This will allow votes to be submitted. To vote, simply select your voting direction from the options that are shown on the screen. For those of you who are here in person, welcome. Voting on voting papers will be done a little later in the meeting. The notice convening this meeting was circulated to shareholders on August 26, 2026. As a quorum is present and there are no apologies, I am pleased to formally declare the meeting open. I would like to take a moment to introduce the board to you. Firstly, Tristram van der Meijden. He is an Independent Director, similarly to myself. Tyrone Foley, also an Independent Director. Josef Roberts, also a Director and CEO. Mark Piet, the Company Secretary and CFO. I would also like to welcome other members of the Burger Fuel executive, together with our auditors, and the share registrar who are with us today.
As far as the agenda for today is concerned, firstly, I will deliver an address. This will be followed by an address from our CEO, Josef Roberts, and he will provide an overview of the business and update you both on the past FY 2026 performance and current FY 2027 year to date. We will then conclude the address with any Q&A. From there, we will move to the formal part of the meeting. In terms of formal business, we have two resolutions, which we will put to the meeting. We will cover each of those resolutions in turn, invite questions for them, and then vote. For those present, any questions on those resolutions can also be put at that time. For those present in the meeting room today, we also have a couple of housekeeping matters to deal with. Firstly, the toilets are through those doors behind you.
They are across the room at the back. The fire exit, just before the elevators where you came in. In the event of a fire or emergency, please make your way to that fire exit and assemble at the front of the building. The 2026 annual report. The 2026 annual report containing the financial statements and auditors' report therein for the year ended March 2026 has been circulated to shareholders. It is not required to be considered at the annual meeting, but we will of course, as usual, be happy to take any comments or questions you may have during the Q&A after the addresses. I will now turn to my address. I will review the main events of the past financial year for the Burger Fuel Group of companies. Firstly, the year in numbers. FY 2026 was the best year in the group's history.
Net profit after tax for the year was NZD 1.97 million, an increase of 91.8% on the prior year, close to double the FY 2025 result. Total system sales across all three brands and all regions grew 2.93% to NZD 111.4 million. In New Zealand, system sales across our three brands and 66 restaurants lifted 4.12%, to NZD 108 million. Group revenue rose by 2.23% to NZD 25.5 million. Our performance was achieved by growing sales in a market where a great many operators went backwards or even out of business. The result was assisted by two things of note. One, we were not required to spend the substantial legal costs that weighed on the FY 2024 and FY 2025 result, and we took a one-off gain of NZD 288,000 on the sale of our company-owned Burger Fuel Ponsonby store in December 2025.
Cash on hand closed at NZD 6.1 million, up from NZD 4.8 million the previous year, despite the group deploying NZD 1.34 million of its own cash reserves into property, plant, equipment and technology during the year. The group continues to carry no debt. Given the environment that Josef will describe in more detail shortly, the board regards this as a very strong outcome and one that really stands out in a very difficult market, but especially in the hospitality sector that we obviously, as a company, operate in. The store network. As of 31st of March 2026, there were 62 BurgerFuel restaurants trading in New Zealand, with three in the Middle East. Alongside those, we had three Shake Out restaurants and one Winner Winner restaurant operating in New Zealand, plus 26 Shake Out virtual kitchens running out of the BurgerFuel locations around the country.
During the year, we opened BurgerFuel Royal Oak in Auckland in June 2025, and BurgerFuel Te Rapa in Hamilton in October 2025. This one, though, replaced our store at the base in Hamilton. Both are franchised and both have been well-received. BurgerFuel Whanganui also traded for the first full year in 2026. These three new store openings. My apologies. There are three new store openings in this current financial year, and Josef will talk more about those in a moment. In December 2025, as mentioned, we sold our company-owned Ponsonby store to a franchisee who had been involved with the brand before and who has quite simply hit the ground running. That transaction is a very good illustration that generally BurgerFuel is at its best when stores are owner-operated. Those are the results and the shape of the network behind them.
BurgerFuel has, as noted, managed to grow sales and profit in a market that was generally going backwards, and we did so while adding cash to the business and continuing to carry no debt. Some comments on the outlook. As I mentioned, FY 2026 was our strongest year to date. But the recovery that we could see building in the second half of last year has been seriously interrupted by global events and cost pressures flowing from them. For us, 2027 is holding up to date reasonably well, but it is being shaped by geopolitical issues the whole country and the world is dealing with. As well, being an election year, this always creates uncertainty for businesses and consumers, and we are starting to see that. New Zealand sales for the first half of this year are tracking ahead of this time last year.
However, we are comparing with a softer period for the same time last year. Our next half year will be also compared to a stronger second half in FY 2026. Full-year sales are always and genuinely difficult to predict. I note that retail spending for August was down 1% from July, and one of our key suppliers has confirmed that the sector was down in August. We are starting to feel a slight softening of sales right now. Sales for the full year are very much subject to local economic conditions, consumer confidence, cost pressure, and the wider effect the ongoing Iran conflict has on our economy. For example, we note right now that oil and therefore petrol prices at the pump are once again rising.
