Livestock Improvement Corporation Limited (NS) Analysis

Overview

LIC is a New Zealand dairy farmer owned co-operative which empowers livestock farmers through the delivery of superior genetics and technology.

With origins dating back to 1909, LIC has a long history of world-leading innovations for the dairy industry.

All LIC profit is returned to its 10,300 farmer owners/shareholders in dividends or re-invested in new solutions, research and development.

LIC listed on the NZAX market in April 2004. Following the closure of the NZAX, LIC migrated to the NZSX on 1 July 2019.

LIC's Non-Standard designation continues, reflecting that trading in its Ordinary Shares is restricted to dairy farmers who qualify to be shareholders through their use of LIC products and services and its co-operative company status. A copy of the waivers granted to LIC is available on LIC's NZX page, in the documents section.

Performance

The following information was extracted from Livestock Improvement Corporation Limited's interim results, released on 22 January 2025:

Livestock Improvement Corporation (LIC) is pleased to present its half-year financial result for the six months to 30 November 2025.

Summary of financials*:

• Total Revenue: up 5.2% at $195.2 million
• Net Profit After Tax (NPAT): $33.8 million, down 13.5% from the same period last year
• Underlying Earnings: $36.8m, up 9.3% from the same period last year
• Underlying Earnings forecast range at year-end: $20-24 million, no change from the market update in November 2025

*Notes to financial information:

• LIC’s half-year result incorporates the majority of revenues from core artificial breeding (AB) and herd testing services, but not a similar proportion of total costs so are not indicative of the second half, nor the full year, result.
• These numbers should be read in conjunction with the financial details in the Interim Report and 2025 Annual Report.
• Figures have not been audited, with the exception of 31 May 2025 comparatives.
• Underlying Earnings: this is NPAT excluding bull valuation and nil paid share valuation movements and is considered useful to investors as it is the basis on which LIC has historically reported and determination of dividends. Non-GAAP financial information does not have a standardised meaning prescribed by GAAP and therefore may not be comparable to similar financial information presented by other entities.
• Bull team valuation: LIC’s elite bull team is its largest biological asset, valued at $101.2 million at half-year (no change from May 2025). This valuation comprises a model that looks at future revenue streams and costs associated with the current bulls owned, discounted back to current value.
• Market guidance is provided on the basis that no significant events, including climate events, or milk price change takes place between now and year-end.
• During the period LIC embarked on a multi-year investment into customer facing systems and process improvements. This is an important initiative to replace aging systems and improve customer experience, making the co-operative easier to work with. The investment is predominantly into Software as a Service (SaaS) tools, the costs of which are generally expensed as incurred, rather than amortised over future financial periods. As a result, Net Profit After Tax (NPAT) has been negatively impacted by $3.0m implementation costs incurred in six months to 30 November 2025 and this expenditure has been excluded from LIC’s Underlying Earnings.