ANZCO Foods posts strong result in 2019

ANZCO Foods has announced a strong result for the year ended 31 December 2019 with a record revenue of $1.7b and a net profit before tax of $30.6m.

In the last 18 months ANZCO Foods has consolidated its focus on its core business and its successful value-creating operations. “This is delivering a stronger and more customer responsive supply chain with greater focus on optimising market opportunities with supply,” says ANZCO Foods’ Chief Executive Peter Conley.

“To support this strategy, the business transitioned to a simplified organisational structure. We invested in new business tools and systems that have helped the company be more agile and responsive, as well as providing more robust data for effective decision making.

“In addition, ANZCO Foods’ focus on being as efficient as possible across the entire operation delivered reduced inventory and lower shipping and storage costs.” This helped achieve positive operating cashflow of $140.7m for the year.

“In 2019 ANZCO Foods made record payments to farmers for the second year in a row ensuring the benefits of higher market prices have been shared across the value chain. We regularly measure payments to farmers for sheep and beef, and ANZCO Foods has consistently paid premium prices when benchmarked with the wider industry,” Mr Conley says.

Market diversification was an important strategy for ANZCO Foods in 2019, with the business focusing on expanding its beef, lamb and healthcare products in a range of markets including New Zealand, Japan, the UK, Europe, North America, and China. As the year progressed, global demand for New Zealand beef and lamb products continued to improve which provided a sustained period of higher market returns.

“Despite the risks of volatility and the emergence of trade-related conflicts in global markets, red meat pricing increased steadily during the year, with China standing out as a significant market for both beef and lamb products,” says Mr Conley.

“ANZCO Foods continued to offer a diversified portfolio of meat, value-add and healthcare products, with Japan, the UK, Europe and North America all remaining integral to balancing market options. ANZCO Foods’ lift in market revenue contributed significantly to business performance.”

ANZCO Foods remained focused on the health and safety of its people at all sites with ongoing investment directed towards key risk areas, including transport management, machinery, ammonia, hazardous materials, and working at heights.

Alongside investment in health and safety, ANZCO Foods is continuing to evaluate new methods of processing efficiency. The company’s $11m investment in automation in 2018 at its Rangitikei lamb processing operation to improve yield and safety measures delivered significant gains in 2019.

“Another highlight for the year was the completion of ANZCO Foods’ Primary Growth Partnership with the Government. The FoodPlus initiative focused on opportunities to add more value by developing new products, particularly from otherwise low-value raw material items,” says Mr Conley.

“ANZCO Foods’ blood product business Bovogen and its healthcare products are two significant successful developments from FoodPlus; with these value-add activities contributing a 17% increase in sales revenue compared to the previous year.”

Chairman Sam Misonou says ANZCO Foods is proud of the achievements the business has been able to make in sustaining investment, creating new products and revenue streams, lifting performance, and for maintaining its commitment to the programme during the last seven years.

ANZCO Foods continues to contribute to the communities in which it operates through wages, salaries, supplier payments and sponsorships. The company developed a partnership with St John to donate an ambulance. Through its bobby calf sponsorship programme ANZCO Foods has donated nearly $1m to rural schools since 2011, in addition to a range of other community sponsorships.

“ANZCO Foods’ shareholder, Itoham Yonekyu Holdings (IYH), and Board remain very supportive of the business and its overall direction and performance. IYH is the nineth largest global meat company and we continue to work closely with it to expand ANZCO Foods’ expertise in food products, as well as capitalising on benefits from IYH’s experience and global networks,” said Mr Misonou.

Looking ahead, Mr Conley said the business was well placed to face the challenges presented by COVID-19. “The changes made in the past year have positioned ANZCO Foods well to manage the business through the current COVID-19 pandemic. The extended Lunar New Year and subsequent lockdown periods have impacted on global markets and business activity, but we are confident that ANZCO Foods and the wider New Zealand economy can recover on the back of a strong New Zealand primary sector.”