Half Year Results to 31 December 2021

Allied Farmers Ltd
201 Broadway, Stratford, 4332
PO Box 304, Stratford 4352
Phone: 06 765 6199
Web: www.alliedfarmers.co.nz
Email: headoffice@alliedfarmers.co.nz

28 February 2022

HALF YEAR 2022 REPORT

Unaudited Half Year Consolidated Result
The Directors of Allied Farmers Limited (AFL.NZX) report an unaudited consolidated net profit
before tax (NPBT) of $1.438 million for the six months ended 31 December 2021. This is above the
updated HY22 NPBT range of $1.2m to $1.4m provided to the market on 28 January 2022.
The following table summarises consolidated NPBT over the previous interim periods from Allied
Farmers’s investments and Parent Company Operations:
Interim Period
(1 July – 31
December)
NZ Farmers Livestock *
(livestock agency, meat
export and finance)
($m)
NZ Rural Land
Management
(asset management)
($m)
Parent Company
Cost of Operations

($m)
2017 0.4 - (0.3)
2018 1.5 - (0.2)
2019 1.7 - (0.4)
2020 0.8 - (0.3)
2021 1.5 0.3** (0.4)
*Reported figures displayed detail 100% of the NPBT for NZFL – Allied Farmers only owns 67% of this business. Allied Farmers is required to report
on a consolidated basis but has detailed an unconsolidated position below.
** The NZRLM profit of $0.3m stated in the table above is attributable of Allied Farmers shareholders (i.e NZRLM’s total NPBT was $0.6m)

This higher result reflects the inclusion for the first time (for an interim period) of the NZ Rural Land
Management GP Ltd (NZRLM) contribution. In addition, the NZ Farmers Livestock Limited (NZFL)
contribution was considerably higher than the previous interim period, driven by substantially
stronger revenue from its Farmers Meat Export business.

Profit attributable to Allied Farmers’s shareholders reflecting its 67% ownership of NZFL and 50%
of NZRLM
The HY22 after tax profit attributable to Allied Farmers’ shareholders was $1.059 million (HY21
$0.228 million). Earnings per share (EPS) for HY22 was $0.0368 (HY21 $0.0079).

Dividend & Net Tangible Assets Per Share
Consistent with previous interim periods, no dividend will be paid for the period as the Company
continues to retain capital.
As indicated at the Annual Meeting last November, the Board’s view is that in the short term,
retaining and redeploying earnings is in shareholders’ best interests, particularly as the
Independent Directors consider various funding options if Allied were to recommend calling its
option to acquire the 50% of NZ Rural Land Management it does not already own (see further
comment under “Focus for 2022” below).
Allied Farmers Net Tangible Assets (NTA) per share based on 67% direct ownership of NZ Farmers
Livestock, and 50% ownership of NZRLM as at 31 December 2021 equals $0.42 cents per share
(versus $0.32 cents per share as at 31 December 2020).

Business Segment Reports
Livestock Agency
The livestock agency result reflects the negative impacts of Covid and unfavourable weather.
Clients and agents have benefited from the continued development of our MyLiveStock digital
platform, which provides important options in the face of Covid challenges. We continue a focus
on agent team development and provision of supporting tools.
Farmers Meat Export
The vast majority of NZFL’s earnings for the period were contributed by Farmers Meat Export. It
benefited from a faster than anticipated recovery of product prices, maintenance of stock tallies,
and an earlier than usual sale of the main Spring production. The latter has removed any export
logistics risk, and reflects the value of the contracted arrangements in place. This was a very strong
result, built upon close management and the procurement performance of our livestock and wider
team.
Farmers Meat Export shortly commences its autumn processing, which is anticipated to be at
similar levels to last year. Our processor has appropriate Covid management arrangements, and
we have good confidence for the more major Spring campaign mid-calendar year.
Livestock Finance
The contribution from our Livestock finance activities was slightly below last year due to buoyant
livestock and dairy prices, funder constraints on the scope of lending, and repayment late in the
period by several larger borrowers. We are exploring initiatives to diversify and grow this business
in a capital efficient manner. Good progress has been made with our Lambplan (store lamb) lending
initiative which will incrementally add to the finance offering.
NZ Farmers Livestock Outlook
Stock values are generally high, and while Covid presents some risk, particularly to primary
processing and the pricing of some stock, any issue that may develop may also raise agency trading

