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Open Country posts record annual profit on surge in sales, sees 'strong' 2015

05 Mar 15

Open Country Dairy, the dairy manufacturer controlled by Talley's Group, reported a record profit for 2014 as revenue growth outpaced rising cost of sales, and said it expects a "strong" result in 2015

Profit was $29.8 million in the 12 months ended Sept. 30, 2014, from $18.2 million in a 14-month period a year earlier, according to the Auckland-based company's annual report. Open Country changed its balance date to Sept. 30 from July 31 in 2013.

Sales jumped to $908 million from $635 million, while cost of sales rose to $858 million from $597 million, allowing the company to increase gross profit by 31 percent. The 2014 year took in a season in which farmers received a record payout for their milk, while global dairy prices tumbled in the second half from near their highest levels in seven years.

This year, the mix is "more volume, lower revenue and lower cost of goods sold," said chairman Laurie Margrain. "I would like to think it is another strong result."

Open Country didn't declare a dividend. Margrain said the company is "reinvesting in stainless steel for growth."

Talley's, the privately-held maker of foods ranging from frozen fish to ice cream, increased its holding in the company from 55.5 percent in late 2013 by buying shares from Singapore's Olam International,, which is the second-largest shareholder with a current stake of 15 percent. for as much as $46.5 million.

The dairy company is relatively unaffected by drought which has disrupted milk production in some parts of New Zealand as none of its catchments are in the most adversely affected areas, Margrain said.

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