Appendix 4E and Annual Report for the Financial Period Ended 30 September 2017
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13 November 2017 Appendix 4E and Annual Report for the Financial Period Ended 30 September 2017 Elders Limited (ASX: ELD) today reports its results for the financial year ended 30 September 2017. Attached is the Appendix 4E (Results for announcement to the market), and Annual Report for the 12 month financial period ended 30 September 2017. Peter Hastings Company Secretary For personal use only 1 ELDERS LIMITED — APPENDIX 4E (RULE 4.3A) FINAL FINANCIAL REPORT RESULTS FOR ANNOUNCEMENT TO THE MARKET For the year ended 30 September 2017 Attached is the final report for the year ended 30 September 2017. The consolidated profit after tax and non-controlling interests was $116.0 million (2016: $51.6 million). Additional Appendix 4E disclosure requirements and further details on the results and operations are included in the Annual Report provided to the Australian Securities Exchange. Result $000 Revenue from continuing operations up 6% to 1,603,137 Profit from continuing operations after tax attributable to members up 79% 111,459 Profit from discontinued operations after tax attributable to members n/m* 4,536 Profit after tax for the year attributable to members up 125% to 115,995 * percentage movement in result not meaningful Dividends Amount per Franked amount security per security 2017 Final dividend 7.5 cents 7.5 cents Special dividend 7.5 cents 7.5 cents Interim dividend Nil n/a 2016 Final dividend Nil n/a Special dividend Nil n/a Interim dividend Nil n/a The record date for both the final and special dividend is 21 November 2017; and payable on 15 December 2017. Net tangible assets 2017 2016 $ $ Net tangible asset backing per ordinary security (113,859,440 ordinary shares) 1.01 0.96 For personal use only 2017 Elders Annual Report For personal use only Elders Limited ABN 34 004 336 636 Contents Chairman’s Remarks 4 CEO’s Report 6 Year in Brief 10 A Year of Progress 11 Elders Gives Back 12 Operating and Financial Review 14 Material Business Risks 22 Review of Operations 26 Outlook 34 Digital and Technical Services Snapshot 36 Elders Expands National Footprint 38 Board of Directors 40 Executive Management Remarks 44 For personal use only Women in Pink 50 Directors’ Report 52 Remuneration Report 60 Annual Financial Report 78 Shareholder Information 130 Company Directory 131 For personal use only Elders is shaping up to drive growth and innovation towards 2020. For personal use only One Elders Values For personal use only 02 One Elders Values Integrity Behaving with honesty and integrity in every interaction Accountability Being accountable for results Teamwork Using the power of the team, and respecting the contribution of every person Customer Focus Growing valuable customer relationships, and showing pride and passion in our organisation Innovation Delivering innovation and continuous improvement For personal use only 03 2017 Annual Report — Elders Chairman’s Remarks Financial results The Company has recorded another year of strong financial progress, with underlying net profit after tax increasing by $16.5 million, from $41.2 million last year to $57.7 million in FY17. Underlying earnings before interest and tax (EBIT) of $70.4 million was up $14.3 million on last year. Balanced growth across the portfolio – including Retail Products, Agency Services, Real Estate Services, Financial Services, and Feed and Processing Services – contributed to the solid results which are discussed in greater detail in the Chief Executive Officer’s report. Strategic direction The strategic direction or “Eight Point Plan” has been the foundation of Elders’ recent success and positioned the business for ongoing and consistent quality growth. Elders continues to be disciplined in how it will grow in the future. There are important agricultural areas in Australia where Elders is under-represented. These areas are prioritised and It is extremely satisfying for the Board and management to thoroughly evaluated to determine how we should approach achieve our earnings before interest and tax ($60 million) and these opportunities. Several investments are listed below that return on capital (20%) goals that were established with the are a result of this analysis and work continues to profitably Eight Point Plan in 2014. This journey commenced in 2013 expand Elders’ footprint. with the decision of the Elders Board to return Elders to being We continue to assess our current operations to ensuring we invest a pure play agribusiness, with our aim to “turn the Company in only those products, services and geographies that are capable around” and regain the confidence of customers, investors of generating positive and sustainable returns. and employees. In FY16 we made the decision to divest the Live Export business. This annual report will give you insights on how this has been Completion of the sale of that business during the year marked achieved and hopefully the confidence to believe that