Agribusiness

Agribusiness

Trident Financial Group has intimate knowledge and offers you practical solutions to help take your agribusiness to the next level. We place a strong emphasis on the finances and operational aspects of your agribusiness, allowing us to pinpoint particular issues you’re facing.

With rapid population growth globally and a growing middle class in Asia, demand for agricultural produce has been on the rise. Set in an advantageous geographical position and an emphasis on high-quality local produce, Australia’s agricultural page-item is poised to take advantage of growing consumption in the Asia Pacific region. While becoming the centre of the food page-item may be ambitious, there is a clear opportunity to provide high-quality produce to meet increasing demand. Certain challenges like climate, investment and structural changes can halt the growth of this sector.

Key Factors Influencing the Industry

Structural

  • Ageing population and lack of proper succession planning.
  • Start-up capital costs serve as a barrier for the younger generation.
  • Corporatisation and consolidation.
  • Old infrastructure leading to high transport costs.

Financial

  • Lower returns on investment in comparison to other industries.
  • Lack of proper access to working capital and improper working capital management.
  • Debt sustainability within enterprises.

Environmental

  • Unpredictable climate conditions and land clearing laws.
  • Social and political changes can influence operations.
  • Land clearing and native vegetation laws.
  • Soil degradation and salinity.

Factors to Consider

Do you have trouble accessing stocking finance and short-term capital?

A key issue facing producers is the way the production cycle works, along with long lead times between crop inputs and receipt of funds. This can increase the demand for working capital support at different times in the year. Trident Financial Group is an expert at developing meaningful cash and working capital forecasting to help producers access short-term financing. We also help financiers better understand working capital needs of their clients, along with their capability to replay loans in the short term.

Are you struggling to repay and service debt? Do you know the level of sustainable debt for your business and how debt levels should fluctuate within the cycle?

Understanding sustainable debt within a sector like agriculture is crucial if businesses need to manage tough trading conditions due to low commodity prices or drought. Failure to do this can lead to accumulating debt that can be serviced in the long term, which can hurt future viability. Trident Financial Group helps businesses and financiers identify the sustainable debt of any business by looking beyond the debt levels based on loan to value ratios, which ensures that the business remains viable in the long run, along with offering insights into how debt can be reduced.

Is your business attractive for potential investors? Do they have access to the right financial and operational information to help them make informed decisions?

Rural businesses have traditionally been sold based on land valuations, rather than economic earning potential. Larger investors are looking for more valuable financial performance details for making informed decisions. We have worked with a range of agri-businesses and can help you prepare sale memorandums and supporting information to help better communicate your business value. This validates and highlights performance capabilities of your business, which can build on its attractiveness to purchasers by bringing down perceived risk and enhancing sales price.

We are highly experienced in thoroughly reviewing agribusinesses to give owners and investors better insights into performance. With so many uncertainties governing the page-item, these insights will identify and close gaps to ensure the best financial support is provided.