the half year ended 31 March, 2012, a decrease of 2% over the previous corresponding period.

Transcription

1 ASX Release Ruralco Holdings Limited 2011/12 Half Year Results Ruralco Holdings Limited today announced a reported net profit after tax (NPAT) of $10.0 million for the half year ended 31 March, 2012, a decrease of 2% over the previous corresponding period. Chairman, Richard England, said Directors have resolved to pay an interim, fully franked dividend of 10 cents per share. Mr England said Despite extremely variable seasonal conditions experienced across the country, it is pleasing to see growth in sales and strong performances in many of the company s business units. Ruralco s Managing Director, John Maher, said Although the Group had seen improved trading across some key activities, a reduction in cattle and wool volumes coupled with lower sheep and lamb prices had affected the profitability of the agency focused businesses within the Group. A softening of the Tasmanian urban real estate market due to economic conditions in that state had also impacted the first half s results. Key features of the first half s results include: Revenue of $534.7 million, an increase of 9% on pcp. Gross profit up 9% to $113 million Normalised earnings before interest expense and tax (EBIT) of $22.9 million, down 3% Reported NPAT of $10.0 million, a 2% reduction on pcp Normalised NPAT of $11.0 million, a decrease of 2% Earnings per share of 18.2 cents, a decrease of 2% Rolling 12 return on equity (ROE) of 9% Mr Maher said, Rural supplies, water broking, water solutions and grain marketing activities all performed strongly and enables a cautiously optimistic outlook for the next 6 months. Rural supplies again generated a pleasing result with gross profit growing by 26% on the previous corresponding period. The activity benefited from recent acquisitions, increased sales in the rice and cotton sectors and continued focus on both margin management and buying positions. Grain marketing also continues to be a top performer with the Agfarm grain operations recording a 34% lift in gross profit compared to the previous corresponding period on the back of strong support of the Advantage grain marketing products. Offsetting these performances were poorer results from real estate, livestock and wool activities. Mr Maher said Low buyer confidence and generally poor economic conditions has seriously affected sales in the Tasmanian residential real estate sector. Livestock and wool prices and volumes have also been softer than last year affecting the performances of these activities. Over the reporting period Ruralco has strengthened its strategy to broaden Ruralco s geographic and business coverage with the establishment of 20 additional locations in the previously underrepresented areas of Western Australia s grain belt, the Wimmera and Sunraysia. 1

2 Mr Maher said that Ruralco s full year results will largely be dependent on a normal seasonal break around the country, particularly Victoria, South Australia and New South Wales. Good subsoil moisture exists for many regions, allowing producers to be less reliant on in-crop rainfall during the start of the season in those areas, however decent seasonal rain is still required to generate solid yields. Our outlook remains positive over the next half with an expected strong winter cropping season and catch up of flood affected livestock and merchandise sales throughout northern Australia. Further information: John Maher Managing Director Ph: Ruralco Holdings Limited (ASX:RHL), is a leading Australian agribusiness. Ruralco operates through a national footprint of businesses that specialise in providing rural customers with products and services in merchandise, fertiliser, seed, wool, livestock, real estate, risk management, water, grain, finance and insurance. Ruralco's businesses around the country operate under their own brands. They have their own cultures, their own service models and their own unique value propositions - all designed to meet the demands of local or regional markets. The group s businesses are committed to supporting the communities within which they operate. 2

