Scales AGM 2021

uh fellow shareholders in scales i'll just one thing i'd better do is get my glasses my name's tim goodacre i'm chair of scales and it's my pleasure to welcome you all to this the 109th annual meeting of the company and the seventh since we became a listed company i'm delighted to be able to be here today particularly given the ongoing impact of covet and the uncertainty that that brings them none of us need reminding of that last year we held our first ever virtual meeting and this year is our first hybrid meeting so whether you're here in person or joining us online i'd like to thank you and welcome you all it's so good to actually get back in front of people in in real time and in reality so here here as you as you may recall from last year lumi agm allows shareholders proxies and guests to attend the meeting virtually this year all attendees will be able to hear and see a live webcast of the meeting in addition shareholders and proxies have the ability to ask questions and vote on resolutions i'll provide further details on those matters shortly just some housekeeping matters for those who have joined us in person first i'd like to remind you as a matter of courtesy to turn your mobile phones to silent also if there's an emergency and we need to leave please do so through the marked exits staff will be available to help us in those circumstances i'm really pleased to confirm that we have a quorum and they therefore declare the 2021 annual shareholders meeting of scales corporation limited open the items of business for this meeting and the resolutions to be considered by shareholders are contained in the notice of meeting which were sent to shareholders on the 24th of may i note here now that the meeting notice wasn't sent to shareholders in the time frame that met the nzx recommendations regarding this i apologize it was a simple oversight and i trust it has not adversely affected any shareholder we will ensure this does not happen again for future meetings our order of proceedings is as shown on slide two i'll briefly comment on the highlights of the last 12 months followed by a review by andy borland our managing director we'll then attend to the resolutions where we'll cover each resolution in turn and invite questions specific to those items i'll shortly open the online voting and explain the voting process following that i'll explain the process for asking questions once the media is complete we hope you that those of you here today will join us for refreshments and the opportunity to ask questions informally to any of the directors present voting process with regard to the online voting process if you're eligible to vote a polling icon will appear on your screen as shown on slide three selecting this icon will bring up the list of resolutions and present you with the voting process of voting options to cast your vote simply select one of the options there's no need to hit a submit button or enter button as the vote is automatically recorded up until the time the poll is declared closed you will have the ability to change your vote by simply selecting another option or you may cancel your vote by clicking cancel you may submit questions on each resolution being put to the shareholders using the questioned process for those who have you joined us in person those of you here today those shareholders who are entitled to vote in proxies who have discretion as to how they vote should have received a voting of prox or proxy form when they registered upon arrival at the meeting if you completed a postal vote you don't need to complete another voting or proxy form if you haven't received a voting or proxy form at the time of voting please go to the computer share desk in the foyer where you walked in where someone will be able to assist you after voting you should place your voting or proxy form in one of the ballot boxes which will be passed around the room i'll invite you to vote after all the resolutions have been introduced to the meeting i now declare voting open on all items of business for those of you attending via lumi agm the online polling icon will soon appear please submit your votes at any time i'll give you a warning before i move to close voting now i'd like to just somewhat quickly summarize the process for asking questions online questions can be submitted at any time to ask a question press the q a speech bubble icon as indicated on slide four this will open a new screen at the bottom of that screen there's a section for you to type your question once you've finished typing please hit the arrow symbol to send now please note that while you can submit questions from now on we won't address them until the relevant time in the meeting please also note that your questions may be moderated or if we receive multiple questions on one topic these will be combined however if you feel you don't that your question has not been addressed please resubmit it finally due to time constraints and to ensure all shareholders have a chance to ask a question i ask that you limit yourself to asking two questions now if you run out of time to answer all of your questions and if this happens or if there are technical issues and we had some of those last year we'll make sure that we respond to all questions in writing following the meeting and as i said also if you're here and you want to ask a question of any of us after the closure of the meeting i encourage you to do so for those of you present we'll offer you an opportunity to ask questions on or to speak to each resolution being put to shareholders at the appropriate time now i'd like to now introduce my fellow directors who are in attendance either in person or online they are andy borland our managing director nick harris nix our chair of health and safety and the sustainability committee and an independent director mark hutton mark's chair of our scales nominations and remuneration committee he's also chair of our finance and treasury committee and also an independent director alan isaac allen is chair of our audit and risk committee and also an independent director tomic and lye tomican's online is a director attending online and nadine tunnelly is a member of our health and safety and sustainability committee and also an independent director now this time last year we just emerged from our national lockdown and since then the year has contained its many challenges with further localized domestic and global lockdowns travel restrictions and ongoing supply chain disruptions as all scales businesses continue to be deemed essential the day-to-day operations continued all our apples were picked shipped and sold and our food ingredients division recorded strong results particularly in our new business in the united states in the