Farmer-owned red meat co-operative Alliance Group continued to bounce back strongly from Covid 19 with a record profit before distribution and tax of $117.2 million for the September year, up 186 per cent on the previous year’s.
The result was based on record turnover of $2.2 billion, up from $1.8b in the previous year.
Alliance will make an $11.3m profit distribution to its farmer shareholders, and in addition, a $10m bonus share issue of one share per qualifying stock unit.
Chair Murray Taggart said it had been a positive year for the company.
“Like many businesses, the co-operative faced significant volatility including from the ongoing impact of Covid-19, global supply chain disruption, labour constraints and inflationary pressures, however, our strategy and investment programme meant we were able to successfully navigate the challenges.
“We ended the year with a sound balance sheet and reduced inventory levels compared to the previous year.”
Taggart said Alliance was mindful of the volatility in its global markets and the uncertain economic outlook.
“The profit distribution allows Alliance Group to return value to our shareholders whilst at the same time continue to invest in the future of the company and retain sufficient funds to manage through any potential future economic uncertainty.”
Chief executive David Surveyor said Alliance continued to experience significant challenges around global logistics with poor vessel adherence to shipping schedules and high freight costs.
“As a co-operative, we adopted an agile approach, and where necessary, re-balanced our product mix, forms and channels so we could continue to meet the needs of our customers.”
Significant investment in improving the operational performance also contributed positively to the record profit result.
“We have invested across our plant network in recent years and this played a key role in significantly improving our performance,” he said.
The co-op had already seen gains from the new generation primal cutter and middles machine installed at its largest plant at Lorneville near Invercargill.
He said Alliance Group was leading the red meat sector in the decarbonisation of its plant network.
Three years ago, Alliance set a goal of ending the use of coal at its plants within 10 years.
“We are continuing to examine other fuel options across our network and rolling out a range of energy-saving projects, which will cut our carbon footprint significantly.”
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