FY24 Annual Report
23 August 2024
announce@nzx.com
The Directors of Allied Farmers Limited (“Allied Farmers” or “Allied Group”) (ALF:NZX) are pleased to
report an audited net profit before tax for the year to 30 June 2024 of $7.315 million (FY23 $ 4.071
million), with an audited net profit after tax attributable to Allied Farmers’ shareholders of $5.206
million (FY23 $3.338 million) which was an increase of 55.96% from the previous year.
The increased FY24 profit was driven by one-off $4.2 million gain on the book value of the sale and
licence back by NZ Farmers Livestock Limited of its interest in the Frankton saleyards, of which $2.85
million was attributable to Allied Farmers’ shareholders.
Excluding this one-off gain, NZ Rural Land Management Limited (NZRLM) earnings were significantly
higher than FY23 on the back of management, performance and transaction fees generated from a
number of NZ Rural Land Company Limited (NZL) transactions successfully executed by NZRLM, but
this was largely offset by lower earnings from NZ Farmers Livestock Limited for the comparative
period.
Allied Group FY24 profitability was also impacted by a full year amortisation of the NZRLM
Management Contract acquired in March 2023 (a non-cash impact) together with interest on the
Heartland loan to fund the acquisition, suspension of dividends from NZL, and costs associated with
strategic initiatives such as the amendment to Allied Farmers’ constitution.
A segmental contribution comparison is provided below which reflects the contribution to Allied
Farmers of our two principal investments and our holding company operating and financing costs:
Segmental Contribution
attributable to Allied
Farmers’ Shareholders
($ 000’s)
FY24 FY 2023
Difference
(%)
NZ Rural Land
Management (NZRLM)
1,357 1,138 19.24
NZ Farmers Livestock +
Finance (NZFL)
4,814 2,407 100
Allied Farmers (Parent) (965) (207) (366)
Allied Farmers NPAT 5,206 3,338 59.64
Commentary on the results for NZRLM and NZFL business units are set out in the following
sections.
Allied Farmers’ earnings per share (EPS) increased by 55.9% to 18.07 cents per share (FY23 11.59
cps), and Net Tangible Assets (NTA) per share, based on 67.8% direct ownership of NZFL and 100%
ownership of NZRLM, equals $0.40 per share (FY23 $0.21 per share).
During FY24 the Board’s strategic focus was on building foundations for Allied Farmers to
accelerate its earnings growth.
This has included a strategic examination of the allocation of Allied Group’s assets, resulting in a
confidential transaction to exit an Allied Group asset at above book value, with the intention that
proceeds from this transaction, and others of this nature in the future, can be redeployed into
growth opportunities.
Aligned with this strategy, with Inland Revenue in FY23 confirming an unrecognised deferred tax
asset comprising unused tax losses of $178 million (as at 30 June 2024), the Board in July of this
year sought and received shareholder approval to amend Allied Farmers’ constitution to
significantly strengthen its ability to restrict share transfers that would cause a breach of
shareholder continuity and forfeiture of tax losses. This constitutional change provides the Board
with a platform and confidence to assess new growth opportunities that accelerate the use of
these tax losses.
The significance of these tax losses means that shareholders’ interests are best served by
deploying earnings into growth opportunities that can utilise the tax losses. Accordingly, no
dividend will be paid in relation to FY24.
New Zealand Rural Land Management (NZRLM) - 100% owned:
NZRLM is the external manager of NZX listed New Zealand Rural Land Company (NZL). NZL currently
owns 17,457 hectares of forestry estates, and pastoral and horticultural land, an increase of 2,703
hectares during FY24.
NZRLM’s FY24 income was up on FY23 comprised of fees associated with status quo portfolio
management, successfully executed NZL transactions and overall portfolio performance.
On 9 February 2024 NZL sold a 25% equity interest in its land portfolio to Australia based investment
manager Roc Partners (Roc). The transaction provided NZL with capital to deploy into high yielding
assets across two sub-sectors, horticulture and forestry. These transactions generated transaction fees
for NZRLM, while also increasing its recurring revenue base from portfolio management. NZRLM also
received a retrospective performance fee for the value gain on NZL’s assets for the 12-month period
ending 31 December 2023 (NZL’s balance date). This fee is in-line with the change in the Net Asset Value
(NAV) of NZL’s portfolio during this period and is paid in NZL shares. Allied Farmers currently owns
2,803,617 NZL shares (~2% of NZL shares on issue).
The Roc transaction has many strategic benefits for NZL, including capital recycling at a premium,
improved financial position and accelerated portfolio growth. Positioning NZL for stable accelerated
growth directly improves the returns to NZRLM and Allied Farmers shareholders.
New Zealand Farmers Livestock Limited (NZFL) – 67.8% owned:
NZ Farmers Livestock, like many farming businesses, grappled with a very challenging 2023/24 year, and
on balance is pleased to report a solid operating earnings result - though approximately 20% below the
comparable period.
The passing during the year of our long time and very widely respected King Country manager and NZFL
co-founder, Alan Hiscox, was felt throughout the team, and we reiterate our condolences to Alan’s many
family and friends, and our thanks to those that stepped up during difficult times.
The veal operation was an important contributor, though moderately impacted by reduced product
pricing and escalating costs.
Livestock agency contributed positively, though materially below the prior year. This reflected cost
inflation in the face of a small reduction in agency revenues. Poor sheep prices and tallies reflected
current market challenges, but cattle pricing (and tallies) remained relatively strong. Dairy herd forward
sales performance was creditable and remains an important focus going forward.
The sale of NZFL’s interest in the Frankton saleyards was coupled with an access licence back to NZFL,
and therefore NZFL’s access to and use of the yards is consistent with prior to the sale.
The recent recovery in sheep pricing and strengthening cattle pricing are encouraging for the current
year.
In the face of cost inflation, the business has focused on improving productivity, cost structure, capital
efficiency and driving our developing digital platform and presence.
Work through the year should
position us well within an improving agribusiness environment.
Livestock financing, based around our Heartland-supported and own lending offerings, continued the
growth forecast in earlier market updates, and its support of the core business, to increase its
contribution.
The Board wishes to thank and acknowledge the hard work and initiative of our NZFL and NZRLM teams
over the last year.
Shelley Ruha – Chair
---
Annual Report
for the year ended 30 June 2024
www.alliedfarmers.co.nz
Listed on:
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CONTENT
S
BUSINESS
OVERVIEW
01 Business
Overview
CHAIR
REPORT
03 Chair Report
3 4 5
DIRECTORS STATUTORY
DISCLOSURES
06 Directors’ 08 Statutory
Disclosures
CONSOLIDATED
FINANCIAL
STATEMENTS
18 Consolidated Financial Statements
INDEPENDENT
AUDITOR’S
REPORT
38 Independent Auditor’s
Report
COMPANY
DIRECTORY
43 Company
Dir
ectory
This report is dated 23 August 2024 and is signed on behalf of the Board of Allied Farmers Limited:
Shelley Ruha – Chair Richard Milsom - Managing Director
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BUSINESS
OVERVIEW
Businesses:
Allied Farmers is a NZX-listed investment company with two investments in the rural sector.
Asset Management:
Allied Farmers owns 100% of New Zealand Rural Land Management Limited Partnership (NZRLM).
NZRL
M provides management, investment and administrative services to NZX listed New Zealand Rural Land
Company Limited and its 75% owned NZ Rural Land Investment Limited Partnership (NZL) pursuant to
Management Agreements. NZL owns and leases rural land to tenants to provide shareholders with superior
risk-adjusted returns compared to legacy rural investment vehicles.
Livestock Services:
Alli
ed Farmers owns 67.8 % of national livestock agency business, NZ Farmers Livestock Limited (NZFL). A
mix of NZFL agents and staff own the balance of NZFL.
NZFL’s core businesses are livestock agency, which generates commission revenue from the marketing,
purchase, sale and financing of livestock for clients, and exporting processed veal.
Strategy:
Allied
Farmers is an investment vehicle focused on delivering earnings per share growth for shareholders by:
•providing strategic guidance and support to its investments to ensure that their business
strategies are designed to deliver sustainable earnings growth in line with Allied Farmers’s
expectations; and
•exploring growth opportunities that leverage its core strengths in the rural and asset
management sectors, and optimizes the utilization of tax losses.
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Tax Losses:
A
llied Farmers has a valuable tax loss asset which was the result of legacy investments in the finance sector.
During FY23 Allied obtained a Private Ruling from Inland Revenue under s 91E of the Tax Administration Act
1994 that significantly increased these tax losses.
As a result of the ruling, Allied Group unrecognised deferred tax assets comprise unused tax losses as at 30
June 2024 total $178,126,791 gross (2023: $180,785,199).
The ability to utilise the tax losses is dependent on meeting shareholder continuity requirements of prevailing
tax legislation, and the Allied Farmers’ Board is acutely aware of maintaining shareholder continuity to preserve
this valuable asset for shareholders. Accordingly, in July 2024 Allied Farmers obtained shareholder approval to
amend its constitution to significantly strengthen its ability to restrict share transfers that would cause a breach
of shareholder continuity.
Five Year Earnings Summary:
Financial Year Ending 30 June FY
2024
FY
2023
FY
2022
FY
2021
FY
2020
Allied Farmers Net Profit After Tax (NPAT)
- attributable to Allied Farmers shareholders - $
000’s
5,206 3,338 2,876 2,021 767
Allied Farmers Earnings Per Share – cents per
share
18.07 11.59 9.98 8.57 4.30
Allied Farmers Dividend Per Share – cents per
share
- - - - 1.2
Comprising
NZFL incl. Finance - earnings attributable to
Allied Farmers shareholders* - $ 000’s
4,814 2,408 1,722 1,370 1,175
NZRLM - earnings attributable to Allied
Farmers shareholders - $ 000’s
1,357 1,138 1,624 1,152 -
Allied Farmers Holding Co (Parent)** - $ 000’s
(965)(207)(470)(501)(408)
* Recognises Allied Farmers’ 67.8% NZFL ownership and 52% Redshaw Livestock ownership.
** In FY 2024 from Parent Operations loss of $1,235,000 (FY 2023: $779,000) disclosed in Note A1 of the
Financial Statements, tax benefits of $270,000 (FY2023: $572,000) received by the Parent arising from tax
losses are deducted.
2
CHAIR
REPORT
The Directors of Allied Farmers Limited (“Allied Farmers” or “Allied Group”) (ALF:NZX) are pleased to report
an audited net profit before tax for the year to 30 June 2024 of $7.315 million (FY23 $ 4.071 million), with an
audited net profit after tax attributable to Allied Farmers’ shareholders of $5.206 million (FY23 $3.338 million)
which was an increase of 55.96% from the previous year.
The increased FY24 profit was driven by one-off $4.2 million gain on the book value of the sale and licence
back by NZ Farmers Livestock Limited of its interest in the Frankton saleyards, of which $2.85 million was
attributable to Allied Farmers’ shareholders.