volumes. We expect significant improvements in livestock trading activity for the balance of the
year due to these higher prices, the return to more favourable weather patterns nationally, good
herd sales activity, and reducing Covid impacts.
Dairy herd forward sales are arranged throughout the financial year but not accounted until
contracts settle late in the financial year. With dairy farm sales activity and a higher milk pay-out,
these contracted sales levels are appreciably ahead of last year, and we expect to see a significant
earnings contribution late in the second half of the financial year.
As in many previous years, the returns from Farmers Meat Export continue to be a major
contributor to first half year performance. However, investors are reminded that typically Allied
Farmers’s second half year profit is driven by factors distinct from this business that drives first half
year profit. The second half is strongly influenced by livestock trading and herd sale activity, much
of which will occur in the later part of the second half, and therefore while it is not possible to
forecast full year profits based on first half performance, the anticipated trading environment
should ensure a pleasing full year result.
NZ Rural Land Management Partnership (NZRLM) – Manager of NZX-listed New Zealand Rural Land
Company (NZL.NZX)
NZRLM contributed $0.3m to Allied Farmers in the interim period, during which NZL completed two
acquisitions.

The first acquisition, completed in August 2021, was a 493-hectare hybrid dairy farm located in
Waimate, South Canterbury. NZL has entered a put and call options deed where interests
associated with the vendor may call for the repurchase of the property from NZL at any time.

In addition, NZL will have the option to put the farm to the vendor and require it to purchase it
back in approximately two years. The purchase price will be $12m plus 4.66% per annum in either
case.

NZL's second acquisition was a portfolio of six large scale dairy assets in Maniototo, Central Otago,
totalling approximately 3,500 hectares. The portfolio comprises a mixture of productive dairy
platforms, support farms and modern infrastructure. The purchase price for the farms was
$60.640m.

The Manager continues to investigate further investments to increase sector and tenant diversity.
NZL has an attractive acquisition pipeline, with the Manager progressing due diligence on several
new opportunities at present.
NZRLM Outlook
It is not possible to provide a forecast for NZRLM but as stated above NZL has an attractive
acquisition pipeline, with NZRLM as Manager progressing due diligence on several new
opportunities at present.

Focus for 2022

The Allied Farmers’ Board continues to focus on growth in earnings per share and careful
consideration of how it can utilise its strengthening balance sheet to build value for its
shareholders.

Specifically, investors will be aware that this year the Independent Directors will need to consider
whether Allied Farmers wishes to recommend calling its option to acquire the 50% of NZRLM it
does not already own. Whilst the call option can only be exercised after 18 December this year,
the Independent Directors are mindful that significant preparatory activity is required to inform
and enable any decision. This work includes the timing of making any call (the option expires on 18
December 2023) and the mechanism for funding.

Mark Franklin
Chair

Results for announcement to the market
Name of issuer Allied Farmers Limited
Reporting Period 6 months to 31 December 2021
Previous Reporting Period 6 months to 31 December 2020
Currency
Amount (000s) Percentage change
Revenue from continuing
operations
$15,192 +16.01%
Total Revenue $15,192 +16.01%
Net profit/(loss) from
continuing operations
$1,438 +170.81%
Total net profit/(loss) $1,438 +170.81%
Interim/Final Dividend
Amount per Quoted Equity
Security
No dividends proposed
Imputed amount per Quoted
Equity Security
N/A
Record Date N/A
Dividend Payment Date N/A
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$0.47 $0.32
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Refer to results release and unaudited financial statements.


