Operator: Thank you for standing by, and welcome to the PGG Wrightson Full Year Results Announcement. [Operator Instructions] I would now like to hand the conference over to Mr. Stephen Guerin, Chief Executive Officer. Please go ahead.
Stephen Guerin: Thank you, Ashley. Good morning, and welcome to the PG Wrightson results presentation for the financial year to 30th of June 2026. As Ashley has introduced, I'm Stephen Guerin, the Chief Executive Officer of PGG Wright. It's my pleasure today to provide a brief overview of our results for the financial year to June 2026. With me on this webcast are Peter Scott, our CFO; and Julian Daly, our General Manager of Corporate Affairs, who is also the Company Secretary. During the call today, I will cover the year's financial results, our trading performance, key themes and initiatives and some thoughts on the year ahead. There will be some time for questions at the end of the call, both on the telephone call and via the new technology we're using today for those who want the webcast and the slide deck and which you'll send details when you've been registering for the webcast. Julian Daly will be acting as moderator for those questions on slide deck. Before I start today, I'd like to acknowledge PGW's 175th year anniversary. Since May 1851, when George Gould opened first general store, PG Wrightson and the businesses that have come before have walked alongside farmers and growers adapting to changing markets, new technologies and shifting needs of our rural communities. The predecessor companies include Pyne Gould Guinness, Wrightson NMA, Dalgety, and Williams & Kettle [indiscernible] business and many more. As we like to say, the PGW today leverages our 175 years of heritage while embracing innovation to shape the future of agriculture. Turning to our financial results. I'll comment briefly on our headline results for the year ended 30th of June 2026. Operating revenue of $1.1 billion, up $99 million or 10% on the prior financial year. Operating EBITDA of $64.3 million, up $8.2 million or 15% on the prior financial year. Net profit after tax of $15.6 million, up $4.9 million or 46% on the prior financial year. Earnings per share of $0.26 per share, up $6.5 per share on the prior financial year. Cash flow from operating activities of $52.6 million, up $4.2 million on the prior financial year. Cash flow from operating activities of $52.6 million, up $40.2 million on the prior financial year. Falling included a final dividend of $0.0055 per share which is $0.10 per share for the full year has been declared by the directors. Our FY '26 results reflect progress across market -- 3 strategic key performance indicators measures that contribute to our long-term success. That's the financial performance, our safety performance and the experience we deliver to our customers. In terms of each of those measures, our EBIT KPI, which is normalized earnings before interest and tax of greater than 10%, normalized over 3 years on a rolling cycle. FY '26 result, we achieved this measure with a growth of 91% over the 3 years rolling cycle, reflecting significant increase of earnings, a target of 10% growth in return on capital over the 3-year rolling cycle. We missed this measure with an average of 8.1% over the 3-year rolling cycle, impacted by the tough market conditions we experienced in FY '24. Our earnings per share target for FY '26 of $0.157. We exceeded our earnings per share target with our $0.206 per share result, benefiting from much lower improved operating result across the rural supplies, livestock and real estate businesses in particular. safety performance, the continuous annual improvement of PGW's total recordable injury frequency rate. And I'm pleased to report that at PGW report a 3.5% decrease in our TRIFR compared to the prior year. Ensuring our people return home safe and well days is a clear priority, and we are committed to building a stronger and safer and orientated culture within the business. Our customer experience KPI, which is continuous annual improvement on PGW's Net Promoter Score measures. Independent market research has confirmed a significant year-on-year increase in PGW's Net Promoter Score in FY '25. Through FY '25 [indiscernible] KPI. Given the importance of customer experience to sustainable business performance, we focus on continuous improvement in this widely used measure of customer satisfaction and based on customers' willingness to recommend our business to others. In the brief highlights, our strategy continues to guide decisions making across the group, providing a framework for investment, innovation and growth. By refocusing our prioritized economic drivers, we have strengthened our customer offering, enhanced operational capability and continue to build on PGW's as a trusted partner to farmers and growers. During FY '26, we made further progress on several initiatives designed to strengthen our customer offering, building technical capability to support long-term growth during the year included the acquisition of Nexan, the manufacturer of Vetmed and Centramax animal health brands, which has been distributed through the [indiscernible] rural supplies and food supply stores, other rural merchants and practices. Nexan provides a strong strategic fit to this integration strategy and builds out our animal health product offering. Establishing our private label portfolio of rich agrochemical active ingredients, which improves our supply chain resilience and provide customers with greater choice. Our new R&D facilities, which expanded our R&D capability through investment in a dedicated R&D station Hastings, supporting innovation and accelerating the delivery of e-based solutions for farmers and growers -- our livestock supply chain partnerships gained momentum during the year with increasing volumes being directed through preferred