Wammco Announces Profit And Bonus Payment

Producer owned co-operative WAMMCO International has announced a pool bonus distribution of 5% of the gross value of lambs supplied by qualifying members in the 2005/06 financial year.  It is the second year in a row that the co-operative has paid the bonus.

In what was described as a more challenging year, WAMMCO announced a pre tax net profit for the year of $2.5 million (subject to audit) after distribution of the pool bonus.  Whilst down on the previous year’s $5.4 million it was still the second highest in the co-operative’s history.

The average payment to members is estimated at $3.39 per head with a range between $5.30 and $0.98, depending on the value of the lambs supplied.  The distribution will be in the form of 40% cash and 60% shares.

In a joint announcement WAMMCO’s Chairman, Dawson Bradford, and Chief Executive, Des Griffiths, listed other highlights of the year as:

• Winning the Austrade 2005 Australian Regional Exporter of the year Award.
• Distributing the co-operative’s first ever pool bonus.
• Securing longer term access to the North American market by investing in a major distribution company.
• Achieving an average 1 kg per head increase in the weight of lambs processed - in what was a mixed year for producers.
• Increasing WAMMCO’s share of the Japanese market.
• Successful commencement of a guest worker programme at Katanning to supplement local labour.

One of the disappointing statistics they highlighted was that 331 of the co-operatives members receiving a pool bonus did not hold sufficient shares to receive their full entitlement.

“Members can increase their shareholding by purchasing additional subscription shares on the basis of one $1.00 share per lamb, with the remaining 7 shares being acquired out of future pool bonuses” they said.

Of immediate concern to WAMMCO are the difficult seasonal conditions currently facing Western Australian producers.  “It is too early to predict what exact effect this may have, both in the short and longer terms, but it would appear turnoff during the current year is going to be later and weights lighter.  This makes it challenging to identify possible alternative markets, whilst at the same time complying with the needs and specifications of our existing customers to ensure we maintain them for the future” Mr Griffiths said.

Looking beyond the immediate concerns Mr Bradford believes the basic fundamentals for prime lamb in the longer term remains positive with production of sheepmeats world wide declining and demand expected to remain firm.