Against any possible growth in New Zealand that we may achieve, sales in the Middle East have drastically fallen due to this conflict as an illustration of some of the issues that we face. Turning to the dividend and our dividend policy. This year's profit and cash we hold, it will be retained in the business. As is our standing policy, no dividend will be paid in FY 2027. In a world of uncertainty, we are prioritizing business resilience as well as strategic investment to continue to grow new revenue streams. It is the strength of our balance sheet that helps guide both our business operations as well as new investment decisions. Our dividend policy, as many of you will know, has been consistent since listing. Our decision not to pay a dividend is not simply about caution.
Cash funds the operation without our having to take on debt, giving us the room to move if conditions turn against us. It lets us back growth when the right opportunities arise, like currently, with our ongoing strategic investment in revenue-generating IT systems. Our cash also supports further investment in BurgerFuel's infrastructure, our franchisees, as well as new store construction and openings, which these days takes considerably more capital, financing, and time to come to fruition. Josef will talk more about where our investment is going during his address. A further consideration in maintaining appropriate cash reserves is that the Burger Fuel Group holds head leases across a number of sites and therefore has significant ongoing lease obligations. As outlined in our annual report, these lease commitments currently total approximately NZD 4.5 million. The board reviews dividend policy every year and will continue to do so.
During these reviews, we assess working capital against the requirements of the business, including any capital commitments that we are aware of over the next three years, as well as considering, of course, current economic circumstances and the impact on the business. We then consider what would happen, what we should do, or what should happen with any meaningful cash surplus. Nothing is ruled in or out, and we will maintain this position and will continue to report any change in our dividend policy to shareholders. I want to be clear that this is not to say that the company will not pay a dividend at some point in future, but this should not be expected.
Our focus remains on the current, on constant improvement of the BurgerFuel system and brand, reviewing and where possible, entering new opportunities like our IT investment, and ultimately on growing our financial metrics such as profit, which is clearly what we are achieving. Food businesses like ours operate on historically low margins. It is for this reason that we are integrating areas such as technology that move us towards other forms of generating income and reducing reliance on solely bricks-and-mortar revenue that BurgerFuel has traditionally generated. Joe will talk more about this in his address. That concludes my review of the year. There is a lot of activity going on within the group, and the board remains cautiously optimistic about the year ahead, notwithstanding the geopolitical situation and the current economic environment within which we are operating.
I'd like to take this opportunity to thank Burger Fuel's team at the head office, and particularly to our franchisees and their crews in store. A result like this is not only produced by, of course, decisions that the board and the executive made, but also by several thousand shifts worked with excellence, and we are very grateful to each and every one of those and the people that make that happen. Josef will now take you through the business operations, the conditions that we are trading in, the franchise system, the Middle East, and where we are investing. I'll return to address you later in the meeting, but for now, I'd like to hand over to Joe.
Thanks, Alan. Morning, everybody. Good to see you. Good to see some familiar faces here today. The FY 2026 result was delivered in a year when a great many operators in our sector did not survive at all. Our performance didn't come from the market getting easier. It came from a business that has been relentlessly and carefully developed and maintained, but especially over the past six years, which have been extremely challenging in our sector. A key reason for our resilience has been because of both the management decisions and the financial investment that we make every year to ensure that the brand remains loved and top of mind. Without that constant investment, like many others in our sector, we simply wouldn't be here today.
The state of the economy is the single biggest determinant of how many customers visit our restaurants and how our franchisees are doing week to week. At this meeting last year, I described trading as among the toughest on record for our industry. The second half of FY 2026 finally brought some relief. Interest rates had come down materially from their peak. Food price inflation had eased back to the mid 2% range, and we could see confidence beginning to return. Finally, I thought we would be heading into FY 2027 with a clear run and stronger economic growth signals. Unfortunately, that was not to be. Much of the momentum gained at the end of FY 2026 has since been lost due to the geopolitical situation, being the Iran and Ukrainian wars, where we are bearing the costs of those every day. Consumer confidence remains fragile and volatile.
Discretionary spending is the first thing that households cut and the last thing they restore. The hospitality sector remains under real stress. Hospitality liquidations in New Zealand rose 50% year- on- year, the second highest of any sector behind construction, and every week seems to bring with it news of another long-standing restaurant, cafe, or bar closing its doors. That's the backdrop against which you should consider our FY 2026 performance. Next, and perhaps most acutely, input costs, particularly beef. A global cattle shortage, combined with very strong demand out of the United States, has pushed New Zealand farm gate beef pricing to record levels.
This is great news for New Zealand farmers and for the country's export earnings. However, it's not good for us as it creates significant margin pressure. We do not see this subsiding in the medium term. In fact, to me, it feels like the new normal.
