Goal - to be financially sustainable in the long term

AgResearch Board of Directors
(clockwise from back left):
Andrew MacPherson, Barry Harris,
Dr Michael Dunbier, John Loughlin,
Dr Jane Adams, Sam Robinson (Chairman),
Susan Huria, Danny Chan.

In the 2010 financial year AgResearch’s revenue grew by $1m to $156m (2009: $155m) and was less than budget primarily because of delays in the flow of Primary Growth Partnership (PGP) funding. Revenue from the Foundation for Research Science and Technology and the Ministry of Research Science and Technology increased by 8% to $71m (2009: $66m) while commercial revenue decreased by 7% to $68m (2009: $73m).

Expenditure decreased by $2m to $153m (2009: $155m) and the surplus before tax improved by $3m from a loss of $1m in 2009 to a profit of $2m. This was less than the budget of $7m but was achieved after $6m of restructuring costs including asset and investment impairments/write downs. The effect of ‘Budget 2010’ removing tax depreciation on buildings was an unfavourable income tax impact of $11m resulting in a deficit after tax of $9m (2009: $1m).

Net operating cash flow was $20m (2009: $20m) and capital expenditure of $10m (2009: $19m) included the completion of the Tokanui Dairy Research farm conversion. With total assets of $258m (2009: $256m), term debt of $20m (2009: $20m) and shareholders’ equity of $187m (2009: $195m) AgResearch maintains a strong balance sheet.

While PGP funding is starting to flow, the general state of the economy, the lack of confidence in the sheep and beef sector and the uncertainty around the benefits to CRIs of the various Government R&D initiatives means that 2011 will be another tight year financially for AgResearch. However, the restructuring undertaken in 2010 should mean that 2011 will be more positive and that financial performance and profitability will improve.

Financial performance indicators