Alliance Delivers Strong Performance In Challenging Year Press Release

Alliance Group overcame significant global volatility and challenges to post a record financial performance and deliver for its farmers and customers, shareholders were told at the company’s Annual Meeting in Timaru today.

Last month, Alliance Group announced a record profit before provisions, distribution and tax of $117.2 million for the year ending 30 September 2022 with a record turnover of $2.2 billion. The co-operative is making a $11.3m profit distribution to its farmer shareholders, and in addition, a $10 million bonus share issue.

“The past 12 months were tough for our farmers and the co-operative with droughts, flooding and the ongoing impact of COVID-19,” said Murray Taggart, chairman of Alliance Group.

“Meeting our farmers’ demands for processing capacity was difficult as large numbers of our people isolated at home or cared for family members. There was also significant volatility in our global markets with the war in Ukraine leading to a significant escalation in food prices and rising inflation rates eating into people’s discretionary income.

“Global logistics remained challenging. While dry goods shipping is returning to normal service levels, refrigerated container shipping is still some way off normal container availability and ship reliability. Our ability to reliably transport chilled product on ocean freight remained heavily compromised, particularly on longer routes, forcing customers to frozen product.

“Our financial performance in the face of this global volatility and domestic challenges was outstanding. It was boosted by rising global red meat prices and reflects the outcome of many years of hard work across all parts of the business to capture more value from the market, optimising the use of our processing assets and achieving lower processing costs.

“While the co-operative’s balance sheet strengthened relative to last year, the global logistics challenge continued to hamper the company’s ability to ship inventory. This in turn slowed the cash cycle within the business, however operating cashflow was strong with a $120m improvement over last year.

“In addition to the excellent profit result, it was good to pass on the strong global prices to farmers through livestock pricing. While we did consider a higher profit distribution to our farmers, we opted to take a conservative approach in light of the uncertain economic outlook and our desire to pursue opportunities to capture more value.”

Mr Taggart paid tribute to departing chief executive David Surveyor, who resigned from the company in November.

“Under David’s watch, Alliance’s financial performance has significantly improved, revenue growth has increased, farmer returns have grown, we have a record numbers of new shareholders, organisational capability has lifted and we are now the safest red meat company in the country.”

David Surveyor, chief executive of Alliance Group, said the co-operative’s strategy of maximising operational efficiency and capturing more market value enabled the company to mitigate the impact of the many challenges over the past 12 months.

“Alliance demonstrated its strength, agility and depth. Our people rose to the challenge and responded with an outstanding effort to make sure we delivered for our farmers.

“Our farmers braved extreme weather conditions and showed patience and understanding when processing capacity was under pressure. It was truly a team effort.”

Alliance continued its investment in expanding its differentiated premium portfolio, says Mr Surveyor.

“There has been significant interest in our premium lamb, beef and venison programmes from farmers and customers in our global markets and these products continue to win award after award.

“We also invested approximately $47m in capital across our plant network and this played a key role in improving our performance, as did the continued roll-out of our Enterprise Resource Planning project, which is driving efficiencies in the way we run the business.

“The co-operative has been focused on investing in our people and lifting capability across the business through our talent development and training programmes.

“Alliance is now a much stronger and more resilient company. As I prepare to leave the company, I am confident Alliance is ready to face what is shaping to be a more challenging market in 2023.” Directors’ election results

The successful candidates to fill two vacancies on the board of Alliance Group are Murray Taggart and Don Morrison.

47.77 per cent of eligible votes were exercised in the directors’ election.
27.88 per cent of shareholders voted.
Ballot results:
Name Votes
Murray Taggart 28,171,656
Don Morrison 25,971,886
George Tatham 15,696,719
Stuart Campbell 13,111,236

The unsuccessful candidates were George Tatham and Stuart Campbell.

For more information, please contact:
Sam Halstead
027 474 6065
sam@latitudesc.co.nz

NOTES TO EDITOR

Alliance is a co-operative owned by more than 4,500 farmer shareholders and exports lamb, beef, venison and co- products to customers in more than 65 countries.