The Iran conflict and the disruption to shipping through the Strait of Hormuz pushed crude oil above $100 a barrel earlier this year, with diesel and freight costs rising further still. Prices have been up and down ever since, and now they are on the up again. With global oil supplies and reserves tightening, my guess is that we are in for further declines in the global and local economy beyond where we are at today. Here at home, suppliers have been adding these additional freight and input costs onto their invoices, and it is clear that many retailers, especially those in food and hospitality, are struggling to pass these costs on for fear of losing customers. It is, of course, the financial inability for many businesses to keep absorbing these costs that ultimately lead to their failure.
That same conflict has had a direct effect, but far more dramatic on our Middle East operations, which I will come back to. There is a further negative trend that I want to remind you of. New Zealand recorded a net loss of another 36,500 of its own citizens in the year to March 2026. That is an improvement on the 42,900 lost the year before, but it remains a very large number, and around 40% of those departing were aged between 18 and 30, squarely our BurgerFuel customer base. Overall, migration was positive, so the population still grew, but the portion of that population that have grown up with BurgerFuel, who were our regular customers, are the ones that have left. Another emerging threat to our industry is the growth of GLP-1 weight loss drugs, such as Ozempic and Wegovy.
In the U.S., around 18% of adults have now used a GLP-1, with approximately 12% remaining on one permanently. As patents begin expiring in markets such as India and China, lower-cost alternatives are likely to make these drugs increasingly more accessible. For the food industry, the implications are significant. Research from Cornell found that households using GLP-1s reduce grocery spending by around 5%, and spending at fast food and other limited restaurants by around 8%. On a New Zealand level, just last week, Foodstuffs stated, and I quote, increasingly, we are seeing clear signals of GLP-1 medications influencing consumption patterns, particularly appetite, portion sizes, and category mix. So this threat is real and already here. As the adoption of weight loss drugs continue to grow and prices for those drugs fall, the challenge for our industry is quite simple.
A growing proportion of our customers will simply want to eat less.
I have talked before about our three Ps, people, product, and place. What I would say is that this is not a slogan. Standards slip quickly if our organization is not intently focused on all three, store by store, day by day. Holding up the three Ps through the downturn is a big part of the reason our FY 2026 results look the way they do. The fourth P we introduced last year, protect, is now doing real work, and I will talk shortly about how we continue to use our Shake Out brand against competitors who discount aggressively. Franchise business first. Following the sale of BurgerFuel Ponsonby, we operate two company-owned BurgerFuel stores and two Shake Outs. All our other restaurants are franchised. So while the system turns over NZD 111 million, we do not bank those sales.
Our revenue last year was NZD 25.5 million. We are a franchisor. We build, maintain, and nurture the system so that we can continue to collect royalties from it. Our franchisees have needed us more than ever through the last six hard years, and that has at times meant providing them with additional support. We remain discerning about that support, but the arithmetic is simple. The cost of losing a store far outweighs the cost of carrying a good operator through a difficult period, particularly now that replacing that store would cost much more to build than it did a few years ago. Despite a weak economy, reduced consumer confidence, rising build costs, and increasing competition, we are still growing, and we will be opening three new BurgerFuel this year. That's Huapai, West Auckland, Richmond in Nelson, and Auckland International Airport.
That's the entrance to the international departure area by customs, and last Friday, I'm pleased to say that we opened that quite behemoth of an outlet. You can have a look at that there. That was opening at some point over the weekend, and it's been quite a challenge, that store. We've introduced new features and, oopsie, we'll go back to that. Oh, well, we'll leave it there. Doesn't work. Anyway. There we go. It's going the wrong way. There we go. I like the other one better. That's good. Okay. Yeah. This store is operated under a license agreement with a large food operator that runs part of the food precinct at Auckland International Airport. These three restaurants will take the brand into catchments that we have not yet served before.
I've spoken at previous meetings about brand power, about marketing being the job of building layers that last, and about operational consistency at scale, so that a burger served in Invercargill is the same quality as one served in Auckland. None of that has changed, but this requires constant attention. For that, our head office remains appropriately resourced for a system of 66 physical restaurants, 26 virtual ones, and still growing. On top of that, we have the resource, costs, and obligations needed to run a publicly listed company. Our HQ Masterclass program continues to move our strongest in-store people towards becoming our future franchisees. Our people remain the backbone of the business, and we are always nurturing and developing new talent for future years. Competition. Competition is a reality in our industry, where barriers to entry are generally low.