Excluding this one-off gain, NZ Rural Land Management Limited (NZRLM) earnings were significantly higher
than FY23 on the back of management, performance and transaction fees generated from a number of NZ
Rural Land Company Limited (NZL) transactions successfully executed by NZRLM, but this was largely offset
by lower earnings from NZ Farmers Livestock Limited for the comparative period.
Allied Group FY24 profitability was also impacted by a full year amortisation of the NZRLM Management
Contract acquired in March 2023 (a non-cash impact) together with interest on the Heartland loan to fund the
acquisition, suspension of dividends from NZL, and costs associated with strategic initiatives such as the
amendment to Allied Farmers’ constitution.
A segmental contribution comparison is provided below which reflects the contribution to Allied Farmers of
our two principal investments and our holding company operating and financing costs:
Segmental Contribution
attributable to Allied
Farmers’ Shareholders
($ 000’s)
FY24 FY 2023
Difference
(%)
NZ Rural Land
Management
(NZRLM)
1,357 1,138 19.24
NZ Farmers Livestock
+ Finance (NZFL)
4,814 2,407 100
Allied Farmers
(Parent)
(965) (207) (366)
Allied Farmers NPAT 5,206 3,338 59.64
Commentary on the results for NZRLM and NZFL business units are set out in the following sections.
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Allied Farmers’ basic earnings per share (EPS) increased by 55.9% to 18.07 cents per share (FY23 11.59
cps), and Net Tangible Assets (NTA) per share, based on 67.8% direct ownership of NZFL and 100%
ownership of NZRLM, equals $0.40 per share (FY23 $0.21 per share).
During FY24 the Board’s strategic focus was on building foundations for Allied Farmers to accelerate its
earnings growth.
This has included a strategic examination of the allocation of Allied Group’s assets, resulting in a
confidential transaction to exit an Allied Group asset at above book value, with the intention that proceeds
from this transaction, and others of this nature in the future, can be redeployed into growth opportunities.
Aligned with this strategy, with Inland Revenue in FY23 confirming an unrecognised deferred tax asset
comprising unused tax losses of $178 million (as at 30 June 2024), the Board in July of this year sought
and received shareholder approval to amend Allied Farmers’ constitution to significantly strengthen its
ability to restrict share transfers that would cause a breach of shareholder continuity and forfeiture of tax
losses. This constitutional change provides the Board with a platform and confidence to assess new growth
opportunities that accelerate the use of these tax losses.
T
he significance of these tax losses means that shareholders’ interests are best served by deploying
earnings into growth opportunities that can utilise the tax losses. Accordingly, no dividend will be paid
in relation to FY24.
New Zealand Rural Land Management (NZRLM) - 100% owned:
NZRLM is the external manager of NZX listed New Zealand Rural Land Company (NZL). NZL currently owns
17,457 hectares of forestry estates, and pastoral and horticultural land, an increase of 2,703 hectares during
FY24.
NZRLM’s FY24 income was up on FY23 comprised of fees associated with status quo portfolio management,
successfully executed NZL transactions and overall portfolio performance.
On 9 February 2024 NZL sold a 25% equity interest in its land portfolio to Australia based investment manager
Roc Partners (Roc). The transaction provided NZL with capital to deploy into high yielding assets across two
sub-sectors, horticulture and forestry. These transactions generated transaction fees for NZRLM, while also
increasing its recurring revenue base from portfolio management. NZRLM also received a retrospective
performance fee for the value gain on NZL’s assets for the 12-month period ending 31 December 2023 (NZL’s
balance date). This fee is in-line with the change in the Net Asset Value (NAV) of NZL’s portfolio during this
period and is paid in NZL shares. Allied Farmers currently owns 2,803,617 NZL shares (~2% of NZL shares on
issue).
T
he Roc transaction has many strategic benefits for NZL, including capital recycling at a premium, improved
financial position and accelerated portfolio growth. Positioning NZL for stable accelerated growth directly
improves the returns to NZRLM and Allied Farmers shareholders.
4
New Zealand Farmers Livestock Limited (NZFL) – 67.8% owned:
NZ Farmers Livestock, like many farming businesses, grappled with a very challenging 2023/24 year, and on
balance is pleased to report a solid operating earnings result - though approximately 20% below the comparable
period.
The passing during the year of our long time and very widely respected King Country manager and NZFL co-
founder, Alan Hiscox, was felt throughout the team, and we reiterate our condolences to Alan’s many family and
friends, and our thanks to those that stepped up during difficult times.
The veal operation was an important contributor, though moderately impacted by reduced product pricing and
escalating costs.
Livestock agency contributed positively, though materially below the prior year. This reflected cost inflation in the
face of a small reduction in agency revenues. Poor sheep prices and tallies reflected current market challenges,
but cattle pricing (and tallies) remained relatively strong. Dairy herd forward sales performance was creditable
and remains an important focus going forward.
The sale of NZFL’s interest in the Frankton saleyards was coupled with an access licence back to NZFL, and
therefore NZFL’s access to and use of the yards is consistent with prior to the sale.
The recent recovery in sheep pricing and strengthening cattle pricing are encouraging for the current year.
In the face of cost inflation, the business has focused on improving productivity, cost structure, capital efficiency
and driving our developing digital platform and presence. Work through the year should position us well within
an improving agribusiness environment.
L
ivestock financing, based around our Heartland-supported and own lending offerings, continued the growth
forecast in earlier market updates, and its support of the core business, to increase its contribution.
The Board wishes to thank and acknowledge the hard work and initiative of our NZFL and NZRLM teams over
the last year.
S
helley Ruha - Chair
5
3
DIRECTORS
Shelley Ruha - Independent Chair
Shelley was appointed a Director of Allied Farmers Limited in November 2022, and Chair in April 2023. Shelley
is a Company Director and Investor across a variety of industries. She Chairs PaySauce Limited and is a
director of Heartland Bank Limited, Partners Life Limited, and 9 Spokes International Limited. Previous
directorships include Hobson Wealth Limited, Paymark Limited, JB Were Limited and The Icehouse. Shelley
has a Bachelor of Commerce.
Philip Luscombe - Independent Director
P
hilip was appointed a Director of Allied Farmers Limited in December 2005 and is Chair of New Zealand
Farmers Livestock Limited. As a former Agricultural Research Scientist, and with a broad farming background,
he has extensive experience in the agricultural sector. He is a shareholder and Chair of the Argyll Dairy Farm
group of farms in Otago, and is a partner in the family dairy farm in Taranaki. He is an Independent Director of
dairy farming business, Te Rua O Te Moko Limited. He is a former director of PKW Farms Limited, Kiwi
Cooperative Dairies Limited, Kiwi Milk Products Limited, Dairy Insight, Dexcel, and NZAEL Limited. Mr.
Luscombe is an independent director. He has the following qualifications: BAgSci(Hons).
Richard Milsom – Managing Director
R
ichard was appointed Managing Director of Allied Farmers Limited in April 2023. Richard is one of the founders
and executives of New Zealand Rural Land Management and NZX-listed New Zealand Rural Land Company.
He was previously a consultant at global investment management firm Elevation Capital Management, where
he focused on special situation investments. Richard has been involved in a number of industries including
investment management, tourism, retail and agriculture/ biotechnology – in functions ranging from finance, to
marketing, strategy, strategic review and implementation. Richard was previously on the board of the Institute
of Finance Professionals New Zealand (INFIZ) and was recognised within the financial services industry by
being awarded the INFINZ Emerging Leader Award 2017. Richard is not an independent director. He holds a
BCom in finance and economics from the University of Canterbury, with post-graduate certificates in value
investing from Columbia University (New York), and agricultural businesses and leadership from Harvard
Business School (Boston).
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Director Independence:
As at 30 June 2024, Shelley Ruha and Philip Luscombe are considered by the Board to be independent
directors. They are considered to be independent due to the following factors:
•They are/were non-executive directors who are not substantial shareholders and who are free of any
interest, business or other relationship that would materially interfere with, or could reasonably be
seen to materially interfere with, the independent exercise of their judgement;
•They have not been employed or retained, within the last three years, to provide material professional
services to the Company;
•Within the last 12 months, they were not a partner, director, senior executive or material shareholder
of a firm that provided material professional services to the Company or any of its subsidiaries; and
•Neither of these directors:
ohave been, within the last three years, a material supplier to the Company or
have any other material contractual relationship with the Company or another
group member other than as a director of the Company;
oreceive performance-based remuneration from, or participates in, an
employee share scheme of the Company; and
ocontrol, or is an executive or other representative of an entity which controls,
5% or more of the Company’s voting securities.
•In the case of Philip Luscombe, the fact that he has been a director for a period greater than 12
years has not caused him to no longer be independent of management. During his tenure Mr.
Luscombe has not demonstrated any undue influence over management. Allied Farmers’
Managing Director’s primary relationship and point of communication is with Allied Farmers’
independent Chair, and Mr. Luscombe does not involve himself in matters that are beyond what
would be required or expected of an independent director. In addition, during his tenure, Mr.
Luscombe has not at any time had any of the factors described above apply to him.
Richard Milsom is not considered to be independent because he is Allied Farmers’ Managing Director and a
substantial shareholder.
7
STATUTORY
DISCLOSURES
Statutory Disclosures:
More information on Allied Farmers governance is set out in the Corporate Governance Report, a copy of
which is available on the Allied Farmers’ website, www.alliedfarmers.co.nz/investors.
Disclosure of Interest:
Pursuant to section 140 of the Companies Act 1993, the following changes in interests were disclosed during
FY24 (excluding directorships of wholly owned subsidiaries) in the Interests Register:
DirectorEntity Relationship
Shelley Ruha Tax Gift
Hobson Wealth
Chair Interest ceased
Director Interest ceased
Richard Milsom Ngutunui Dairies Limited Director Interest ceased
Directors’ Share Trading and Holdings:
D
irectors and former directors disclosed the following acquisitions and disposals of relevant interests in Allied
Farmers Limited shares during FY24 pursuant to section 148 of the Companies Act 1993:
Director/relevant Interest Date(s) Details
Richard Milsom 12 September
2023
Issue of 144,032 Performance Share Rights
As at 30 June 2024, directors, or entities related to them, held relevant interests (as defined in the Financial
Markets Conduct Act 2013) in Allied Farmers Securities as follows:
Director Number of shares and percentage of shares on issue
Richard Milsom 4,553,667 (15.8%)
Philip Luscombe 15,557 (0.054%)
Shelley Ruha 150,000 (0.52%)
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Directors’ Fees:
Director 2024 2023
Philip Luscombe $67,500 $55,000
Shelley Ruha
1
$82,500 $38,333
Richard Milsom
2
- -
Christopher
Swasbrook
3
-
$46,250
Mark Franklin
4
-
$29,167
Total $150,000 $168,750
Directors Other Remuneration:
Director 2024 2023
Richard Milsom
$500,000
$95,416
Shelley Ruha
-
$20,348
Total
$500,000 $115,764
1
Appointed 9 November 2022
2
Appointed 5 April 2023
3
Resigned 5 April 2023
4
Deceased November 2022
9
Shareholders approved a cap on directors’ fees of $332,000 p.a. at the 2007 Annual Meeting. This cap
includes all directors’ fees paid in relation to Group subsidiary companies as well as for the Parent. In
addition to the above payments, Simon Williams, a director of NZ Farmers Livestock Limited and NZ
Farmers Livestock Finance Limited, received total remuneration and benefits from NZ Farmers Livestock
Limited of $128,412. T his remuneration and benefits did not include any director’s fees.