3 RURALCO HOLDINGS LIMITED ABN HALF YEAR REPORT APPENDIX 4D Half year ended 31 March 2012 Previous corresponding period Half year ended 31 March 2011 Results for announcement to the market $A 000 Revenue from ordinary activities Up 8.8% to 534,707 Profit from ordinary activities after tax attributable to equity holders of the company Down 2.3% to 9,995 Net profit for the period attributable to equity holders of the company Down 2.3% to 9,995 Amount per security Franked amount per security Interim dividend 10 cents 10 cents Previous corresponding period Interim dividend 9 cents 9 cents Record date for determining entitlements to the dividend 1 June 2012 Date Interim Dividend is payable 19 June 2012 It is recommended that this Half Year Report is read in conjunction with the Consolidated Interim Financial Report of Ruralco Holdings Limited as at and for the period ending 31 March Net Tangible Assets Net tangible asset backing per ordinary security $1.78 $1.91 Details of entities over which control has been gained or lost during the period During the period the reporting entity gained control of the following entities and operations: Entity Date Percentage acquired Agritech Rural Pty Ltd 1 February % Agritech Rural Unit Trust 1 February % MacIntyre Rural Pty Ltd 1 February % Farmworks Rural Pty Ltd formerly ACN Pty Ltd 1 March % 3

4 During the period the reporting entity lost control of the following entities: Entity Date Percentage divested Monds & Affleck 9 December % Details of associates and joint venture entities During the period the reporting entity entered into the following joint venture: Entity Date Percentage acquired N/A Dividend Reinvestment Plan The Dividend Reinvestment Plan will not apply to this dividend. Review The accounts are not subject to any review dispute or qualification. S H H Ball Joint Company Secretary 22 May

5 Ruralco Holdings Limited ABN Interim Financial Report For the half year ended 31 March

6 Ruralco Holdings Limited Interim Financial Report Six months to 31 March 2012 Directors Report Your Directors submit their report together with the consolidated interim financial report for the halfyear ended 31 March 2012 and the independent auditor s review report thereon. DIRECTORS The Directors of the Company at any time during or since the end of the interim period are: Richard A F England FCA, MAICD Chairman (non executive) since 5 February Director since 9 July John S Maher BAgSc (Hons), MBA, GAICD Managing Director and CEO since 2 October N John Edwards FCPA, FAICD Director (non executive) since 5 February 2007, resigned 6 February Michael J Millner MAICD Director (non executive) since 5 February John Lord LLB, FCA, FTIA, MAICD Director (non executive) since 15 December 2009, resigned 16 February Shane M Smith GAICD Director (non executive) since 15 December Bruce R Dixon BA (Econ), MAICD Director (non executive) since 16 February Michele J Allan BAppSc, MMgmtTec, DBA, MComm Law, FAICD Director (non executive) since 15 March REVIEW AND RESULTS OF OPERATIONS Your Directors report that net profit after tax (NPAT) attributable to members including non-recurring items was $10.0 million for the six months ended 31 March This is a decrease of 2% on the same period last year. During the half year total revenue was $534.7 million, up 9% on the same period last year. Earnings before Interest and Tax of $21.5 million is down 6% on the previous corresponding period (pcp). Earnings per Share of 18.2 cents is down 2% on the previous corresponding period. Over the half, the Group saw improved trading across the rural supplies and grain marketing activities, however, a reduction in cattle and wool volumes coupled with lower sheep and lamb prices has lowered the profitability of the agency focussed businesses within the Group. A softening of the Tasmanian urban real estate market due to economic conditions in that state has also greatly impacted the first half s results. 6

