Agribusiness and property group Elders has reported a whopping 90 per cent gain in half-year profit, although shareholders did not receive a higher dividend.
Elders on Monday reported half-year statutory net profit after tax to March 31 of $52 million, almost double the same period last year.
Its acquisition last year of wholesaler Australian Independent Rural Retailers, which supplies livestock feed, pet food and chemicals, was largely responsible.
Shareholders will receive a dividend of 9.0 cents per share, fully franked, which is the same as the previous half-year payment.
Chief executive Mark Allison told AAP that Elders had the ability to pay a higher dividend in the second half and wanted to be sure the COVID-19 environment turned out as it expected.
He said the decision was a conservative, prudent one.
The COVID-19 pandemic has not had a significant impact on demand for its products and services, which include a meat distribution network in China.
Elders’ agricultural operations include livestock, feed, wool and supplies. It also offers financial services, and has residential operations in rural and residential areas.
Its rural products, the bulk of which are farm supplies, increased gross margin by 33 per cent or $22.5 million.
Chief executive Mark Allison said some rain on the east coast during the half-year lifted farmers’ confidence and demand for crop products.
Elders said it was on track to produce full-year net profit after tax in line with analysts’ consensus of between $85.8 million and $102.9 million.
There was some uncertainty from COVID-19, it said.
Government restrictions such as social distancing had the potential to affect sales of livestock, wool and property but this could not be reasonably estimated, according to the company.
Elders shares were trading higher by more than 9.0 per cent to $10.31 at 1433 AEST.
The share price has increased by more than 51 per cent since January 1 despite a wider market downturn from the pandemic.