14 Jun 2017

PGG Wrightson chief executive to step down

10:11 am on 14 June 2017

PGG Wrightson chief executive Mark Dewdney will step down at the end of the year, as the rural services firm issues a profit warning.

PGG Wrightson chief executive Mark Dewdney

PGG Wrightson chief executive Mark Dewdney Photo: PGG Wrightson

Chairman Alan Lai said in a statement that the board and Mr Dewdney, who was appointed chief executive in June 2013, believed it was the right time to review the company's leadership.

A search for a replacement was under way and it hoped a new chief executive would be in place by the start of next year.

Mr Dewdney was stepping down to "pursue private interests", the company said in a statement to the NZX.

"When Mark joined PGW he came in with a clear mandate to build staff engagement and capability and target growth in key areas of the business. Mark has done an excellent job in implementing that strategy and the objectives that were set when Mark was appointed have been achieved. The business has performed well during his tenure and he continues to have the full support of the Board," Mr Lai said.

Mr Dewdney said it had been a privilege to be part of the PGG Wrightson family.

"I am looking forward to supporting the succession process and helping the Board of Directors in providing leadership continuity through this period. I am absolutely passionate about New Zealand agriculture, and committed to doing everything I can to support PGW through this transition. I am but one person in a team of over 2000 - our success over the past four years is a credit to the whole team at PGW."

Meanwhile, the company has announced it expects full-year operating earnings to be in the bottom half of its previously announced range of $62-68 million.

It also expected its after-tax profit to be towards the lower end of its range of $46-51m.

"We advised at the start of the year that we expected the 2017 financial year to be a tougher year than 2016," Mr Dewdney said.

"Prior to autumn we were tracking ahead of our forecasts, but the weather across New Zealand in this final quarter of our financial year has put a dampener on our 2017 earnings expectations.

"April was very wet for most of the country and this made crops difficult to harvest and paddocks challenging to work. Our business that has been most affected is New Zealand Seed and Grain."

"For our Grain business, lower harvest yields have reduced earnings from our processing and drying facilities. For Seed, autumn demand for our seed products has been less than expected as many farmers have simply been unable to complete their re-grassing and autumn pasture renewal plans. While we did see some lift in activity into May as the country started to dry out, falling temperatures brought the autumn planting season to its inevitable close."

PGG's Livestock business was have a stronger quarter as international demand for protein and lower stock numbers pushed prices higher, the company said.

It was positive about the outlook for the 2018 financial year.

"There are some signs of improving confidence in a number of key agricultural sectors, and the early indications for our 2018 financial year are looking encouraging. Our 2016 earnings were a record, and we are hoping that FY18 will be close to that again," Mr Dewdney said.

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