Profit drop for Sanford after restructure

Sanford [NZX: SAN] reported a 38% drop in annual profit after New Zealand's largest listed fishing group wrote down the value of businesses and exited some struggling units.

Net profit fell to $13.8 million, or 14.8c per share, in the 12 months ended September 30, from $22.4 million, or 24c a year earlier.

That included impairment charges of $13.3 million and $3 million of restructuring costs after Sanford wrote down a series of assets, some of which it sold.

Revenue slipped 1.1% to $455.3 million. Before one off-costs and exchange rate impacts, earnings before interest, tax, depreciation and amortisation rose 16% to $69.3 million.

"The year was marked by the introduction of a new direction which led to the introduction of a new logo and tagline and changes in the organisational structure, the way we work and in the focus of our resources," chief executive Volker Kuntzsch says.

"The next step will be a consolidation of these changes into specific activities pointed at creating value."

The company has pared back its operations in the past year, closing an unprofitable mussel processing factory in Christchurch, exiting the Pacific tuna business and putting the unit's fleet up for sale, and writing down the value of its Australian operations due to a limited quota holding across the Tasman.

The board declared a final dividend of 14c per share, payable on December 9 with a December 2 record date. That takes the annual payout to 23c per share, unchanged from a year earlier.

The shares rose 1% to $5.15, and have gained 6.3% so far this year. The announcement came just before the close of trading.

Chairman Paul Norling signalled plans to seek an increase in the pool for directors’ fees, saying they need to stay in line with the market after underspending $341,000 over the past four years.

The board will seek shareholder approval at the upcoming annual meeting to raise the pool to $700,000, effective from October 1, from the current level of $630,000.

"This increase will reflect the midpoint of the market median amongst publicly listed companies of similar size and complexity, and will also provide some minor unutilised flexibility should additional or 'one off' costs arise," Mr Norling says.

Sanford didn't provide earnings guidance for the 2016 year, saying it will focus on bedding in changes from the past year and look to boost its use of fish by-products and waste.

(BusinessDesk)