Authority for this announcement
Name of person

authorised
to make this announcement
Brian Lee
Contact person for this
announcement
Brian Lee
Contact phone number 027 201 3040
Contact email address brian.lee@alliedfarmers.co.nz
Date of release through MAP

28/02/2022

Unaudited financial statements accompany this announcement.

Allied Farmers Group
Profit and Loss Statement
For the 6 Months Ending 31 Dec 2021
Unaudited
Dec
Jun
Dec
202120212020
$000
$000$000
Revenue and other income15,192
21,661

13,095

Cost of sales and operating expenses(13,398)
(18,594)(12,218)
Depreciation and amortisation(466)
(827)(428)
Net interest income110

241
97
Profit before tax1,438

2,481
546

Income tax (expense) / benefit
-
95 (15)
Profit after tax 1,438
2,576
531

Total comprehensive income
1,438
2,576
531

Profit attributable to:
Shareholders of Allied Farmers Limited ('Allied')
1,059

2,021
228

Minority shareholders of NZ Farmers Livestock Limited ('NZFL')
379
555
303

Basic Earnings per share (cents)
3.68
7.02
0.79

Statement of other Comprehensive Income
For the 6 Months Ending 31 Dec 2021
Unaudited
Dec
Jun
Dec
202120212020
$000
$000$000
Profit after tax 1,438
2,576
531

104
(135)
-

Total comprehensive income
1,542
2,441
531

Change in value of investment in equity securities
Group
Group
1

Allied Farmers Group
Statement of Cash Flows
For the 6 Months Ending 31 Dec 2021
DecJunDec
2021
20212020
Cash flows from/(to) operating activities$000
$000$000
Cash receipts from customers17,765 21,815 17,708
Interest received312 631 317
Distribution from NZRLM400 350 -
Cash paid to suppliers and employees(17,960) (18,119) (16,177)
Interest paid(202) (389) (218)
Income tax received/(paid)(62) 213 322
Net cash flow from operating activities253
4,501 1,952
Cash flows from/(to) investing activities
Decrease (Increase) in finance receivables NZ Farmers Livestock Finance Ltd/Rural Financial SolutioNZ Ltd
(208)
(1,559) (1,811)
Acquisition of New Zealand Rural Land Company Limited shares
(660)
(1,130) (1,121)
Rights Issue of shares in Allied Farmers Limited
-
2,686 2,706
Purchase of shares in NZ Farmers Livestock Ltd
-
(28) (11)
Acquisition of intangibles, property, plant and equipment *
(249)
(847) (199)
Net cash flow from/(used in) investing activities(1,117)
(878) (436)
Cash flows from/(to) financing activities
Drawdown of finance receivables borrowings
1,000
- 1,500
Repayment livestock trading borrowings
(221)
(448) (217)
Repayment of vehicle finance borrowings
-
- (281)
Repayment of finance receivables borrowings
(233)
(301) (1,650)
Repayment of bond
(1,000)
- -
Dividends paid
(549)
(418) (419)
Net cash flow used in financing activities(1,003)
(1,167) (1,067)
Net movement in cash and cash equivalents
(1,867)
2,456 449
Opening cash and cash equivalents
4,542
2,086 2,086
Closing cash and cash equivalents2,675 4,542 2,535
Reconciliation of Profit to Cash Surplus from Operating Activities
Profit for the year 1,438
2,576
531
Adjustments for items not involving cash flows:
Impairment on receivables
(3)
41
80
(Profit)/loss on sale of assets
(52)
(17) (6)
Depreciation
466
827
428
(Increase) Decrease in Deferred Tax
-
(163)
-
Movement in Investments
92
(667) (55)
Other - including non cash items
(10)
14
-
493
35
447
Movement in trade and other receivables 2,680 1,632
4,971
Movement in inventories 26 245 88
Movement in trade, other payables and employee benefits
(4,322)
(200) (4,407)
Movement in taxation (62) 213
322
Cash flow from operating Activities 253 4,501
1,952
* Includes Motor Vehicles after allowing for the financing of them.
Group
Unaudited
2