circumstances it was imperative that we prioritize safety for our staff and made sure that our team of two and a half thousand were kept safe we would like to say a very big thank you to all management and staff members who continue to put in an exceptional effort and commitment to deliver our products and services andy will speak more about the impact of covert in his address out of all that change and uncertainty we were pleased to deliver a solid result in twenty twenty and we firmly believe that this was aided by our strategy of diversification in terms of products services and geographic markets it was also only made possible by the hard work and commitment of our management and staff as mentioned the business did not stop in 2020 despite all the challenges thrown at us we made considerable progress on our sustainability journey including our first climate change report as an agribusiness company sustainability and climate change are key factors that we recognise as both critical to our future and they need to be addressed there is also a growing community expectation that we take action and hence we need to be proactive in determining what steps we need to take both issues are pres are present also present opportunities if we are smart and flexible enough being seen as a sustainable and responsible contributor to society can have strong rewards in terms of our mr apple brand for example and the recognition that that delivers in terms of both increased sales and pricing premiums this is very much an area of focus for our business currently and andy will elaborate further on this later thanks to our strong financial position we've been able to actively research and review growth investment and acquisition opportunities last year we reported that we continue to look at opportunities to grow our business in the areas where scales can add value or enhance an existing business through its capital resources agribusiness experience and or export network especially in china this search continues frankly it's not been easy to find businesses that we believe are right for us particularly with the current limitations on travel however there remain a number of promising opportunities in our core areas of pet food ingredients and logistics in both australia and the united states if the opportunities are not in our area of existing or easily acquired expertise then the question front of mind is simply will scales ownership ensure that they are at least as successful as our existing businesses as andy will touch on later one area of focus is the wine industry and will continue to provide updates on progress in this area as appropriate i've previously said without reservation that scales would not be the company it is without its strong and positive culture made possible by the personal commitment of each and every one of our staff as in previous years we've observed the importance of our roc workers within our team mr apple has an annual requirement for 300 rsc workers of these approximately 60 in any one year are returnees from prior years in 2020 approximately 900 workers stayed on voluntarily at the end of the season which greatly assisted the 2021 season about 600 workers are still with mr apple this year working in the pack houses or pruning visas for these workers will expire in september this issue is now taking on critical importance for the 2022 season not only do these workers show remarkable skills and commitment but they play a vital part in enabling overall company growth a 37 increase in roc workers over the period 2012 to 2020 has coincided with mr apple increasing its permanent staff numbers by 111 percent in other words an increase in rsc worker numbers has led to over a doubling of local permanent jobs we're also aware that the skills acquired and the wages earned by these workers are highly beneficial to them their families and their pacific communities now something which is close to my heart the strong scales culture comes from the top and we shareholders are fortunate to have a team of highly skilled and committed senior managers led by md andy borland this past year andy has been recognised externally for his leadership skills and we congratulate him for the credit he has received in october last year andy was awarded the invin's leadership award and just last month he received an honorary doctorate of commerce from lincoln university as part of our responsibility as an equal opportunity employer we were pleased to undertake our inaugural pay equality review during during 2020. we were pleased with the results that found that we offer pay equity which echoes our belief that pay rates should be reflective of role experience responsibility and tenure not gender this will remain a key area of focus for us going forward the logistical challenges presented by covert it was important to the board that good governance practices should prevail throughout so as was the case for so many businesses zoom meetings became the norm with board meetings undertaken on this platform when needed as we advise in the notice of meeting and in our corporate governance statement scales does not have a board tenure policy the board does however recognise that a regular refreshment program leads to the introduction to the board of new perspectives skills attributes and experience consequently shareholders can expect to see a planned and orderly succession of the existing board over time as always new directors will be needed will need to have appropriate experience and qualifications with increased board diversity also a criteria it is our intention to conduct the board skills makers exercise as we have done in the past to identify requirements and ensure that there are no skills gaps as the board is refreshed shareholders can expect to see an overlap between new appointments and retirements this will enable a more effective transition for new directors as i mentioned earlier we're delighted to announce that we're continuing our participation in the institute of directors future director program with the appointment of kelly brown a brand and marketing consultant with extensive knowledge of the fmcg category including wine and she is our next and fifth future director and kelly is here today and kelly is killing the front row lastly we continue to refresh our ethics and other policies as appropriate now i'd like to hand you over to andy who will give you a broader update on how covert 19 has impacted the group together with the review of 2020 and an update on sustainable and business operations for each of our trading businesses following andy's presentation we'll move to the formal business of the meeting as always we welcome feedback on any of the matters raised during today's presentation or other general matters in