channels. [Indiscernible] recorded a 2% reduction in operating greenhouse gas emissions from the FY '21 baseline. This figure is currently ongoing assurance checks and so we have some caution to confirm that in due course. This is primarily attributed to the continued rollout of our hybrid vehicles into our fleet. Dairy real estate sales volumes increased 30% and [indiscernible] sales volume increased 60% year-on-year. We expanded our GO-stock offering to provide farmers with greater financial flexibility while supporting long-term customer growth and business consolidated activities into a national option, a single marketplace to maximize buyer participation and competition grow across New Zealand. Our platform market penetration continued to deepen the market penetration for this product to expand digital livestock networks, increasing transaction volumes and provide customers with greater market access and flexibility. Approximately 30% of all our [indiscernible] bids were placed through the bidder platform, reflecting the growing role of digital participation in livestock markets. The strong seasonal nature of our business means most of our earnings occur in the first half of the financial year. Retail [indiscernible] business contributes more strongly in the first half reflect the strong spring trading activity. Livestock typically generates a large portion of its earnings in the second half of the year due to the timing of livestock transactions and dairy forward contracts. Revenue of $1.1 billion represents an increase of $99 million or 10% over the prior year. This marks the first time PGW has exceeded $1 billion in revenue since the divestment of PGG Seeds in 2019, which is a positive indicator of the continued growth of our business. The Retail Water operating revenue of $51.2 million was up $8.3 million or 10%. Our agencies Group operating revenue was $221.5 million, up $20.5 million or 10% -- turning to each of the business units within the first quarter. This business recorded operating EBITDA of $44.5 million, an improvement of $2.3 million or 6% from the prior year's results. The Rural supplies business benefited from reinvestment in on-farm activity by our customers. Rallies delivered strong results supported by favorable market conditions and sales execution across the business. Far confidence remain positive across most sectors supporting increased on-farm spending and investment. Our Fruitfed Supplies business experienced a solid year with increased revenue despite challenging conditions across parts of the horticultural sector. Market conditions varied across the sectors during the year. The fruit sector remained a key contributor to performance, supported by ongoing development and continued investment across the industry. The graph wine sector remains subdued with reduced harvest and lower wine production impacting demand across several product categories. Our farming also experienced lower returns continuing to constrained margins. Turning to our Agency business. The Agency business delivered operating EBITDA of $29 million, up $5.5 million or 23% on the prior year's results. Our livestock business saw elevated livestock prices across sheep, cattle and dairy markets, supporting an outstanding financial result for the livestock business. Favorable international demand for meat and improved farm economics, stronger farmer confidence and robust buying interest from farmers and result was broadly in line with prior year, albeit a small reduction in volumes transacted. New Zealand's wool industry experienced record prices, with prices reaching their highest levels in decades. Prices nearly doubled and growers experienced improved returns. Our export business, Bloch & Behrens New Zealand Limited, increased export volumes into key international markets, particularly Europe, despite an overall decline in production. PGW consolidated auction activities into a national open cry auction marketplace to maximize participation and competition across New Zealand. Our real estate FY '26 results saw a significant uplift in real estate activity resulting in improved performance. Seasonal conditions have been largely positive for farmers and growers over the past year, and as I've already noted, I call out a few points on the slide including the dairy sector benefiting from Fonterra's forecast milk price, and farm returns in key markets such as dairy, red meat and horticultural categories, notably kiwifruit. Continuing challenges in the space and viticulture and the wine sector responding to changing consumption habits inverse. Net profit after tax. Our net profit after tax of $15.6 million was an increase of $4.9 million or 46% on the FY '25 year result. a result of improved operating EBITDA result versus FY '25 fair value gains on foreign exchange derivatives. This year includes the full amortization expense for the Microsoft D365 enterprise reporting platform that went live in April 2025. The group reported strong operating cash flows of $52.6 million, an increase of $42.2 million versus FY '25. This resulted from improved financial performance of the business along with favorable working capital movements compared to the prior year. Operating cash flows represent the cash generated by PGW's day-to-day trading activities and is a key measure of the group's ability to convert [indiscernible] into cash while funding working capital and support Cash flow from investing activities. Investing cash flows of $24.5 million, an increase of $10.3 million from FY 2025 reflects a combination of growth through the Nexen acquisition and ongoing investment capability and technology to support the group's long-term strategy. The acquisition of Nexan a strategic capital allocation decision designed to strengthen PGW's market position and expand earnings opportunities. Our working capital saw a $7.3 million increase in working capital, which