Elders (ELD) H2 2024 earnings summary

Executive summary

• FY24 marked the first year of the fourth Eight Point Plan, with a challenging Q1 but improved conditions and operational discipline in later quarters.

• Delivered resilient results amid difficult market and cost conditions, with EBIT near the midpoint of guidance.

• Diversified business model and geographic spread supported earnings despite market volatility.

• Announced the acquisition of Delta Agribiz for AUD 475 million, fully aligned with strategic goals and expected to be EPS accretive pre- and post-synergies.

• Maintained position as Australia's most trusted agribusiness brand for the fifth consecutive year.

Financial highlights

• Underlying EBIT for FY24 was AUD 128 million, just below the midpoint of guidance, mainly impacted by a weak Q1.

• Sales revenue declined 6% year-over-year to $3,131.3m, but gross margin increased by 3% to AUD 637.6 million, driven by acquisitions and new business.

• Underlying NPAT fell 38% to $64.0m, and underlying EPS dropped 39% to 40.7 cents.

• Final dividend declared at AUD 0.18 per share, franked at 70%, with total dividend per share reduced 22% to 36.0 cents.

• Operating cash inflow was AUD 82.9 million, with cash conversion at 129%, down from 163% in FY23.

Outlook and guidance

• Targeting 5%-10% growth in EBIT and EPS through the cycles, with a minimum 15% return on capital.

• FY25 expected to benefit from average seasonal conditions and normalised first quarter earnings, with positive momentum from Q4 FY24.

• Leverage ratio forecast to return to target range by FY25 H1, supported by debtor collections and lower transformational capex.

• Margin stability anticipated in rural products, with livestock prices and volumes forecast to remain strong.

• No formal annual guidance provided, but management is focused on financial discipline and cost control.