LIC’s half-year revenue up 18%

Livestock Improvement Corporation’s $159 million revenue in the six months to November 30 was 17.7% higher than the same period last year, the cooperative reported this morning.

Net profit after tax for the half year was $29.7 million, up $2.7 million from the previous year, reflecting the strong first half revenues across most product categories.  

The listed company, which specialises in advanced dairy genetics, trades as LIC and is a farmer-owned co-operative.

Cashflows from operations generated $6.6 million in the year to November 30, 2014, compared with $1.2 million in the half year to November 30, 2013.

As the livestock genetics industry is highly seasonal, LIC’s half-year results includes the majority of artificial breeding revenues but not a similar proportion of total costs.

Accordingly, they are not indicative of the second half nor the full year result: no dividend is therefore declared at half year.

In a statement chairman Murray King said the half-year result was better than expected, and driven by farmers choosing to continue to invest in solutions which improve their productivity and prosperity.

“As their co-operative, we provide farmers with solutions that will add value on-farm and deliver a return on their investment.

“While we do see a reduced spend in lower payout years, we find that farmers are willing to continue to invest in the solutions that will deliver a high return for their business.”

In July, NBR ONLINE reported that LIC had recorded a 6% rise in revenue while registering a 24% drop in profit, as the farmer-owned cooperative re-invested in research and development.

Its revenue to the year to May 31, 2014 was $211 million, up from $199 million the year before, with net profit after tax reduced from $23.6 million to $18.0 million. 

Dividend for LIC’s 11,000 dairy farmer-shareholders shrank 33% in the year to May 31 2014, from $16.75 million in 2012/13 to $11.17 million, as the cooperative invested more than $40 million in its information systems.

Last May, the Waikato-based company launched an ambitious plan for the future, as it plans to increase revenue from just under $200 million in the 2012/13 financial year to $1 billion by 2025.

Since 2003/04, LIC has recorded 10% annual growth and seen its share price surge 500%, while tripling the amount of dividends paid.

With roots reaching back 105 years, the cooperative has approximately 700 staff, about 400 of whom are based in Hamilton, as well as 1500 part-time staff employed during the breeding season each year.