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Alliance announces increase in commercial profit

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Alliance Group will show increased business profit when it reports its annual financial results later this year, CEO David Surveyor said.

Last year, the company made an underlying profit of $ 27.4 million for the fiscal year ended Sept. 30, which after adjusting for one-time events (donning and doffing) brought it down to 7 , $ 5 million before taxes.

Speaking to a virtual vendor tour yesterday, Mr. Surveyor said the year-round problem was not the ability to sell but the shipping of the product.

Supply chains had been “greatly disrupted” due to the Covid-19 pandemic, and global supply chain issues had become the new normal.

Like many businesses, Alliance had been affected by this significant global supply chain congestion and disruption, and New Zealand’s ports were not spared.

The problem came with significant increases in costs and freight and Alliance had tried to mitigate the impact as best it could.

“We do not see the situation for global supply chains improving in the near future,” he said.

Another impact had been on refrigeration space and, while this was “almost invisible” to farmers, the company almost ran out of cold storage space during peak season.

If this had happened, the factories would have shut down and the cattle would have remained on the farms. The year-end inventory was higher than expected.

Mr Surveyor said New Zealand agriculture had “helped ensure New Zealand’s success” during the pandemic.

Farmers had received high prices this season, and in the future the company expected high demand and high prices for all species.

He was especially happy to see an upward movement in the price of venison.

Consumers increasingly focused on food as part of their lifestyle and well-being, and they sought traceability and trust in supply chains.

The company continued to develop products and programs to meet these needs. Its participation in premium channels continued to grow.

A persistent labor and skills shortage was a problem for New Zealand’s meat processing sector and the government needed to allow access for foreign workers, Surveyor said.

At the same time, the company was implementing initiatives to develop its own staff and attract new employees.

Alliance Group Livestock and Shareholder Services General Manager Danny Hailes said there was “good news” with the price outlook for the first two quarters of the new season which included a range. up to 9.70 kg in the first quarter (October to December) for lamb.

Demand in North America remained very strong for lamb and mutton, and was still strong in China, where demand supported the price of mutton. There was potential for a correction in China, but he didn’t think it would be major.

Catering in Europe, UK and North America is slowly reopening but remains under pressure.

Earlier this week, Alliance announced an agreement with global retail giant Marks & Spencer (M&S) on a range of value-added branded beef and lamb products in Singapore.

The M&S brand line, completely transformed in New Zealand, was now available in 11 stores in Singapore.

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