Alliance Group returns to profit after two years with $93m turnaround
After two years, Alliance Group has returned to profit.
The deal sees Dawn Meats take a 65% stake in Alliance, with farmer-shareholders retaining a 35% stake in the business.
Alliance Group chief executive Willie Wiese said the completion of the transaction was an essential milestone.
“We can move from planning to implementation with a partner that brings scale, global reach and expertise that clearly creates a competitive advantage. This marks the start of an exciting new chapter for Alliance, one that is centred on value creation for our farmer-shareholders," says Wiese.
“This investment provides the capital we need to strengthen our balance sheet, accelerate value growth initiatives and further enable the delivery of our strategic objectives.
“Importantly, it also maintains meaningful farmer ownership and influence through a strong 35% holding and robust governance arrangements.”
With the transaction now settled, approximately $188 million of the investment proceeds will be applied to reduce Alliance’s short-term working capital facility and $20 million will be invested in the company’s strategic capital programme to lift performance.
Farmer-shareholders will also benefit from a distribution of up to $20 million in the current financial year (FY25/26) and up to $20 million in the next financial year (FY26/27).
In FY25/26, 45% will be paid as a dividend and 55% as a supply-based rebate. In FY26/27, 75% will be paid as a rebate and 25% retained as earnings.
In addition, up to $26 million will be distributed as a special dividend from the joint venture to the new Alliance Investment Co-operative following a stronger than forecast year-end result for Alliance.
Niall Browne, chief executive of Dawn Meats, said the company is pleased that the formal process of acquiring a 65% shareholding in Alliance Group has been completed.
“This joint partnership will unlock new and exciting opportunities for both companies and our farmer-suppliers in New Zealand, Ireland and the UK.
“This investment expands our business significantly and positions us, our UK company Dunbia and Alliance Group as a unified and dynamic industry competitor with a substantial presence and customer base in both the Northern and Southern hemispheres.
“We are intent on ensuring we can maximise our new combined strength to provide existing and new customers with a year-round supply of sustainable and world class, grass-fed red meat.
"As part of our strategic partnership, Dawn Meats will now work closely with Alliance and its farmer-shareholders to identify and invest in capital expenditure upgrades, new technology and new sustainable business practices that will support the company's future growth and development.
"Throughout the process of securing this strategic partnership, Dawn Meats was clear about the potential benefits of combining our knowledge and experience with that of Alliance and its farmer-shareholders.
“Alliance is a leading New Zealand business with a proud legacy of cutting-edge processing and history of exporting the highest-quality grass-fed lamb, beef and venison.
“We know from our existing customers and new customer interest to date that our partnership creates a dynamic new offering that will allow us to meet an increasing global demand for red meat protein in addition to opening new markets to the benefit of our farmer-suppliers in both hemispheres.
“We now intend to make the most of what is a unique opportunity for enhanced customer relationships, resources, skills, routes to market and industry knowledge."
Wiese acknowledged the effort of those involved in the process.
“Completion of this partnership reflects a huge amount of work across the Alliance team, our advisers and Dawn Meats.
“I also want to thank our farmer-shareholders for their trust and support. Their commitment has allowed us to secure a strong future for the company.”
The directors of the Alliance Group board are:
- Thomas Moran (Independent Chair)
- Niall Browne
- Sean Breen
- Mark Wynne
- Jared Collie
The directors of the New Alliance Investment Co-operative:
- Mark Wynne
- Jared Collie
- Matt Iremonger
- Ross Bowmar