Particular Disclosures:
R
elated Party disclosures and information can be found in section E1 of the FY24 Financial Statements.
General:
Except to the extent described above, no Director has entered into any transactions with the Company
or its subsidiaries other than in the normal course of business, on the Company’s normal terms of trade,
and on an arms-length basis.
No Director issued a notice requesting to use Group information received in their capacity as a Director
which would not otherwise have been available to them.
D
uring the year the Company paid premiums on contracts insuring directors and officers in respect of
liability and costs permitted to be insured against in accordance with Section 162 of the Companies Act
1993 and the Company’s constitution.
Managing Director Remuneration:
The review and approval of the Managing Director’s remuneration is the responsibility of the Allied
Farmers’ Board after receipt of recommendations from the Remuneration and Nomination Committee.
T
he Managing Director’s remuneration comprises a fixed base salary, and at-risk short-term and long-
term incentives. At-risk incentives are paid against targets agreed with the Managing Director, and are
based on financial measures including earnings targets and progress against objectives related to the
strategic plan and other personal objectives. The Board assessed the Managing Director’s Short Term
Incentive performance at the end of FY24 (see below).
Richard Milsom’s total remuneration for FY24 was as follows:
Financial
Year
Remuneration Benefits Performance –
Short-term
Incentive
Total
Remuneration
FY 2024 $2 50,000 Nil $250,000 $500,000
FY 2023 $ 95,416 Nil Nil $ 95,416
10
FY24 Short Term Incentive: For FY24 the Managing Director’s short-term targets and objectives were:
•Target: $125,000, being 50% of the Managing Director’s FY24 base remuneration.
•Maximum Achievable: $250,000, being 100% of the Managing Director’s FY24 base remuneration.
•Objectives:
o60% - NZRLM and NZFL achieving their respective Budgeted NPBT.
o40% - Achieving strategy and leadership targets.
T
he Allied Farmers’ Board assessed that Richard Milsom significantly over-achieved his FY24 performance
targets, resulting in a payment of $250,000.
FY25 Short Term Incentive: For FY25 the Managing Director’s short-term targets and objectives are:
•Target: $187,500, being 50% of the Managing Director’s FY25 base remuneration.
•Maximum achievable: $375,000 being 100% of the Managing Director’s FY25 base remuneration.
•Objectives:
35 % - NZRLM and NZFL achieving their respective Budgeted NPBT.
65% - Achieving strategy and leadership targets
The Allied Farmers’ Board will assess Richard Milsom’s achievement against these FY25 performance
targets at the end of FY25.
Long Term Incentive
The Board has established a Long-T erm Incentive Plan to link rewards with strategic long-term goals
and performance and the maximisation of shareholder returns. This involves a grant of Performance
Rights being made to the Managing Director subject to certain Vesting Conditions. Each Performance
Right represents a right to receive an Allied Farmers’ ordinary share or be paid an amount of cash
consideration (in certain circumstances), subject to the satisfaction of the Vesting Conditions. The
Vesting Conditions are measured over a three-year performance period.
The NPAT target will be set at
the beginning of each of the three financial years and assessed at the conclusion of the three-year
performance period.
FY24 Long Term Incentive: 144,032 Performance Rights were issued to Mr. Milsom for FY24 pursuant to
Listing Rule 4.6.1.
The proportion of Performance Rights that satisfy the Vesting Condition are determined by
reference to the following scale:
Performance against target
(budgeted) three-year average of
Group NPAT
Percentage of performance rights to satisfy
Vesting Condition
<80% of target 0%
80% to 100% of target 50% paid if achieve 80%.
100% paid if achieve 100% or more.
with a pro rata allocation between the 80% and
100% achievement levels.
11
FY25 Long Term Incentive: The Board has agreed to issue Mr. Milsom a further 144,032 Performance
Rights for FY25. Allied Farmers amended its constitution in July 2024 to restrict the issue of further
equity securities to shareholders such as Mr. Milsom who already own greater than 5% of Allied
Farmers’ shares. Therefore, the grant of Performance Rights is subject to and conditional on approval
from Allied’s shareholders. Allied intends to seek this approval at its 2024 Annual Shareholders Meeting,
likely to be in November 2024.
The proportion of Performance Rights, if approved, that satisfy the Vesting Condition will be determined
by reference to the following scale:
Performance against target
(budgeted) three-year average of
Group NPAT
Percentage of performance rights to satisfy
Vesting Condition
<80% of target 0%
80% to 100% of target 50% paid if achieve 80%.
100% paid if achieve 100% or more.
with a pro rata allocation between the 80% and
100% achievement levels.
No executives or employees other than Mr. Milsom had a Long-Term Incentive Plan in FY24. Mr. Milsom does
not have a severance package. Either party may give three months’ notice to terminate Mr. Milsom’s Service
Level Agreement.
12
S
ubsidiary Employee Remuneration:
The number of employees whose remuneration and benefits were over $100,000 for FY24 is within the
specified bands as follows:
Remuneration Range 2024 2023
100,000 110,000 4 4
110,001 120,000 5 5
120,001 130,000 4 3
130,001 140,000 1 1
140,001 150,000 2 2
150,001 160,000 1 2
160,001 170,000 2 2
170,001 180,000 2 -
180,001 190,000 1 1
190,001 200,000 -1
200,001 210,000 -1
210,001 220,000 --
220,001 230,000 1 1
230,001 240,000 2 3
240,001 250,000 1 -
250,001 260,000 - -
260,001 270,000 -1
270,001 280,000 --
280,001 290,000 1 -
290,001 300,000 --
300,001 310,000 --
310,001 320,000 --
320,001 330,000 1 1
Total 28 28
The remuneration figures shown in the above table include all monetary remuneration actually paid, plus
the cost of all benefits provided, during the year. The table does not include independent contractors.
13
S
ubstantial Product Holders:
Notices given under the Financial Markets Conduct Act 2013 up to the date of this Annual Report:
Holder Relevant Interest Date of Notice
Richard Milsom 4,553,667 (15.8%) 5 April 2023
WAF Limited 5,758,406 (19.99%) 25 October 2023
Subsidiary Companies:
Directors of subsidiary companies as at 30 June 2024 were as follows:
Subsidiaries of the Parent Principal Activity Directors
Allied Farmers Rural Limited Rural Services S. Ruha, P Luscombe
ALF Nominees Limited
Nominee company S. Ruha
Allied Farmers (New Zealand)
Limited
Non-trading S. Ruha
Rural Funding SolutioNZ Limited Rural Financing S. Ruha, O Carruthers
Subsidiaries of Allied Farmers (New Zealand) Limited
Allied Farmers Property Holdings
Limited
Non-trading S. Ruha
Allied FLA Limited Non-trading R. Milsom
Subsidiaries of Allied Farmers Property Holdings Limited
UFL Lakeview Limited Non-trading S. Ruha
5M No 2 Limited Non-trading S. Ruha
QWF Holdings Limited Non-trading S. Ruha
Lifestyles of NZ Queenstown
Limited
Non-trading S. Ruha
LONZ 2008 Limited Non-trading S. Ruha
LONZ 2008 Holdings Limited Non-trading S. Ruha
Clearwater Hotel 2004 Limited Non-trading S. Ruha
Subsidiaries of Allied Farmers Rural Limited
NZ Farmers Livestock Limited Livestock Trading
P Luscombe, R. Milsom, S
Williams, O Carruthers
Subsidiaries of NZ Farmers Livestock Limited
Farmers Meat Export Limited Meat Processing S Morrison, W Sweeney, P
Luscombe
NZ Farmers Livestock Finance
Limited
Rural Finance S. Ruha, O Carruthers
Redshaw Livestock Limited
Livestock Trading
D Freeman, B. Lee, M MacDonald,
W Sweeney
14
Shareholder Information:
The ordinary shares of Allied Farmers Limited are listed on the NZX. The NZX share code is ‘ALF’.
Twenty Largest Registered Shareholders:
The shareholder information in the following disclosures has been taken from the Company’s share
register at 8 August 2024.
Rank Shareholder
Number of
Shares
% Issued
Capital
1 WAF Limited 5758406 19.99
2 Rem Trustee Limited 3585000 12.45
3 Custodial Services Limited 1348536 4.68
4 Wairahi Investments Limited 1300000 4.51
5 Donald Clifton Jacobs 831050 2.88
6
Elizabeth Beatty Benjamin & Michael Murray
Benjamin 682622 2.37
7 FNZ Custodians Limited 646612 2.24
8 Stephen James Hurley & Bridget Eileen Wall 570000 1.98
9 Dfs Investment Partners Llc 522185 1.81
10 Rpmilsom Investments Limited 512000 1.78
11 Deborah Lee Seerup 500001 1.74
12 New Zealand Depository Nominee 465079 1.61
13 Glenn Leslie Ballinger 457334 1.59
14 Graeme Stuart Lord & Lisa Anne Lord 442742 1.54
15 FNZ Custodians Limited 408074 1.42
16 Fortune Capital Group Limited 337239 1.17
17 Jade NZ Limited 300000 1.04
18 Ross Phillip Drew 198107 0.69
19 Milsom Holdings Limited 190000 0.66
20 Forsyth Barr Custodians Limited 176861 0.61
15
Analysis of Shareholding:
Range Holders % Issued Capital Issued Capital %
1-1000 60.78 422872 1.47
1001-5000 19.86 899089 3.12
5001-10000 6.82 922025 3.2
10001-50000 9.35 3724885 12.93
50001-100000 1.16 1521251 5.28
Greater than 100000 2.04 21316312 74
Diversity and Gender:
In June 2020, Allied Farmers adopted a Diversity and Inclusion Policy. More information on the Policy is set out
in the Corporate Governance Report and a copy is available on the Allied Farmers’ website. The Board has
evaluated Allied Farmers’ performance against its Diversity Policy objectives to operate the business in a way
that:
• does not tolerate discrimination of any kind;
• is objective, open-minded and free from discrimination;
• empowers management to cultivate a culture of inclusion in which the strengths of every
individual are recognised and valued;
• seeks to ensure that all staff receive equal and fair treatment under our policies and practices,
so that success is unhindered by individual differences;
• recognises and values individual diversity, different skills, ability and experiences; and,
• complies with the New Zealand Human Rights Act 1993, New Zealand Bill of Rights Act
1990, and all other relevant Human Rights laws.
The Board considers that these objectives have been met.
As at 30 June 2024, females represented 33% (FY23: 33%) of Directors and 20 % (FY23: 17%) of Officers of
Allied Farmers. Officers are defined as being the Managing Director of Allied Farmers Limited and specific
executives having key influence.