relation to the group thank you annie thanks tim good afternoon ladies and gentlemen um i'll add a welcome there tim just slipped it by but uh we've got our bankers here or one of them anyway richard swan swaney welcome lawyers and anthony harper i'm not sure if there's anyone here from chapman trip steve is there oh maybe online welcome online if you're there rachel in addition tim mentioned kelly brown and also our auditors deloitte so um welcome to you all as a result we expect ongoing ripples from the pandemic to impact our current year results more on that later i'll now quickly recap on the financial and operational highlights of the 2020 financial year slide 15 depicts some financial and volumetric measures of the group in 2020 a few of which i'll go into in more detail in subsequent slides encouragingly despite the national lockdown happening at our busiest period last year we reported a record number of our own grown apples and sold a record amount of pet food ingredients we also made significant steps in their sustainability story i'll provide more information on that in the next section the next slide depicts a summary of their earnings over the last five years and as i mentioned last year reflects the group's m a activity particularly over the 2018 and 2019 period pleasingly despite despite the difficulties that covert threw at us last year we managed a slight increase in underlying ebitda in 2020 moving on to some more detail on our 2020 results we encountered a slight three percent decrease in revenue in 2020 together with a seven percent decrease in underlying net profit strong growth and food ingredients division offset lower earnings in the horticulture division the latter being due to the effect and time of global lockdowns this led to a significant change in the earnings mix between divisions as compared to previous years we also reported lower net profit as results in 2019 included significant gains on the sales of polar cold and meteor as well as a revaluation gain on the establishment of meteor new zealand joint venture with alliance group slide 18 summarises some highlights for the divisions in 2020 in addition to the record crop at mr apple andrew van werkum and his team oversaw the construction of new cool store at fokker 2 and i'll provide some more information about that this build in a later slide food ingredients generated significant increases in revenue and underlying earnings due in part to global growth in the pet food industry and john sainsbury together with brett frankel in the usa continue to steer this division to new heights as part of the growth shelby secured a new toll processing plant in kansas to help satisfy demand logistics successfully navigated the global supply chain disruptions caused by covert in 2020 and delivered a solid result we believe that the impact of covert was lessened by the division's focus on the essential agribusiness sector and thank kent ritchie for his ability to successfully navigate the difficulties encountered moving to slide 19 where the change of mix and divisional earnings is shown as you can see from the graphs food ingredients took a considerable step in 2020 towards its long underlying ebitda target of 25 million and we believe it continues to be an attractive industry for investment turning to our balance sheet which shows a relatively steady situation increases in capital employed and net assets were due primarily to capital expenditure on the new mr apple cool store and orchard redevelopment amongst other projects as well as the revaluation of land and buildings and we maintained a strong net cash position at 31 december 2020 of almost 98 million providing us with the ongoing ability to invest in appropriate growth opportunities when they arrive as and when they arrive the next section i'd like to cover is sustainability despite the disruption distraction of covert 19 karen morris and our team made considerable progress on our sustainability journey we partnered with think step a and z to update our stakeholder engagement and materiality exercises to ensure that our focus remains current this was done last in 2016. this exercise involved undertaking a number of interviews surveys workshops and reviews and with the outcome being shown on the tables on the slide this list will provide a sustainable focus for the future periods slide 23 summarize a few statistics about our workforce however our staff are not just numbers to us in the early days of covert there were feelings of anxiety and disbelief but we quickly realized that being agile and dynamic we could make our workplaces and team members safe and secure this was our primary concern and turn our staff and management pulled together determined to weather the storm we believe the resilience gained over the last 12 to 18 months has made us a stronger team and that will continue to benefit us in 2021 and beyond the next slide summarizes a selection of the health and safety initiatives that were expanded or developed during the 2020. health and safety is integral in our work practices and continues to be the top priority of the board and of the group in general accordingly with an ongoing focus on injury prevention and management we also continue to be aware of the needs and requests of external stakeholders as a result we realigned their good agricultural produce certifications with mr apple and undertook a social practice audit of our supply chain for worker welfare practices in addition we're focusing on traceability including a move where possible to digital options to streamline and fast-track approvals moving on to slide 25 in the environment we're acutely aware of the impact of our business operations on the world and its environment and we realize that our actions now will have a long lasting effect we continue to take part in the two toy carbon reduce programs and our emission reduction initiatives and now and into the third year showing an ongoing reduction in emission intensity with an ongoing commitment to align our business practices to chosen united nations sustainability development goals and are pleased to report that we exceeded the goals and three out of the four areas we're also investigating understand the reason for the increase in our fourth which is fuel use the goal and we'll continue to monitor this in a future periods 2020 also saw the preparation of our inaugural tcfd or climate change report which explores the impact of climate change on our business and summarizes the direction in which we're going to address or adapt to those impacts the report was based on four themes continued contained within the tcfd's recommended framework being governance strategy risk management and metrics and targets over time our reporting will involve into including