apr-11.pdf (2.07 MB) - Crown Ownership Monitoring Unit

OperationsAsureQuality meat inspectors continued to exceed the Ministry of Agricultureand Fisheries’ (MAF) target for compliance accuracy, with an accuracy rate of99% for the 25 million animals inspected.As part of a wider MAF and meat industry-led meat hygiene reform strategy,changes to the ovine inspection standard were implemented on a trial basisthis season at the AFFCO Imlay plant. Following the ovine trial, MAF hasprovided the United States Department of Agriculture (USDA) with a proposalto change the current ovine inspection standard to allow meat companies totake greater responsibility for non-food safety-related defects. If agreed by theUSDA, the proposed changes will have a negative impact on AsureQuality’sfuture meat inspection revenue. However, the size impact will depend on thenumber of companies that decide to do their own inspection and the pace atwhich they wish to make the change.During 2010/11, the Auckland laboratory operating procedures were reviewedleading to improved profitability. Growth in the laboratory business, bothdomestically and internationally, is seen by AsureQuality as a significantgrowth opportunity.Financial performanceAsureQuality changed its balance date from 30 September to 30 June,effective from 1 July 2011. This means the 2010/11 financial reporting periodis only nine months.AsureQuality generated NPAT of $7.6 million, which was $2.5 million above the2009/10 profit of $5.1 million. The strong performance was primarily owing togrowth across all the core (domestic market) business units. AsureQuality’stotal revenue for 2010/11 was $116.9 million, $9.2 million, ahead of target.Performance against planAs a result of the strong 2010/11 financial year, AsureQuality has performedahead of plan in respect of the major financial performance measures,including EBIT, NPAT, dividend declared and net cash flow from operatingactivities.DividendsAsureQuality paid an interim dividend for the 2010/11 financial year of$1.5 million in May 2011 and paid a final dividend of $3 million inSeptember 2011. In addition, AsureQuality also paid a special dividend inDecember 2010 of $1.6 million as part of the transition to AsureQuality’starget capital structure. The dividends are consistent with the dividend policyas detailed in the AsureQuality SCI.Major investmentsWith the Singapore laboratorygenerating strong revenue fromincreased testing volumes, alaboratory extension project wasestablished to address spaceand equipment constraints. Theextension will provide an additional1,400 square feet of capacity. Theexpansion will assist in lifting itsturnover in South East Asia to over$5 million.In the 2011/12 financial yearAsureQuality expects to establish apresence in China, with a dairy andanimal diagnostics focus.Non-financial performanceIn November 2010, AsureQualityresponded to the Kiwifruit PSAincursion and managed theoperational response. This wasthe first large response since theBiosecurity Response ServicesAgreement was agreed withMAF and included surveillance,organism management, movementcontrol and logistical support.Corporate social responsibilityAsureQuality and its staff thisyear supported the Agri-Women’sDevelopment Trust, Christchurchand Japanese earthquake appeals,the Police Guild Trust (campaignsagainst drugs) and SpecialOlympics basketball players tocompete in Athens.page | 71