Invercargill-based Alliance Group has recorded an operating surplus of $42.1 million from a turnover of $1.5 billion for the year to September 30. It will make an extra payment of $15m to its farmer shareholders related to the livestock they supplied, as well as pay a 5c full imputed dividend, worth $2.8m, based on share holdings reports The Southland Times. A bonus issue of 18.6 million shares is also planned this year so the company’s farmer owners can share in its growth and receive a larger share of its equity.

Chairman Owen Poole said the company had recorded a strong profit and provided “very good returns” with lamb prices at record levels.”It is somewhat unfortunate that we reflect on a successful year at a time when an unhelpful New Zealand dollar looks set to undermine returns in the year ahead,” he said.

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Sheep farmers’ returns look like plumbing the depths seen before last year’s boom unless the NZ  dollar takes a dive reports Rural News. Meat & Wool NZ economic service director Rob Davison says last week’s post-float record for the kiwi against Sterling, combined with continued strength against the Euro and US dollar, suggests the average lamb price will be back to $66.‘That’s not a good price given there has been a 21% increase in on-farm inflation in the last three years.’

Average prices achieved in 2005-06, 2006-07 and 2007-08 were $56.20, $53.60 and $57.90 respectively. Last year’s lift to $89 was about 55% currency driven and 45% market related. Fortunately, those in-market gains look like holding with a lamb crop similar in size to last year, says Davison.

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Alliance Group expects to pay shareholders $15 million in rebates this year, within the $10 to $20 million annual historic range.  Speaking to about 100 shareholders in Milton yesterday, chief executive Grant Cuff said the rebate payment was over and above its yield quality premiums paid for lambs which met its yield target reports The ODT. In a low-key meeting, Mr Cuff was bullish about prospects for sheepmeat, beef and venison, saying markets were generally strong, the world wanted our meat and the only blight on the horizon was the exchange rate.

At current levels of over $US65c to the New Zealand dollar, Mr Cuff said January to March prices for all three species would be about 10% less than last season. Alliance chairman Owen Poole said the company would be meeting suppliers to its two North Island meat works in coming weeks and inviting them to become shareholders. They company bought its first works at Dannevirke in 2003 and had just three North Island shareholders. He said the approach was designed to get a commitment to the company from its other suppliers, while the capital injection “would be useful”.

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Alliance last week announced operating profit before distributions to shareholders of $67.9 million on turnover of $1.3 billion for the year ended September 30 reports Rural news.

Operating surplus after tax and before pool surplus payments for the year was $54.0m, from $10.9m in 2007. The board approved a pool surplus distribution of $20.5m and dividend of 5c per share with a full imputation credit. The combined pool surplus and dividend distribution to shareholders is $23.3m.

The pool surplus will be paid on November 21 and the dividend on December 19. A bonus share issue will be made in December 2009.

Alliance chairman Owen Poole says the result is pleasing and brings the net profit before distributions over the past five years to $152.2m, $99.3m of which has been distributed to shareholders. ‘For a fully paid average shareholder, this amounts to more than $4.00 per lamb above schedule for every lamb supplied over that period’