Annual Report

Blue Sky Pastures delivers improved performance amidst tough trading conditions

Download the 2021 Annual Report in PDF format

A year of significant challenges across the red meat sector has not dampened the performance of southern meat processor Blue Sky Pastures, delivering an improved performance on the previous year with the release of its 2021 Annual Report.

In the 12 months to 30 June 2021, the business generated a profit of $5.3 million before tax, an increase on 2020’s $4.2m. It resolved to pay a dividend of 5 cents per share.

Blue Sky Pastures CEO Jim Goodall, having stepped into his new role at the beginning of July, said the result was pleasing, given the 2020 year had been a 15-month season.

“It’s been a challenging 12 months, especially with the shipping issues that have slowed delivery to key markets, so to have this increased financial performance within the regular reporting period is a good achievement for the team.”

Profitability has grown by 20% on 2020 (which was a 15-month year). Cashflow has stayed strong at positive $10.7m, borrowings have decreased by $6.4m and total shareholders’ equity is up by $2.7m (10%).

Blue Sky Pastures’ Gore plant has been sold with its transaction due to settle in November.

Chairman Scott O’Donnell said he was pleased to deliver a good result for shareholders. Blue Sky’s balance sheet was looking positive, allowing the company to look at future reinvestment, he said.

“Blue Sky has ever-increasing potential and with our financial outlook we’ll be able to invest in areas of the business that will help us reach this potential,” he said.

O’Donnell thanked interim CEO Reece Oliver, who had held down the fort between former CEO Todd Grave’s departure and Goodall’s arrival.

Along with Goodall’s arrival, Blue Sky welcomed independent director Sarah Brown to the board. Brown brings with her a career in law, a significant amount of governance experience and rural background, coming from a farming family.

The impact of COVID-19 across operations continues to be tasking. Sales prices were negatively impacted at the beginning of 2020/2021 year, with global markets being affected by various world lockdowns. As vaccination rates increase, countries are opening for business in a “new normal” environment.

The outbound shipping issues have also affected cold storage space, with some exporters needing to decrease production to match space freed up by shipping availability.

Fortunately, proactive planning and reaction from Blue Sky’s marketing and logistics teams and support from partners in South Port, Maersk and others, have allowed these issues to be largely mitigated for Blue Sky. Its Morton Mains plant was able to continue effectively at full production through the whole season.

Looking ahead, Blue Sky would seek to weather the COVID-19 storm while delivering sustained profitability. Establishing a product point of difference that appeals to affluent consumers and process improvement at the Morton Mains processing plant were key priorities.

Goodall’s prior experience of direct to retail supply chains would be a great advantage in this endeavour.

“Blue Sky has great potential, we’ve got a great product and a loyal supply base,” he said.

“I’m looking forward to further enhancing the operational and market performance of Blue Sky Pastures.”

The Blue Sky Pastures Annual Report 2021 is available on the company’s website, www.bluesky.co.nz/latest

Due to the uncertainty around COVID-19 restrictions, the company’s annual general meeting will be held virtually by Zoom on 21 October, 4pm. To register your interest in attending, please email your name and number of people to bsm@mcp.co.nz.