Current Year Previous Year
Male Female Male Female
Number of Directors 2 1 2 1
Percentage of
Directors
67% 33% 67% 33%
Number of Officers 4 1 5 1
Percentage of
Officers
80% 20% 83% 17%
16
Shareholder Enquiries:
Shareholders should send changes of address, dividend queries, and instructions and shareholding information
requests to MUFG, which acts as the Company’s share registrar.
Annual Meeting of Shareholders:
Allied Farmers Limited’s Annual Meeting of shareholders is typically held in late November each year. A Notice
of Annual Meeting and Proxy Form will be circulated to shareholders prior to the meeting.
Dividends Paid:
No dividend was paid to shareholders in FY24 (FY23: Nil).
Donations:
The Allied Farmers Board has determined that it will not make political donations. No political donations were
made during FY24.
Waiver and Approval:
On 7 June 2024 NZ RegCo granted Allied Farmers the following, in relation to proposed amendments to its
constitution to minimize the risk to Allied Farmers’ shareholder continuity being lost inadvertently:
•A waiver from Listing Rule 8.1.5 to the extent that this Rule would otherwise prevent Allied Farmers
from suspending the voting rights attaching to securities that, in accordance with the Constitutional
Amendments, are Affected Shares; and
•Approval under Rule 8.1.6 to allow Allied Farmers to include provisions in its Constitution that:
orestrict the transfer of Allied Farmers’ securities to any person if the Board knows or believes
that the transfer will or is likely to result in that person having a relevant interest in breach of the
Ownership Threshold;
orestrict Allied Farmers from issuing, acquiring or redeeming shares where Allied Farmers has
actual knowledge that the issue, acquisition or redemption would result in a breach of the
Ownership Threshold; and
oallow the Board to require documentation and/or information in relation to a proposed transfer
or transferee of Allied Farmers’ shares, in the circumstances permitted under the Constitutional
Amendments.
F
ull details of the waiver and approval, including the definition of the capitalized terms referred to above, can be
found on the NZX website: https://www.nzx.com/announcements/432440
17
CONSOLIDATED
FINANCIAL STATEMENTS
SEC
TION
5
18
Consolidated Profit and Loss Statement
For the year ended 30 June 2024
Audited
June
June
20242023
Note
$000
$000
Commission and fee income
A1 16,497
15,906
Sale of goods
A1 10,381
10,015
Interest income
A1 328
414
Other Income
A1 422
387
Equity Accounted Earnings NZRLMA1
-
417
Total Income
27,628
27,139
Cost of goods sold
A1 (7,703)
(7,155)
Personnel expenses
A1 (9,428)
(10,018)
Depreciation and amortisation
A1 (1,165)
(902)
Operating expensesA1
(5,681) (4,717)
Total Expenses
(23,977) (22,792)
Finance CostsA1
(565) (276)
Operating Profit before tax
3,086 4,071
Gain on Sale of PropertyA1 4,229
-
Profit before tax
7,315
4,071
Income tax (expense) / benefit
A2 (396)
207
Profit after tax 6,919 4,278
Profit attributable to:
Shareholders of Allied Farmers Limited ('Allied')
5,206 3,338
Non-controlling shareholders of NZ Farmers Livestock Limited ('NZFL')
1,713 940
Allied Earnings per share (cents) - Basic
A3 18.07 11.59
Weighted average number of shares - Basic (000's)
28,806 28,806
Allied Earnings per share (cents) - Diluted
A3 17.98 11.59
Weighted average number of shares - Diluted (000's)
28,950
28,806
Consolidated Statement of Other Comprehensive Income
For the year ended 30 June 2024
Audited
June
June
20242023
$000
$000
Profit after tax 6,919
4,278
Amounts Not Reclassified Through Profit and Loss
C2 (371)
(670)
Total comprehensive income
6,548
3,608
Change in value of investment in equity securities
Group
Group
Consolidated Statement of Cash Flows
For the year ended 30 June 2024
June
June
2024
2023
Note
$000
$000
Cash flows from/(to) operating activities
Cash receipts from customers26,819 26,144
Interest received328 414
Cash paid to suppliers and employees(23,862) (23,541)
Interest paid(565) (276)
Income tax (paid)/received(621) (52)
Net cash flow from operating activities2,099
2,689
Cash flows from/(to) investing activities
Decrease (Increase) in finance receivables NZ Farmers Livestock Finance Ltd/Rural Funding SolutioNZ Ltd
67
1,324
Dividend income from NZL
-
152
Acquisition of New Zealand Rural Land Company Limited shares
-
(156)
Investment in New Zealand Rural Land Management Partnership
(2)
(6,358)
Purchase of shares in NZ Farmers Livestock Ltd
-
(93)
Net disposal/(acquisition) of intangibles, property, plant and equipment
358
(120)
Sale of Frankton Saleyards
5,910
-
Net cash flow from/(used in) investing activities6,333
(5,251)
Cash flows from/(to) financing activities
Drawdown (Repayment) of Heartland borrowings
(951)
3,660
Dividends paid to Non-Controlling Shareholders in Subsidiaries
(678)
(1,295)
Drawdown (Repayment) of Vehicle Finance Borrowings
(1,062)
(567)
Net cash flow used in financing activities(2,691)
1,798
Net movement in cash and cash equivalents
5,741
(764)
Opening cash and cash equivalents
3,783
4,547
Closing cash and cash equivalents
B49,524 3,783
Reconciliation of Profit to Cash Surplus from Operating Activities
Profit for the year 6,919
4,278
Adjustments for items not involving cash flows:
Impairment on receivables
39
10
(Profit)/loss on sale of assets
(47)
13
(Profit)/loss on sale of Frankton Saleyards
(4,229)
-
Depreciation and amortisation
1,165
902
(Increase) Decrease in Deferred Tax
(140)
(330)
Other - including non cash items
(365)
(442)
(3,577)
153
Movement in trade and other receivables 612 75
Movement in inventories 12 (178)
Movement in trade, other payables and employee benefits (1,245)
(1,493)
Movement in taxation (621) (146)
Cash flow from operating Activities2,099
2,689
Group
Audited
Consolidated Balance Sheet
As at 30 June 2024
Audited
June
June
20242023
Note
$000
$000
Equity
Share capital
B2 158,204
158,204
Accumulated Losses and Reserves
(136,299)
(141,134)
Equity attributable to owners of the Parent
21,905
17,070
Non-controlling interests
2,688
1,653
Total equity 24,593 18,723
Liabilities
Trade and other payables
B7 8,392
9,498
Employee benefits
1,226
1,365
Income tax payable
-
79
Bank borrowings
B5 867
945
Lease liabilities
B6 804
665
Total current liabilities 11,289
12,552
Bank borrowings
B5 1,842
2,715
Lease Liabilities
B6 1,431
905
Total non-current liabilities 3,273
3,620
Total liabilities 14,562 16,172
Total liabilities and equity 39,155 34,895
Assets
Cash and cash equivalents
B4 9,524
3,783
Trade Receivables
C1 9,471
9,931
Inventories
240
252
Income tax receivable
6
-
Finance receivables
C1 1,438
1,505
Other receivables
22
214
Total current assets 20,702
15,685
Deferred tax assets
A2 1,464
1,324
Goodwill
D2 742
742
Intangible assets
C4 9,942
10,442
C2 2,997
2,467
Investments - Other
C2 8
6
Property - owned
C3 1,492
2,837
Property - right of use assets
C3 1,808
1,392
Total non-current assets 18,453
19,210
Total assets 39,155 34,895
0.480.26
0.400.21
Note: net tangible assets is a non-GAAP disclosure and calculated as equity from which is deducted goodwill and intangible assets
The Board of Directors of Allied Farmers Limited authorised these financial statements for issue on 23 August 2024.
Richard MilsomShelley Ruha
Net Tangible Assets per Share - attributable to Allied ($ per share)
Net Tangible Assets per Share - Consolidated ($ per share)
Investment - New Zealand Rural Land Company Limited
Group
Consolidated Statement of Changes in Equity
Components that make up the capital and reserves of the Group and the changes of each during the period.
For the year ended 30 June 2024
Audited
Group
Share
Capital
Accumulated
losses
Revaluation
Reserve
Allied
Shareholders
Interests
Non-
Controlling
Shareholders
Interests
Total
$000$000$000$000$000$000
Balance at 1 July 2022
158,204 (143,555) (188) 14,461 2,042
16,503
Profit after tax for the period - 3,338 - 3,338 940 4,278
Revaluation of Equity Securities - - (670) (670) - (670)
Total comprehensive income for the period - 3,338 (670) 2,668 940 3,608
Dividends paid to Non-Controlling Interests - - - - (1,295) (1,295)
Allied purchase Non-Controlling Shareholders Shares - (59) - (59) (34) (93)
Total transactions with owners
- (59) - (59) (1,329) (1,388)
Balance at 30 June 2023 158,204 (140,276) (858) 17,070 1,653 18,723
Balance at 1 July 2023 158,204 (140,276) (858) 17,070 1,653 18,723
Profit after tax for the year
- 5,206 - 5,206 1,713 6,919
Revaluation of Equity Securities
- - (371) (371) - (371)
Total comprehensive income for the period - 5,206 (371) 4,835 1,713 6,548
Dividends paid to Non-Controlling Interests
- -
-
- (678) (678)
Total transactions with owners - - - - (678) (678)
Balance at 30 June 2024 158,204 (135,070) (1,229) 21,905 2,688
24,593
A Financial performance
A1 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 and referring livestock finance to farmer clients.Parent operations: The ultimate holding company for Allied Group's investments and governance activity for the Group.Segment information (Audited)
June
June
June
June
June
June
June
June
June
June
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
Commission and fee income
13,126
14,699
21
4
3,350
1,203
-
-
16,497
15,906
Sale of goods
10,381
10,015
-
-
-
-
-
-
10,381
10,015
Interest income
253
284
75
124
-
-
-
6
328
414
Other Income *
78
40
344
195
-
-
-
152
422
387
Equity Accounted Earnings NZRLM
-
-
-
-
-
417
-
-
-
417
Total Income
23,838
25,038
440
323
3,350
1,620
-
158
27,628
27,139
Cost of goods sold
7,703
7,155
-
-
-
-
-
-
7,703
7,155
Personnel expenses
8,881
9,789
108
96
343
56
96
77
9,428
10,018
Depreciation and amortisation
645
769
-
-
520
133
-
-
1,165
902
Operating expenses
3,671
3,606
42
41
829
210
1,139
860
5,681
4,717
Total Expenses
20,900
21,319
150
137
1,692
399
1,235
937
23,977
22,792
Finance Costs
(181)
(128)
(83)
(64)
(301)
(84)
-
-
(565)
(276)
Operating Profit/(loss) before tax
2,757
3,591
207
122
1,357
1,137
(1,235)
(779)
3,086
4,071
Gain on Sale of Property
4,229
-
-
-
-
-
-
-
4,229
-
Profit/(loss) before tax
6,986
3,591
207
122
1,357
1,137
(1,235)
(779)
7,315
4,071
Income tax (expense) / benefit
(396)
207
Profit/(loss) after tax
6,919
4,278
Current Assets
17,321
12,603
1,438
1,505
1,612
1,267
331
310
20,702
15,685
Investments in NZL
-
-
-
-
-
-
2,997
2,467
2,997
2,467
Other Non-Current Assets
5,517
6,296
100
100
9,839
10,347
-
-
15,456
16,743
Assets
22,838
18,899
1,538
1,605
11,451
11,614
3,328
2,777
39,155
34,895
Current Liabilities
9,848
10,869
-
525
1,105
1,001
336
158
11,289
12,552
Non-Current Liabilities
1,431
905
-
-
1,842
2,715
-
-
3,273
3,620
Liabilities
11,279
11,774
-
525
2,947
3,716
336
158
14,562
16,172
Additions of Property, Plant and Equipment, and Right of Use assets
2,043
231
-
-
-
-
-
-
2,043
231
In this section
Rural Land Management: New Zealand Rural Land Management Limited Partnership (NZRLM) - the contracted asset manager of New Zealand Rural Land Company Limited (NZL), including a management agreement with RoC Partners.
