T&G Global Limited (T&G) had plenty to celebrate in its 120th year despite climatic challenges which impacted its overall business result and contributed to a reduced profit after tax of $22.6m, down 30% on the previous year.
The Group reported over a billion dollars of revenue for the first time, due to continued growth in its core business and aided by the consolidation of UK subsidiary Worldwide Fruit.
Continued strong pricing for T&G’s apple varieties supported revenue growth for the Pipfruit business. Additionally, improved local trading conditions led to an improved result for the New Zealand Markets business.
However, 2017 was overall a challenging year with poor weather conditions negatively impacting on fruit quality and domestic and international harvests. Adverse weather conditions also impacted the International Produce division’s product lines with the most affected being T&G’s key grape and high margin cherry businesses. The growing maturity of T&G’s international operations, inflationary increases in employee wages and salaries also added to an increase in operating costs.
T&G’s Chief Financial Officer, Wolfgang Loose, states “despite the difficult environmental conditions, the business overall remains on track to achieve its long-term strategic objectives. These include further vertical integration, additional investment in plant variety rights, produce marketing, and a continued focus on customer value and investment in people.”
One-off gains of $23.6m, relating to the acquisition of shares in Grandview Brokerage LLC and the first-time consolidation of Worldwide Fruit, were largely offset by asset impairments recorded in the business.
T&G continued to invest in its local infrastructure and growing operations during 2017 as evidenced by a capital investment programme of $20.4 million. This included the planting of 62 hectares of new apple orchards and 140,000 new apple trees, ensuring a steady future supply of key variety apples for T&G’s export programmes.
The Group will pay a fully-imputed dividend of $0.06 per share to its shareholders in April 2018.