farming farm tractor dry dead field
Source: Canva. It’s a poor harvest for AGJ, the pandemic hitting the business hard.
  • Revenues jump 38%, but losses large at $6.19M
  • Net liability reported as $109.34M
  • Increasingly competitive market with Primewest moving into the sector

Rural property investment company Agricultural Land Trust (ASX: AGJ) recently released their half-yearly accounts to the ASX.

The company owns almost 9,000 hectares in rural property across Western Australia, and posted a 38% increase in revenue from the last corresponding period, now $6.973M.

AGJ posted large losses, however, reporting “… a net loss attributable to unit holders of $6.19 million (2019: profit $0.96 million).”

In the statement to the ASX, the company noted major losses were due to “… the provisions for impairment that have been recorded against the interest receivable on the loans the Group had advanced to iProsperity Underwriting Pty Limited (in liquidation) (‘IPU’).”

The losses also resulted in AGJ “… being in a net liability position of $109.34 million at 31 December 2020. As described below,the Group’s debentures (excluding Series 5 and 8) were issued on a limited recourse basis, and as such the net liability position is not expected to impact on the Group’s ongoing activities at Linkletter’s Place or expected to impact up on its ability to continue as a going concern”

COVID had its effect on the company, a statement said some operations were paused due to the pandemic, and the recommencement of harvesting has not been confirmed as yet.

AGJ also reported that “Subsequent to the balance date, the unitholder loan facility limit further increased to $1.65 million. This additional funding is expected to be used to fund the surrender of the existing lease [of Linkletter’s Place] and to also provide funding for operating costs while harvesting activities are paused. At the date of these financial statements, the Trust had drawn down $0.8million of the loan facility.”

The sector is becoming increasingly competitive, with Primewest making a move into the agricultural market back in early February.

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