OPTIMISM was in the air at Elders’ annual general meeting in Adelaide today, as managing director Mark Allison labelled the company’s turnaround “all but complete”.
“This time last year, I stood before you and remarked on the story of Elders’ survival,” Mr Allison said.
“This year, it’s a different story - 2015 was a year of stabilisation, positive progress and robust preparation for growth.”
While Elders was back in black in 2014, the company’s financial performance was much healthier in 2015, recording a $38.3 million statutory profit in the 12 months to September 30 – well up on the $3m achieved in the previous year.
Led by strong livestock returns, increased retail earnings and interest cost savings, the improvements were enough to get Elders readmitted to the ASX 300 index in September following a three-year hiatus.
Chairman Hutch Ranck said all staff - agents, retail staff and senior managers - had contributed to the turnaround.
“Our consistent improvement, year-on-year, reflects the vision and commitment of our management team and the hard work of employees across Australia, China and Indonesia,” he said.
Mr Ranck said the company had achieved zero term debt following seven years of debt reduction.
“For too long, our debt levels have been an issue of concern for shareholders and the board alike, so this milestone has played a key role in Elders’ turnaround story,” he said.
“With zero term debt, we are in a strong position to be able to shift our focus from debt repayment and we are directing our cashflow towards the eight point plan.”
But, he said dividend payments were still a couple of years away.
“I understand for many long-standing shareholders, there has been considerable time between dividends, and while I understand we still have some work to do before you view our performance as acceptable, I hope you can see the significant progress that has been made in our vision to create value for stakeholders.”
Major company achievements included the launch of the online livestock auction platform livestock.com.au, the introduction of a seasonal livestock financing facility, and the launch of a new online grain system.
“Also, Elders sent the first shipment of live slaughter cattle from Australia to China under the new health protocols established pursuant to the China-Australia Free Trade Agreement,” Mr Allison said.
“While our approach to capitalising on future opportunities in China will be measured and methodical, this was a key milestone for Elders and the wider Australian industry.”
Mr Allison said significant progress had also been made on the company’s eight point plan.
“The eight point plan is our blueprint for becoming an efficient user of capital and a business that produces acceptable returns for all our stakeholders while servicing our customers’ needs,” he said.
“I’m pleased that after two years’ solid progress, we remain on-track to deliver the financial commitment of the eight point plan.
“Of course we’ll experience challenges from the weather and markets, but that’s the business we’re in.”
He said the company’s top priorities for 2016 would be safety performance, operational performance, key relationships, and efficiency and growth.
“You can be confident that Elders is back. We are doing what we said we would do, and we are focussed on servicing our customer needs and the future growth of our business,” he said.
Several motions were carried at the meeting, including the election of Robyn Clubb to the board, the re-election of Mr Ranck and an amendment to Elders’ constitution capping board numbers at eight.