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Rice price increase

SunRice announced a boost to the Crop Year 2014 paddy price at its annual general meeting on Friday.

August 26, 2014 3:15am

A $20 boost to the Crop Year 2014 paddy price for A Class shareholders and growers was announced at the SunRice annual general meeting on Friday.

SunRice met with shareholders in Jerilderie to present the results for the 2013/14 financial year and outline a strong outlook for the future.

Following a strong first quarter in its pool business, the announcement of a $20 boost to C14 paddy prices takes the indicative full year price for the crop just harvested to at least $340 per tonne for medium grain Reiziq and $470 per tonne for Koshihikari.

The company also said it was anticipating a 10 per cent uplift in group profit after tax year-on-year, providing ‘‘current market conditions prevail’’.

SunRice chairman Gerry Lawson said 2013/14 was a year in which the company built on its strengths.

‘‘We continued to invest in our products, our people, our operations and our brands in 2013/14 and we leveraged what were at times difficult circumstances to deliver a solid set of results,’’ he said.

‘‘SunRice’s debt is the lowest it has been since April 2007, when we acquired the storage sheds.

‘‘In addition, our global market share is the largest it has been in five years; we have invested $54 million in capital improvements since the drought broke; and we are continuing to innovate and diversify to ensure resilience of SunRice’s earnings.

‘‘We are well poised for future growth.’’

SunRice CEO Rob Gordon presented the company’s results for the 12 months ending April 30, 2014, which included a consolidated revenue for the SunRice Group of $1.151 billion, up 7.7 per cent on the previous year’s $1.068 billion.

Net profit after tax was $34 million, slightly down 6.4 per cent on last year’s $35.8 million.

SunRice paid a final Crop Year 2013 paddy price of $293.61 per tonne for medium grain Reiziq and $403.61 per tonne for Koshihikari, down 7.5 per cent on last year.

It paid a fully franked dividend of 23 cents per B Class share, representing a payout ratio of 43 per cent, up from 40 per cent last year.

Mr Gordon said SunRice and the rice industry are approaching an exciting period, with opportunities to continue to build presence in high growth consumer markets and in premiumisation across commodity markets.

‘‘This past year has seen us make good progress on the group strategy, with revenue uplifts in all of our profit businesses and substantial investment undertaken to position the group for the future.

‘‘This includes our pending acquisition of the Blue Ribbon Rice Group’s rice milling assets, which is subject to ACCC clearance.

‘‘In line with our long term strategic aspirations, we are targeting group revenue approaching $2 billion over the duration of the strategic plan, a return on funds employed of more than 15 per cent, and paddy returns that compel our A Class shareholders and growers to deliver us future crops of at least 950,000 tonnes to meet market demand.’’

All resolutions put to the meeting were passed. AGM presentations, speeches and voting results are available on the National Stock Exchange website and ‘shareholder’ section of the SunRice website.

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