Livestock Services
Financial Services
Rural Land Management
Parent Operations
* Other Income in the Financial Services segment includes referral fee income from Heartland Bank Limited to 30 June 2024 $343,507 (2023: $195,214)* Gain on sale relates to the sale of an Allied Group property asset disposed of during the year.
Total
A2 Taxation
2024
2023
$000 $000
Income tax using the company's tax rate (28%)2,048 1,140
Expenditure not deductible for tax
11
3
Other permanent differences
145
(80)
Temporary differences
(8)
1
Recognition of deferred tax asset
(140)
(330)
Non Taxable Income
(1,181)
-
Use of Group tax losses
(1,271)
(527)
Income tax (expense )benefit(396)
207
Deferred Tax
Movement in temporary differences during the year
Opening
balance
Recognised in
income
Closing
Balance
$000$000$000
Financial receivable credit loss provision 51 10 61
Employee benefits 249 (11) 238
Tax loss carry forward 1,024 141 1,165
1,324 140 1,464
Financial receivable credit loss provision 48 3 51
Employee benefits 251 (2) 249
Tax loss carry forward 694 330 1,024
993 331 1,324
2023
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.
Income from referring customers to Heartland Bank Limited is recognised when the financing transaction is agreed between Heartland Bank Limited and the
borrower.
2024
Measurement & Recognition
Income tax expense is the income tax assessed on taxable profit for the year. Taxable profit differs from profit before tax reported in the statement of
comprehensive income as it excludes items of income and expense that are taxable or deductible in future years (i.e. deferred tax) and also excludes items
that will never be taxable or deductible.
All income noted above is recognised at a point in time, in accordance with NZ IFRS 15, and performance obligations are met upon delivery of goods.
Group
The Performance fees are determined based on the net asset value of the underlying fund and is settled in NZL shares. Half of the shares issued are
subject to escrow arrangements for 5 years after the performance fee is payable.
Revenue by NZRLM from property management fees, performance fees and transaction fees are recognised as revenue in the accounting periods in which
the services are rendered, which is when they satisfy their performance obligations to NZL.
Group unrecognised deferred tax assets comprise unused tax losses as at 30 June 2024 which are estimated at total $178,126,791 (2023:$180,785,199).
The ability to utilise tax losses, given the age of the losses, is dependent upon continuing to meet shareholder continuity requirements of prevailing income
tax legislation.
As at balance date imputation credits available to the shareholders of only the Parent Company in subsequent periods totalled $140,856 (2023: $89,248).
Measurement and Recognition
Commission 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, net of rebates. 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 year end the variable consideration is taken account of in the revenue recognised.
Sale of goods (veal meat and skins) revenue is recognised once goods are delivered to the customer.
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.
A3 Earnings Per Share
2024
2023
$000
$000
Profit attributable to shareholders of Allied Farmers Limited
- Basic and diluted
5,206
3,338
Weighted number of shares
- Basic
28,806
28,806
- Diluted*
28,950
28,806
Earnings per share (cents)
- Basic
18.07
11.59
- Diluted
17.98
11.59
Key Judgement:
A deferred tax asset is recognised to the extent it is probable that future taxable profits will be available to use the asset. This is reviewed at each balance
date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available in the future to utilise the asset. The level of losses
recognised reflects management's expectations of recurring levels of taxable profitability for approximately the next 18 months.
Measurement and Recognition:
Deferred tax is income tax that is expected to be payable or recoverable in the future as a result of the unwinding of temporary differences. These arise from
differences in the recognition of assets and liabilities for financial reporting and for the filing of income tax returns. Deferred tax is recognised on all temporary
differences, other than those arising from goodwill and the initial recognition of assets and liabilities in a transaction (other than in a business combination)
that affects neither the accounting nor taxable profit or loss.
Deferred tax is calculated at the tax rates that are expected to apply to the year when a liability is settled or an asset realised, based on tax rates and tax laws
that have been enacted or substantively enacted at balance date.
Group
* Apart from an issue of 144,032 Performance Share Rights to the Managing Director under a long term incentive scheme effective from 1 July 2023 there
are no other changes during the year, nor are there any dilutive potential shares / warrants/ options or convertible instruments at the end of either the current
or preceeding year.
Allied Farmers Group
B. Funding and Related Financial Risks
B1 Capital management
B2 Share Capital
20242023
Share capital ($000) 158,204 158,204
Number of shares issued and fully paid (000's)
Balance at beginning of period
28,807 28,807
Balance at end of year
28,807 28,807
B3 Non-controlling interests
20242023
Summary financial results $000 $000
Revenue 24,278 25,361
Profit and total comprehensive income 7,193 3,713
Summarised balance sheet
Current assets 18,760 14,108
Non-current assets 5,617 6,396
Current liabilities (9,848) (11,393)
Non-current liabilities (1,431) (905)
Net assets 13,098 8,207
B4 Cash and cash equivalents
20242023
$000 $000
Cash and cash equivalents 9,524 4,308
Finance Receivables overdraft facility offset per agreement - (525)
Net cash and cash equivalents 9,524 3,783
Undrawn overdraft facilities
8,500 7,975
Cash is held at banks with a credit rating of A- or higher.
B5 Debt funding
Payable within 1
year
Payable after 1
year
Undrawn Interest rate
$000$000$000%
Bank borrowings - Heartland Bank Limited
867 1,842 1,102 9.63
Total debt funding
867 1,842 1,102
Bank borrowings - Heartland Bank Limited
945 2,715 150 9.67
Total debt funding
945 2,715 150
In this section
This section explains how the Allied Group manages its various funding sources including capital structure and debt. It also explains the financial risks that the Group faces
and how these risks are managed.
Group
The Allied Farmers Group's non controlling interests arise from minority interests held by other shareholders in NZ Farmers Livestock Limited and further non-
controlling interests held by a shareholder other than NZ Farmers Livestock Limited in its controlled subsidiary, Redshaw Livestock Limited.
The following summary financial information of the NZFL Group is provided to assist in understanding the significance of external shareholders interests in the
group's reported position and performance. This information is presented before intercompany eliminations.
All ordinary shares rank equally as to voting, dividends and distribution of capital on liquidation. There is no par value.
The Allied Group's capital includes share capital, accumulated losses and non controlling interests.
The Board manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying
assets. In order to maintain or adjust the capital structure, the Group may issue new shares, sell assets, seek additional debt funding, or adjust the amount of
dividends paid to shareholders.
NZFL and Subsidiaries
2023 2024
Group
Group
The overdraft borrowing facilities which are provided by ANZ Banking Group (New Zealand) Limited include seasonal finance and are secured, by way of a first
ranking General Security Agreement and gross guarantee and indemnity, against the assets of NZ Farmers Livestock Limited, NZ Farmers Livestock Finance
Limited and Farmers Meat Export Limited. The financial covenants under these facilities have been fully complied with during the year.
Redshaw Livestock has an overdraft facility provided by the Bank of New Zealand. This overdraft is secured against the assets of Redshaw Livestock Limited. NZ
Farmers Livestock Limited guarantees the bank overdraft of its subsidiary Redshaw Livestock up to $338,000 (FY23: $338,000), plus interest and costs.
The Heartland Bank Limited borrowings are secured by way of a first ranking General Security Agreement and cross guarantee against the assets
of Allied Farmers Limited and New Zealand Rural Land Management Limited Partnership. Principal is paid monthly with final repayment in March
2028. The interest rate is calculated on the 90-day BKBM rate plus a margin of 4%. There are no covenants.
Allied Farmers Group
B6 Lease liabilities
Property Motor Vehicles
Plant &
EquipmentTotal
$000$000$000$000
Opening 259 1,267 44 1,570
Leases entered into during the period - 1,726 - 1,726
Interest expense 32 127 4 163
Principal repayments (120) (1,087) (17) (1,224)
171 2,033 31
2,235
Current lease liabilities
88 701 15
804
Non-current lease liabilities
83 1,332 16 1,431
Property
Motor Vehicles
Plant &
EquipmentTotal
$000$000$000 $000
Opening 353 1,729 57 2,139
Leases entered into during the period - 144 - 144
Interest expense 26 97 4 127
Principal repayments (120) (703) (17) (840)
259 1,267 44 1,570
Current lease liabilities
97 556 13 665
Non-current lease liabilities
162 711 31 905
B7
20242023
$000 $000
Trade Payables (livestock and NZL receivables) 7,990 9,048
Accruals and sundry creditors 402 450
Total payables 8,392 9,498
Balance Sheet
Contractual
Cashflow
< 6 months 6 - 12 mths 1 - 5 yrs
$000$000$000$000$000
Trade and other payables 8,392 8,392 8,392 - -
Bank borrowings - Heartland Bank Limited 2,709 3,250 433 433 2,384
Lease liabilities 2,235 2,495 534 460 1,501
13,336 14,137 9,359 893 3,885
Trade and other payables 9,498 9,498 9,498 - -
Bank borrowings - Heartland Bank Limited 3,660 4,496 655 591 3,250
Lease liabilities 1,570 1,713 333 333 1,047
14,728 15,707 10,486 924 4,297
2023
2024
Group
These are substantially the liability that exist to the vendor of livestock as a result of livestock sales on the vendors behalf.
Measurement and recognition
The above lease liabilities are in relation to leases of regional offices and the leases of Motor Vehicles.
Residual buy back values included in new lease arrangements are included within lease payments in which management expects to exercise at the inception of the
lease.
The motor vehicle leases are typically for a 3 year term with instalments of principal and interest paid on a monthly basis. At the end of the lease the vehicle can
either be returned or the Group has the ability to pay the residual value and unpaid balance and take ownership of the vehicle. The Lessor holds a registered
security interest over the vehicle throughout the term of the lease. All vehicle operating expenses are met by the Group. The Group's incremental borrowing rate
ranges between 6.0% to 10.6% (2023: 6.0% to 9.95%) as the discount rate, with adjustments for the type and term of the lease.