It's not that hard to open a burger bar, so we regularly see independent operators opening those close to BurgerFuel. They come and they go, as we have seen in recent times, but sometimes they stick around for years, and sometimes they grow. We keep a close eye on competitors, especially new ones. We look at what they are offering and what we can learn and do better ourselves. In most cases, there isn't a lot other than to keep building on our values of consistency and quality, and to make sure we continue to stand for something. For BurgerFuel, that's clean food and good value. Sure, it costs more to provide better quality beef, free-range chicken, fresh vegetables, and proprietary sauces, all wrapped in a freshly toasted bun with no added sugar, but that's why our customers keep coming back.
Our quality and consistency at scale is hard to beat. Shake Out sales continue to grow. During the year, we enabled 20 additional Shake Out virtual kitchens, taking the total to 26 and giving us coverage across most of New Zealand. Customers anywhere can now try Shake Out through the various delivery channels. These virtual outlets still contribute a relatively small share of system sales, but they deliver franchisees additional profit for little to no additional labor cost. They build brand awareness and, importantly, they give us a weapon. Delivery platforms are a difficult and often fatal economic model for vendors. Generally, customers win and vendors lose and carry the cost. Rather than compete on Burger Fuel's margins, we tend to compete in that channel more with Shake Out. For every Shake Out burger we sell, a competitor sells one less.
We will continue to use Shake Out as our predominant attack brand to compete in the world of slippery slope discounting and delivery platforms. On Winner Winner, our position is unchanged. The Courtenay Place store in Wellington is the only remaining Winner Winner outlet.
That franchisee is continuing with the brand, and also runs a Shake Out virtual kitchen from the same premises. Currently, we are not investing further in Winner Winner. Burger Fuel Middle East. Operation of Burger Fuel in the U.A.E. and Saudi Arabia remains under the development agent agreement. The region contributed modest royalties and profit in FY 2026. Middle East system sales are down 26% for the year, largely reflecting the closure of the Riyadh Nakhlah store in Saudi Arabia partway through FY 2025, and the closure of various dark kitchens in the UAE. At the end of FY 2026, the region represented 2.95% of total Burger Fuel sales.
Since balance date, the region has been significantly affected by the Iran conflict, with a considerable decline in sales and facing a far more uncertain operating environment. In May 2026, our Saudi license holder elected to close the Jubail store, leaving Amwaj as the sole remaining Burger Fuel location in Saudi. In Dubai, the business continues to trade from the World Trade Centre site, supported by a purpose-built Burger Fuel food caravan, which I think I showed before. The reason I just want to show you, this is a new model of We had one years ago, but this is a new model that we have been trialing and we have further plans for those, not just in the U.A.E., but also here. It is not a great photo, but it does show our ability to offer a full menu out of a location trailer now.
By getting rid of the third-party kitchens in the Middle East, I was very concerned there about quality. This enables us to better maintain our brand quality. We continue to assess the Iran impact on trading costs, supply chains, and consumer demand. The duration and extent of the disruption remain uncertain, and we will keep the region under close review. In short, we are not relying on any revenue from the Middle East in FY 2027. That said, hopefully things will eventually recover there as I still believe the region does hold great future opportunities for us. Supply chain. I would like to spend a moment on the cost of goods side of the business, because it is one of the biggest operational issues we are facing. Managing our supply chain is a constant focus.
As I noted earlier, global demand for New Zealand beef, particularly from the United States, has driven farm gate pricing to record levels, and a worldwide cattle shortage means we do not expect relief in the medium or even long term. We have historically been good at managing supply chain costs, and we have mitigated a great deal, but some increases are simply inescapable. Fuel and freight increasing arising from disruption in the Middle East have compounded costs and look set to continue. With cost of goods rising and margins tightening across the system, we have begun investigating supply chain opportunities that would give us more involvement in ingredient production. Any such decision comes back to a simple test: Can we do it better with more certainty of quality, pricing, and efficiency, than if we purchase products? If the answer is yes, we look at it seriously.
If it's no, we don't. We are currently assessing several areas that could offer us investment opportunities within the supply chain, and we will see if anything meaningful comes out of that. Investment in technology. I have set out at previous meetings why we chose to build our own technology systems rather than renting somebody else's, and this comes down to a couple of things. Controlling the ever-increasing Software as a Service costs and getting better customized reporting and utilization of our own data. That decision is paying off. In January, we launched version two of the BurgerFuel online ordering platform, website, and app. It's more stable, has better features, and its architecture lets us release new features far faster than before. Online ordering is now a solid revenue stream. It generated NZD 520,000 of revenue for the group in FY 2026.
The second piece is our white label platform, which is complete and now being operated by several smaller third-party users. I'm pleased to report that we've just started banking our first third-party monthly subscriptions, which I have to say are minuscule at this point, but they are a start. The logic here is straightforward. In the first instance, we solved a problem for ourselves. As a by-product, we have created something we can license outside of our own system on a royalty basis. There is still work to do, but early indications demonstrate that there is a market for our system, so we are hopeful that this can become a new and meaningful outside revenue stream over time. Strategic investment in our IT platforms continues in FY 2027, with further features in development that have the potential to generate more revenue.