scenario modelling strategies and increasing knowledge about a best future path also of note was that mr apple made a submission as part of the tank catchments processed to ensure water quality and quantity for the future within hawke's bay and we participated in an industry pilot for farm environmental plans as part of the tank review moving on to an update of the divisional businesses we've previously mentioned that we're experiencing headwinds and margin in the horticulture division and this continues to be a focus the completion of mr apple's new cool store at fokker 2 is providing both operation and logistics efficiency and has allowed us to sell our havelock north pack house resulting in greater centralization of our post-harvest operations the second phase of our orchard redevelopment was completed during the winter of 2020 resulting in over 140 hectares of orchard planted or redeveloped since 2018 we focused on planting high value varieties such as posey and dazzle as well as incorporating a new two-dimensional two-dimensional planting techniques which allow pruning thinning and picking efficiencies we anticipate higher prices and yields from 2023 onwards as these orchards reach commercial scale we also note that the availability and cost of labor has changed whilst continuation of the rs scheme rse scheme at pre-covert levels continues to be critical to our operations we intend to speed up automation initiatives particularly in the post-harvest area we anticipate committing to selected automation initiatives this current year the horticulture division continued to exceed expectations around volumes at 3.92 tces of own grown volumes 2020 represented another record production year and together with our external growers division sold 5.7 million tces or cartons while total export volume was four percent down on 2019 fernridge place replaced a portion of its apple volume with kiwifruit sales and these weren't included in the reported volumes pleasingly sales their premium volumes continued to grow with a 4 increase in 2019 accounting for around 57 of all exports we encountered some tightening of prices of our premium varieties into the asian markets due to the impact and timing of lockdowns in 2020 as an example the china lockdown coincided with chinese new year which is typically a good period for apple sales however the decrease in pricing for premium varieties was partially offset by firmer prices in european markets reinforcing the benefits of our strategy to operate in diversified markets and channels it's important that the horticulture division continues to identify innovative strategies for market penetration particularly in asia and middle eastern markets as these markets continue to make up a significant portion of their sales at 62 percent of exports china itself accounted for 17 of export volumes in 2020 in line with 2019 we're also continuing to develop and grow our retail and e-commerce sales channels particularly in china where these channels are now account for over half of all in market sales so in 2020 we launched dazzle through a high-end chinese retailer and new innovations for 2021 include opening a flagship store and tmall a business to consumer online platform operated by the alibaba group this allows us international businesses to sell and market branded goods direct to chinese consumers moving on to food ingredients on slide 31 and its exceptional year 2020 saw the division taking advantage of the growth and global pet food demand we believe that part of the growth can be attributed to an increase in pet ownership and adoption rates through the pandemic together with other consumer trends such as the humanization of pets this resulted in significant increases in both revenue and profitability for food ingredients and reflected the benefit of the division's geographical and protein diversification strategies with underlying ebitda of over 23 million a 71 increase on 2019 the division took a considerable step towards its long-running but target of 25 million to help satisfy this demand shall be entered into a new third-party warehousing and processing agreement with a toll processor in dodge city kansas this brings a number of processing facilities at shelby to eight its own facility in amarillo texas plus seven toll pricing facilities throughout the united states pro fruit volumes were also up compared to last year with a six percent increase due to high fruit bricks and good yields and increased retail demand so market indications suggest that the global pet food industry will continue to grow with one market research company suggesting it will increase at a compound annual growth rate of six percent over the period 2019 to 2029. anecdotally we're aware of plans for at least two new mega pet food plants to be built in the united states this year with a global strategy of being a key provider of pet food ingredients to a wide range of international brands we're continuing to actively analyse and review organic and transactional opportunities to expand their geographical presence and protein offering travel restrictions in place during 2020 limited our ability to pursue acquisition opportunities as well as limiting our ability to develop new supply and off-take relationships however we continue to explore opportunities as constraints allow moving to slide 2033 in a number of the logistic summary of the logistics division covert and lockdowns provided a number of challenges for logistics with supply chains around the world resulting in decreased volumes of both ocean and air freight for the division however the impact of covert in 2020 was lessened by the division's focus on the essential agribusiness sector and reported a solid result with both underlying ebitda and ebit up on last year moving on to the outlook for 2021 within the horticulture division the season was affected by weather events during the key growing period as a result mr apple's own growing volumes were lower than originally forecast there has been a significantly lower level of pip fruit exports from the tasman region impacting on third party export volumes 4.8 million tces have been picked and packaging is ongoing we anticipate that the lower than forecast fruit volumes will be partly offset by higher in market prices the outlook for europe and the uk is positive with a lower natural crop anticipated in early sales in asia are encouraging sales to date cover around one third of the harvest and are broadly consistent with the same time last year however where continued experience some disruptions in markets and shipping due to the ongoing effects of covert and the full impact of this will only be known at the end of the season the pet food market in the usa continues to perform well resulting in its good