Australian Agricultural Company (ASX:AAC) share price slips on full-year results

The Australian Agricultural Company Ltd (ASX: AAC) share price is sliping today following the company’s full-year results. Here’s the highlights.

| More on:
beef cattle in stockyard

Image source: Getty Images

The Australian Agricultural Company Ltd (ASX: AAC) share price is edging lower during mid-afternoon trade. This follows the company’s release of its full-year results for the 2021 financial year.

At the time of writing, the Australian cattle producer’s shares are fetching for $1.20, down 1.6%.

How did Australian Agricultural Company perform for FY21?

Investors are hitting the sell button in light of the company’s challenging COVID-19 economic environment.

For the period ending 31 March 2021, the Australian Agricultural Company reported a fall in meat and cattle sales. The business experienced lower calving in 2018-2020 due to a prolonged drought and the Gulf flood event, which impacted 2021’s result.

Meat sales dropped to $200 million, reflecting a 29.6% decline from the $229.6 million achieved in the prior corresponding period.

Cattle sales on the other hand, also sunk to $65.5 million, tumbling 39% from $104.5 million recorded in FY20.

Overall, total sales came to $265.5 million, signifying a 68.6% downturn on the $334.1 million made this time last year.

Operating profit lifted to $24.4 million, with $17.7 million included pre-JobKeeper. This reflected a jump from the $15.2 million received over the prior comparable period. The improved metric was attributed to higher meat sales per kilo, up 8% which offset the 19% fall in meat volume sales. In addition, management carefully reduced costs across the business which supported the strong performance.

As a result, statutory earnings before interest, tax, depreciation and amortisation (EBITDA) came to $99.3 million, an increase of $19.2 million over FY20.

Net tangible sales per share jumped to $1.75, compared against $1.53 from the end of March last year. This was driven by improvements in the livestock market values and in the property portfolio.

Australian Agricultural Company noted it retains a robust balance sheet, with comfortable headroom under existing bank covenants. The closing cash balance stood at $8.9 million, however, the business has over $1 billion in net assets.

Management commentary

Australian Agricultural Company managing director and CEO, Hugh Killen said:

The fundamentals of the business remain strong and we’ve made progress with our brands, which is encouraging considering the ongoing challenges that we will navigate over the coming few years.

The last 12 months have been dominated by uncertainty across many industries and ongoing disruption across our key markets around the world.

Importantly though, our herd rebuild has commenced, with a 47% increase in calves in FY21 compared to FY20.

Australian Agricultural Company share price summary

Over the past 12 months, Australian Agricultural Company shares have risen just under 10%. The company’s share price reached a high of $1.24 in early April before profit-taking swooped in. However, its shares have rebound and are within a whisker of breaking new territory.

Australian Agricultural Company has a market capitalisation of roughly $729 million, with around 602 million shares outstanding.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of January 12th 2022

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Consumer Staples & Discretionary Shares

man at casino throwing chips in the air
Broker Notes

Why the Aristocrat share price is surging again today

The gain comes on top of its 6.7% surge yesterday.

Read more »

Supermarket trolley with groceries going up the stairs with a rising red arrow.
Consumer Staples & Discretionary Shares

Woolworths share price lifts following $218m online marketplace deal

The supermarket giant is gaining alongside the ASX 200 on Friday.

Read more »

Sad person at a supermarket.
Consumer Staples & Discretionary Shares

Why is the Woolworths share price sliding 7% today?

Aussie investors heed Target's inflationary warning...

Read more »

Supermarket trolley with a red arrow pointing downwards, symbolising a falling share price.
Consumer Staples & Discretionary Shares

Here’s why the Coles share price is tumbling 5% today

Could recession talk be impacting the supermarket's stock?

Read more »

wine share price rising represented by two people raising wine glasses
Consumer Staples & Discretionary Shares

Treasury Wine share price beating the sell-off amid ‘made in China’ push

Let's take a closer look.

Read more »

A woman leaps into the air with loads of energy, in a lush green field.
Consumer Staples & Discretionary Shares

Own Woolworths shares? The company’s about to hit a major sustainability milestone

Woolies' South Australian operations are set to switch off from fossil fuels in July thanks to a new partnership.

Read more »

A trader stand looking at a sharemarket graph emblazoned with the words buy and sell
Consumer Staples & Discretionary Shares

Could the Wesfarmers share price have already bottomed?

Could Wesfarmers shares be in the buy zone today?

Read more »

Woman thinking in a supermarket.
Consumer Staples & Discretionary Shares

Why I think Coles is a better ASX dividend share than Woolworths

Are Coles shares a better pick for dividends than Woolworths?

Read more »