Ultimately, this is about maintaining ownership of our customers and building potential revenue streams outside of the BF system. Regarding IT, I will say that it is a growing cost for many businesses, and I'm staggered at the infrastructure pricing that is having to be paid today simply to operate. The green fees are rising every year as technology companies increase prices, sometimes by more than 150% in a year. Leaving us no option but to pay for basic services that used to be free or low cost. Technology is an area where we are seeking to make better use of the infrastructure costs, as well as make the business more efficient. Let's take artificial intelligence. The arrival of AI is not an evolution, it's a revolution. AI has ramped up to now become a mainstream tool for almost anyone who uses a smartphone.
In our business, AI has entered many disciplines. Looking into the future, we will adopt AI in as much of the business as possible, providing we achieve savings and efficiencies. AI guardrails, if there really are any such things, are just as important as the beast itself, and we are cautious as we progressively introduce AI into the workplace. In a bricks-and-mortar business like ours, AI has limitations on a practical level. It cannot manufacture or make a hamburger, but it can control the robotics that potentially could. Behind the frontline, there is no doubt that AI is already assisting us in the performance of administrative tasks, particularly in the information systems and data analytics areas. At restaurant management level, there are also exciting developments that we will eventually implement to assist our franchisees in better managing their business.
There is a whole new world arriving right now in this area, and you can be sure that we are already embracing it and will continue to do so. But again, it all costs money to sit at the table. Although our ongoing investment IT is fulfilling a growing need within our own business, it should also be viewed as a new strategic investment as it has the capability to sit outside of the BF system. We are excited about where our IT platforms are going and where this could lead to. Acquisitions and further use of our cash. As Alan said, cash is essential to our business, and we are in a period where we need to keep investing, both within the business and outside of it. We are also living in massively uncertain times.
We literally have no idea what is coming next on a global level and how that might impact our business financially or in other ways. On acquisitions, we look at opportunities, and there are quite a few that come across my desk. They range from joint ventures, where an owner or founder wants to stay in their business but is looking for a cashed-up, experienced operational partner to help grow it, through to full acquisitions. We ask the same questions every time. What is the opportunity? Does it fit our skill set? Should it be a full purchase or a joint venture? We look hard at the people behind those opportunities. Who are they? What is their track record? Do we want to be in business with them?
In the past six months, we have looked at some categories that vary from our mainstream business, but they are things that we understand and could fit into our plans to grow revenue. Current economic conditions have dampened some decision-making in the short term, but they also create buying opportunities, and we remain engaged in reviewing opportunities and ready to acquire all or part of another business if it meets our criteria. Closer to our existing business, one area has been on my mind for years. We run what we call our Satellite Kitchen, where we make some of our proprietary products, including our aioli. It operates from leased industrial premises. Buying our own production facility and expanding it to make more of our own products is something we are actively investigating.
It would consume a meaningful amount of cash, but it would give us better scalability, better returns, and security of tenure over a part of the supply chain that we greatly depend on. We are disciplined about our feasibility assessments, and we will proceed only where we believe the prospective returns adequately outweigh the risks. The purchase of our own industrial facility with the ability to expand beyond current production does make financial sense, and we are currently looking at those options. Cash is always needed closer to home. Build costs for new stores are much higher than they were a few years ago, and new openings often need our capital assistance if the system is to keep growing. A new store build costs around NZD 800,000 these days. Depending on the incoming franchisee's financial situation, we have to loan up to 50% of that cost for some years.
In some cases, like right now, we are fully funding the build costs of newly developed stores. Extended global lead times on critical kitchen equipment because of trade tariffs and wars have also dramatically increased, meaning that we need to hold more inventory of key items so that new store openings and trading is not delayed. A good example of this is where we are constantly needing to update our commercial kitchen equipment to achieve faster operating and delivery times. Upgraded hot grills or enhanced software of machines, for example. If we make a system change, we may need to purchase up to 60 units from overseas. Some of these range from NZD 20,000- NZD 65,000 each. That alone could be an order in the vicinity of NZD 1.2 million- NZD 4 million or more, depending on the timing of orders.
If the New Zealand dollar keeps weakening against the U.S. dollar, equipment will cost us even more. All of this requires cash and the ability to plan and make decisions knowing that we have it in the bank. Just yesterday, we had to transfer quite a considerable amount to the U.S. for some new equipment that we are currently introducing. That is what our cash is for. It's not sitting idle. It's there to support investment decisions that we make every week, and that is the reason the board's decisions on dividends has not changed. We have many projects on the drawing board that require cash to implement, enabling us to both keep maintaining and growing the business to increase profits. Sustainability. Sustainability is a big part of our business and always has been. It builds long-term value.