7 Ruralco Holdings Limited Interim Financial Report Directors Report (continued) Finance The Company s gearing (as measured by the ratio of net interest bearing debt to equity) is 19.6% and is within the parameters set by the Board. Interim Dividend Directors have declared a fully franked dividend of 10 cents per share payable to shareholders on 19 June Safety Safety is a key priority for the group, with a focus to develop a safety first culture in the organisation. Our corporate goal is to have a Lost Time Injury Frequency Rate (LITFR) of zero for the organisation. LTIFR has dropped dramatically over the last 5 years since the introduction of quality systems and processes. Recently our safety systems and procedures have been reviewed in line with the National Harmonisation Legislation. Outlook Ruralco s result for the full 2011/12 year will largely depend on seasonal conditions for winter cropping. Carryover subsoil moisture from summer rains will assist producers in some areas with winter sowing given there will be less reliance on in-crop rainfall. However, widespread rains are still required to generate reasonable yields, particularly in Victoria, South Australia and NSW. The uncertain Australian dollar and softer wheat price trends may have some affect in dampening grower confidence but ABARES is forecasting increases in production from the 2011 season, where wheat production is estimated to increase by 6% to 29.5 million tonnes, barley production increasing 5% to 8.6 million tonnes and canola production estimated to increase by 16% to 2.8 million tonnes on the back of higher prices. This anticipated increase in production augurs well for the company. The Eastern Young Cattle Indicator (EYCI) has maintained levels lower than last year, but still high when compared to historical averages. Strong restocking activities for both cattle and sheep has taken place during the summer months, with growers anticipating better seasonal conditions. This restocking activity has helped sustain livestock prices, but the volatility of the AUD, uncertainty surrounding the live export trade and the competitiveness of US beef into Asian markets is having an impact on the Australia s cattle markets which may continue over the next 6 months. Sheep and lamb prices have also decreased from record highs last year. The high AUD has made lamb too expensive for the U.S, Australia s largest export market. This has led to a build up of supply which has reduced prices markedly. Wool prices across all micron ranges have lost some ground compared to last year. The demand for wool has reduced with the Australian Wool Exchange reporting reduced volumes to China for raw and semi-processed wool of up to 13.2% during the reporting period. The current financial turmoil in Europe and a slowing Chinese economy are expected to impact markets, however reduced supplies and a weakening AUD providing some reprieve. A short report on each of the operating sectors follows: 7

8 Ruralco Holdings Limited Interim Financial Report Directors Report (continued) Rural Services Segment Rural Supplies Rural supplies sales grew by 16% with a gross profit of $48m, up 26%, on the previous corresponding period. The rural supplies activity benefited from recent acquisitions, increased sales in rice and cotton sectors and a continued focus on both margin management and buying positions. The rural supplies result was strong in what was a challenging period with relatively dry conditions persisting in WA, SA and Western Victoria and flooding in Queensland and NSW in recent months. Outlook for the coming months is positive, providing normal seasonal rainfall is received as we commence the winter cropping season. In Tasmania favourable seasonal conditions, supported by irrigation dams filled to capacity, expansion in the dairy industry and the announcement of government irrigation schemes, created a solid first half result for Roberts rural supplies operation. Livestock and Wool Livestock and wool gross profit was $36m, down 6% on the previous corresponding period. The strong Australian dollar is having an adverse effect on export markets. Cattle prices across the country have softened compared to last year, however strong restocker demand have helped reduce the drop in prices. Lamb and Mutton prices across the board are up to 20% down on last year s averages. Similar to rural supplies, seasonal conditions for livestock have been mixed for the reporting period. Drier conditions have been experienced in VIC, SA and parts of WA. However, conditions in some regions of WA, much of QLD, the NT and NSW have been described as exceptional and we are going into the mustering season in the top end with cattle in great order. Sheep live exports have dropped in volume and cattle live exports continue to come under scrutiny following the suspension of the Indonesian trade last year. The competitive position of US beef as a result of the devalued USD has also affected demand for Australian beef in some export markets. The wool market has traded in a narrow band over the past 6 month period with the Eastern Market Indicator (EMI) starting the period at 1193 AUD cents and settling at 1212 AUD cents by the end of March. Trade in19.5 micron and broader types continue at reasonable levels, whilst trade in finer wool remains sluggish. Real Estate Real estate gross profit was $13m, down 8% on the corresponding period. Both residential real estate and rural property have struggled as vendors have been reluctant to lower price expectations to meet demand. Lack of buyer confidence brought about by uncertainty of interest rates, job security and the stability of the local and international economies has contributed to softer market conditions. This has been particularly so for the Tasmanian residential market which has led to a drop in the profitability of Roberts real estate. 8

