New Zealand Professional Investment Services Firm

Forsyth Barr

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

<h2>PGG Wrightson (PGW) 1H21 Result Initial Impressions</h2>
PGG Wrightson (PGW) delivered a strong 1H21 result, with operating EBITDA of NZ$42.1m, +5.5% ahead of our expectations (FB NZ$39.9m). Strong performance was broad based, however the primary driver of the beat was stronger than expected Agency trading, which benefitted from a rebuild in capital stock numbers following the drought last summer.
PGW reiterated its FY21 guidance for operating EBITDA of c. NZ$57m (FB NZ$57.3m).&nbsp;The second half is all about Agency trading and we suspect guidance implies a degree of caution at this stage, reflecting global trade uncertainty. Supply chain challenges, softer schedule prices, and farmer caution around trade flows could all weigh on livestock trading.
PGW announced an interim dividend of 12cps, in line with expectations.
Conference call details — 10am NZT
Dial in 0800 444 845, conference ID 5591085
Result take outs
<ul>
<li>Retail &amp; Water — Operating EBITDA NZ$35.8m, +15% on the pcp. PGW continues to gain market share as it focuses on its technical service offering. Fruitfed is once again the highlight within the business, as the horticulture sector continues to grow and outpaces softness in sheep and beef.</li>
<li>Agency — Operating EBITDA NZ$9.5m, +44% on the pcp. Very strong result and well ahead of our expectations, however we suspect boosted to some degree by non-normal trading with a rebuild in capital stock occurring as a result of last year’s drought.</li>
<li>Net debt reduction — 1H21 net debt fell -34% (on 1H20) to NZ$39.2m, with strong cashflow (first time positive interim operating cash flow in last five years), supported by lower receivables and lower capex in the period.</li>
</ul>
1H21 result summary (NZ$m)
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Source: PGW, Forsyth Barr analysis
Guy Hooper&nbsp; Analyst, Equities
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 P: +64 4 495 5255 | TF: 0800 367 227&nbsp; Level 22, NTT Tower, 157 Lambton Quay, Wellington

PGG Wrightson (PGW) 1H21 Result Initial Impressions
PGG Wrightson (PGW) delivered a strong 1H21 result, with operating EBITDA of NZ$42.1m, +5.5% ahead of our expectations (FB NZ$39.9m). Strong performance was broad based, however the primary driver of the beat was stronger than expected Agency trading, which benefitted from a rebuild in capital stock numbers following the drought last summer.
PGW reiterated its FY21 guidance for operating EBITDA of c. NZ$57m (FB NZ$57.3m).&nbsp;The second half is all about Agency trading and we suspect guidance implies a degree of caution at this stage, reflecting global trade uncertainty. Supply chain challenges, softer schedule prices, and farmer caution around trade flows could all weigh on livestock trading.
PGW announced an interim dividend of 12cps, in line with expectations.
Conference call details — 10am NZT
Dial in 0800 444 845, conference ID 5591085
Result take outs

Retail &amp; Water — Operating EBITDA NZ$35.8m, +15% on the pcp. PGW continues to gain market share as it focuses on its technical service offering. Fruitfed is once again the highlight within the business, as the horticulture sector continues to grow and outpaces softness in sheep and beef.
Agency — Operating EBITDA NZ$9.5m, +44% on the pcp. Very strong result and well ahead of our expectations, however we suspect boosted to some degree by non-normal trading with a rebuild in capital stock occurring as a result of last year’s drought.
Net debt reduction — 1H21 net debt fell -34% (on 1H20) to NZ$39.2m, with strong cashflow (first time positive interim operating cash flow in last five years), supported by lower receivables and lower capex in the period.

1H21 result summary (NZ$m)

Source: PGW, Forsyth Barr analysis
Guy Hooper&nbsp; Analyst, Equities

 P: +64 4 495 5255 | TF: 0800 367 227&nbsp; Level 22, NTT Tower, 157 Lambton Quay, Wellington

PGG Wrightson (PGW): 1H21 Result Initial Impressions