Expansion Investment and Chair Succession

Allied Farmers Ltd
201 Broadway, Stratford, 4332
PO Box 304, Stratford 4352

Phone: 06 765 6199
Web: http://www.alliedfarmers.co.nz
Email: headoffice@alliedfarmers.co.nz
22 June 2020

announce@nzx.com


EXPANSION INVESTMENT AND CHAIR SUCCESSION

Allied Farmers announces expansion of rural finance operation, investment in innovation,
and change of Chairperson.

The Directors of Allied Farmers Limited (“Allied” or “Allied Group” NZX:ALF) are excited to
announce a number of new initiatives and developments, aimed at materially strengthening
the Allied Group and which provide significant opportunities for growth. Importantly, these
initiatives will also allow Allied to achieve its vision of being a major solution provider to the
New Zealand rural sector.

Investment in growth of rural-focused finance business

The Allied Group has a well-established finance operation providing short term seasonal
livestock financing. The finance business has operated profitably and has given the Allied
Group significant experience in rural financing.

It has become apparent that New Zealand food producers are seeking sources of finance
from other than the traditional banks. As a result, the Allied Group has decided to invest in
the expansion of its financing operation.

The expansion will focus on unlocking potential for good food producing operators who are
constrained by traditional financing structures. Allied Group will continue to do this by
providing insight and advice, on time, on point and when it matters. Simple. Flexible. Easy.

Allied Group’s financing operation is chaired by Director and experienced rural banker Mr.
Ross Verry. In announcing today this expansion, Mr Verry said “Growing and expanding
Allied’s finance offering is a logical step forward for the Allied Group. This is an exciting
opportunity for us to invest in a way that supports cost effective financing solutions to New
Zealand food producers”

Innovation initiatives

Allied recognises that food producers are facing constant challenges relating to compliance,
technology, environment and market expectations. Allied believes that there are many
potential innovative solutions which can assist farmers to meet these challenges.

One such challenge was presented by the COVID-19 lockdown which forced the cessation of
livestock sale yard operations. Allied Group subsidiary New Zealand Farmers Livestock Ltd
(NZFL) demonstrated its ability to respond quickly and through the introduction of the world
leading innovative online/live sales process via its website MyLivestock, was able to provide
farmers with an effective means to buy and sell livestock in real time both on-site and on-
line.

The successful creation and deployment of this technology is an example of Allied’s strategy
to invest in innovation that will directly benefit food producers. Allied’s intention is to
continue to invest in these types of initiatives including:
• Further development of the MyLivestock website to enhance and improve this
service to farmers, leading to growth in its use.
• Investigate ways in which Allied can connect Agritech providers with farmers,
facilities and industry knowledge in order to trial, test and refine potential solutions
and products.
• Partnering with other companies and providers to develop a modest programme of
research and development aimed to identify and develop potential solutions.

Allied is conscious of the growing desire of consumers for products that are sustainable and
high quality, and, in addition to the above, is currently in the early stages of an investment
proposal to support the development of an important technology which will further
enhance the innovation reputation of New Zealand dairy farmers,. Allied’s intention is to
continue to evaluate and potentially invest in profitable and innovative technologies either
by strategic partnership or through direct investment within a disciplined and ethical
investment framework.

Capital Raising

To support these initiatives, and to enable Allied to achieve its goals, Allied is exploring
various capital raising options. These could include raising equity, potentially through an
SPP and a placement, and raising additional debt finance through a wholesale bond issue in
order to support the finance operations. Further details will be provided as these options
develop.

Change of Chair

The Board of Allied is also pleased to announce the appointment of current Director Richard
Perry to the position of Chairperson, effective from 1 July 2020. Mr Perry replaces current
Chairperson, Mark Benseman, who indicated to the Board earlier in the year that due to
personal circumstances he would have less time to devote to the role of Chairperson, as
2020 progressed. Mr. Benseman intends to remain as a Director of Allied.

Mr. Perry, on behalf of the Board, said: “We are very grateful to Mark for his valuable
insight, strategic thinking and drive during his time as Chairman. He leaves the Chair with
Allied in a strong position to be able to launch the initiatives announced today”.

Mr. Perry has for the last six months been providing advisory services to the Allied Group.
He has a wealth of experience and skills relevant to the current strategic direction that
Allied is following. Therefore, in addition to his role as Chairperson, Mr. Perry will continue
to provide advisory services to the Allied Group. Accordingly, Mr. Perry will not be an
Independent Chairman, and in recognition of this the Board has also resolved to appoint
Mrs. Marise James as Lead Independent Director with effect form 1 July 2020.

Further background on Mr. Perry is below.

Guidance

On 18 March 2020, Allied indicated it is expected that the FY20 second half result will be
significantly below the FY19 second half result and that the FY20 full year result will be
significantly lower than the FY19 full year result. This guidance remains current.

Despite the impact of COVID-19, the Board believes Allied remains strong and is well
positioned to capitalize on the opportunities that are available to the New Zealand
agricultural sector. New Zealand is well placed to be a significant supplier of food products
to the world’s growing population and Allied is committed to providing solutions to the rural
sector to realise that aspiration.

Mark Benseman
Chairperson


Richard Perry

Mr Perry was appointed a Director of Allied Farmers Limited in June 2019. He has a strong
knowledge and experience of the agribusiness, finance and technology sectors. He has previously
held senior finance and executive roles at the Reserve Bank of New Zealand, Landcorp Farming Ltd
and Callaghan Innovation and has been a Technical Advisor to the International Monetary Fund. He is
currently a member of the External Reporting Advisory Board and Director of Business Applications
for Rocket Lab.
As an experienced company director he has acted for several company boards across the agri-tech,
property and food and beverage sectors including start-ups, mergers and established companies.
He has the following qualifications: B Com (Hons), F.C.A (Fellow of Chartered Accountants Australia
and New Zealand) and CTP (Certified Treasury Professional).