Thursday, 21 July 2022 15:55

LIC set to deliver strong dividend

Written by  Staff Reporters
LIC board chair Murray King. LIC board chair Murray King.

LIC has announced its financial result for the 2021-22 year, driven by increased farmer spend on premium genetics and herd improvement services.

Reporting a 15.3% increase in underlying earnings, the farmer-owned co-operative will return $26.2 million in dividend to shareholders. This equates to 18.43 cents per share with a 18.5% gross yield on the current share price. It will be paid on 19 August.

LIC board chair Murray King says the board is pleased to present the result, especially considering the financial year was hampered by numerous factors including the Covid-19 pandemic, inflationary pressures, and supply challenges.

 “I want to thank our farmer shareholders for their ongoing support, many of whom faced similar challenges as us. Delivering value for our farmers is at the centre of everything we do and it’s results like this that enable us to do just that – through our herd improvement products and services, a solid dividend, and, importantly, the right R&D investment to keep their herds profitable and sustainable into the future.”

King says the result was driven by more farmers opting to use the co-op’s premium bull teams to breed high genetic merit cows which produce more milk, more efficiently – resulting in a lower environmental footprint per kilogram of milk solids produced.

“The dairy industry needs to keep evolving to meet the challenges posed by climate change. Consumers expect a more sustainable approach to farming and this result reaffirms our farmers are well dialled into this.

“The production efficiency of every cow in our national dairy herd has never been more important; farmers know that all cows aren’t created equal and they are investing in solutions to breed the best cows, faster.

“These breeding decisions will serve them well into the future to build a more profitable and sustainable dairy sector and meet climate goals.”

During the 2021-22 financial year, 71% of fresh semen straws used for breeding replacements were from LIC’s premium bull teams (2.1 million straws), up from 60% in the 2020-21 year (1.8 million straws).

King says the co-op invested heavily in genomics over the past three decades and new research has confirmed farmers are reaping the rewards.

“Long term users of LIC genetics have almost doubled the speed of improvement in their herds over the last decade. They are not only breeding genetically superior cows which are more emissions efficient, they’re also breeding them at a much faster rate and genomics is the key contributor to this.

“We don’t need to milk more cows, we just need to milk the best cows and we’re really pleased that our farmers are making solid progress in this space.”

Summary of financials

  • Total Revenue from Continuing Operations: $263.2 million (up 5.7%)
  • Net Profit After Tax (NPAT): $26.7 million (up 16.5%)
  • Underlying Earnings: $25.7 million (up 15.3%)
  • Strong balance sheet, no debt at year-end and total assets $385.6 million (up 1.2%)
  • Dividend: $26.2 million, or 18.43 cents per share
  • R&D investment: $18.2 million or 6.9% of revenue (up 6.2% from $17.1 million)

More like this

Genetics focus boosts herd

A strong focus on genetics and DNA has paid dividends for Fernside dairy farmer Julie Bradshaw with four of her cows being selected for the LIC breeding programme.

Top bull joins Hall of Fame

A 12-year-old bull with over 150,000 daughters has been inducted into an elite animal ‘Hall of Fame’ for his outstanding contribution to dairy herd improvement in New Zealand.

Discovery Project keeps on giving

A joint venture between Holstein Friesian NZ and LIC is going strong 18 years after it was established with another six Holstein Friesian bulls being accepted into the LIC Sire Proving Scheme for the 2022-23 season.

National

Everyone's a winner

Hot on the heels of Bremworth claiming a "win" in its ongoing court case with rival carpet-maker Godfrey Hirst, the…

Carpet battle far from over

Despite claims by NZ carpet manufacturer Bremworth that an international rival has abandoned a court battle about the benefits of…

Feilding boy made good

Malcolm Bailey grew up on a dairy farm near the township of Feilding in the lower North Island.

Winter grazing headaches

A Hawke's Bay-based farm consultant reckons there will be a need for farm system changes next season in order for…

Machinery & Products

New disc cultivator launched

Väderstad has introduced a new disc cultivator – the Carrier XT 425-625 – featuring rotating disc axles, that optimizes results…

JD unlocks its digital system

As a long-term advocate of digital technology, John Deere has taken the route of mass data capture, rather than concentrating…

» The RNG Weather Report

» Latest Print Issues Online

The Hound

Full of it!

OPINION: Your old mate was told about some research that proves that what consumers claim and what they actually do…

A better deal?

OPINION: This old mutt has been contacted by a number of members of rural insurer FMG expressing concern about the…

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter