Elders' share price jumped almost 10 per cent after the farm services company posted a $91.2 million six month profit on Monday and tipped two more years of good times for the farm sector.
The net profit after tax was up 34pc from $74m reported at the same time last year.
The big agribusiness, which added five more regional companies and 300 full-time staff to its national agency and farm inputs operations during the period, has also forecast full year pre-tax earnings will jump by 30pc to 40pc on last September's $166.5m result.
Strong demand for crop inputs and other farm materials, complemented by heady livestock market prices and hot property demand, enabled Elders to report sales revenue of $1.5 billion, or a 38pc jump from the $1.1b recorded a year ago.
Overall earnings before interest and tax leapt 80pc to $133m and the company's return on capital has shot up to almost 28pc from 20pc for the same period last year, or well above Elders' minimum target of 15pc ROC.
The upbeat mood, including a share price nearing $15, has subsequently set the scene for a 40pc increase in interim dividend to shareholders to 28 cents a share (30pc franked).
Elders' strong growth outperformed expectations in all geographies and product categories.
The biggest agency earnings performances by geography were the Victoria-Riverina region, up 56pc to $46m; West Australia up 24.3pc to 31m and NSW, up 103pc to $28m.
Rural product sales were up $313m, or 47pc, while the Australian Independent Rural Retailers wholesale business' sales were up $46.7m or 27pc.
Rural products turnover was fuelled by strong demand for fertiliser and crop protection lines thanks to favourable seasonal conditions across key cropping regions.
"Ongoing material value continues to be delivered through our business improvement and growth initiatives," said managing director, Mark Allison.
"The company is leveraging excellent market conditions and delivering an outstanding result for shareholders."
Yet, while good seasons and bullish markets had helped drive Elders' results - including a 354pc earnings leap for its B&W Rural division in northern NSW's summer and winter cropping belt - almost 60pc of growth originated from non-market related performance gains and "self help initiatives", including acquisitions.
"Favourable market conditions delivered considerable upside to our results compared with this time last year, but 58pc came from organic growth and acquisitions ... and there's much more to come," Mr Allison said.
In recent years Elders has added about seven new businesses every 12 months, but it currently has "17 active candidates" in the acquisition pipeline.
Very, very positive
"In the mid term the outlook is very, very positive, he said, noting the farm sector's seasonal and commodity market prospects.
"We expect 18 months to two years of very strong market dynamics.
"The outlook is certainly bright for the remainder of 2022 for Elders, its shareholders and its customers."
The company anticipated flow-on benefits from a positive winter crop season with sufficient soil moisture now available for improved production in the second half, and potentially well into the 2022-23 summer cropping period.
Mr Allison said the strong first half performance had continued in April.
The business was also confident it had built a robust inventory to cope with anticipated rises in winter cropping demand, including the heightened potential that a damp winter could drive extra sales of post emergent herbicides and fungicide products.
Cattle and sheep prices were likely to stay high, which would help the agency business, compensating for lower livestock sales numbers which were widely evident because abundant feed conditions on farms meant more stock were being retained for herd and flock rebuilding.
Real estate jump
In real estate, Elders enjoyed a 15pc jump in properties sold in its first half.
Given the number of properties still awaiting settlement, and continued buyer demand, this business area was set to continue to outperform against the prior year, too.
In the first six months of 2021-22 real estate services contributed a gross margin of $33.3m, up 38pc on last year.
Aside from farmland agency sales, including some big name transactions such as Gina Rinehart's Hancock pastoral divestments, regional residential transactions grew 7pc.
Elders also made solid gains in regional rental property management, which now represented about 25pc of its real estate gross margin.
The company's financial services margin grew $2.8m, or 14pc to $23.3m in the reporting period, led by a 9pc rise in gross written premiums in Elders Insurance and improved Livestock in Transit product penetration rates.
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