demand across food ingredients businesses and proteins however supply chain disruptions continue to present the division with challenges which we anticipate will continue for the foreseeable future logistics is also encountering significant global chain disruptions with equipment shipping schedules and poor congestion issues however supply chain disruptions continue to present the division with challenges which we anticipate will continue for the foreseeable future i might have missed that guy in addition so we're still happy about the agriculture volumes at the unit uh uh services and we expect that 2021 will continue to be a challenging year for the logistics industry in general so an outlook for the group whilst the group is benefiting from its overall diversified agribusiness strategy we anticipate the impact of global lockdowns together with lower levels of food exports and logistics issues will affect our current year results earlier this year we amended our full year 2021 guidance and based on current business conditions we reiterate these earnings levels at the present time however we continue to look to the future and hope to progress both organic and external growth opportunities including as previously announced opportunities in the wine sector further details on this will be provided at the appropriate time and that concludes my presentation we'll answer questions following the resolutions but in the meantime i'll pass you back to tim to cover the formal part of today's meeting thanks andy now we'll now move to the business of the meeting all items of business are ordinary resolutions and need to be passed by a simple majority of votes the resolutions that we'll be voting on today are as follows resolution one authorisation for the directors to fix the auditor's remuneration for the coming year now resolution 2 re-election of myself tim goodacre as a non-executive independent director resolution 3 re-election of mark hutton as a non-executive independent director current best practice for shareholder voting is by way of poll accordingly i require that a poll be held for each of the resolutions i and my fellow directors hold the following undirected proxies with respect to resolution one authorisation for the directors to fix the auditor's remuneration for the coming year 261 thousand six hundred and fourteen shares with respect to resolution two the re-election of tim goodaker's non-executive independent director two hundred and seventy thousand eight hundred and forty four shares with respect to resolution three re-election of mark hutton as non-executive independent director 270 844 shares your board supports these resolutions and we intend to vote all these shares in favor of each resolution now move on to each of the resolutions resolution one relates to the remuneration of auditors the proposed ordinary resolution is to authorize the directors to fix the auditor's remuneration for the coming year in accordance with the companies act deloitte has been automatically reappointed as scales auditor as is usual with audit fees due to the complexity and changing nature of the company's affairs it is not possible to fix the remuneration at the beginning of the year so i now move as an ordinary resolution that the board is authorized to fix the orders of remuneration for the coming year are there any questions in relation to this resolution thank you so we'll now move to the next resolution which i'll ask alan isaac to introduce thanks thanks tim resolution two relates to the re-election of tim goodacre the internet's listing rules state that directors must not hold office without re-election past the third annual meeting following the director's appointment or three years whichever is longer accordingly tim goodaker is required to retire at this meeting tim was first appointed to the board in 2014 and a brief biography for him was included in the notice of meeting tim being eligible office himself for re-election and the board unanimously supports his re-election and recommends that shareholders vote in favor of resolution too i now invite tim to briefly address the meeting on his proposed re-election um look i've been around for a while and i i just want to say first it's an absolute honour and a privilege to be the current chairman of scales i'm seeking to be re-elected again and as confirmation of the commitment by the board to a planned and orderly succession program if elected i do intend to retire as a director during this next period i've been associated with scales since 2012. i can assure you i remain committed to scales for all the reasons i stated in my address in particular the company's strong and positive culture which i both strongly relate to and remain committed to ensuring continues i also believe non-executive directors being very much committed to the business which they represent for this reason i believe in directors spending actual time and energy in getting to know in detail the business and importantly ensuring we have the right management team to achieve what is needed in this regard i feel i can continue to bring to the company the benefits of my long experience in australia and new zealand agribusiness at both the senior executive level including as ceo of a large business and more recently as a board director so thank you thanks tim i now move as an ordinary resolution having retired by rotation that tim gooday could be re-elected as a non-executive independent director are there any questions on this resolution thank you will now move to the next resolution and i'll pass you back to tim now resolution three relates to the re-election of mark hutton the execs listing rules state that directors must not hold office without re-election pass the third annual meeting following the director's appointment or three years whichever is longer the coiling mark hutton is required to retire at this meeting mark was first appointed the board in 2011 and a brief biography for him was also included in the notice of meeting mark being eligible offers himself for re-election and the board unanimously supports his re-election and recommends that shareholders vote in favor of resolution three i now invite mark to briefly address the meeting on his proposed re-election thank you mark um thanks tim and tina koto kurta and now that andy's a doctor so i see why we're now in a lecture theater is it anyway good afternoon to all shareholders either present or online um and it's always a pleasure to follow on from tim he's always so positive about uh the business we're involved with so it's an easy and easy to ask given that most of the votes have probably already been taken i thought i'd just divert slightly from the normal presentation and talk a little bit about what i consider to be issues