Allied Farmers Group
Balance Sheet
As at 31 December 2021
Unaudited
Dec
JunDec
202120212020
$000
$000$000
Equity
Share capital
158,204
158,204
158,224
Accumulated Losses
(145,403)
(146,566) (148,207)
Equity attributable to owners of the Parent
12,801
11,638
10,017
Non-controlling interests
1,777
1,933
1,681
Total equity 14,578 13,571
11,698
Liabilities
Trade and other payables
7,086
11,452
7,329
Employee benefits
1,144
1,100
1,017
Income tax payable
-
39
3
Finance receivables bank borrowings
500
300
300
Bank borrowings and bonds
453
1,447
1,434
Lease liabilities
866
599
241
Total current liabilities 10,049
14,937
10,324
Bank borrowings and bonds
445
669
912
Finance receivables bank borrowings
1,192
625
775
Lease Liabilities
1,219
1,534
1,138
Total non-current liabilities 2,856
2,828
2,825
Total liabilities 12,905 17,765
13,149
Total liabilities and equity 27,483 31,336
24,847
Assets
Cash and cash equivalents
2,675
4,542
2,535
Trade Receivables
7,242
10,116
6,676
Inventories
25
51
209
Income tax receivable
34
-
-
Finance receivables
5,350
5,142
5,394
Other receivables
443
246
310
Total current assets 15,769
20,097
15,124
Deferred tax assets
953
953
790
Goodwill
742
742
742
Intangible asset - computer software
208
271
296
Investments
4,986
4,297
3,628
Property - owned and leased
4,825
4,976
4,267
Total non-current assets 11,714
11,239
9,723
Total assets 27,483 31,336
24,847
Net Tangible Assets - Consolidated0.470.440.37
Net Tangible Assets - attributable to owners of the parent0.420.380.32
Note: net tangible assets is calculated as equity from which is deducted goodwill and intangible assets
DirectorDirector
The Board of Directors of Allied Farmers Limited authorised these financial statements for issue on 28 February 2022.
Philip LuscombeChristopher Swasbrook
Group
3

Allied Farmers Group
Statement of Changes in Equity
For the 6 Months Ending 31 Dec 2021
Unaudited
Group
Share
Capital
Accumulated
losses
Revaluation
Reserve
Minority
Shareholders
Interests
Total
$000$000$000$000$000
Balance at 1 July 2020
153,018 (148,210) - 1,582 6,390
Profit after tax for the year - 228 - 303 531
Total comprehensive income for the period - 228 - 303 531
Dividends paid - (214) - (204) (418)
AFL Purchase Minority Shareholders Shares - (11) - - (11)
AFL Shares issued in purchase of New Zealand Rural
Land Management Limited Partnership
2,500 - - - 2,500
Pro rata renounceable rights issue 2,706 - - - 2,706
-
Total transactions with owners
5,206 (225) - (204) 4,777
Balance at 31 December 2020 158,224 (148,207) - 1,681 11,698
Balance at 1 January 2021
158,224 (148,207) - 1,681 11,698
Profit after tax for the year - 1,793 - 252 2,045
Revaluation of Equity Securities - - (135) - (135)
Total comprehensive income for the period - 1,793 (135) 252 1,910
AFL Purchase Minority Shareholders Shares (17) - - (17)
Pro rata renounceable rights issue (20) - - (20)
-
Total transactions with owners
(20) (17) - - (37)
Balance at 30 June 2021 158,204 (146,431) (135) 1,933 13,571
Balance at 1 July 2021 158,204 (146,431) (135) 1,933 13,571
-
Profit after tax for the year
- 1,059
-
379 1,438
Revaluation of Equity Securities (refer Note C2)
- - 104 - 104
Total comprehensive income for the period - 1,059 104 379 1,542
Dividends paid
- -
-
(535) (535)
Total transactions with owners - - - (535) (535)
Balance at 31 December 2021 158,204 (145,372) (31) 1,777 14,578
4