9 Water & Environment Water & Environment gross profit was $4m up 133% on the previous corresponding period. This uplift is due to excellent trading results from both water broking and water solution operations. Sales of permanent water entitlements have been strong however the demand for temporary water is still understandably low due to the abundance of water in most catchment regions. Grain Marketing Grain marketing gross profit was $5.0m up 34% on the previous corresponding period. Agfarm grain operations recorded a significant lift in support from growers for their Advantage Pool marketing products, contributing to a lift in profitability for this segment. Brokered tonnes, whilst in line with last year s volumes, have been affected by the softer wheat prices, with growers deferring sale decisions in hope that prices will lift in the near future. Other Segment Financial Services and Other Financial services gross profit was $9m, up 6% on the previous corresponding period. Other gross profit was $0.8m. Ruralco Insurance continues to grow in both General and Life products with revenue increasing significantly compared to the previous corresponding period. Ruralco Finance Pty Ltd is a national finance broker specialising in rural and regional Australia offering commercial and consumer finance products to its customers. Strong growth has been achieved in regions that have experienced good seasonal conditions with Queensland and South Australia performing stronger than expected. However, deteriorating farm equity positions and tighter lending criteria from banks has seen growth suppressed in West Australia, Victoria and Tasmania. Ag Concepts continues to develop innovative products to assist growers in price risk management. Recent partnering with the Financial & Energy Exchange (FEX) to offer wool forward contracts, has received strong industry support as growers sought to protect against falling wool prices. AUDITOR S INDEPENDENCE DECLARATION The lead auditor s independence declaration is set out on page 11 and forms part of the Directors Report for the half year ended 31 March

10 ROUNDING The amounts contained in the interim financial report have been rounded to the nearest thousand dollars (where rounding is applicable) unless otherwise stated, under the option available to the company under ASIC Class Order 98/100 dated 10 July The Company is an entity to which the Class Order applies. Signed in accordance with a resolution of the directors. Richard England Chairman Hobart 22 May

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12 Ruralco Holdings Limited ABN Consolidated Interim Statement of Comprehensive Income For the Half Year ended 31 March 2012 Half Year to Half Year to Notes 31-Mar Mar-11 $ 000 $ 000 Revenue 4 534, ,599 Other income Raw materials and consumables used net of changes in inventories of finished goods (421,667) (388,124) Depreciation and amortisation expenses (2,744) (2,560) Personnel expenses (56,715) (50,386) Property and equipment expenses (8,426) (6,994) Motor vehicle expenses (7,033) (5,956) Other expenses (17,027) (15,809) Results from operating activities 21,268 22,617 Share of net profits of equity accounted investees (net of income tax) Finance costs 7 (3,629) (3,585) Profit before income tax 17,844 19,203 Income tax expense (5,227) (6,088) Profit for the period 12,617 13,115 Other comprehensive income - - Total comprehensive income for the period 12,617 13,115 Total profit and comprehensive income attributable to: Equity holders of the company 9,995 10,226 Non-controlling interests 2,622 2,889 Total profit and comprehensive income for the period 12,617 13,115 Earnings per share (cents per share) - Basic for profit for the half year Diluted for profit for the half year The accompanying notes form part of these condensed consolidated interim financial statements. 12

13 Ruralco Holdings Limited ABN Consolidated Interim Statement of Financial Position As at 31 March 2012 As at As at Notes 31-Mar Sep-11 $ 000 $ 000 Current Assets Cash and cash equivalents 60,036 67,745 Trade and other receivables 318, ,271 Inventories 111,990 83,503 Assets held for sale Total Current Assets 491, ,931 Non-Current Assets Trade and other receivables 1,072 1,428 Investments in equity accounted investees 3,491 3,546 Other financial assets Property, plant and equipment 45,448 47,929 Deferred tax assets 9,112 9,459 Intangible assets 72,178 65,287 Total Non-Current Assets 131, ,886 Total Assets 622, ,817 Current Liabilities Trade and other payables 333, ,381 Loans and borrowings 66,519 60,133 Current tax payable 1,891 5,600 Provisions 12,799 12,616 Total Current Liabilities 414, ,730 Non-Current Liabilities Loans and borrowings 27,121 23,359 Deferred tax liabilities 8,190 8,287 Provisions 1,941 1,940 Total Non-Current Liabilities 37,252 33,586 Total Liabilities 451, ,316 Net Assets 171, ,501 Equity Issued capital 9 99,565 99,565 Retained earnings 46,468 42,065 Reserves 14,823 14,981 Total equity attributable to equity holders of the Company 160, ,611 Non-controlling interests 10,422 10,890 Total Equity 171, ,501 The accompanying notes form part of these condensed consolidated interim financial statements. 13

