ELD +18.28%: the agricultural services business jumped to 3-month highs on a small beat for FY23 despite some notable headwinds. Sales fell 4% to $3.3b, slightly ahead of consensus, while EBIT was just above the midpoint of guidance, the $170.8m was down 26% on FY22 but ~2% ahead of expectations. Cash conversion was a big tick, operating cash flow ~50% above consensus helping the company to pay a 23cps div (30% franked), 7cps above expectations.
Softer retail and wholesale markets and falling soft commodity prices weighed on FY23, but while those headwinds are expected to continue into FY24, the company has managed costs far better than expected. Around 7% of ELD shares were short-sold heading into the result, and the share price had more than halved in the last 12 months highlighting how negatively positioned the market was heading into this result.
- A decent set of numbers was enough to see the share price rip on the day.
MM remains neutral ELD
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