Drought conditions push subsidiaries of agricultural services provider Conquest into administration
Three subsidiaries of listed agricultural services provider Conquest Agri have been placed in administration, following a tumultuous year for the retail-focused agricultural company as it undergoes a major restructure.
The business, which supplies agricultural products to retail outlets and started trading on the ASX just last year, delivered a loss of $4 million last year and hoped to pursue growth through these subsidiaries – particularly its pet project Conquest Crop Production.
Conquest Crop Protection, Farmworks Merchandise Services and Farmworks Australia Livestock have all been placed in administration, with Andrew Saker and Martin Jones of Ferrier Hodgson appointed to the company.
Both the administrators were contacted this morning but no reply was available before publication. Conquest was contacted, but referred to Ferrier Hodgson.
Conquest Agri is a specialist provider of rural products, wholesaling to retail outlets across the country. Its main business venture is its Conquest Crop Production line.
According to its most recent financial report, the company turned over $56 million in the year to September 2011.
And while the retail industry has certainly been suffering, Conquest has had internal problems of its own. The 2011 financial year was its first as a listed entity, and it recorded a loss of $4.03 million, mostly due to one-off costs, it said.
But chairman Larry Shutes said in the company's final report the agri-sector in Western Australia has been suffering due to severe drought conditions – and that's where the company earns most of its money.
"As part of the strategic restructure of the business, the company has identified a number of growth opportunities that will help capitalise on the expected increased activity in the agri-sector in the 2012 year."
But the company's problems have continued. Chief executive David Jones submitted his resignation on October 1, which the company said it accepted "reluctantly".
Three days later, the company said it had been in discussions with its secured lender in order to support its subsidiaries through a major restructure. That plan includes divesting its real estate, financial services livestock and retail branches to focus on Conquest Crop Production.
But GE Capital appointed administrators instead.
"As part of the strategic restructure of the business, the company has identified a number of growth opportunities that will help capitalise on the expected increased activity in the agri-sector in the 2012 year," Larry Shutes said in a statement.
Read more about the agricultural services sector in today's special IBISWorld industry feature.