PGGWrightson cuts profit forecast

Rural services company PGG Wrightson has slashed its profit forecast after real estate sales "dropped off a cliff" reports The NZ Herald. The NZX-listed firm yesterday cut its net earnings forecast for the year ending June 30 to between $39 million and $45 million, down from guidance in October of $46 million to $51 million - a drop of 13.4 per cent at the mid-point. PGG Wrightson said the main factor in the revised outlook was an expected loss in the group's real estate business, given the impact of economic conditions on demand for properties. The Real Estate Institute of New Zealand said 348 farms were sold in the three months to November, down 49.1 per cent on the previous year, with sales in November alone down 64.3 per cent on the previous year. PGG Wrightson handled $2.6 billion worth of real estate sales last year. The operating performance of most of the group's other businesses in the current year remains strong despite the difficult economic environment."Net earnings in the six months ending December 31 were expected to be affected by a writedown of an 11% shareholding in NZ Farming Systems Uruguay, costs related to the termination of a partnership agreement with meat processor Silver Fern Farms and the "marking to market" of interest rate hedges and adjustment of defined benefit superannuation scheme surpluses under international financial reporting standards.