The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have lease terms of 12 months or less and leases of low-
value assets. The Group recognises the lease payments associated with these leases within operating expenses on a straight-line basis over their lease terms.
2024
Group
Group
2023
Liquidity risk
Liquidity risk represents the Group’s ability to meet its contractual obligations as they fall due.
Liquidity risk is reviewed on an ongoing basis and managed to meet requirements. Cash flow forecasting is performed in the operating entities of the Group and
aggregated at Group level. The Group monitors rolling forecasts of the Group's liquidity requirements to ensure it has sufficient cash to meet operational needs while
maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Group does not breach borrowing limits or covenants (where
applicable) on any of its borrowing facilities.
The amounts disclosed in the tables above show the contractual undiscounted cash flows (including interest) due on financial liabilities, so will not always reconcile to
the amount disclosed on the statement of financial position. The amounts below also reflect the contractual repricing timing on financial liabilities, if applicable.
Payables
Allied Farmers Group
Interest Rate Risk
20242023
$000 $000
Effect on net profit for the year / equity 27 37
B8 Net Interest income/(costs)
20242023
$000 $000
Interest received 328 414
Total interest income 328 414
Interest paid on borrowings (399) (149)
Interest paid on bonds - -
Lease interest (166) (127)
Total interest expenses (565) (276)
Net Interest income/(costs) (237) 138
Group
Group
The Group is exposed to interest rate risk on movements in floating interest rates on bank borrowings. Finance receivables have fixed interest rates and generally
a term of less than one year.
In managing interest rate risk, the group aims to reduce the impact of short-term fluctuations on the group’s earnings. Over the longer term, however, permanent
changes in interest rates will have an impact on profit.
If market interest rates for bank borrowings were to increase or decrease by +/-1% (2023: +/-1%), the effect on net profit after tax and equity for the year as applied
to year end balances would be as follows:
Allied Farmers Group
C. Our receivables, other assets and other payables
In this section
C1 Receivables
2024
2023
$000
$000
Trade Receivables (livestock and NZL receivables) 9,471 9,931
Finance receivables 1,438 1,506
Total receivables 10,909 11,437
Amounts are stated at carrying value, net of credit loss allowance
provisions of
220
181
Receivables written off during the year 12 10
The status of receivables at the reporting date is as follows:
Group receivables
Not yet due
1 - 30 days
overdue
31 - 60 days
overdue
>60 days
overdue
Total
$000 $000 $000$000$000
Receivables from livestock sales
6,946 836 395 264
8,441
Credit loss allowance (livestock)
(38) (14) (4) (74) (130)
Receivables from NZL
140 - - 1,020 1,160
Finance receivables
1,005 81 380 62 1,528
Credit loss allowance (finance)
- (2) (26) (62) (90)
Net receivable
8,053 901 745 1,210
10,909
Receivables from livestock sales
8,081 533 118 247 8,979
Credit loss allowance (livestock)
(27) (10) (3) (53) (93)
Receivables from NZL
102 48 894 - 1,044
Finance receivables
1,514 2 2 78 1,596
Credit loss allowance (finance)
(8) (2) (2) (78) (90)
Net receivable
9,662 571 1,009 194 11,436
Security held for finance receivables
2024
2023
$000
$000
1,527
1,535
- 61
Total finance receivables 1,527 1,596
Concentrations of counterparties
Movement in gross finance receivables balance
2024
2023
$000
$000
Opening balance
1,596
2,920
6,315
7,695
Principal repaid
(6,477)
(9,193)
93
174
Total finance receivables 1,527 1,596
The amount due from NZL includes transaction, leasing and management fees due in accordance with the management contract. This balance is not secured
as at 30 June 2024.
New loans issued
Interest and fees accrued
Key Judgement
The loss allowances for receivables are based on assumptions about risk of default and expected loss rates. The Group uses judgement in making these
assumptions and selecting the inputs to the impairment calculation, based on the Group's past history and existing market conditions, as well as forward-
looking estimates at the end of each reporting period.
It is expected that all trade receivables will be collected within 12 months of the balance date. All accounts past their due date have been subject to individual
assessment.
On origination, the finance receivables will fund the entire value of secured livestock. No credit scores are assigned to borrowers for internal risk management
purposes.
Receivables from livestock sales and finance receivables are exclusively held with counterparties trading in the farming sector. However there are no
individual counterparties that are considered to be significant to the group.
Secured via PPSR
Not secured
All amounts not secured as at 30 June 2023 were subsequently secured.
This section explains:
- The assets the Group is due to receive from third parties and the credit risk associated with these assets.
- The property and motor vehicles the Group owns and has a right to use under lease arrangements.
- The obligations to third parties, other than banks.
2023
2024
Group
Allied Farmers Group
Credit Risk Management
C2 Investments Held by Group
2024
2023
$000
$000
2,997 2,467
8 6
Total Investments 3,005 2,473
New Zealand Rural Land Company Limited
2024
2023
$000
$000
Carrying Value Brought Forward
2,467
3,103
Shares Purchased / Issued / Rights Issue
-
156
Shares Issued under NZRLM Performance Fee Arrangement
901
1,627
Shares sold
-
(1,750)
Change in Value Credited to Other Reserves
(371)
(669)
At 30 June 2024 2,997 2,467
Under the Management Agreement NZL is to pay NZRLM a performance fee which, subject to certain adjustments, is to be equal to 10% of the increase in net
asset value of NZL in each financial year. The performance fee for the year ended 30 June 2023 comprised 299,855 shares of NZL distributed to NZRLM.
The performance fee for the year ended 30 June 2024 comprised 564,139 shares of NZL distributed to NZRLM. Half of the shares issued in each Financial
Year to satisfy the performance fee are subject to escrow arrangements, under which NZRLM or any nominee agrees not to sell, transfer, assign or otherwise
dispose of, or offer or agree to sell, transfer, assign or otherwise dispose of, its right and title to, and beneficial interest in such shares for a five year period.
1,347,719 shares distributed to Allied Farmers Limited were subject to this arrangement as at 30 June 2024 (2023: 1,065,650).
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 30 June 2024 is $2,997,328 (2023: $2,467,184).
Settlement of receivables from NZL is dependent on NZL's cash flows and management expects that the full outstanding amount will be settled by the end of
September 2024.
At 30 June 2024 the Group holds
3,367,756 (2023: 2,803,617) shares in New Zealand Rural Land Company Limited. This holding represents a 2.41%
ownership in NZL as at 30 June 2024 (2023: 2.00%). These shares are equity investments quoted in the active market which the Group has elected to
designate as a financial asset at fair value through other comprehensive income.
Other Investments
New Zealand Rural Land Company Limited
Credit risk is the risk that a counterparty to a transaction with the Group will fail to discharge its obligations and make payment, causing the Group to incur a
financial loss.
The Group manages its exposure using a credit policy that includes limits on exposures with significant counterparties that have been set and approved by the
Board and are monitored on a regular basis and does not have any significant concentration of risk with any single party. The Group considers an account to
be in default when a debtor fails to make a contractual payment in the absence of a written agreement to the contrary. This is when the account is past due by
more than 90 days. Livestock finance receivables are secured over the livestock concerned and in the majority of cases supported by personal covenants
from the borrower.
Receivables are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan with the Group. The
Group categorises a loan or receivable for write-off when a debtor fails to make contractual payments more than 180 days past due. Where loans or
receivables have been written off, the company continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are
made these are recognised in profit or loss.
Measurement and recognition
Receivables from livestock sales and Finance Receivables are measured on initial recognition at fair value, and are subsequently carried at amortised cost,
less provision for expected credit losses.
For Receivables from livestock sales, the provision for expected credit losses is based on the simplified approach, as permitted by NZ IFRS 9, and records the
loss allowances as lifetime expected credit losses from recognition. These are the expected credit losses that result from all possible default events over the
life of the financial instrument.
Based on the simplified approach which requires a loss allowance to be measured at an amount equal to lifetime expected credit losses, finance receivables
are reviewed on an individual basis to determine whether any amounts are unrecoverable and an expected credit loss provision is recorded. The expected
credit losses are based on management's assessment of amounts considered uncollectible for specific customers based on age of debt, history of payments,
account activity, current and future economic factors and other relevant information. Debts known to be uncollectible are written-off as bad debts to the profit
and loss when identified.
The fair value of NZL shares held by Allied Farmers Limited as at 30 June 2024 is $2,997,328 (2023: $2,467,183).
Allied Farmers Group
New Zealand Rural Land Management Limited
Reconciliation of Summarised Financial Information2024
2023
$000
$000
Opening Balance -
2,324
Profit For Period
-
920
Dividend
-
(2,677)
Less Transfer to Intangible Asset
-
(567)
Closing Net Assets - -
Increase in net assets - -
Reconciliation of Interest in Associate 2024
2023
$000
$000
Opening Balance -
3,665
Increase in Net Assets (50% of Profit for Period)
-
417
Less Dividend paid (50% of Dividend)
-
(1,338)
Less Transfer to Intangible Asset
-
(2,744)
Carrying Value 30 June 2024 - -
C3
Property, Plant & Equipment
Owned
LandBuildings
Plant and
equipment
Motor Vehicles Total
$000 $000 $000 $000 $000
Cost at beginning of year
2,019 1,049 650 209 3,927
Additions
- - 15 302 317
Disposals
(1,393) (235) (30) (162) (1,820)
Cost at end of year
626 814 635 349 2,424
Accumulated depreciation at beginning of the year
- (607) (465) (18) (1,090)
Depreciation
- (62) (32) (12) (106)
Disposals
- 99 16 149 264
Accumulated depreciation at end of year
- (570) (481) 119 (932)
Net value 2024
626 244 154 468 1,492
LandBuildings
Plant and
equipment
Motor VehiclesTotal
$000 $000 $000 $000 $000
Cost at beginning of year
2,019 1,049 637 243 3,948
Additions
- - 22 - 22
Disposals
- - (9) (34) (43)
Cost at end of year
2,019 1,049 650 209 3,927
Accumulated depreciation at beginning of the year
- (546) (430) (38) (1,014)
Depreciation
- (61) (33) (14) (108)
Disposals
- - (2) 34 32
Accumulated depreciation at end of year
- (607) (465) (18) (1,090)
Net value 2023
2,019 442 185 191
2,837
On 27th March 2023 Alied completed the purchase of the 50 percent of NZRLM that it did not already own. The consideration comprised a combination of
cash and NZL shares owned by Allied but transferred to NZRLM vendors.
From 27th March 2023 NZRLM was consolidated into the Allied Group consolidated Financial Statement (Refer note C4).
