CRT Reaches New Heights

19 July 2012

CRT announces year end result - For immediate release

CRT Reaches New Heights

New Zealand farmer-owned co-operative CRT has posted its best ever annual result, setting new heights in both turnover and operating profits in 2012.

Revenue growth of $200 million, (18%), was achieved to create a new record of $1.292 billion, while operating profit grew 55% to $13.149 million.

Chairman Don McFarlane announced that a record bonus rebate of $9.75 million would be distributed to shareholders. This was the biggest bonus distribution CRT had made in its 49 year history, and was consistent with recent years in representing 75% of the annual operating surplus.

Mr McFarlane said the bonus rebate would be distributed in August and would be calculated by a formula that recognised shareholders’ business support of the various activities of CRT. The rebate would be paid 50/50 in cash and shares.

He said the 2012 result was a solid demonstration of support from shareholders across the co-operative’s business and clearly showed that
CRT was still achieving its reason for being.

“While the business base has grown over the years, the co-operative has been totally committed to its founding objective of improving the profitability of its shareholders by creating competition in the market. The long established parts of the business in rural retailing and the CRT Card remain central to that objective,” Mr McFarlane said.

This year’s bonus rebate is the cream on top of already competitive pricing provided to shareholders which includes rebate savings recognised monthly totalling $24.3 million and rewards points in CRT’s Choices Rewards loyalty programme valued at $3.65 million. The total benefit enjoyed by shareholders in the year through this combination of benefits was $37.7 million.

The bonus rebate offered on fuel card purchases at Challenge and Caltex sites this year would, based on $2 per litre pricing, attract a total discount of more than eight cents per litre off pump prices.

A first this year would be a bonus rebate on commission paid on livestock sales, a result of the strong performance of CRT’s livestock business in its second full year of operation. Improved conditions in the real estate market also provided a rebate on vendor commissions paid by shareholders.
The bonus rebate in the core activity of farm supplies was also very significant as this business has considerable competitive pressure on margins at the point of sale. Receiving a further 2.4% rebate on these prices was a very significant benefit for shareholders, said Mr McFarlane.

“While CRT existed primarily to provide service to farmers and ensure competitive prices, it was pleasing to see shareholders were getting a further
return on their co-operative investment through the bonus distribution,” Mr McFarlane said.

(A full table of the bonus rebate contributors is appended at the end of this release.)

CRT’s business spans four general areas:
• Rural supplies (including retail, seed, fertiliser and feed manufacturing)
• The CRT Card
• CRT fuel and lubricants
• Rural services (including real estate, livestock and finance)

Chief executive Brent Esler said the result was a very pleasing one for him and the staff of CRT.

“CRT staff have a unique relationship with our shareholder customers and this co-operative difference plays a significant part in achieving the results we do. Our shareholders know that everything we do is focussed on increasing their profitability,” said Mr Esler.

“Unlike 2011, this year’s growth was mostly achieved in the existing operations of CRT. Establishing Gulf oil distribution in New Zealand and acquiring a single rural supplies store in Hokitika were the only additions to the business during the year,” Mr Esler said.

CRT has enjoyed seven record turnover years in the last eight years, and produced record profits in five of those years. Few other businesses as long established as CRT have enjoyed more than 350% growth over this same period.

Mr Esler also said that the sustained growth and performance of the business were a testimony to the staff, structure and strategy of the business, but it also illustrated the resilience of the New Zealand agricultural market during a period of global economic turmoil.

Highlights of year were:
• Total turnover grew to $1.292 billion, an increase of $200 million (18%) on 2011

• Profits before tax and bonus distribution to shareholders rose to $13.15 million (an increase of 55%)

• The bonus rebate distribution to co-operative shareholders rose to $9.75M (up 62%)
2012 CRT Bonus Rebate $9.75M Sales Contribution Rates:

CRT FarmCentre retail farm supplies 2.4%
CRT Seed 2.4%
CRT Fuel - bulk deliveries 4.25%
CRT Caltex / Challenge fuel card 2.0%
CRT Card and other brand card fuel 0.4%
CRT Livestock (on commission paid) 1.5%
CRT Real Estate (vendor commission paid) 1.5%

CRT’s Annual General Meeting will be held at the CRT FarmCentre in Rangiora on Thursday 2nd August 2012. At the meeting, the reappointment of two of the elected directors will be confirmed. Howie Gardner, South Otago, and John Foley, North Otago, both retired by rotation and offered themselves for re-election. No other nominations were received for the roles.

ENDS

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