Agribusiness Ruralco is expanding its insurance and retail operations as it seeks to turn around a 69% fall in full-year profit. Source: The Australian
Ruralco is acquiring a 50% stake in insurer Ausure Consolidated Brokers and will merge it with assets of its Ruralco Insurance business.
Also, wholly owned Ruralco subsidiary Roberts Ltd will acquire the business of Tasmania based rural products retailer TP Jones.
Ruralco did not disclose the purchase prices but said the acquisitions will enhance its platform to grow in rural markets.
Ruralco reported net profit for the year to September 30 of $4.3 million, down from $14.06 million a year earlier.
The company flagged the result in August, with the bottom line pulled back by divestments and the restructuring of both its live cattle and sheep export business and its water business.
Ruralco says its traditional businesses – rural supplies and agency services – generated strong results.
“I am pleased with the underlying business performance delivered this year,” Ruralco chief executive Travis Dillon said.
“While it is disappointing that our bottom line has been impacted by the restructuring in water and live exports and divestment of our non-core farm machinery business, we are in a much better position to take advantage of changing market conditions.”
Mr Dillon said the insurance joint venture with Ausure would consolidate Ruralco’s insurance network across rural Australia.
He said there were further development opportunities for Ruralco’s financial services business as farmers sought more capital to respond to climate conditions and high livestock prices.
Mr Dillion said the acquisition of TP Jones and its four retail locations in Tasmania enhanced Ruralco’s rural supplies network, and activity to increase the group’s retail footprint would continue.
Ruralco’s livestock export business is now focused solely on northern Australia, and the company said it continued to see strategic benefit in growing the live export business.
In the water business, Ruralco had substantially increased its water services capability in eastern Australia to match the strength of the business in the west.
Ruralco said there are opportunities to make further water acquisitions in 2017.