Allied Farmers Group
Financial performance
In this section
-
-
How we operate and generate returns for shareholders
Livestock services: An agency business facilitating livestock transactions and the procurement and export of veal.Financial services: Providing livestock finance to farmer client.Parent operations: The ultimate holding company for Allied Group's investments and governance activity for the Group.Segment information (Unaudited)
Dec-21
Jun-21
Dec-20
Dec-21
Jun-21
Dec-20
Dec-21
Jun-21
Dec-20
Dec-21
Jun-21
Dec-20
Dec-21
Jun-21
Dec-20
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
Commission and fee income
5,940
12,875 6,128
-
- -
-
- -
-
- -
5,940
12,875 6,128
Sale of goods
8,794
7,547 6,922
-
- -
-
- -
-
- -
8,794
7,547 6,922
Interest income
71
187 77
240
443 239
-
- -
-
- -
311
630 316
Other Income
133
87 45
-
- -
-
- -
-
- -
133
87 45
Equity Accounted Earnings NZRLM
-
- -
-
- -
325
1,152 -
-
- -
325
1,152 -
Total Income
14,938
20,696 13,172
240
443 239
325
1,152 -
-
- -
15,503
22,291 13,411
Cost of goods sold
6,916
6,823 6,126
-
- -
-
- -
-
- -
6,916
6,823 6,126
Personnel expenses
4,113
7,942 3,962
23
46 23
-
- -
43
95 47
4,179
8,083 4,032
Depreciation and amortisation
466
827 428
-
- -
-
- -
-
- -
466
827 428
Rental and operating leases
4
- 3
-
- -
-
- -
-
- -
4
- 3
Other operating expenses
1,870
2,958 1,786
44
86 42
-
- -
385
644 229
2,299
3,688 2,057
Total Expenses
13,369
18,550 12,305
67
132 65
-
- -
428
739 276
13,864
19,421 12,646
Finance Costs
(111)
(195) (93)
(72)
(121) (89)
-
- -
(18)
(73) (37)
(201)
(389) (219)
Profit/(loss) before tax
1,458
1,951 774
101
190 85
325
1,152 -
(446)
(812) (313)
1,438
2,481 546
Income tax (expense) / benefit*
-
95 (15)
Profit/(loss) after tax
1,438
2,576 531
Current Assets
9,751
14,450 5,393
5,350
5,142 8,600
-
- -
668
505 1,131
15,769
20,097 15,124
Non Current Assets
6,633
6,847 9,623
100
100 100
2,587
3,302 -
2,394
990 -
11,714
11,239 9,723
Assets
16,384
21,297 15,016
5,450
5,242 8,700
2,587
3,302 -
3,062
1,495 1,131
27,483
31,336 24,847
Current Liabilities
9,486
13,345 7,876
500
351 2,107
-
- -
63
1,241 341
10,049
14,937 10,324
Non Current Liabilities
1,664
2,203 1,050
1,192
625 775
-
- -
-
- 1,000
2,856
2,828 2,825
Liabilities
11,150
15,548 8,926
1,692
976 2,882
-
- -
63
1,241 1,341
12,905
17,765 13,149
* The Group has significant unused tax losses of $40.6m.Rural Land Management: Investment in New Zealand Rural Land Managment Partnership the contracted asset manager of New Zealand Rural Land Company Limited.
Total
Group
Livestock Services
This section explains the financial performance of the Group providing additional information about individual items in the Profit and Loss Statement, including:
accounting policies, judgements and estimates that are relevant for understanding items recognised in the Profit and Loss Statement and Balance Sheet.the key operating segment information regularly reported to and reviewed by the Directors.Measurement and RecognitionCommission income on facilitating a livestock sale agreement, grazing agreement or forward livestock sale agreement is recognised when the sale is agreed by a vendor and purchaser. The Group is acting as an agent as it doesn't have inventory risk and isn't able to set a price. Forward delivery contracts in relation to herd sales on which commission income is earned contain an element of variable consideration due to the timeframe between when the sale is agreed and its completion. At 31 December 2021 all (2020: none) no forward delivery contracts have settled and therefore the variable consideration has no impact on the revenue recognised. Sale of goods (veal meat and skins) revenue is recognised when delivered to the customer, or once goods are delivered to the customer. The Group is deemed a principal, rather than an agent, as it holds inventory risk.Fee income relates to RFID scanning fees, yard fees charged at saleyards and valuation fees. The income is recognised when livestock are scanned, a sale is agreed within the auction or when the livestock are weighed. The Group is acting as a principal as it is primarily responsible for the service rendered and is able to set a price.Finance receivables interest income is recognised using the effective interest method. The calculation of the effective interest rate includes all fees that are integral to the effective interest rate. All fees except those charged to customer accounts in arrears are considered to be integral to the effective interest rate. Fees charged to
customer accounts in arrears are recognised as income at the time the fees are charged.
The shares in New Zealand Rural Land Company Limited are equity investments quoted in an active market which the Group has elected to designate as a financial asset at fair value through Other Comprehensive Income. The fair value of these shares at 31 December 2021 is $2,394,000 (30 June 2021 $990,000). The Company also owns a 50% interest in NZ Rural Land Management Partnership ('NZRLM'). NZRLM is the external manager of New Zealand Rural Land Company Limited. The Group has determined that it has significant influence but not control over NZRLM. Accordingly, the Group applies the equity method of accounting to its
investment in NZRLM. Under the equity method the investment is initially recongnised at cost, and the carrying amount is increased or decreased to recognise the investors share of the profit or loss of the investee after the date of acquisition.
Financial Services
Rural Land Management
Parent Operations
5