maybe more interest to shareholders generally and even try and make shareholder meetings a bit more relevant maybe to earth people who come to the meetings in particular um as you're aware there's two major groups who act effectively as guardians for your shareholding one of them you'll be very familiar with being the shields association our association is certainly to be congratulated for their development over the years and attend most of the meet annual meetings that are held in new zealand i'm not sure if there's somebody actually here today from the association so thank you for attending um tim and i have met with either the chair or the ceo um of the association each year since um since listing and um as you're probably also aware the association undertakes a benchmarking exercise to review the company and director performance as always there are some areas for us to work on mostly that can be addressed by a bit of disclosure but pleasingly there's no red flags in terms of their report the second group um advise our institutional investors and they sort of mellow in the investment community as proxy advisors now most yielders don't get to see these reports and institutions generally communicate directly with the company rather than through their advisors and in fact we've never met one ourselves a representative of these groups and they tend to be rather more benchmark driven at 21 they identified two issues uh one was still into the late uh filing of our notice which um you know we accept that censure and um you know obviously we'll work hard to make sure that doesn't happen again and the second one covers remuneration and the disclosure remuneration noting that tim and i make up the remuneration committee director and ceo remuneration is always a focus and rightly so um i would just like to say that i think as outlined in our report i would make make two comments one is terms of remuneration um there's no doubt the scales remuneration structure is heavily weighted to variable pay which is again a positive um so just to finish off you know why are we where we are um and to me the results are very dependent on a great commitment from our management team uh wise counsel from our directors and ongoing support from all our stakeholders uh including china resources who are brought into our vision for the company they continue to be a fantastic partner for scales and um ably are supported by the dedication of tomic and ly who hopefully is online as well um he's a highly experienced director with great food and beverage experience and we're certainly fortunate to have his contribution so with that i'll finish thank you for your continuing support and happy to respond to any questions thanks man thank you mark and i just want to endorse mark's comments about uh some of those we talk about bone additional bonuses so the as i said in my speech um the performance of our team and the num and they're here today was in the circumstances was exceptional when i uh reside in australia i am here legally at the moment so you can be assured um i'm no covered risk to anyone um but i just i saw a lot of what happened in agribusiness in australia during the lockdowns and unfortunately you know australia's still going through part of that process at the moment but i saw businesses that did not get their crops picked packed or exported and as i said in my address we did that um i also saw a lot of businesses fail in in many areas purely because people lost confidence in being able to even turn up to their job in a safe and secure manner scales was certainly not in that category i mean the guys were just uh i think exceptional in terms of their commitment and dedication and as one person here today said there's no there's no plan b we've just got to get on with the business but we'll do it in a safe and responsible manner so i just want to again as a shareholder i'm speaking now very grateful for that again i said that commitment and which reflects the culture which andy andy leads in this business so so now sorry back to the formality i now move that as an ordinary resolution having retired by rotation that mark hutton be re-elected as a non-executive independent director are there any questions on this resolution okay we'll now move to finalize the voting and we'll answer general questions i just want to go through the process once all the votes have been cast they will be counted by the company's share registrar computer share and scrutinised by the company's auditor the results of today's meeting will be released to the nzx on the completion of verification of voting if you've not already done so please cast your votes now and give your voting forms to computer share while we take questions so the boxes are coming down now if there are any questions on the financial results the business update or any other matters you'd like to raise please do so through the lumi q a function a reminder of the process is shown on the screen for those of you present those of us here in the room i'll open the floor to any questions i want to remind everyone that if we do run out of time we can and we can't answer them all now we will respond to any additional questions in writing following the meeting and as i said for people here also we will be around after the meeting and if you'd rather ask the question in a more informal way i said we're more than happy to do so so if i could just now uh anyone with any questions please oh songs if you could just uh perhaps stand up and identify yourself just for the record that would appreciate it my name is chairman of the shareholders association my question is what consideration has the company given to introducing a dividend reinvestment plan well i might uh just we haven't and certainly but uh maybe if i just asked mark for you to make a comment uh yeah well sorry as as tim highlighted we we haven't actually given it any consideration and i think that's just reflective of our current balance sheet i mean obviously we're in a very strong position net cash of 90 something million so it's probably in the circumstances yeah we just don't feel that's probably appropriate at this time um and obviously we're paying you know what i consider a good strong dividend as well so for the moment it wouldn't be if if we were to invest the capital then would be definitely something would turn our mind to in that circumstance thank you mark yes [Music] belle saxton um given the meteor pet food situation and its potential being realized i realize that you're using lamb veal venison beef and you have a processing place in timaru what thought if any have you given to getting rid of the wallaby menace and filling the coffers i've got a menace also where i live in australia but then by the way well andy yeah