Elders a successful exit for Elders from Live Export logistics. will continue to grow and strengthen in the future. This means we are no longer competing with live cattle exporters Safety in terms of shipping, logistics and supply chains, and this has The success of a Company, such as Elders, is very much facilitated an increase in our ability to supply cattle to exporters dependent on the health and wellbeing of its employees. as we are now seen as a partner. We remain committed to the We prioritise the safety of our employees and recognise that live export industry and our many clients servicing this industry their welfare must be a key consideration in all that we do. with livestock. For personal use only In 2017, we had six lost time injuries (LTIs), which is another Elders is committed to continuing to expand and improve our solid step in our journey to achieving our target of zero LTIs. products and services for our customers. We believe technology In FY14, the year before the Eight Point Plan commenced, LTIs that provides productivity improvements to Australia’s growers stood, on a like for like basis, at 14. As a result we consider we and producers is key to ongoing profitability and sustainability. are on the right track with our safety strategy. Our plan is to offer access to new technology through improved A safe and healthy Elders is in the interests of everyone: our digital platforms and through our partnerships with global and employees and their families, our clients and customers, and Australian research providers. We believe continuous improvement our regional communities. in productivity is key for Australia to successfully compete globally and meet growing demand for food and fibre in Asia. 04 Chairman's Remarks Investment Corporate governance In 2017 Elders made several important investments to support The Board strongly believes that the Eight Point Plan. a culture of compliance, and a commitment to applying the One Elders For example, in Bunbury Western Australia, Elders purchased Values by our employees in their day- Southern Districts Estate Agency which is one of the largest to-day business activities, is essential and most diversified real estate groups in the south-west of in ensuring the long-term success of Western Australia. our strategic objectives. To this end, In a fresh approach to the Real Estate offering, a team of water we continue to uphold high standards brokers has been recruited to establish a capital-light water of corporate governance, including broking business. our continuous disclosure obligations. The Company’s corporate governance We continued to grow our specialised horticultural footprint framework and practices, which are fully with the acquisition of New South Wales horticultural service compliant with the third edition of the provider and inputs retailer, Ace Ohlsson. An established leader ASX Corporate Governance Council’s in the horticulture industry, Ace Ohlsson is a good strategic, Principles and Recommendations, are cultural and geographical fit for Elders. detailed in the Corporate Governance Another important investment in 2017 was the acquisition Statement (CGS) available on our of 30% of the livestock financing company StockCo. The website at elders.com.au. investment has created more financing options for our The CGS also outlines our policy, customers to acquire livestock and added another important objectives, and progress against service to our Financial Services business. those objectives, for achieving gender diversity in the workplace, which Balance sheet and finance remains a priority. A concerted effort to One of the most significant accomplishments in 2017 was the achieve gender balance in the workforce simplification of the Elders balance sheet. In April 2017, Elders is progressing and steadily making realised and cancelled its Hybrid securities which were issued inroads into the desired increase in in 2006 with a face value of $150 million. Realisation of the representation of women in all facets Hybrids enables Elders to pay a dividend for 2017, without the of the business, from the Board to the need to first pay distributions on the hybrids. This is, obviously, branches. of great advantage to you, our shareholders. The Board remains committed to I am pleased to report that on the back of the Eight Point ensuring Elders stays on its course of Plan, with three years of strong business results, normalised growth and that it continues to deliver banking arrangements, reduced debt levels and improved results in accordance with shareholder cash generation, a final dividend – the first since 2008 – will expectations. be forthcoming in December 2017, together with a special dividend. On behalf of the directors, I take this opportunity to extend the Board Board’s gratitude to Mark Allison, Recently, we announced the appointment of a new non- his management team and all Elders’ executive director, Ms Diana Eilert, who will stand for election employees who continue to represent at Elders’ 2017 Annual General Meeting (AGM).