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Elders posts remarkable turnaround

Business

South Australian agribusiness Elders has attributed a change in focus for its thorough turnaround and reaching zero-term debt for the 2014-15 financial year.

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Elders, one of the oldest brands in Australia, posted a net profit after tax of $38.3 million compared with a $3m profit the previous year.

In a statement to the ASX on Monday, Elders recorded its underlying net profit had improved by $23.5 million to $32.6 million on the previous financial period.

Chief executive officer Mark Allison said after seven years of debt reduction, this financial year saw the company reach zero-term debt.

“Elders can now focus on directing our cash flow back into Eight-Point-Plan initiatives and ultimately reinvigorate and strengthen the business to grow earnings and returns,” Allison said.

Allison said the results reflected the company’s focus on new priorities as well as renewing key relationships with clients, suppliers, investors, local communities and employees.

“Elders is rising to the challenge of new priorities, new expectations and a new level of performance, resulting in another year of incremental improvement.”

Allison said retail was up $3.7 million on last year due to increased winter crop demand and price book management and consolidating its supplier base.

Elders CEO Mark Allison

Elders CEO Mark Allison

Increased livestock prices and increases in cattle and wool volumes saw a $16.3 million improvement in the agency service business.

Killara Feedlot in New South Wales reported improvement and Chinese investment brought a further $3.1 million in feed and processing services.

“Net underlying finance costs reduced by $5.7 million on last year with lower average net debt in 2015,” Allison said.

The turnabout in Elders’ fortunes started with Allison’s switch from chairman to chief executive in April 2014 in a bid to restore the struggling business.

Before Allison’s appointment, Elders had endured a horror year with a $505.2 million loss which prompted a major restructure.

The business celebrates 175 years of business after Alexander Elder arrived at Port Misery, South Australia in January 1840, put up a sign “A.L Elders, General and commission agent and began selling his wares.

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