was largely driven by the growth of our gross stock book, reflecting continued customer demand for livestock financing solutions and higher livestock prices. The investment in GO-STOCK receivables supports a core strategic initiative and contributes to strengthening customer engagement. Underlying working capital reduced, reflecting a continued focus on inventory and receivables management. Net debt is otherwise referred to as NIBD. The group ended the year with NIBD of $2.4 million higher than the prior year, reflecting the strong operating cash flows and strategic investments undertaken during the year. The group has maintained a prudent balance sheet with the funding of the Nexan acquisition and the growth of the GO-STOCK portfolio. On a like-for-like basis, excluding the strategic growth investments, NIBD reduced, highlighting the strength of the underlying cash generation performance within the group. The small increase in debt versus the prior year demonstrates the group's continued focus on cash flow management [indiscernible] and capital efficiency to support growth and strengthen PGW's market position. Since August 2029 share consolidation, PGW has delivered total shareholder return of 44.6%, exceeding the NZX50's 25.5% by 19.1 percentage points over the same period. Turning to outlook, [indiscernible] agriculture FY '27 from a position of relative strength, supported by healthy international demand and favorable conditions across key market sectors. Strong returns of red meat, dairy and horticulture continue to provide positive momentum for New Zealand supporting farmer profitability and investment. While the outlook is positive, we've seen a start to FY '27, some areas of challenge remain. Geopolitical tensions, supply chain disruptions, elevated input costs and potential impact of the dry farming conditions continue to present risks. Dry conditions in a number of key farming and horticulture regions could impact production, cash flows and customer confidence. In addition to this, we have dynamics, which may contribute to caution. -- farm is also expected to remain challenging in the near New Zealand recently signed New Zealand-India free trade agreement, which provides additional optimism for future growth through improved market access. Although conditions across the sector remain favorable, the critical spring trading period remains ahead of us, and it's too soon to provide guidance on the expected FY '27 performance. PGW expects to be in a better position to provide FY '27 guidance at our 30 October Annual Shareholder Meeting. In closing, I'd like to acknowledge the dedication of our people across the country and thank our customers and shareholders for their continued support and trust. This concludes our 2026 financial presentation. I open the webcast for questions along those on the telephone. And thank you very much for participation. As I'll now hand back the slide to remind you for those on the web quest.
Operator: Thank you very much. [operator instructions]. There are no phone questions at this time. I'll now hand back to Stephen Guerin.
Julian Daly: We have one question through on here, so I'll just read that out. The outlook commentary remains positive. What is the biggest risk to achieving another strong result in FY '27?
Stephen Guerin: Thanks for that question. And that was Julian's voice of the background who's acting as a moderator for today the background as moderator today. The risks in terms of the FY '27 results fall into 2 areas. The commodity cycle price position that impacts returns for our growth and underpins the confidence it builds and there are 3 sectors that at the moment, you would say that the commodity price cycle looks positive, whereas there is certainly uncertainty and increased commentary about the impact of El Nino out there. Time will tell as to how that actually plays out because it is a forecast.
Julian Daly: Another question online regarding the Nexan acquisition. The question is how has Nexan performed relative to the acquisition case for the business and we would be likely to see the full benefits of this acquisition being realized?
Stephen Guerin: We are very pleased with having the Nexan business as part of our family. We've had a relationship that goes back over 10 years with the business and we saw a really strategic opportunities to invest in the business to grow both the Nexan business and PGW as well. The business has settled in well. We have good data around what -- how the business was before the acquisition and has traded ahead of expectations in terms of that. We have a number of initiatives underway in terms of future product portfolio growth, and they have actually traveled with the Nexan team and China just the last few months to visit some of the suppliers, I'm confident that that's going to be delivered on a starting from this year. And we're welcome to see that provide a return to our shareholders and to our [indiscernible] opportunities. Animal Health is one of those areas where we haven't seen a lot of innovation in the marketplace. So [indiscernible] strategic investment underpins our performance, and we're really confident that will perform ahead of expectations because they're focusing in the first 11 months of business within our organization. has settled in around how the business performed.
Julian Daly: I have a follow-up question on Nexan. Have the -- other stock in Station or big companies like [indiscernible] stopped selling Nexan and Fitment products since the acquisition?
Stephen Guerin: No. They continue to support the product brands. So that's just very pleasing to see. We were very transparent. We have a team that's engaged with those customers. As we see that we do treat them as customers and they continue to support the brand.
Julian Daly: Another question. has AI disrupted the work of our technical advisers somewhat?
