Tuesday, 18 October 2016 10:55

Former wool boss unimpressed

Written by  Pam Tipa
Wools of New Zealand former chief executive Ross Townshend. Wools of New Zealand former chief executive Ross Townshend.

Wools of New Zealand (WNZ) has posted its first after-tax profit of $1.48 million for the year ending June 2016, but former chief executive Ross Townshend is keeping up the pressure.

The company’s maiden profit results from a 16% improvement in wool sales, helping lift revenues past $30m for the first time -- to $31.5m, the company says.

Operating profit increased to $681,000, a turnaround of $1.16m from the previous year’s loss of $493,000.

The company sold 5.5 million kg of shareholders’ wool during the year, reflected in an increase in Wool Market Development Commitment (WMDC) income to $2.6m, from $2.2m in 2015.

Commenting on the WMDC, chairman Mark Shadbolt says “at the time of our capital raising in 2012 the WMDC was critical to driving our marketing initiatives and investments. By 2014 we’d reduced our reliance to 20% of revenue and this year this has fallen to 8%, in spite of the WMDC’s increase in real terms.”

But Townsend says the claimed net operating profit includes $2.6m of WMDC “donation”.

“So without that – or in real terms – this is a $2m loss, not a profit. When WMDC runs out mid-2018, WNZ will be broke,” says Townshend who is a shareholder and former chief executive of the organisation.

“The directors need a Plan B, as I stated recently.”

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