Our approach is practical, understand our environmental impact and reduce it wherever we reasonably can. Our second carbon analysis has given us a clearer emissions baseline and is helping identify reduction opportunities. We have introduced commercial composting and recycling across all company-owned stores, with plans to extend this across Auckland stores where feasible by end of FY 2027. Franchisees are supported by a practical store sustainability guide developed in conjunction with our external environmental consulting group. We continue to improve our packaging and, subject to operational requirements, move away from traditional plastic-lined materials, with a long-term goal of transitioning all proprietary single-use packaging to certified commercially compostable alternatives. Royal Oak, our first fully electric site, is testing electric kitchen equipment in a live operating environment, while new developments will incorporate lower impact features where possible. Auckland International Airport has also just opened with a full electric commercial kitchen.
We have always been pretty good at our environmental obligations, and that culture is embedded within the system that we operate. I need to flick a couple. Forgot to introduce you to a couple of things. This is our new parts and supply area that we will be launching next week. This is all about some merchandise that we have demand for, that people ask for. Soon people will be able to go onto our website. There is quite a range. It is just beginning. We see all sorts of things to be basically, as we say on the next one, pretty much BurgerFuel stuff that is not burgers. Yeah, quite an interesting area that we are starting to move into. Also just wanted to update on our whole car culture, because cars have always been a big part of BurgerFuel.
Muscle cars, American cars are kind of dying as the lovers of those cars get older. We know there is a big market in younger Japanese cars, and we have recently entered that market ourself with an emphasis on JDMs, Japanese cars and younger people. It is a huge market actually, and we are having some great fun and success in that area in attracting new customers or younger customers. Animal welfare. We are also proud to continue supporting the Fiordland Wapiti Foundation. Our annual Wild Heart venison campaign has raised more than NZD 120,000 for predator control, native biodiversity protection, local processing capability, and regional employment in Te Anau. Animal welfare sits alongside our environmental work and is built into how we approach the sourcing and specification of our ingredients.
BurgerFuel championed the introduction of free-range chicken in 2014, becoming the first major fast casual restaurant chain in New Zealand to move to 100% SPCA approved free-range chicken. More than a decade later, we continue to source chicken from suppliers operating under SPCA certified standards, representing some of the highest animal welfare standards available in New Zealand at the scale required to supply our nationwide network. Yesterday, in another first, we were proud to announce a new partnership with BurgerFuel and SPCA to launch their new Welfare Plus+ Programme. We are the first company in New Zealand to do that. This will allow us to continue to work closely with the SPCA, government, our suppliers, and the wider industry on how animal welfare standards can practically continue to evolve. Summary.
After six years of at times extremely challenging operating conditions in our sector, FY 2026 delivered a result that reflects the strength of the business that we have built. Despite the momentum of FY 2026 being dampened down by geopolitical events, the business remains resilient and capable of continuing to expand and achieve growth. I would repeat last year's statement, though, that protecting what we have is every bit as consuming as growing it, and we intend to keep doing both. Running a successful franchise system today is harder than it has ever been. Margins across retail food are as tight as I have ever seen them. Build costs and compliance costs keep climbing.
A system that stops improving, stops delivering for the franchisee first and then for the franchisor. Franchising is a partnership, and I have always treated it that way since I was appointed to the role of CEO.
Burger Fuel is successful because we make sure that the correct investment is made within the franchise system. While I am very positive about the future of BFG and the many things we are working on, I have to expect that 2027 may bring with it yet another set of operating challenges on top of the ones we are already dealing with today. Once again, I remain positive and I am sure we will overcome them as we have in the past. In this environment and closer to home, where the successful day-to-day management of a restaurant business the size of Burger Fuel is relentless, cash is both a necessary and tremendous asset to have. Without the availability of cash to both defend the business and deploy it into new opportunities, we cannot grow outside of where we operate today. We run a system with enormous fixed costs.
You can't just turn them off when sales slow down or things get tough. We need reserves, and especially these days, plenty of them. The complexities of operating a system with, at present, 66 physical restaurants and 26 virtual ones and more than 1,000 full and part-time staff, are immense. Every outlet comes with its own set of challenges, and the more restaurants we add, the more challenges arrive. That is the nature of the business we are in. That concludes my address. I would like to thank all our shareholders, including those who have joined us online today, and I would also like to thank our board of directors for their efforts during the year. Our board of independent directors bring strong capability across various areas of the business, and the experience to assist management to achieve further growth.
My thanks to the team at HQ, to our franchisees, and to everyone working in our stores each day, keeping the fires blazing. Of course, to our customers, who ultimately make or break us. Thank you also for your attendance today. I remain proud of the brand and the business that we have built and of the storms we have weathered alongside our franchisees, no more so than during the past six years. I will now hand you back to our Chairman, Alan Gourdie, to continue with the proceedings. Before I do, I am sure that there may be a question or two. Would anyone like to ask that? If you are online, you can ask by typing a question in the Q&A box at the bottom of your screen. Lovely, Chris.