14 Ruralco Holdings Limited ABN Consolidated Interim Statement of Changes in Equity for the Half Year ended 31 March 2012 Attributable to equity holders of the Company Non Issued capital Retained earnings Reserves Total controlling interests Total equity $'000 $'000 $'000 $'000 $'000 $'000 Balance at 1 October ,565 42,065 14, ,611 10, ,501 Total comprehensive income for the period Profit for the period - 9,995-9,995 2,622 12,617 Other comprehensive income Other - Transfer of reserve on sale of property (138) Total comprehensive income for the period - 10,133 (138) 9,995 2,622 12,617 Transactions with owners recorded directly in equity Contributions by and distributions to owners - Dividends to equity holders - (4,952) - (4,952) (4,854) (9,806) - Performance rights reserve - - (20) (20) - (20) Total contributions by and distributions to owners - (4,952) (20) (4,972) (4,854) (9,826) Changes in ownership interests in subsidiaries that do not result in a change of control - Change in non controlling interest Total changes in ownership interests in subsidiaries that do not result in a change of control Total transactions with owners - (778) - (778) 1, (778) - (778) 1, (5,730) (20) (5,750) (3,090) (8,840) Balance at 31 March ,565 46,468 14, ,856 10, ,278 The accompanying notes form part of these condensed consolidated interim financial statements. 14

15 Ruralco Holdings Limited ABN Consolidated Interim Statement of Changes in Equity for the Half Year ended 31 March 2012 Attributable to equity holders of the Company Non Issued capital Retained earnings Reserves Total controlling interests Total equity $'000 $'000 $'000 $'000 $'000 $'000 Balance at 1 October ,565 34,658 16, ,687 6, ,385 Total comprehensive income for the period Profit for the period - 10,226-10,226 2,889 13,115 Other comprehensive income Other - Transfer of reserve on sale of property (728) Total comprehensive income for the period - 10,954 (728) 10,226 2,889 13,115 Transactions with owners recorded directly in equity Contributions by and distributions to owners - Dividends to equity holders - (4,401) - (4,401) (2,341) (6,742) - Performance rights reserve Total contributions by and distributions to owners Changes in ownership interests in subsidiaries that do not result in a change of control - Change in non controlling interest Total changes in ownership interests in subsidiaries that do not result in a change of control Total transactions with owners - (4,401) 182 (4,219) (2,341) (6,560) (4,212) 182 (4,030) (1,561) (5,591) Balance at 31 March ,565 41,400 15, ,883 8, ,909 The accompanying notes form part of these condensed consolidated interim financial statements. 15

16 Cash flows from operating activities Ruralco Holdings Limited ABN Consolidated Interim Statement of Cash Flows For the Half Year ended 31 March 2012 Half Year to Half Year to 31-Mar Mar-11 $ 000 $ 000 Receipts from customers 573, ,775 Payments to suppliers and employees (569,501) (485,298) Interest received 5,588 5,921 Bank charges (674) (779) Interest paid (2,955) (2,806) Income taxes paid (8,288) (3,436) Net cash flows used in operating activities (2,196) (8,623) Cash flows from investing activities Proceeds from sale of property, plant and equipment 1,688 4,586 Proceeds from disposal of shares in subsidiaries Proceeds from sale of business Distribution from equity accounted investment Dividends received Purchase of property, plant and equipment (1,327) (1,055) Purchase of intangible assets (754) (68) Purchase of shares in subsidiaries (895) - Payments for purchase of controlled entities net of cash acquired (5,572) (2,816) Net cash (used in)/from investing activities (5,554) 1,877 Cash flows from financing activities Loans from related entities Repayment of finance lease liabilities (342) (632) Repayment of borrowings (210) (529) Net proceeds from depositor funds 12,603 4,479 Dividends on ordinary shares in the company (4,952) (4,401) Dividends to non controlling interests (4,854) (2,341) Net cash flows from/(used in) financing activities 2,627 (3,233) Net decrease in cash and cash equivalents (5,123) (9,979) Cash and cash equivalents at beginning of period 63,227 32,468 Cash and cash equivalents at end of period 58,104 22,489 Represented by Cash and cash equivalents 60,036 30,803 Bank overdraft at end of period (1,932) (8,314) Cash and cash equivalents at end of period 58,104 22,489 The accompanying notes form part of these condensed consolidated interim financial statements 16

