Key Highlights

• Elders (ASX:ELD) completed the sale of Killara Feedlot Pty Ltd to Australian Meat Group on 30 June 2026.

• In February 2026 Elders announced it would sell Killara for about $195.8 million, made up of $122.0 million in cash and normalised Working Capital of $73.8 million, mostly cattle inventory, measured at 30 September 2025.

• The company said it intended to use proceeds to reduce net debt, targeting accounting Leverage below 2.0 times.

• Killara contributed $12.1 million to underlying Earnings before interest and tax (EBIT) in FY25, so the sale gives up a real earnings stream.

What does Elders (ASX:ELD)' exit from feedlotting mean for the rural services group as it approaches its next full-year result? In short, it turns a diversified agribusiness into a leaner distribution, livestock and property business, with the cash from the Killara Feedlot sale earmarked to reduce Debt just as new management takes over.

Elders (ASX:ELD) completed the sale of Killara Feedlot Pty Ltd to Australian Meat Group on 30 June 2026. Investors now have a reshaped balance sheet, a recently acquired crop-inputs Business to bed down, and a chief executive transition to weigh up.

The Killara sale and why it matters

In February 2026 Elders announced it would sell Killara for about $195.8 million, made up of $122.0 million in cash and normalised working capital of $73.8 million, mostly cattle inventory, measured at 30 September 2025. The company said it intended to use proceeds to reduce net debt, targeting accounting leverage below 2.0 times.

Killara contributed $12.1 million to underlying earnings before interest and tax (EBIT) in FY25, so the sale gives up a real earnings stream. Elders estimated the annualised hit to Earnings Per Share at under 1 per cent, and said carried-forward capital losses of $107.4 million would offset any capital gain.

Approvals from the Foreign Investment Review Board and the ACCC were obtained in mid-June, and completion followed on 30 June. The completion notice did not disclose the final net debt reduction, so the new leverage position will only be visible in the next set of accounts.

What Elders does and how it earns

Elders is a long-established Australian agribusiness serving farmers and regional communities. Its income comes from several linked lines:

• Rural products: crop protection, fertiliser and animal health products, sold through retail branches and wholesale channels, including the Titan Ag and AIRR businesses.

• Agency services: livestock and wool marketing, where commissions rise with prices and volumes.

• Real estate: rural and regional residential sales and property management.

• Financial services: finance broking and related services for farmers.

From 1 October 2025 Elders moved to a divisional model, reporting Crop Protection, AIRR, Rural Services, Delta Agribusiness and Real Estate separately.

The most recent results

For FY25, the year to 30 September 2025, Elders reported Revenue of $3,201.7 million, up 2 per cent. Underlying EBIT rose 12 per cent to $143.5 million and underlying net profit after tax rose 34 per cent to $86.0 million. Underlying earnings per share were 46.5 cents. Total dividends were 36.0 cents per share, 75 per cent franked.

The first half of FY26, to 31 March 2026, looked different on the surface. Underlying sales revenue rose 32 per cent to $1,767.7 million and underlying EBIT rose 33 per cent to $76.6 million, helped by the Delta Agribusiness Acquisition completed in November 2025, which contributed $10.4 million of EBIT in its first five months. Underlying Profit after tax rose 13 per cent to $37.9 million.

Operating cash flow more than doubled to $67.0 million. The interim Dividend was held at 18.0 cents, fully franked.

Sector conditions and competition

Rural businesses tend to move with farm incomes, and farm incomes move with rainfall, Commodity prices and input costs. That makes Elders' earnings less steady than a typical retailer's, even though its revenue base is spread across several activities.

Seasonal conditions drive the whole group. Elders said improved conditions supported the first half and that it was optimistic about the winter crop, after dry weather in South Australia and Victoria weighed on FY25 crop protection sales.

Competition is a constant. In FY25, localised competition and dry regions pressured retail and wholesale margins. Elders competes with national and regional rivals in rural inputs and agency work, and Delta's addition increases its scale in crop inputs, where management says synergies will be fast-tracked, with full benefits expected over three years.

Risks and uncertainties

Several matters could affect outcomes:

• Weather: a poor season would hit input Demand and farm spending.

• Costs: management flagged diesel prices as a second-half risk, though they had eased from March highs.

• Supply: fertiliser Supply disruption is being managed through back-to-back purchasing and diversified suppliers.

• Integration: Delta's earnings are weighted to the second half, so delivery matters, and the benefits of cost savings have yet to be proved.

• Technology: Systems Modernisation means running dual platforms until legacy AS400 use ends in 2027, lifting corporate costs in the meantime.

• Leadership: René Dedoncker succeeded Mark Allison as chief executive from 1 October 2026, a planned handover.

Funding looks steadier. Elders refinanced $465.0 million of syndicated bank facilities effective 18 May 2026, with the main Facility maturing in November 2029.

What to watch next

The business is also less capital-heavy without the feedlot, which carried cattle inventory and sizeable working capital. Whether that translates into a higher return on capital will depend on how Delta and the new retail systems perform.

Elders' FY25 result came on 17 November 2025, and a similar timetable would put the FY26 result in mid-November, although the date should be confirmed on the company's announcements page. Management said it expected a more encouraging second half. The result should show whether Delta, a full season of Killara-free operations and cost discipline delivered that, and how far net debt has fallen.