Well done. There was lots more information there than I have ever heard at these meetings. Is there a microphone?
I think it is just for the online.
Okay. A lot of emphasis on cash and the use of cash. Obviously, when we were here last year, we did talk about the possibility of a dividend. I am just wondering if there is ever going to be a right time to pay a dividend or maybe the board just needs to put that one to bed some way, shape or form. It is selling the Ponsonby store.
I think, we are sort of cash flow positive, NZD 3.5 million, imputation credits, retained earnings. NZD 6 million in the bank at year-end, but it is probably over NZD 7 million now with the positive cash flow. It just seems like a maiden dividend would be perfect timing right now. NZD 1 million, just to energize the shareholder base and probably put a bit of liquidity into the share price. It sounds like what you are doing is, everything is heading in the right direction. Is there a reason that we.
Well, I think the reason we have just pretty much outlined here.
But we haven't ever spent any of the money that we always were paying.
Well, we are. Every week it gets spent. Balance dates, we always try and keep cash to where it is. But at the end of the day, it comes back to, it's pretty simple. Once we start transferring assets from the business to shareholders, we're going to start losing the ability to grow. Like I've pointed out, we are a mature business. We can only grow very incrementally with BurgerFuel. You would understand that, I'm sure. What we need are outside opportunities, and that's where we're going. IT for us has been a fantastic investment, and that's going very well. But all these things require cash. Like I say, we don't know what's around the corner. These stores that we're having to fund, they're nearly NZD 1 million each now.
But how much We haven't funded any at balance date.
We are funding stores. I just told you in the speech, we're funding one right now. So, yeah.
Oh. I was just looking at the financials.
Yeah
What we had spent today, I think it is only [inaudible] .
I think that is where we stand on dividends. I think we have never been. You have been part of that. We have not been a dividend-paying company. We still want to get back to being a growth stock. The only way we can affect the stock price is by performance, ultimately. I think that
You talked a bit about performance around the IT side. Can you let us know what we are spending NZD 3 million on?
I can speak to what I can speak to in this meeting, and you can look at that in the report in the next half-year that is coming out.
Maybe, Joe, just to add to your comments on the dividend. The reason that we have spent so much time in the addresses discussing the use of cash was because we appreciate that there is a discussion around the dividend at the annual meeting every year. As Joe has said, the policy of the company has been, and it is clearly stated in its documents and website, that we do not issue a dividend. However, I can assure you that we do, as a board, review our dividend position and our cash position regularly.
To your question as to what have we deployed in cash and what are we looking to deploy in cash, what we can see and what we have stressed in the addresses today is a number of things relating to defense of the business first and foremost, and the requirement for our competitiveness in terms of the equipment and the cost of that equipment, and the support of franchisees to supply that equipment, only growing.
Sure. There is just no evidence of the spend.
Yeah. Our job as the board, though, is to not only reflect on the
Well, you haven't even reported yet.
It's not to say
Well, okay. You're talking about in the last six months
It is to not only reflect on the year that was, but of course, we have to look into the future and go, what is that telling us about where we will need to invest? We do not see any lessening of the economic tightening.
Absolutely.
The headlease point, for example, is something that we are conscious of on one hand. Secondly, we think that there will be opportunities, acquisition opportunities. As we have identified, there are issues within the hospitality sector, but that also creates opportunities for us.
We have definitely got a few concerns. Yes.
Acquisition opportunities are very real to us as well. Those things. I think my main point though, Chris, is that this is not something that just turns up every year. It is a constant discussion.
Sure.
40%-50% of the board's time is taken up with discussing the situation that we're in and the opportunities in the business for growth, therefore the use of that cash. It is a constant discussion inside the organization. Of course, a dividend within that is always part of the not immediate future in thinking, but something that we of course, have to reflect on.
Yeah.
As directed.
I would just make the point is like, a NZD 1 million dividend would not materially change where we are. Based on the history of our spend and what we do with the cash, based on where we're going in the future, based on everything I've heard. That was my main point.
Well, fair enough. Yes. Yeah.
Thank you. My name's Neil Anderson, and I represent the New Zealand Shareholders' Association.
You've spent a lot of time, an awful lot of time explaining why you are not going to pay a dividend and what you're going to do with the cash. Shareholders need to know if they're going to get some gains out of this company. Because at present, your share price sits nowhere. It's sitting low. Shareholders are getting nothing as a return from the company. So when can shareholders expect some kind of return, and how are you thinking about delivering a return to shareholders? They put money into the company in the anticipation that they're going to get some kind of return. At the moment they're getting zero. So, that's a question you need to be answering to shareholders. Thank you.
That's fine. Well, I think at the end of the day, there's two possible returns, isn't there? There's growth in the stock price.
It's not happening.
Yeah. It's not my fault.
Well, just a minute. Our job is to deliver performance. Correct?