17 Ruralco Holdings Limited ABN Condensed notes to the Consolidated Interim Financial Statements for the Half Year ended 31 March REPORTING ENTITY Ruralco Holdings Limited (the "Company") is a company limited by shares, incorporated and domiciled in Australia. The consolidated interim financial statements of the Company as at and for the half year ended 31 March 2012 comprise the Company and its subsidiaries (together referred to as the "Group") and the Group's interest in associates and jointly controlled entities. The consolidated annual financial report of the Group as at and for the year ended 30 September 2011 is available upon request from the Company's registered office at 2 Collins Street, Hobart or at 2 STATEMENT OF COMPLIANCE The consolidated interim financial statements are a general purpose financial report which have been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act The consolidated interim financial statements do not include all notes of the type normally included within the annual financial report. Accordingly, the interim financial statements should be read in conjunction with the annual financial report of Ruralco Holdings Limited as at 30 September 2011 and any public announcements made by Ruralco Holdings Limited during the half-year ended 31 March 2012 in accordance with the continuous disclosure obligations arising under the Corporations Act The consolidated interim financial statements were approved by the Board of Directors on 22 May The Company is of a kind referred to in ASIC Class Order 98/100 dated 10 July 1998 and in accordance with the Class Order, amounts in the financial statements have been rounded off to the nearest thousand dollars, unless otherwise stated. 3 SIGNIFICANT ACCOUNTING POLICIES The accounting policies applied by the Group in these consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 30 September

18 Ruralco Holdings Limited ABN Notes to the Consolidated Interim Financial Statements For the Half Year ended 31 March Mar Mar-11 $ 000 $ REVENUE Sale of goods 471, ,594 Rendering of services 55,950 46,530 Sundry revenue 2,136 2,554 Interest revenue 5,588 5, , ,599 5 OTHER INCOME Dividend income Net gain on disposal of property, plant and equipment OTHER EXPENSES Other expenses includes the following items: Impairment loss on goodwill - 1,287 An impairment loss totalling $1,286,695 in respect to goodwill allocated to the stockfeed, seed and grain cash generating unit (CGU) was recorded following disposal of property assets during the half year ended 31 March 2011, which previously supported the recoverable amount of this CGU's goodwill. The recoverable amount of the CGU was based on its value in use using a pre-tax discount rate of 11.73% (30 September 2010: 12.23%). 31-Mar Mar-11 $ 000 $ FINANCE COSTS Bank charges Interest expense 2,955 2,806 3,629 3,585 8 DIVIDENDS PAID AND PROPOSED Equity dividends on ordinary shares Dividends paid during the half-year: Final franked dividend for financial period 30 September cents (2010: 8.0 cents) to equity holders of the company 4,952 4, Mar Sep-11 9 ISSUED CAPITAL $ 000 $ 000 Ordinary shares issued and fully paid 99,565 99,565 Movements in fully paid ordinary shares No. of $ 000 shares At 1 October ,019,284 99,565 Movements in ordinary shares in the period - - At 31 March ,019,284 99,565 18