Stephen Guerin: That's a really good question. Right at the moment, the short answer is no. There are certainly a number of AI tools out of the marketplace. Customers are experimenting with those. We ourselves are experimenting with those. We have the research facility, I spoke about earlier on in the Hawk's Bay. We're in the process of setting government digital twin for that research facility. So we're going to see that -- we can model send scenarios of that environment. And it's an area of investment for us. We have both in terms of the technology and staff that are -- we've got our teams to support the innovation that we're seeing. And we continue to monitor what's going on in the world as well. I tend to travel -- it's an effort to see what's going on. Our observation at this point in time is New Zealand is well placed around innovation, and we have pieced out there well placed. The challenge is not going to bleeding edge on the stuff as well.
Julian Daly: Other question in relation to the Nexan acquisition, can we disclose the Nexan revenue, EBITDA and EBIT?
Stephen Guerin: [indiscernible] to turn to you because we do have we've got some information in our financial reports.
Peter Scott: Yes, we. This is Peter Scott here actually. We do actually disclose the financial accounts that Nexan revenues of $8.1 million generated a net profit after tax of $1 million. We don't really go into EBITDA because that's commercially sensitive. But as Stephen mentioned before, the 11 months, been very positive from an acquisition point of view, and we're very pleased with the performance of Nexan.
Stephen Guerin: But that notes [indiscernible] of the financial stress.
Julian Daly: [indiscernible] operating cash flow increased significantly during FY '26. How much of this improvement is sustainable versus being driven by timing impacts of working capital movements?
Stephen Guerin: It's sustainable to the extent that we're reliant on the performance, strong performance and commercial opportunities our customers are receiving. We, as a business, are equally focused on working capital. And we've got a number of initiatives underway in terms of our planning of our inventory. As we go further up to supply chain as a business, we need to take greater control and deliver a better planning for our working capital and as said, we've got a number of editions underway in their space. And I'm really pleased to see that the retail team, in particular, which were most of our working capital from an inventory perspective is concentrated. I have that as a major project within their business. The cash flow cycle, we're monitoring what's going on with [indiscernible] business. We want to -- we scan across the sector as well. and going to pure information with our banker bank syndicates. And in the near term, we are confident around the cash flows of our position of our business. You'll see in our notes that we have reviewed our banking facilities of both the financial statements, and we've modeled out our cash flow as part of that process out over the next few years, and that gives us some confidence based on the underlying results we are protecting in the business.
Julian Daly: Question now in relation to net debt, Do we intend to reduce net debt over FY '27?
Peter Scott: Well, as Stephen just mentioned, cash flows were strong FY '26 operating cash flow being $52 million. It depends on the year ahead from a performance from an EBITDA performance, of course, and we constraining our net working capital. However, if there are growth opportunities such as investment and GO-STOCK product, then we would -- then that might lead to an increased net debt. But we've seen this year that [gold] has gone up $7 million and that we would want that to continue to grow actually is one of our strategies. If you look in the Nexan financial statements, too, you'll see that we've expanded our facilities with banks to an upper limit of $265 million from $185 million. And a lot of that is to account for continued growth in the GO products. So depending on what happens over the year, we could see an increase from a GO perspective.
Stephen Guerin: Thank you, Peter. And now is the support of our directors around the continued investment in the business, the likes of the Nexan acquisition, the ability to grow the Go product and we talked last year's result that part of our strategic initiatives was looking at acquisitions that will grow the business. Some of those are through the investment in products and services. Some of those are lots of new initiatives such as an Nexan acquisition and then the growth of the GO products. So those things are already within our business.
Julian Daly: Two related questions to that topic. What is the [indiscernible] size of the Go stock book and how do we balance growth against credit risk in funding requirements.
Stephen Guerin: We haven't given anywhere in our market commentary that market sensitive around our appetite for growing the grow product, but it is there. We have given a specific target around that. In terms of the market credit risk we have a team that operate across the country. We have a senior leader on that, who's well experienced within our business. We measure both concentration risk for species type, our areas across the country, and we're monitoring the price of the underlying market in terms of the sector. And we monitor those on a monthly basis. And we've -- part of our management reporting systems and through up to the Board as well. So we are -- the other point about this is that we have long and deep relationships with our customers in this space. And we're doing the other trading activity. So it's still as if we're solely having a relationship around the GO product, we have the other farm inputs and other activities. So we are seeing what's going on in the whole farm system rather than just the lending facility of the GO product.
Peter Scott: I'd just add to that, Stephen, that although we don't have a target, you will see in the [indiscernible] accounts that we have facilities up to $115 million for Go and that's about fund 90% of the GO stock. So that's one thing we do. We do disclose in the accounts.
