PGG Wrightson's share price dived a further 6% this week following speculation that its real estate arm lured two of Bayleys' best rural salespeople for a figure of $550,000.PGG Wrightson Real Estate general manager Stuart Cooper has firmly denied what he has described as "industry rumours from rival companies" that the firm coughed up the six-figure amount for the agents reports the Waikato Times. However, the rumours that PGG paid Ian Morgan and Paul O'Sullivan $300,000 and $250,000 respectively have left existing agents at PGG disgruntled, an inside source says. Mr Cooper said PGG was looking to recruit more good agents to help combat the challenging market. "Our people are here and we have more people who want to join us." Both men started at the agencies last week, Mr Morgan joining PGG's Matamata branch and Mr O'Sullivan the Rotorua office. Mr Morgan was Bayleys' second-highest rural selling agent and Mr O'Sullivan was the third-highest. The source, who did not want to be named for fear of losing his job, said the other 14 agents now felt extremely undervalued and were looking to move agencies. "Agents are struggling to make commission, and there's a lot of us who have been with the company for many years. To have a company you have been so loyal to pay someone $300,000, it's a bit of a slap," the source said. "If I move to another company, I will not get a sign-on fee." Meanwhile, the PGG group of businesses is facing tough times. The company's operating earnings for the year to June 30 fell 16 per cent, to $30 million to $32m. The fall was blamed on the recession and the fall in world dairy prices. However, Mr Cooper said PGG's real estate business had been steadily increasing its market share for four years. The rural real estate sector is a challenging market. The latest Real Estate Institute of New Zealand figures, released this week, show that Waikato farm sales fell 60 per cent in the June quarter compared with the same period last year. Only 39 farms sold during the period.
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