19 Ruralco Holdings Limited ABN Notes to the Consolidated Interim Financial Statements For the Half Year ended 31 March SEGMENT REPORTING The Group comprises the following operating segments: - Rural Services which offers livestock agency, wool broking, rural merchandise, rural machinery service and sales, water broking, real estate operations and stockfeed manufacture, seed and grain marketing. - Other Operations comprising financial services. Rural Services Other Operations Eliminations Total $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 External revenues 528, , , ,678 Interest revenue 5,338 5, ,588 5,921 Segment revenue 533, , , ,599 Segment profit/(loss) before income tax 29,287 27, (123) ,323 27,152 Unallocated expenses Corporate overheads (8,055) (4,535) Results from operating activities 21,268 22,617 Interest expense (2,004) (1,848) (951) (958) - - (2,955) (2,806) Corporate bank charges (674) (779) Share of profit/(loss) of equity accounted investees Income tax expense (5,227) (6,088) Profit for the period 12,617 13, FINANCING FACILITIES 31-Mar Mar-11 $ 000 $ 000 At balance date, the following financing facilities had been negotiated and were available: Total facilities - Bank overdraft 12,170 10,170 - Bank loans 88,405 85, ,575 95,720 Facilities used at balance date - Bank overdraft 1,932 8,314 - Bank loans 22,393 22,307 24,325 30,621 Facilities unused at balance date - Bank overdraft 10,238 1,856 - Bank loans 66,012 63,243 76,250 65,099 19

20 Ruralco Holdings Limited ABN Notes to the Consolidated Interim Financial Statements For the Half Year ended 31 March BUSINESS COMBINATIONS Acquisition of controlling interest in the following entities: Percentage Date acquired acquired Agritech Rural Pty Ltd 50.1% 1 February 2012 Agritech Rural Unit Trust 50.1% 1 February 2012 The acquisition Agritech Rural is consistent with the Group's strategy of broadening its geographic footprint by joining quality agribusinesses and people. $ 000 Consideration transferred: Cash consideration paid on acquisition date 5,011 Identifiable assets acquired and liabilities assumed: Assets Cash 406 Receivables 2,699 Other assets 135 Inventories 6,948 Property, plant and equipment 225 Liabilities Creditors (9,223) Provisions (241) Borrowings (205) 744 Goodwill: Fair value of the consideration paid Add: Recognised amount of non-controlling interest using proportionate interest method Less: Recognised amount of identifiable assets acquired and liabilities assumed Goodwill on acquisition of Agritech Rural 5,011 1,871 (744) 6,138 Additional cash consideration of $1 million was paid to retain 51% interest in a subsidiary. This amount has been recorded in goodwill in line with the transitional paragraphs of Australian Accounting Standard AASB 3 Business Combinations. 13 NEW BUSINESSES ESTABLISHED MacIntyre Rural Pty Ltd Farmworks Rural Pty Ltd Date established 1 February March DISPOSAL OF OPERATIONS The group disposed of the Monds & Affleck business and brand for sales proceeds totalling $2.3 million. Pre-tax losses of approximately $0.8 million have been recorded in the Group s profit and loss for the half year ended 31 March These losses incorporate costs associated with discontinuing the Monds & Affleck business. 15 COMMITMENTS AND CONTINGENCIES There are no significant commitments, contingent assets or contingent liabilities to be disclosed in the interim financial statements. 20

21 Ruralco Holdings Limited ABN Notes to the Consolidated Interim Financial Statements For the Half Year ended 31 March EVENTS AFTER THE BALANCE SHEET DATE On 2 May 2012 the Group, via its wholly owned subsidiary Farmworks Rural Pty Ltd, acquired the Western Australia branch and agency network business from FarmWorks Australia Limited for $5.8 million cash consideration. 21

22 Director s Declaration In the opinion of the directors of Ruralco Holdings Limited ( the Company ): 1. the financial statements and notes set out on pages 12 to 21 are in accordance with the Corporations Act 2001 including: (a) giving a true and fair view of the Group s financial position as at 31 March 2012 and of its performance for the six month period ended on that date; and (b) complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001; and 2. there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. Dated at Hobart this 22nd day of May 2012 Signed in accordance with a resolution of the directors: Richard England Chairman 22

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