2023
Group
2024
Allied Farmers Group
Right of Use Assets
Property Motor Vehicles
Plant &
Equipment
Total
$000 $000 $000 $000
Opening
247 1,101 44 1,392
Additions
- 1,726 - 1,726
Less Disposals
- (864) - (864)
Less Depreciation
(95) (337) (14) (446)
Total Right of use Asset 152 1,626 30 1,808
Total Cost
620 3,285 57 3,962
Total Accumulated Depreciation
(468) (1,659) (27) (2,154)
Total Carrying Value
152 1,626 30 1,808
PropertyMotor Vehicles
Plant &
Equipment
Total
$000$000$000$000
Opening 338 1,493 57 1,888
Additions - 140 - 140
Less Disposals - (59) - (59)
Less Depreciation (91) (473) (13) (577)
Total Right of use Asset 247 1,101 44 1,392
Total Cost
620 2,423 57 3,100
Total Accumulated Depreciation
(373) (1,322) (13) (1,708)
Total Carrying Value
247 1,101 44 1,392
C4
Intangible Assets
NZL
Management
Contract
Software Total
$000 $000 $000
Opening Cost
10,474 809 11,283
Additions
- 113 113
Disposals
- - -
Cost at end of year
10,474 922 11,396
Accumulated amortisation at beginning of the year
(131) (710) (841)
Amortisation
(517) (96) (613)
Disposals
- - -
Accumulated amortisation at end of year
(648) (806) (1,454)
Net value 2024
9,826 116 9,942
NZL
Management
Contract
Software Total
Opening Cost
- 739 739
Additions
10,474 70 10,544
Disposals
- - -
Cost at end of year
10,474 809 11,283
Accumulated amortisation at beginning of the year
-
(624) (624)
Amortisation
(131) (86) (217)
Disposals - - -
Accumulated amortisation at end of year (131) (710) (841)
Net value 2023
10,343 99 10,442
2023
2024
Measurement and recognition
All right of use assets are measured at cost. Land is not depreciated. All other owned property, plant and equipment is depreciated on a straight line basis at
rates over their estimated useful lives, as follows:
- Buildings: 8 - 30 years
- Plant and equipment: 2.5 - 30 years
- Motor Vehicles (owned): 1-3 years
- Right of use assets: over their lease term
Group
2024
2023
Measurement and recognition
Intangible assets are depreciated on a straight line basis at rates over their estimated useful lives, as follows:
- Management Contract -20 years
- Software - 3 years
Key Judgement
The assessment that there was no impairment of the NZL management contract at 30 June 2024. The valuation of the management contract is based on
management forecasts of future financial performance together with an assessment of the useful life of the asset, and therefore there is an inherent estimation
uncertainty.
Allied Farmers Group
The terms of the transaction were negotiated on an arm's length commercial basis.
New Zealand Rural Land Management Limited Partnership (Manager) continues to be the manager of NZL and will also manage the LP.
The key assumptions that were included in the assessment were:
Asset Growth in the portfolio being managed - 2.3% per annum
The level of acquisitions and divestments to the portfolio - 5% per annum
The discount rate to ensure it reflects the specific risks relating to future financial performance - 6.1%
NZRLM also acts as manager for the Investor in respect of its interest in the LP.
NZRLM does not receive a benefit due to its related party relationship with NZL.
The relationship and role of the NZRLM with NZL did not change in any material respect due to the transaction or the variation of the management agreement
with NZRLM.
Due to the amendment, it was identified that there is an indicator of impairment and hence an impairment assessment was performed as at 30 June 2024.
In February 2024, New Zealand Rural Land Company Limited (NZL) sold a 25% equity interest in its land portfolio to an Australia based investment fund
managed by specialist private markets investment manager, Roc Partners (Investor).
Under the agreement NZL transferred its group assets (other than cash on hand) to a New Zealand registered limited partnership (LP), together with NZL's
revolving credit facility with Rabobank.
The existing management agreement was amended at completion to facilitate this new structure, and to allow for the Manager to manage entities that NZL has
a controlling interest in (alongside its wholly owned subsidiaries) . Furthermore the Manager also acts as the manager for the investor in respect of its interest
in the LP.
In November 2020 New Zealand Rural Land Company Limited (NZL) entered into an exclusive management agreement with NZRLM to provide NZL with
management investment and administrative services (Management Agreement).
NZRLM provides all management services to NZL. From this date NZRLM received management fees, transaction fees and performance fees.
On 19 December 2022 Allied Farmers Limited announced that it exercised its call option to purchase the remaining 50 percent of NZRLM that it did not already
own.
The NZRLM Consideration was based on an independent valuation further supported by an independent expert’s report and totalled $8.3m (the total value
being $16.6M).
On 27 March 2023 Allied completed the purchase of the 50 percent of NZRLM that it did not already own.
Allied decided to apply the Optional concentration test under NZ IFRS 3 to consider if the acquisition can simply be considered an asset purchase.
Allied determined that the optional concentration test was met because substantially all of the value of the gross assets is concentrated in a single identifiable
asset being the management contract with NZL. Accordingly, the transaction is treated as an asset purchase.
The Management Contract meets the definition of an intangible asset.
Accordingly Allied has elected to follow a cost-based approach for the acquisition of this intangible asset.
Allied Farmers Group
D. Group Structure
In this section
D1 Subsidiaries
2024
2023
Ownership
interest
Ownership
interest
Operating Subsidiaries of the Parent
Allied Farmers (New Zealand) Limited
Investment
100%100%
Allied Farmers Rural Limited
Investment
100%100%
Rural Funding SolutioNZ Limited
Finance
100%100%
Rural Property Management
100%
100%
Subsidiaries of Allied Farmers Limited
Allied FLA Limited Non trading
100%
-
Subsidiaries of Allied Farmers Rural Limited
NZ Farmers Livestock Limited
Livestock Agency and Finance68%
68%
Subsidiaries of NZ Farmers Livestock Limited
Farmers Meat Export Limited
Meat Processing and Trading100%
100%
NZ Farmers Livestock Finance Ltd
Livestock Finance100%
100%
Redshaw Livestock Limited
Livestock Agency52%
52%
Subsidiaries of Allied Farmers (New Zealand) Limited
Allied Farmers Property Holdings LimitedNon trading
100%
100%
UFL Lakeview Limited
Non trading
100%
100%
5M No. 2 Limited
Non trading
100%
100%
QWF Holdings Limited
Non trading
100%
100%
Clearwater Hotel 2004 Limited
Non trading
100%
100%
Lifestyles of New Zealand Queenstown Limited
Non trading
100%
100%
LONZ 2008 Limited
Non trading
100%
100%
LONZ 2008 Holdings Limited
Non trading
100%
100%
D2 Goodwill
2024
2023
Cash generating units:
$000
$000
Redshaw
642
642
NZFLFL
100
100
742 742
Subsidiaries of Allied Farmers Property Holdings Limited
The Group financial statements include the financial statements of Allied Farmers Limited and the operating subsidiaries listed below.
Subsidiaries are entities controlled by the group. Control is achieved when the Group is exposed to, or has the rights to, variable returns from its
involvement with the entity and has the ability to affect those returns through its power over the entity. The financial records of operating subsidiaries are
included in the consolidated financial statements from the date on which control commences until the date on which control ceases.
This section provides information to help readers understand the Group structure and how it affects the financial position and performance of the Group.
All companies within the Group are incorporated in and have their principal place of business in New Zealand, and have a balance date of 30 June.
Goodwill in Redshaw arose on the acquisition of a controlling interest in Redshaw Livestock Limited and the NZFLFL goodwill arose from the
acquisition of a finance book from Stock Plan Limited previously supplying finance to a number of NZ Farmers Livestock Limited customers.
Key Judgement
The assessment that there was no impairment of the goodwill in the Redshaw CGU ('cash generating unit') at 30 June 2024. The valuation of the
CGU is based on a discounted cashflow of management forecasts of future financial performance and therefore there is an inherent estimation
uncertainty.
Group
New Zealand Rural Land Management Limited Partnership
Allied Farmers Group
Impairment assessment
Redshaw CGU
2024
2023
Revenue growth rate
2.5%
2.0%
Long term growth rate
2.5%
2.5%
15.5%
15.5%
2024
2023
Revenue growth rate - reduced by
2.5%
2.0%
Long term growth rate - reduced by
2.5%
2.0%
Discount rate - increased by
1.5%
2.0%
NZ Farmers Livestock Finance CGU
D3 Jointly Controlled Operation - Associated Auctioneers
Group's Share
of Profit
Group's Share
of Assets
Group's Share
of Liabilities
Group's Share
of Revenues
Group's Share
of Expenses
$000$000$000$000$000
2024 (17) 189 (29) 700 (717)
2023 32 392 (112) 692 (660)
Measurement & Recognition
The Group's subsidiary NZ Farmers Livestock Limited owns a proportion (25-50%) of various sale yard tangible assets and has joint arrangements in
relation to the operation of these sale yards (referred to as 'Associated Auctioneers'). The Group has assessed the nature of its investment in
Associated Auctioneers as joint operations. As joint operations, the Group accounts for its share of the revenue, expenses, assets and liabilities.
These joint operations are in four different locations. These joint operations are charged with the operating activities of the sale yards including
conducting sales of livestock via the auction process, maintaining the sale yards, collecting levies on livestock sales and meeting operating costs of
the yards. If there is a shortfall in the income to meet the operating costs in any one year then the joint operation's parties are required to contribute to
the shortfall in the proportion of their ownership of the sale yards.
The joint operation of the sale yards is strategically vital to the interests of NZ Farmers Livestock Limited as the sale yards activity provide significant
income to NZ Farmers Livestock Limited via commission on the sale of livestock handled through the sale yards.
Management has identified that a reasonably possible change in key assumption could cause the carrying amount to exceed the recoverable
amount. The following table shows the amount by which these assumptions would need to change individually for the estimated recoverable amount
to be equal to the carrying amount.
On an annual basis, the recoverable amount of Goodwill is determined based on value in use calculations specific to the Redshaw CGU. These
calculations use pre-tax cash flow projections based on financial budgets prepared by management covering a five year period. Cash flows beyond
the five year period are extrapolated by way of a terminal value calculation using the estimated growth rates stated below. The growth rates adopted
are consistent with internal forecasts and budgets. The discount rate reflects the specific risks relating to the cash flow being discounted.
On an annual basis the recoverable amount of this goodwill is tested by undertaking an assessment of its value in use.
No impairment charge was required to be recognised in the financial statements. There are no foreseeable changes in assumptions which could
result in a material impairment.
Below is a sensitivity analysis showing the impact on value of changes to the key variables:
The estimated recoverable amount of the Redshaw CGU is estimated to have exceeded the carrying amount of the CGU at 30 June 2024 by
approximately $114,000 (2023: $152,000).