Julian Daly: [indiscernible] question in relation to Nexan, does the successful integration of Nexan increase the likelihood of further acquisitions?
Stephen Guerin: The short answer to that is yes, it does. If you can bring a business into the [indiscernible] to the PGW Group. So this was a privately owned business a small business, tightly held coming into the shape and size of PGW is different. That's the reality of things. To be able to do that successfully demonstrates to both management to those staff that come as part of the acquisition, and to our Board and to our shareholders that we can actually manage acquisitions successful right part of the business is concerned. So I'm sure that if the feedback was discussed in their Board that we have a good business case, good strategic risks in line with our broader strategy as a business in the key market segments that they would support us obviously, is subject to the working capital constraints of the business as well.
Julian Daly: Slightly longer question here now. Retail & Water revenue was up approximately $31 million and EBITDA was up just $2.3 million. What does PGW doing to demonstrate operating leverage and very little increased revenue in making EBITDA. Is the increase in review mostly from price inflation or actual revenue growth.
Stephen Guerin: Thanks for the question. And as you acknowledged, [indiscernible] longer question. So the revenue was up, as I noted, those facts, as outlined are correct. We did see -- as I talked about in my commentary, we did see some variation in terms of the underlying market sectors from a horticultural perspective on the [indiscernible] Supplies business. The great market is close to 40,000 hectares of graphs and that potential sector has seen a downturn in [indiscernible] sector. We've seen some areas actually been pulled out from a grade perspective. I think wie globally [indiscernible] consumption has fallen 4% annually year-on-year, and we have -- that's certainly impacting our business. There's been some -- [indiscernible] an apple market perspective. We've seen some variability in that [indiscernible] customer form stronger not so strong there. And so that's impacted the business. So conversely, the [indiscernible] performance to support the [indiscernible] growth. If we look at our underlying results from a customer engagement so perspective, the business continues to perform strongly and our gross market share.
Peter Scott: Yes. Just adding to that point that Steve's mentioned lost revenue has grown really presently, you would see from our notes of the accounts that we have taken an impairment charge over 1 large receivable and that's influenced our EBITDA for the Retail & Water segment. So that's the reason -- that's the main reason actually that whilst revenue has grown, EBITDA has not grown in the same percentage for us.
Julian Daly: We have a question here on Blue ag quite labeled product. The Blue ag has completed its first full trading season. What are the early indicators that we're seeing around customer adoption, margins and market share opportunities.
Stephen Guerin: There has been strong adoption from our clients. This was a key strategic initiative. We've seen the rise of the generic chemistry within the marketplace. PGW has positioned itself well. We've been in relationships with a number of the suppliers in this space for a period of time. And then we've therefore expanded the range within our network. In terms of that process, we made sure that our staff are well briefed including some staff, a number of staff had traveled to our suppliers to understand their manufacturing process insurance on quality, et cetera. And that's flowed through to the market adoption by our clients. The fact that PGW is prepared to put its brand name on the particular products, [indiscernible] and the support networks across the country in terms of [indiscernible] to support those products more to marketplace. As you go up supply chain, the reality is that you are able to do great margins. And that's what we've been able to achieve. We've got further expansion plans for this [season] ahead of us both in terms of sales volumes and in terms of the number of products that we have in the marketplace.
Julian Daly: We have a question here. which business units contributed most to FY '26 earnings growth? And where do we see the biggest opportunities for further improvement.
Peter Scott: It's Peter here. So the biggest, I guess was from the livestock business. The livestock business is actually -- you would have seen red meat prices were very strong throughout the whole year and continue to strengthen over the year, so that's been one of the major contributors. The real estate business was also very positive during the year with commodity prices being so strong. That's given confidence for what for the rural real estate side of the business. Rural supplies also the rural supplies business was a strong contributor to and also the inclusion of Nexan helped us a lot, too. So rural supplies in the trade business and our agency business itself livestock and real estate contributed mostly.
Stephen Guerin: Rural supplies business has a concentration customer base around the dairy the red meat customers. So those underlying commodity price returns drove the performance of that particular business unit. But we all have sent that. We've also seen some market share growth in those particular business as well.
Julian Daly: That's all the questions through on Slide deck.
Stephen Guerin: Thank you, Ashley. I'll turn the call back to you. Is there any last questions that we may have had on the phone line.
Operator: Thank you. There are no questions on the phone line at this time. I'll hand back.
Stephen Guerin: Thank you, and I wish you all a good day ahead. And thank you for your time and listening to this presentation today. And now we wish you all our customers, a good spring because that is key to the success of the PGW business. So thanks very much.
Operator: Thank you.