well i might ask my learned colleague mr sainsbury's help here but we do uh do out of australia we do export kangaroo to america weirdly you're not allowed to export any kangaroos through the state of california it's illegal so um but john do you know anything about uh is there a wallabies yeah there's plenty of them all right well let's uh let's take it on as a little uh what let's have a look at it for you thank you yeah you hit them in the car you certainly know about it don't you as i said i know all about them you can have plenty of mine um okay okay um nothing steve though steve's gonna read out some online questions so we've got a couple of questions online first one from bruce morrison parks the mr apple environmental plan report notes an 11 rise in fuel usage is this a one-off anomaly and is it being corrected karen yeah um there were a few factors that led to that increase one was the spring that we had in the increased spraying um the second one were the fuel use for the increased amount of accommodation that we had with the um elongated stay of the rses and yes it's definitely on the radar to look at how we can reduce that considerably thank you uh there's a further question from uh bruce parks has there been an improvement in age receivables uh perhaps i can answer that um i'm not sure what uh time period we're referring to here but what i can confirm is there's no current issues with age receivables next question is from robert malcolm keane catherine marie keane in the king family trustee limited it's a long question whatis has just announced at the beginning of this month a multi-million dollar upgrade of its hastings pet food manufacturing site involving a new canning capability this is as a direct result of global pet food shortages what has meteor new zealand done with its 50 partner alliance to take advantage of this opportunity and will wati's upgrade increasing their productivity pose any threats to meteor new zealand um we with the media lp with the joint venture with alliance we've uh regularly looked at um doing further value add of products with plant uh you know different uh canning plants etc we haven't commissioned any of those yet we do sell to new zealand manufacturers to the question we're not a branded pet food business so we're air customer are the branded pet food businesses john do we give much product to hines we do supply hinds already with ingredients and they are just down the road from our waka to plant um this expansion will be an opportunity for us not a threat so one would expect that they will be looking for more ingredients and may not have the capacity to process the ingredient themselves as opposed to the finished canned product which was what the expansion was about thank you john next question is from coralie ann van kemp please elaborate on what kind of pet food is manufactured in the us eg cats and dogs and brand names and a second question and when may we taste dazzle apples in new world auckland supermarkets as i haven't seen them there well we'll take that in john if you could answer the first and mr van work and mr apple can answer the second i think the question might be around are we producing pet food in the u.s we're not so just to clarify that we're an ingredient supplier we supply the raw material the meat protein raw material to companies like nestle like mars and others who make branded pet food so i think that was what the question was yeah sorry john i think you'll see um perina as the brand or you know fancy feast could be some of our product in there whiskers is a mars brand so they are the sort of brands that will have our product in them but we you know we sell them to the the raw material to the customer to the to the manufacturer if you're in a pet food store and look for a lamb and rice recipe um you know most of what we do is lamb and and most of the pet food companies buy lamb from us especially the ones that export to new zealand so if you buy lemon rice there's a good chance you're buying with your land and in america a majority of their product is beef and pork um so you know that's the ingredient that's you know prevalent up there and andrew why aren't there dazzle apples and air supermarkets yes i hope you're gonna tell them because they can't afford them yeah i endorse that but because they can't afford them look i think that the dazzle supply situation is still quite quite short we've only really got going with this new variety it's pretty um rapid growth but the demand overseas is exceeding the supply and the truth is the the money overseas and the markets we're developing are really important as we get that steep growth curve um so we are selling a few in new zealand but they get snapped up pretty quickly i'd say that in the next couple of years we'll see you'll start to see them quite regularly but really um volume and price uh all about other asian countries around a lot goes to china andrew could you just briefly describe the attributes of dazzle just for the attributes of dazzle just briefly um look dazzle's uh probably the first apple we've grown that you'd say is really focused or tailored for asia and particularly china it's it's it's large it's red it's quite firm and juicy it's super sweet so it's sweet sweet sweet and it's got by by western standards it's got no acid in it at all so a lot of people would say it's a bit bland but it's it's been hugely popular overseas one of the things that's nice is very grower friendly uh it has good yields easy good timing of harvest stores very well looks very good and um yeah it's just it sort of takes all the boxes if you look at the characteristics of what is a good apple it ticks every single box on that line so we that we're very confident about his future and and in fact it was open for planting throughout new zealand as part of the commercialization model that because it's a plant and food variety and um the demand for trees was so great in the after the first three years we've had to shut off the plantings and we'll be measured in allowing more trees to grow to make sure we match the supply to the to the market and our ability to um obtain um reasonably good returns we would like very good returns thank you andrew steve so uh one further question from paul david hawkin can we have some additional information about the proposed villa maria purchase um look as i commented we're looking at a it's a number of potential opportunities and i certainly can't comment on any one of those at this stage thank you okay sorry oh sorry paul hughes and i noticed you've had quite a lot of money in the bank or on deposit in the last year and a half i'm not sure what sort of interest rate you're getting but i presume it's not very much why you still got quite a bit of turned debt and