Allied Farmers Group
About this report
Statement of compliance and basis of preparation
The financial statements have been prepared:
-
-
-
presented on the basis of historical cost; and
-
The fair value of Financial Assets and liabilities approximates their carrying value.
Other accounting policies
Events subsequent to period end date
The financial statements at 31 December 2021 include estimates and judgements in respect of the potential impact of Covid-19 on the Group's financial
position and results. Whilst these reflect all available information at the date these financial statements are approved it is noted that there is significant
uncertain with regards to medium and long term efect of Covid-19 on the New Zealand economy and livestock agency related industries.
In preparing the Group financial statements, all material intragroup transactions, balances, income and expenses have been eliminated. Subsidiaries are
consolidated on the date on which control is obtained to the date on which control is lost.
The accounting policies have been consistently applied to the periods in these financial statements. Where the presentation and structure of the financial
statements has changed comparative figures have been amended to align with this periods presentation.
These financial statements do not include all the notes and information normally included in the annual financial statements. Accordingly, they should be
read in conjunction with the annual financial statements for the year ended 30 June 2021.
Critical judgements and estimates
The financial statements have been prepared using significant estimates and critical judgements disclosed in the 2021 Annual Report.
Allied Farmers Limited is a for-profit entity domiciled in New Zealand and registered under the Companies Act 1993. The company is an FMC Entity in terms
of the Financial Markets Conduct Act 2013 and prepares its financial statements in accordance with that Act, the Financial Reporting Act 2013, and NZX
Main Board Listing Rules.
The consolidated financial statements are for Allied Farmers Limited and its subsidiaries (together referred to as "Allied") and Allied's interests in associates
as at end for the 6 months ended 31 December 2021.
in New Zealand dollars, with all values rounded to the nearest thousand dollars unless otherwise stated.
on the basis of going concern. The directors, having considered projected future performance and the availability of financing, consider the going
concern basis to be appropriate;
These Consolidated Financial Statements ("Financial Statements") have been approved for issue by the Board of Directors on 28 February 2022.
in accordance with Generally Accepted Accounting Practice (GAAP) in New Zealand and comply with International Financial Reporting Standards
(IFRS) and the New Zealand equivalents to IFRS (NZ IFRS) and other applicable financial reporting standards, as appropriate for a Tier 1 for-profit
entity;
The interim financial statements have been prepared in accordance with New Zealand generally accepted accounting practice (GAAP) and comply with NZ
IAS 34 Interim Financial Reporting.
6