DROUGHT in Western Australia and too much rain in the east made the past year a courageous time to list on the stock exchange for ambitious WA farm services and chemical supplier, FarmWorks Australia Limited.
FarmWorks’ $61.9 million revenue from operations across Western Australia, South Australia, Victoria, NSW and Queensland translated into an after tax trading loss of $574,000 for the six months to September.
While seasonal setbacks restricted growth plans for the business’ livestock marketing activities in SA and WA, the company was also hit by the cost of carrying a large inventory of high-priced glyphosate herbicide and other farm chemicals, which had to be sold at a discount.
Although its share price has rallied slightly to a little in the past week to 11 cents, it is still lagging well behind the 24c a share quoted after listing 10 months ago.
FarmWorks has also just changed chief executive officers, after last year’s appointment, David Connolly, resigned early this month, replaced by Rick Moody, who had joined the company as chief financial officer in December.
Company chairman for the float in March, Glenn Tetley, was also replaced by Larry Shutes in mid 2010, and the company’s registered office changed twice, first to Sydney and recently to Surfers Paradise in Queensland.
Its trading head office remains in Perth.
Mr Moody, whose background as an accountant and company executive includes eight years with long established farm services player, Elders, said the Queensland business registration reflected the fact that Farmworks’ major shareholder and financial backer, Charter Pacific was in Queensland.
“We’ve had a less successful year than was expected, but we’re still travelling pretty well, with last year’s revenue actually an improvement on the previous trading year,” Mr Moody said.
“We’ll continue with our plans to expand the company’s geographic spread and risk diversification strategy by developing more wholesale markets for the Conquest chemical range in the eastern States and sales of other farm inputs.
“Livestock market growth is also still a key objective, although has been hampered by the widespread flooding and disruption to cattle markets in Queensland.
“Overall, however, the longer term seasonal prospects for agriculture are positive as a result of the widespread rain, and WA should be likely to enjoy a more traditional seasonal break in autumn.”
FarmWorks, founded in 2001 in WA has developed a full service network of rural services including rural merchandise, livestock, finance and property.
It has a total customer base of approximately 4700 growers and employs more than 60 staff across Australia.
With the FarmWorks brand name well recognised in rural WA and SA, the medium term business plan is to strengthen its position in the NSW, Queensland and Northern Territory markets.
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