paying 1.8 million of interest uh paul some of that interest is uh against debt we we use to buy the invest in the shelby business so it's we're probably using a fairly large chunk of it as a as a natural hedge uh again we're a hedge against that u.s dollar investment because it we've borrowed in the us dollars um and their interest rates are a bit lower than uh well they're not anymore are they but they were incredibly low rates so it just seemed a uh you know a a prudent thing to do to cover the the the money we sent to invest in shelby against the us dollar debt but uh other than that it's it was i think the rest of the debt we kept was because we just had interest rate swaps against them and just want them to run out their course no other reason and we have recently paid back some debt steve a 10 million back but it was a wee time ago thanks andy yes keith hitching shoe holder where does the company see itself in five years time compared with today say three or four bullet points well as from my perspective taking let's say a bit a high level view i certainly want to see us i believe we're the best agribusiness in new zealand quite frankly in terms of what we do and how we do it uh we're i believe we're very ethical and i think we have a strong brand and reputation internationally which we are building on and we determine as i mentioned in terms of sustainability and and the environmental issues you know using that ethical position we have to obviously increase value so as we've said you know we're looking at other areas to diversify within the agri-business portfolio so i certainly see us as more a diversified business i see the business having a greater presence internationally where we sell i i certainly see us having a presence or greater presence in a lot of our international markets i have a very strong view that you can only do business you know to the best or the most effect if you are there employing people who understand the culture and the environment which are selling your products so you know we haven't been able to do that to any great extent in terms of our for example our apple business only because of you know the size of our business and the cost of doing that but that's where i see the business going i see the mr apple brand and potentially other acquisitions or investments we might be i'm i'm looking that to be the let's say dare i say it up there with the zesty brand in terms of fruit recognition worldwide so you know i mean in zestbury in some markets is the number one fruit recognized brand and when you're talking about companies like dole and so on that's a significant achievement i don't believe that that is beyond us in terms of our apple business ultimately so mark said i'm positive yeah i am positive uh i'm very positive about the business because we've got the right fundamentals uh you know so we've got the right team we've got a i believe a very good board and we've talked about ensuring that that the board is you know the the level of expertise and experience of the board is going to be refreshed and maintained so that's that's a commitment i can give you so long-winded ants i'm just going to say we you know we want to be the best at what we do i believe we are what we do now would be just doing a bit more alison cardin shareholder um what is about what it is what is it about the wine industry that you think fits with scales and has appeal for you to invest and diversify into well do that i just think in any we're looking at all of the as i just at this stage certainly don't want to focus on any one particular area because you know that's we're looking at a number of them but it'll be as we said where we can add real value so some you know some fundamentals around marketing and branding and and uh delivering you know get improving the supply chain of a let's say an integrated business but you know that applies to everything we're looking at so as i said in my address we'll only look at businesses where we believe we can make them at least the equivalent of what we're already doing so it can be wine it we're looking at a whole range of issues of of industry so and as i said it's been hard i mean we have high standards um and as you know there's you know there's there's not a lot of businesses that yeah that we believe you know fit what we need to do to add value so you know i said we we're relatively conservative a lot you only have to look at us i suppose but i see conservative as a positive thing um it shows we take care and we care you know we treat this business with respect i certainly i get very um uh so i'm quite passionate about good businesses and good people and we we've got something to protect you talked about where we be in a few years time well we've got a great business now so anything we do we want to make sure that it stays a great business and we just made a great bigger business again long answer but i think you get the gist yeah uh ian upston shareholder okay um these possible acquisitions what's the possibility or likelihood there's a flying a kite of a share issue well i like to say it would depend on the on what's involved what we need to do you know what we're obviously going to pay but i don't know whether andy you might make it i think it would have to be pretty big at the moment because we've got a lot of cash but i mean if we needed more capital from shareholders that would you know it would be uh you know we would go back to the shareholders to um to go to get that equity and we wouldn't want to run our debt levels too high sorry richard but you know we want to be conservative there but um so you know if you know two or three acquisitions came along and our balance sheet was getting a bit um you know to indebted we'd certainly be looking to keep the capital growing beside the debt okay well look um as i said i think that's all the questions please stay around um i'd like to i and the other directors would certainly like to talk to you and if you've got any questions you'd like to ask us directly um please don't hesitate so um again thank you i appreciate the uh let's say the question and answer time again in australia i'm not used to the let's say the informality and but it again it's a positive i can assure you so i hope you've also found it a positive so thank you again for your attendance and i just want to say um sorry just one thing i should say um well i've gone off track and i'm renowned for that in a couple of minutes i'll close the voting system so just please ensure everyone has cast your vote um and on that basis i'll close the voting uh i just want to advise you the results of all the votes will be released to the nth nzx later today and we'll go back to what i said before thank you for attending and i close the meeting thank you