The Elders Ltd (ASX: ELD) share price is in focus today after the company announced it has agreed to sell its Killara Feedlot business to Australian Meat Group for approximately $195.8 million. Killara contributed $12.1 million to underlying EBIT in FY25, and the sale is expected to deliver significant balance sheet benefits.
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What did Elders report?
- Entered into agreement to sell 100% of Killara Feedlot for a total consideration of ~$195.8 million
- Killara contributed $12.1 million to underlying EBIT in FY25
- Non-working capital assets valued at $45.5 million as at 30 September 2025
- Elders holds $107.4 million in carried forward capital tax losses, fully offsetting any capital gain from the sale
- Sale expected to complete before 30 June 2026, subject to regulatory approval
What else do investors need to know?
The agreement covers 100% of shares in Killara Feedlot Pty Ltd, which operates on 1,402 hectares and can process up to 62,000 head of cattle annually. The deal includes $122.0 million cash and normalised working capital, mainly cattle inventory, valued at $73.8 million at 30 September 2025.
Elders plans to use the sale proceeds to reduce net debt, targeting a return to sub 2.0 times accounting leverage. The company forecasts the annualised impact on its earnings per share will be less than a 1% reduction. Upon completion, Killara will be reported as a discontinued operation and asset held for sale in Elders' HY26 statements.
What did Elders management say?
Elders Managing Director and Chief Executive Officer, Mark Allison said:
Killara has long been a successful and valuable part of Elders' Products and Services Portfolio. We feel for Killara to continue to grow and develop as a blue chip operation, it is appropriate for it to move to a more natural owner, and we have found this in AMG. The sale at this time supports our value creation strategy for Elders' shareholders. We thank Killara management and its employees for their contribution to Elders.
What's next for Elders?
Completion of the Killara sale is subject to approval from the Foreign Investment Review Board and ACCC, with Elders expecting this to finalise before 30 June 2026. Once completed, the company will apply proceeds to lower its net debt, improving future balance sheet flexibility.
Elders notes that its core strategy remains focused on value creation for shareholders. The company's operational structure will adjust to reflect the divestment, and management has highlighted minimal impact on ongoing earnings.
Elders share price snapshot
Over the past 12 months, Elders shares have risen 5%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 11% over the same period.
