How Did Elders Boost Profit 190% Amid Dry Conditions and Acquisitions?
Elders Limited reported a robust half-year performance for the period ending 31 March 2025, with profit after tax surging 190% to $33.6 million and revenue rising 5% to $1.41 billion. The company’s growth was driven by strong livestock prices, real estate acquisitions, and disciplined cost management.
- 190% increase in profit after tax to $33.6 million
- 5% revenue growth to $1.41 billion
- Underlying EBIT of $64.3 million and 12.7% return on capital
- Interim dividend maintained at 18 cents per share
- Pending acquisition of Delta Agribusiness with $245.8 million equity raise
Strong Half-Year Financial Performance
Elders Limited (ASX: ELD) has delivered a standout half-year result for the six months ended 31 March 2025, reporting a 190% jump in net profit after tax to $33.6 million, up from $11.6 million in the prior corresponding period. Revenue increased by 5% to $1.41 billion, reflecting broad-based growth across the company’s core agribusiness segments.
The company’s underlying earnings before interest and tax (EBIT) rose to $64.3 million, supported by improved livestock prices and real estate services growth. Return on capital improved to 12.7%, signaling enhanced operational efficiency despite ongoing challenges in some retail product lines.
Drivers of Growth and Operational Highlights
Livestock agency services were a key contributor, with significant uplifts in both price and volume for cattle and sheep amid favourable market conditions and increased de-stocking in drier regions. Real estate services also posted strong gains, boosted by the acquisition of IPST Holdings (formerly Knight Frank Tasmania) and organic growth across broadacre, residential, and property management sectors.
Retail product margins faced headwinds from dry conditions in South Australia and western Victoria, which dampened crop protection sales and local market confidence. However, gains in fertiliser and animal health products partially offset this decline. Wholesale products and feed and processing services also recorded margin improvements, supported by product mix and operational efficiencies, including the commissioning of a new feed mill.
Capital Management and Strategic Initiatives
Elders maintained strict cost discipline, reducing its underlying cost base by 3.6% excluding acquisition-related expenses. The company’s net debt decreased by 10% to $529.6 million, aided by proceeds from a $245.8 million equity raise to fund the pending acquisition of Delta Agribusiness, which remains subject to Australian Competition and Consumer Commission (ACCC) approval.
During the half, Elders completed five acquisitions, expanding its footprint with additional points of presence. The company also continued investing in transformational initiatives and digital platforms such as AuctionsPlus and Clear Grain Exchange, aiming to enhance service offerings and operational scalability.
Outlook and Market Conditions
Looking ahead, Elders expects a positive second half, underpinned by a forecast average winter crop despite delayed planting in some regions. Livestock prices are anticipated to remain strong, supported by robust international demand for protein. Real estate services are poised to benefit from stabilising interest rates and sustained demand for farmland.
The company plans to grow its financial services segment, including expansion of its employed broker model and launch of Elders-branded deposit products. While wool commission earnings may face pressure from lower prices and production, ongoing uptake of Elders Wool Handling is expected to support margins.
Management remains focused on capital and cost efficiencies, aiming to keep cost increases below inflation (excluding acquisitions) and to continue investing in accretive growth opportunities.
Bottom Line?
Elders’ strong half-year momentum sets the stage for continued growth, but regulatory approval of the Delta Ag acquisition and weather-driven crop conditions remain key watchpoints.
Questions in the middle?
- Will the ACCC approve the Delta Agribusiness acquisition, and on what timeline?
- How will prolonged dry conditions in key regions impact retail product demand in H2 FY25?
- Can Elders sustain its improved return on capital and cost discipline amid ongoing acquisitions?
