Half Year 2025 Elders Ltd Earnings Call Transcript
Key Points
- Elders Ltd (ASX:ELD) reported a 67% increase in EBIT for the first half of FY25 compared to the previous year, indicating strong financial performance.
- The company successfully rolled out its systems modernization (smod) in South Australian and Tasmanian branches, with plans to complete all states by year-end.
- Project Slimline achieved targeted cost reductions, and Project Streamline is on track with supply chain efficiencies.
- Elders Ltd (ASX:ELD) experienced growth across livestock, wool agency services, real estate, feed and processing, and financial services.
- The company maintains a robust balance sheet and expects continued progress in reducing leverage towards its target range of 1.5 to 2 times.
- The rural products category faced market softness due to very dry conditions in South Australia, southern New South Wales, and western Victoria.
- There were three lost time injuries in the first half, all related to livestock, which is a concern despite being below industry benchmarks.
- The company experienced a reduction in retail growth margin, particularly in South Australia and Western Victoria, due to a dry start to the winter crop.
- Net debt was negatively impacted by intra-week volatility from livestock networking capital over balance date.
- The dividend payout ratio is currently elevated above Elders Ltd (ASX:ELD)'s target of 40 to 60% of underlying net profit after tax (NAT), with expectations to return to the target range by FY26.
Thank you for standing by, and welcome to the Elders Limited HY25 results investor briefing. (Operator Instructions)
I would now like to hand the conference over to Mr. Mark Allison, CEO and Managing Director. Please go ahead.
Thank you very much and welcome to all of those on the call for the elders half year results presentation for the FY25 year.
Thank you for joining Paul and myself for the session today.
As an overview, the half year results today are very strong on a half year comparative basis, with a 67% uplift in EIT on the first half last year as flagged in the FY24 full year results in November last year.
We anticipated the normalization of the very poor first quarter from last year. This has been achieved with a corresponding improvement in the FY25 first half result from an EBIT ROC gearing viewpoint.
We've also made good progress on our smod rollout with South Australian and Tasmanian branches rolled out with
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