Ruralco undecided on Elders rural services

Ruralco Holdings says it does not yet know whether it will bid for Elders' rural services business.

Ruralco chairman Richard England on Tuesday said Ruralco was monitoring the situation but had not yet made a decision.

"If Ruralco did participate, we would be disciplined and would not pursue any acquisition unless it was value-accretive for Ruralco shareholders," Mr England said in a statement on Tuesday.

"Regardless of the outcome, Ruralco was well-positioned to benefit either from a synergistic acquisition of (Elders) rural services or continuing to win market share if sold to another entity."

Ruralco holds a stake of about 12 per cent in agribusiness and automotive interiors supplier Elders.

In September, Ruralco approached Elders to discuss a possible merger between the two agribusinesses, but no formal proposal was put on the table.

Elders began a sale process for its rural services business in late October, saying it wanted to sell it to accelerate returns to shareholders.

Ruralco on Tuesday booked a net profit of $13.8 million for the year ended September 30, down 7.5 per cent on the prior year amid falling commodity prices and variable seasonable conditions in cropping regions.

Ruralco in November had flagged a fall in annual net profit of five to 10 per cent below the $15.0 million profit recorded for 2010/11, blaming lower revenue from its wool and livestock businesses.

Despite the fall in overall group profit, Ruralco said its rural supplies, grain marketing and water and environment businesses all generated greater revenue and profits during the fiscal year.

Ruralco managing director John Maher said the outlook for the current financial year was "cautiously positive".

"Farm cash flows have been under pressure and much depends on growers capturing the benefits of current grain prices to build confidence levels into the 2012/13 financial year," he said in a statement.

"Relatively dry conditions persist in the summer cropping and horticulture regions of the country while subdued sheep, lamb and wool prices compared to last year are still impacting trading conditions, particularly in the southern markets."

However, Ruralco's grain marketing and water-related businesses were confident of a good year ahead.

Ruralco will pay a fully-franked final dividend of 10 cents per share, up from nine cents in the prior year.

Shares in Ruralco were two cents higher at $3.16 at 1048 AEDT on Tuesday.

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