 months to June 2012
Previous Reporting Period 6 months to June 2011
Amount (000s) Percentage change
Revenue from Ordinary Activities $337,399 1.9%
Profit after tax from ordinary activities after tax attributable to security
holder $5,551 -6.1%
Net profit attributable to security holders $5,551 -6.1%
Final Dividend Amount per security Imputed amount per security
N/A N/A N/A
Record Date N/A
Dividend Payment Date N/A
There has been no dividend declared or paid in the six months to June 2012.
Comments Refer to the attached documents
Profit after tax for the Turners & Growers Group for the six months ended 30
June 2012 was $7.1m, a 2.2% increase on the result for the corresponding
period last year.
EBIT (Earnings before interest and tax) was $12.6m, 1.7% down on the same
period last year.
The Domestic division has been trading satisfactorily in difficult times.
Retail demand in New Zealand has been flat and the traditional firming of
prices heading into winter has encountered consumer resistance.
The average price per unit over the period was 7% down on last year which
translated into a similar drop in turnover.
The newly formed division Turners Logistics, a merger of the Fruit Case
Company and Turners Transport, faced a competitive market environment in the
first six months of 2012 and consequently revenue was below expectations. The
arrival of the newly introduced folding crates will enable the division to
improve performance over the remainder of the year.
The 2012 New Zealand apple season was one of the latest on record following
an unusually cool and wet summer. This impacted fruit size which has been
significantly smaller than average and resulted in lower volumes being
packed. It was pleasing to see volumes of Jazz(TM) and ENVY(TM) reach
pre-season forecasts while most other varieties fell well short. Quality and
pack-outs have been high. All major markets have performed well this year,
delivering a significant lift in prices. The introduction of a new management
system for foreign exchange exposure has enabled the Group to benefit from
the improved market prices despite the NZD''s relentless upward trajectory,
particularly against the EURO. As a result apple growers'' returns are
forecasted to be a significant improvement on 2011.
ENZA''s overseas programmes continue to expand. The 2011 Northern Hemisphere
crops were very well received in the markets and achieved higher returns for
growers than the previous year.
The Delica Group is also performing strongly. Apples from both New Zealand
and North America are up in volume and have experienced an increase in sales
prices in main markets. New Zealand volumes, in particular to Asian markets,
are 34% ahead of 2011. Jazz(TM) continues to grow in volume to Asia,
especially in Thailand and Hong Kong. Shipment of a significant commercial
volume of apples to Japan has been positively received by the market and
there have been increased volume sent to the Chinese market. Exports of table
grapes and cherries to Asian destinations have markedly increased on 2011
volumes. The newly formed import division of Delica in Australia, mainly
involved in trading apricots, blueberries and kiwifruit, is also exceeding
ENZAFoods continues to grow its value-added retail and food service products
portfolio in Australasian and Asian markets. Contract manufacturing work has
grown significantly, including grape juice concentration and packaging retail
fruit products. Expansion has also occurred in the range of products being
processed, helping to maintain growth across all areas of the business. The
full year result is expected to be a solid improvement on 2011.
Status Produce is tracking close to budget for the first six months of the
year. Status is focused on further improving operational excellence,
targeting increased crop quality and yield as well as better management of
disease and pests. The Australian export market and New Zealand domestic
returns have been lower than anticipated. Status has managed to offset the
lower price with additional volume grown across all three sites and increased
volume of contract packed product through the packhouse.
The pipfruit orchards in Hawkes Bay performed to expectations. Due to the wet
and cool summer conditions fruit size was down on previous seasons which
resulted in lower than forecasted harvest volumes. This was offset by the
exceptional fruit quality which lead to higher than normal pack-outs.
Conversely, in the Nelson region, the wet and cool growing conditions have
resulted in the crop being 15% below pre-season forecast.
Smaller citrus fruit size has presented production challenges for Kerifresh
this season that has resulted in a lower result for the first half. Kerifresh
has continued its mandarin export drive and increased its export crop
percentage to its highest level in over ten years. This season Kerifresh
produced its first substantial ENZAGold kiwifruit crop. A good level of
marketing co-operation with Zespri has occurred, and the variety has been
particularly well received in Australia, China and USA. The focus remains on
maximising the crop yield and quality and development continues with ENZA
kiwifruit varieties and blueberries.
Fruitmark, Turners & Growers'' Australian based trader of processed produce,
faced deteriorating market conditions in Australia in the first half year and
these conditions are not expected to improve in the short term. Despite
declining sales, Fruitmark managed to increase its market share and has
further expanded its European trading arm in Belgium.
Major investments in 2012 to date have been the increase in controlled
atmosphere storage capability of the Nelson facility, the enlargement of the
fruit ingredient production line of ENZAFoods, a fumigation facility and
waxing machine in Whakatu, completion of the ENZA administration building in
Hastings, and the SAP kiwifruit upgrade at Kerifresh.
Due to the Group''s strengthened relationships with the Asian markets and
robust volumes in all the major produce varieties, the Turners & Growers
Group is heading towards an improved full year operational result over last
year, accompanied by higher apple grower returns, providing a strong base for
End CA:00225823 For:TUR Type:HALFYR Time:2012-08-10 11:44:58