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Australian agribusiness Elders has today released its results for the 12 months to 30 September 2024. 

Elders recorded a resilient FY24 earnings result, with improved second half trading partially offsetting the negative earnings impact from the first quarter which resulted from low livestock prices, lower crop protection margin and subdued client sentiment. 

Our product, channel and geographical diversification allowed Elders to partially overcome market headwinds, while investment continues in our transformational projects to support underlying EBIT growth and operational efficiency.

underlying EBIT of $128.0 million (down 25 per cent) and return on capital of 11.3per cent (pc)

sales of $3,131.3 million (down 6pc) and gross margin of $637.6 million (up 3.0pc) benefiting from recent acquisitions, the commencement of Elders Wool and recovery in livestock prices

costs of $509.6 million, up 14pc, driven by continued investment in transformational growth initiatives and acquisitions. Costs, excluding transformation and acquisitions held below CPI at 1.8pc

operating cash inflow of $82.9 million, resulting in a cash conversion of 129pc, exceeding benchmark set out in Elders capital management framework

covenant leverage ratio of 1.3 times against a limit of 2.5 times, demonstrating significant headroom

accounting leverage ratio of 3.1 times, forecast to return to target by FY25 H1 based on a normalised Q1and debtor collection. 

The Directors have determined to pay a dividend of 18.0 cents per share, 70pc franked.

In FY24, Elders entered the first year of its fourth Eight Point Plan, targeting 5pc to 10% growth in EBIT and EPS through the agricultural cycles whilst maintaining strong financial discipline to generate a compelling ROC of at least 15pc.

Managing Director and Chief Executive Officer Mark Allison said, “Elders was impacted by an underperforming first quarter, lower crop protection gross margin and subdued client sentiment. Second half trading conditions partially offset Q1 results, with trading conditions improving to deliver a reasonable result overall. 

"A focus on building and maintaining Elders’ product and geographic diversification has allowed us to deliver steady earnings overall during a challenging financial year. 

"Our increase in costs is attributable to continued investment in key transformational projects like Elders Wool and Systems Modernisation, which will have long-term benefits for both Elders and our clients. 

“The official opening of Elders Wool was a particular highlight for me, signalling a reaffirmation of our enduring commitment to the livestock industry during Elders’ 185th year of servicing Australian producers.” 

“Elders also invested in acquisitions in FY24, expanding the network by 21 points of presence to welcome a range of high-quality bolt-on businesses that have incremental benefit to earnings.” 

Looking forward, Mr Allison said “Elders expects a return to average seasonal conditions and intends to heighten its focus on the fundamentals of the Elders Eight Point Plan to achieve sustainable, consistent growth and create shareholder value in FY25.”

“We remain committed to achieving long-term consistent and methodical growth, driven by financial discipline and decision making that is true to our core as a pure-play agribusiness.”

“Throughout our 185 years of servicing rural Australia we have taken great care to nurture strong client relationships, built on a foundation of trust, and this remains true as we focus on how to best service Australian agriculture now and in the future.” 

Elders reports steady FY24 earnings