Elders Reports $64.3M Underlying EBIT, Five Acquisitions Boost Growth
Elders Limited has reported a robust 67% increase in underlying EBIT for the half-year ending March 2025, driven by livestock market recovery and real estate growth, alongside five new acquisitions and ongoing transformation initiatives.
- Underlying EBIT rises 67% year-on-year to $64.3 million
- Five acquisitions completed in HY25, expanding geographic and product footprint
- Cost reductions achieved excluding growth and transformational investments
- Systems Modernisation project progressing with benefits expected from FY26
- Sustainability targets on track with significant emissions reductions and renewable energy use
Strong Financial Performance Amid Market Recovery
Elders Limited (ASX: ELD) has delivered a compelling half-year financial result for the six months ending 31 March 2025, reporting a 67% year-on-year increase in underlying EBIT to $64.3 million. This performance reflects a recovery in the livestock market and solid growth in the real estate segment, which together helped offset challenges from drier seasonal conditions in parts of South Australia and Victoria.
The company’s Managing Director and CEO, Mark Allison, highlighted that the results were underpinned by a diversified business model spanning rural products, agency services, real estate, and financial services. This diversification has provided resilience against market volatility, particularly in agriculture, where weather and commodity prices remain unpredictable.
Strategic Acquisitions and Expansion
During the half-year, Elders completed five acquisitions, including notable additions such as IPST Holdings and Knight Frank Tasmania, further expanding its geographic footprint and product offerings. These acquisitions contributed to the company’s ongoing strategy to grow through both organic and acquisitive means, enhancing its presence across key Australian agricultural regions.
The acquisitions have added approximately $4.3 million in annualised EBIT, supporting Elders’ ambition to deepen customer relationships and broaden its integrated supply chain. The company also maintains a robust pipeline of potential bolt-on acquisitions to sustain growth momentum.
Operational Efficiency and Transformation
Elders has achieved cost reductions excluding growth initiatives and transformational projects, reflecting disciplined financial management. The company is progressing well with its Systems Modernisation program, which aims to replace legacy technology platforms with a modern ERP system. This multi-wave project is expected to deliver operational efficiencies and improved customer experience, with full benefits anticipated from FY26 onwards.
While transformational capital expenditure has temporarily impacted return on capital, Elders expects these investments to yield returns above 15% in the medium term. The company also reported maintaining significant headroom in banking covenants and forecasts leverage to improve towards the target range of 1.5x to 2.0x by the end of FY25.
Sustainability and Market Outlook
On the sustainability front, Elders remains on track to meet its Scope 1 and 2 greenhouse gas emissions reduction targets, with a 23.9% reduction achieved against the baseline. The company has committed to 100% renewable electricity at Australian sites by 2025 and net zero emissions by 2050, partnering with research institutions and supporting carbon farming initiatives.
Looking ahead, Elders anticipates average seasonal conditions to support a favourable second half of FY25, with livestock and real estate markets expected to remain robust. The company’s strategic focus continues to balance growth, transformation, and operational discipline, positioning it well to navigate agricultural cycles and deliver shareholder value.
Bottom Line?
Elders’ blend of strategic acquisitions, operational transformation, and sustainability focus sets the stage for sustained growth amid agricultural market cycles.
Questions in the middle?
- How will Elders balance ongoing transformational costs with improving return on capital?
- What impact will seasonal variability have on the second half earnings forecast?
- How might further acquisitions shape Elders’ competitive positioning in key agribusiness sectors?