LIC’s strategic focus on innovation led growth and how data would fuel that growth was a key topic discussed at the farmer-owned co-operative’s Annual Meeting in New Plymouth yesterday.
Board Chair and Nelson dairy farmer Murray King told LIC shareholders, directors, shareholder councillors the co-op’s “solid financial results” show it is in a strong position to continue to invest in technology and data platforms to fuel genetics and herd management innovations.
For the year ending 31 May 2019, LIC reported $22.2 million NPAT, up 139% from $9.3 million the previous year.
LIC delivered new records in strength of balance sheet, operating cash flow and total revenue, as well as a $15.6 million dividend to its 10,300 shareholders, the largest paid out since 2013.
“The work we have completed since 2016 to shape LIC into a modern, progressive co-op have enabled this year’s solid results.
“2018-19 was about embedding our new innovation-led growth strategy with an ongoing focus on the core NZ dairy industry. This year we will focus on driving this strategy forward by taking full advantage of data to benefit both LIC and our farmers.
“We believe these results are sustainable and we are confident that we will continue to build on them in the coming years.”
LIC’s investment in R&D remained high in 2018-19 at $13.6M, which equates to 5.5% of revenue and is well above the primary sector average of around 1%.
King said the co-op also received additional funding from MPI and MBIE to boost two key projects aimed at driving improvements in the health and wellbeing of the national herd and more sustainable milk production.
“Our Resilient Dairy programme alongside DairyNZ and MPI will strengthen our existing R&D programme to keep our farmers and New Zealand leading the global pastoral dairy system,” says King.
LIC Chief Executive Wayne McNee explained how data will unlock the next wave of productivity and sustainability improvements for farmers.
“The next era of farming starts with taking full advantage of data.
“Dairy farmers are being tested like never before. They are looking for certainty and trusted partners to help them navigate the rapidly changing domestic and global industry, and we want to step up and help farmers meet those challenges head-on.
“Starting with the first national herd database, one of the strengths of our co-op has always been our ability to use our data to drive genetic gain, produce better milk and help farmers save time and increase their profits.
“Now, more than ever, we’re using the data our co-op collectively gathers and shares to give our farmers the ability to make faster, more informed decisions on farm. In our cutting-edge genomics work, big data is allowing us to supercharge the rate of genetic gain.”
McNee said LIC has taken major steps forward in its digital transformation agenda, including moving one billion pieces of farm data into the cloud to open up new opportunities.
“As we move from a ‘cow-focussed’ business to a truly ‘customer-focussed’ business, we will need to continue with significant investment in R&D and take advantage of emerging technologies. This work is shifting us from creating product around cows to building ecosystems around our customers to support them and their farms and keep New Zealand leading the global pastoral dairy system.”
This year LIC was awarded the ‘Co-operative Business of the Year’ award at the Co-operative Business Awards, where it was recognised for its “significant and positive impact” within the co-operative community and returning benefits to its 10,300 shareholders.
LIC has also been made a finalist in the NZ Biosecurity Awards for its world-leading response to Mycoplasma bovis.
Murray King says the co-op’s comprehensive daily testing regime and biosecurity protocols in the face of M. bovis are important to protect the national herd.
“As the farming community in New Zealand continues to grapple with this biosecurity threat, LIC is committed to doing all we can to eliminate the risks and reassure farmers.”
All meeting resolutions were passed by shareholder vote:
- Tim Gibson was reappointed as an independent director of the LIC Board for a further three-year term.
- Sophie Haslem was ratified as an independent director of the LIC Board until the 2020 Annual Meeting.
- Director Remuneration.
- Shareholder Councillor Remuneration.
- External Auditor Reappointed.
- Shareholder Council Budget.