Elders shares have managed to hold on to the impressive gains made this year as the company continues to make positive announcements. At the company’s recent annual general meeting ELD’s chairman highlighted how at last years’ meeting the company was talking about survival, and how much has changed with the business now preparing for growth.
After facing financial difficulties, ELD’s has managed to restructure itself and is now focussed on an 8 point 3 year operating plan which to date has been a resounding success. While the market remains optimistic on the company, it is likely operating conditions will be more mixed next year. An El Nino weather pattern looks set to bring a drier spring and summer which has the potential to negatively impact ELD’s business. As such we will be watching developments closely but for now remain very much positive on the ELD investment case over the medium term as one of our key “dining boom” exposures.
A development of note around growth prospects for the business was that the first shipment of live slaughter cattle from Australia to China under the new Free Trade Agreement was shipped in September. We see this as a key milestone not only for Elders, but for the industry as a whole and fits with our longer term outlook for Australian agricultural businesses’ such as ELD.