16 January 2007

1 minute read

Oceania

Australian Agricultural Co's share price yesterday hit a record high and the company is "fundamentally in a very strong position", according to ABN Amro Morgans analyst Belinda Moore. The shares which punched through $2 for the first time since last May closed 8¢ higher at $2.06 after reaching $2.09 earlier in the day.

Ms Moore has forecast that the Brisbane-based business, which runs nearly 530,000 head of cattle on 24 stations in Queensland and the Northern Territory, will more than double its net profit to $31.4 million this calendar year and deliver a near identical result in 2008.

But a recent slide in cattle prices means AACo's December year net profit result will probably come in at $13.6 million, down from $16.8 million in 2005.

AACo's current guidance remains between $16 million and $20 million in after-tax profit, with its full-year results scheduled to be released on February 6.

The company said in October that it had been moving its operations to northern Australia over the past two years and better than average rainfall on many of its properties had resulted in a strong season. While grain prices have risen sharply, AACo has shielded itself by forward purchasing much of its feed through September.

Source: The Courier Mail