NZ: Productivity gains boost Eastpack’s full year results

EastPack, the largest wholly New Zealand grower owned kiwifruit post harvest co-operative, is set to end the 2010 financial year positively with profit before tax and rebates expected to be up at least 10 per cent on prior year to around $10 million. “The improvement in our financial performance for the year ending December 31 2010 is a result of achieving greater efficiency and productivity from our three year investment in Lean manufacturing,” said EastPack Chairman, Ray Sharp.  “This strong financial result means that we are in a position to increase Rebates to Transactor shareholders from 25 cents per tray in 2009 to 30 cents per tray this year. The Dividend paid to Investor Shareholders will lift from 14 cents per share to 15 cents.”

Looking forward, Mr Sharp said that EastPack had carefully considered the potential impact of the outbreak of Psa on the business and its growth plans.
“We are in a strong position to support ongoing expansion and preserve our capital base. We have healthy cash flows, solid retained earnings and a balance sheet with an equity ratio of over 55 per cent.” He said that it was with “considerable regret” that Satara and EastPack were not able to conclude a proposed merger as a result of the uncertainty over the long term impact of the Psa bacteria.

“Our decision not to proceed with the merger reflects the importance of protecting the investment of grower shareholders and ensuring resources are there to support growers during this period. Taking on more debt to pay out Satara’s non-grower investor shareholders would not have been good stewardship of grower investments in this period of uncertainty.” Mr Sharp said that EastPack’s success to date had been based on providing top quality facilities and operational excellence to look after growers’ fruit, delivering high quality product and giving a good return to grower shareholders. “We have a history of being fiscally prudent and we wanted to be reasonably assured that we could continue to deliver the level of returns via rebates and dividends that our growers expect,” he said. “We are also conscious that as the largest fully New Zealand grower owned operation that we also work to deliver economic and social benefits to the local, regional and national economy.”

Mr Sharp said EastPack had invested over $9 million over the past 12 months in continuing to upgrade its packhouse, coolstorage and packing line infrastructure to efficiently manage the handling and quality outturns of increased volumes of green and gold kiwifruit to supply export marketer, ZESPRI.Further growth in volumes in 2012 was targeted and the operation was on course to consolidate its financial position in the best interests of growers and sustain momentum for continued planned growth with the right resources, expertise and strategy in place. “We are in good health and in a position to stay that way,” Mr Sharp said.