RIDLEY Corporation Limited has recorded a net profit after tax of $400,000 in an action-packed first first half of its current financial year which ends on 30 June.
This compares with a profit of $16.1 million in the six months to 31 December 2018, but Ridley earnings before interest, tax, depreciation and amortisation (EBITDA) from ongoing operations improved marginally to $30.7 million for the latest half-year.
This was up $100,000 on the half to December 2018 result, and follows a strong performance in the October-December quarter.
Behind Ridley’s reduced profit has been the $7.2M closure of Ridley’s Murray Bridge feedmill, a $2.9M internal restructure which included 44 staff redundancies, and a $1.9M payout to poultry customer Baiada.
The first year of depreciation of Ridley’s Westbury aquafeed plant in Tasmania has also weighed on the balance sheet.
New growth structure
Commissioning of Ridley’s new feedmill at Wellsford near Bendigo remains on track for completion prior to 30 June, and will take the company to peak debt.
The Wellsford mill will supplement regional production coming out of the smaller Ridley mill in East Bendigo, and will allow the company to review its footprint in northern Victoria.
Ridley’s new structure incorporates five business units:
- Packaging and supplements;
It said this structure would provide a single point of accountability for customer servicing and operation of supply, which would enable Ridley to maximise capacity, and respond better to sales opportunities.
Ridley now expects to be able to simplify its business, install automation, leverage its raw-material and consumable procurement and rationalise its supply chain.
Over the next three years it sees improvements in sales to the prawn, monogastric, equine and dairy markets.
However, it does not predict a drop in grain prices in the short term.
“The recent rain will have little impact on national grain supply, so prices are expected to remain firm,” the company said in its presentation to investors.