Post tax discount rate (leading to a pre-tax equivalent rate of 21.5%)
Allied Farmers Group
E. Other
In this section
E1 Related parties
20242023
$000 $000
Key management personnel ('KMP') compensation
Short term employee benefits
594
570
Directors fees
150
169
Directors Fees - NZ Rural Land Management Limited Partnership
-
17
Transactions with entities with common directors
Livestock sales
1,043
483
Livestock purchases
832
375
Commission revenue
39
22
Dividends received as non-controlling shareholders of NZFL
580
1,213
Amount receivable from KMP
-
26
Amount receivable from NZL
1,421
1,044
Amount payable to KMP
-
9
No debts with key management personnel were written off during the year (2023: nil)
Transactions with directors
Consulting Fees paid to Directors and former Directors -
118
Distributions paid to Directors and former Directors -
679
Transactions with entities with common director - Heartland
Bank Limited
Borrowings at Balance Date 2,709
3,660
Interest Paid on borowings 301
83
Referral Fees received 344
146
Vehicle Lease Liability at balance Date * 180
204
Interest Paid on Vehicles Financed* 23
7
Managing Director
Contract for Service 250
95
Short Term Incentive 250
-
Distributions paid -
309
20242023
E2 Auditors’ remuneration
$000 $000
Audit fees - RSM Hayes Audit
125
118
Fees for other services RSM Hayes Audit
3
2
Direct expenses associated with the audit
22
18
Total
150 138
E3Events Subsequent to Balance Date
Share Cancellation by NZ Farmers Livestock Limited Allied Farmers
Limited
Non-
controlling
Shareholders
of NZFL
Total
$000$000$000
Paid/Transferred 4,0191,8915,910
Shareholder loan 1,4486822,130
5,4672,5738,040
This section includes information required to comply with financial reporting standards that is not covered in other sections.
Group
Identity of related parties
The Group has a related party relationship with each of its subsidiary companies, an associated entity and joint operation outlined in Section D.
On 16 August 2024, 68% owned subsidiary NZ Farmers Livestock Limited undertook a share buy back and susequent cancellation returning $8,040,000
to Shareholders. $5,910,000 was paid to its shareholders in cash and $2,130,000 remains as an outstanding shareholder loan. A summary appears in
the table below:
Related parties include key management personnel, their related parties, or directors/non-controlling shareholders of NZFL.
144,032 Performance right Shares were issued to Mr Milsom under a long term incentive scheme which commenced on 1 July 2023.
* Relates to NZ Farmers Livestock entering into six vehicle leases with KIA Finance provided by Heartland Bank Limited.
.
About this report
Statement of compliance and basis of preparation
The financial statements have been prepared:
-
-
-
presented on the basis of historical cost (except for certain financial assets measured at fair value); and
-
-
Note A1
-
Note A2
-Note C4
Intangibles recognition and measurement (including impairment testing)
-Note D2
Goodwill impairment assessment
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;
in New Zealand dollars, with all values rounded to the nearest thousand dollars unless otherwise stated.
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.
Revenue recognition
Deferred tax asset recognition
Critical Judgements and Estimates
The preparation of financial statements requires management to exercise its judgement in applying Allied's accounting policies. Significant estimates and
critical judgements are reviewed by management on an on-going basis, with revisions recognised in the period in which the estimate is revised and in any
future periods affected. Areas of estimate or judgement that have most significant impact on the amounts recognised in the financial statements are:
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;
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 jointly
controlled operations as at the year ending 30 June 2024.
These Consolidated Financial Statements ("Financial Statements") have been approved for issue by the Board of Directors on 23 August 2024.
INDEPENDENT
AUDITOR’S REPORT
SEC
TION
6
38
Independent Auditor’s Report
To the shareholders of
Allied Farmers Limited
Opinion
We have audited the consolidated financial statements of Allied Farmers Limited and its subsidiaries (the
Group), which comprise:
- the consolidated balance sheet as at 30 June 2024;
- the consolidated profit and loss statement for the year then ended;
- the consolidated statement of other comprehensive income for the year then ended;
- the consolidated statement of changes in equity for the year then ended;
- the consolidated statement of cash flows for the year then ended; and
- the notes to the financial statements, which include material accounting policy information.
In our opinion, the accompanying consolidated financial statements on pages 18 to 37 present fairly, in all
material respects, the financial position of the Group as at 30 June 2024, and of its financial performance and its
cash flows for the year then ended in accordance with New Zealand equivalents to International Financial
Reporting Standards and International Financial Reporting Standards.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs (NZ)).
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of
the consolidated financial statements section of our report.
We are independent of the Group in accordance with Professional and Ethical Standard 1 International Code of
Ethics for Assurance Practitioners (including International Independence Standards) (New Zealand) issued by
the New Zealand Auditing and Assurance Standards Board and the International Ethics Standards Board for
Accountants’ International Code of Ethics for Professional Accountants (including International Independence
Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these
requirements and the IESBA Code. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Other than in our capacity as auditor we have no relationship with, or interests in, Allied Farmers Limited or any
of its subsidiaries.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial statements for the current period. We identify two key audit matters as detailed on the next pages,
which were addressed in the context of our audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on this matter.
Revenue recognition
Why we considered this to be a key audit matter
The Group’s revenue, totalling $16,497,000 (2023:
$15,906,000), arises from a variety of revenue
streams (as detailed in Note A1) which include
livestock services (livestock agency services and
veal processing), financial services, and revenues
from rural land management services.
With livestock agency services the gross
transactional cash flows exceed the reported levels
of revenue, given the adopted treatment to recognise
this revenue on a commission (i.e. agency) basis.
Because of the complexity of the accounting
requirements and varied nature of revenue streams
across the Group we considered this to be a key
audit matter.
Our approach
Our procedures in relation to revenue recognition
included:
Reviewing a sample of contracts to ensure that
the Group’s policy for the point of recognition is
in compliance with the requirements of NZ
IFRS 15: Revenue from Contracts with
Customers;
Understanding the processes and evaluating
the related controls implemented by the Group
over revenue recognition;
Testing the operating effectiveness of controls
related to the recording of revenue from
livestock agency and veal processing revenue;
Performing tests of detail on a sample of
revenue transactions throughout the period
and in particular around period end to ensure
that these have been appropriately recognised,
as appropriate for that revenue stream; and
Given the reliance on outsourced service
providers/processors in the generation of meat
and skin revenue, we have also assessed
procedures to ensure all revenue due to the
Group has been recorded.
We also evaluated and tested the policies for
revenue recognition adopted by the Group’s jointly
controlled operations, including testing of the
recognition of revenue within these components.
We also evaluated the accounting polices applied
and considered disclosures relating to revenue
recognition, and the presentation of revenue
described in Note A1.
Impairment of intangible assets
Why we considered this to be a key audit matter
As disclosed in Note C4 to the Group’s consolidated
financial statements, the Group has intangible assets
totalling $9,942,000 (2023: $10,442,000), including
$9,826,000 (2023: $10,343,000) relating to the NZL
Management Contract (the ‘Contract’).
Due to the amendment to the original management
agreement with NZL as a result of NZL selling a 25%
interest in its land portfolio to a third party,
management assessed that there was an indicator of
impairment that required an assessment of the
recoverable amount of the Contract.
The Contract was significant to our audit due to the
size of the asset and the subjectivity, complexity and
uncertainty inherent in the measurement of the
recoverable amount of the asset for the purpose of
the impairment test. As such we considered this to
be a key audit matter.
Our approach
Our procedures among others included:
Understanding and evaluating the Group’s
internal controls relevant to the accounting
estimates used to determine the recoverable
amount of the Contract;
Validating the management, transaction and
performance fees recognised during the year in
respect of the Contract;
Challenging management’s assumptions and
estimates used to determine the recoverable
amount of the Contract including those relating
to the underlying NZL property portfolio (asset
growth, acquisition and divestment) and the
discount rate.
Procedures included:
o Evaluating the logic of the value-in-
use calculations supporting
management’s impairment test and
testing the mathematical accuracy
of these calculations;
o Challenging and evaluating the
forecast asset growth rates and
forecast levels of acquisitions and
divestments in the NZL property
portfolio;
o Evaluating the inputs to the
discount rate applied,
o Engaging our own internal valuation
experts to evaluate the logic of the
value-in-use calculations and the
inputs to the discount rate applied.
Evaluating the related disclosures about the
Contract in relation to the requirements of
NZ IAS 36: Impairment of Assets and NZ
IAS 38: Intangible Assets (including the
material accounting policy information and
accounting estimates) which are included in
Note C4 of the financial statements.
Other information
The directors are responsible for the other information included in the annual report. The other information
provided is contained on pages 1 to 17 (but does not include the consolidated financial statements and our
auditor’s report thereon), which we obtained prior to the date of this auditor’s report. Our opinion on the
consolidated financial statements does not cover the other information and we do not express any form of audit
opinion or assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other
information identified above and, in doing so, consider whether the other information is materially inconsistent
with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be
materially misstated. If, based on the work we have performed on the other information that we obtained prior
to the date of this auditor’s report, we conclude that there is a material misstatement of this other information,
we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the consolidated financial statements
The directors are responsible, on behalf of the Group, for the preparation and fair presentation of the
consolidated financial statements in accordance with New Zealand equivalents to International Financial
Reporting Standards and International Financial Reporting Standards, and for such internal control as the
directors determine is necessary to enable the preparation of consolidated financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the directors are responsible, on behalf of the Group, for
assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the directors either intend to liquidate the
Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit
conducted in accordance with ISAs (NZ) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of these
consolidated financial statements. A further description of the auditor’s responsibilities for the audit of the
consolidated financial statements is located at the XRB’s website at:
https://www.xrb.govt.nz/assurance-standards/auditors-responsibilities/audit-report-1
Who we report to
This report is made solely to the company’s shareholders, as a body. Our audit work has been undertaken so
that we might state those matters which we are required to state to them in an auditor’s report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than
Allied Farmers Limited and its shareholders, as a body, for our audit work, for this report or for the opinions we
have formed.
The engagement partner on the audit resulting in this independent auditor’s report is Nigel de Frere.
RSM Hayes Audit 23 August 2024
Auckland
COMPANY
DIRECTORY
Directors:
Shelley Ruha
Richard Milsom
Philip Luscombe
Registered Office of the
Company:
201 Broadway
Stratford 4332
Postal Address
of the Company:
P.O. Box 304
Stratford 4352
Ph: 06 765 6199
Auditors:
RSM Hayes Audit
1 Broadway Newmarket
Auckland 1023
Share Registrar:
MUFG Pension &
Market Services
PO Box 91976
Auckland 1142
Shareholder Enquiries:
MUFG Pension & Market
Services
Ph: 09 375 5998
Fax: 09 375 5990
Email:
lmsenquiries@linkmarketservices.com
PO Box 91976
Auckland 1142
SEC
TION
7
43
---
Results announcement
Results for announcement to the market
Name of issuer Allied Farmers Limited
Reporting Period 12 months to 30 June 2024
Previous Reporting Period 12 months to 30 June 2023
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$27,628 1.8%
Total Revenue $27,628 1.8%
Net profit/(loss) from
continuing operations
$6,919 61.7%
Total net profit/(loss) $6,919 61.7%
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
$0.40 $0.21
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
Refer to results release and audited 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
23/08/2024
(Audited financial statements accompany this announcement.)
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.
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