Australia Markets closed

Graincorp lifts profit, rejects takeover

Grains marketer Graincorp's annual profit has increased by 19 per cent and the company's current harvest is proceeding well.

Graincorp has also rejected a recently received $2.68 billion takeover proposal from US-based food processing giant Archer Daniels Midland Company (ADM).

Graincorp made a net profit of $204.9 million in the year to September 30, up from $171.6 million in the previous 12 months.

All of the company's business units - storage, marketing, malt and mills - posted a strong performance in the year to September, Graincorp said.

Chief executive Alison Watkins said the current eastern Australia harvest was generally proceeding well.

"Production forecasts average about 18.3 million tonnes," she said in a statement on Thursday.

ADM lodged an indicative takeover offer on October 22 and, after an assessment by Graincorp's board, the offer had been deemed too low, Graincorp said.

"The GrainCorp board has determined that the proposal materially undervalues GrainCorp and has advised ADM accordingly," the company said.

Meanwhile, Graincorp has outlined about $250 million in spending to achieve about $110 million in annual earnings growth by the end of fiscal 2016.

It will increase spending on strategic projects in its storage and logistics operations, and integrate its oil crushing and refining operations to strengthen its oils business.

Graincorp will also implement new measures to improve efficiency in its port operations.

The company declared a fully-franked final dividend of 35 cents per share.