Yeah.
If the profit doubles and the share price goes up a little bit or less, that's something that I can't control, that we can't control. Our job is to deliver on the metrics of the company, to grow the business. Eventually that will be seen or it won't be seen. Now, just in regards to dividends, we've spoken about those here. I think that in the end, as Alan says, it's not off the table. It's simply that right now when we look at everything that we've got on and look at the demands of us and the system, as well as where we want to go and I've mentioned about some of those areas of acquisitions, IT investment, other things we're looking at. The company simply needs the money.
I understand what you're saying, but also you need to understand that the share price is languishing because investors don't see any opportunity to get a return. You need to seriously, as a board, think about how you're going to give some kind of return to shareholders, and that will help increase the share price.
There is no return at the I mean, look at Savor Group. Look at the gentailers, they give dividends. I mean, you say that. A dividend doesn't automatically increase the share price.
Return. I'm talking about.
Yeah.
A return.
That's the point. Fine, that point is taken. Yes. Franco.
About the Ponsonby shop.
Yes.
Can you explain a bit
Yeah.
Of what happened and the reasoning?
Well, Ponsonby, Chris' very first store that he opened.
Yeah. I know.
It has always been a difficult store to operate.
I thought it was running pretty well.
No. It was run okay, but in fact, Chris will know this very well, the history of it. We only ever actually made money out of it under one particular manager we had many, many years ago. It is a difficult site in terms of it is an expensive site in rent. It requires long hours. That store was open till 4:00 A.M. in the morning on a Friday and Saturday night. Basically what you have got there is a situation where we felt that it could be better run by a franchisee than it could be by us. That is why we sold it. Also, we can see already now that the turnover of that store is rising very well. I know and you have always been a fan of owning stores, but we just are not good at running them. I would have to admit that.
Franchisees run a better store than company.
What about the Takapuna one?
We keep that one. Yeah.
We keep that store. That's going well. We're trialing a lot of fast equipment in there at the moment. That's a store that we will retain.
Because I live in Takapuna, and when I go past there, I can see it is doing well.
Yeah.
Next door, Subway, there is nobody.
Yeah.
If they can survive.
They can stay closed. Oh, no. Yeah.
It must be doing very well the BurgerFuel there.
It is. We own that one. We own that one. So no plans to sell that store.
So no plans for.
No.
Our future. What about, which one is the-
Henderson.
the third one?
Henderson.
Henderson.
Yeah, Henderson. And we will see what happens with that one. We really only need one company-owned store, ultimately. But we are just, I will admit that, we are just not good at running them, or not as good as a franchisee, and I think it comes down to the mentality of a franchisee versus the more the sort of employee thinking.
How much you got, is a good price, is overall, or what was-
We've reported the price in there. We made a gain. The store's been on the books for many, many years, so the gain in the end, that stores needs a refurb and it will have that. We've reported in there a NZD 288,000 gain for that store.
Okay. Thank you.
Okay. Thank you. Yes, Carl.
Thank you. My question also, curiously enough, relates to dividend. A couple of numbers. I was interested to hear Mr. Mason refer to the possibility or speculating around a NZD 1 million dividend. That equates to about NZD 0.03 a share. A couple of numbers. The market capitalization of the company is around NZD 12 million. We've got NZD 6 million in cash or cash equivalents. Congratulations, you've got the laziest balance sheet on the NZX, and that's a good thing.
Well, I would say it is a strong balance sheet.
Well, that is another way of looking at it. Just on those, a few more numbers, if I may. Mr. Chief Executive, you pull from the company, by my estimation, something like NZD 1.35 million each year. Part of that is salary, part of that is wearing another hat as the owner of the head office or by way of rent. Nobody begrudges you either of those things. My point is this, as shareholders, we have never had a return, and it is high time. You have NZD 6 million in cash in the bank. To reduce it to NZD 5 million would make no material effect, would send a strong signal to the market that you value your shareholders. Because, sir, you are treating them with contempt, and it goes on and on.
The easy way might be for a shareholder to say, well, we have had a guts full. We will sell. How? The liquidity is in the toilet. So is the price. So you have
Well, it's always
What I'm-
Yeah.
-what I'm asking is-
Okay.
-when will you recognize-
I think if.
-the input of shareholders?
I think if we were going to pay a NZD 1 million dividend, we have 2,500 shareholders, most of them with less than 1,000 shares. I think we would have to, in all honesty, clean up the register, which would be a scaling up. To do that puts pressure on those, or we end up paying NZD 0.03 or something to people who have got 100 or 300 shares. Sharesies, of course, have created another, say, complication. There is more than 3,000 of those on the register as well these days. Look, I get your point and I think that it is fine. I can see where you are coming from. I personally would like to still see that we can come forth as being a growth stock that we once were. We did have a great share price when I did the Subway deal.
I notice Mr. Mason likes to talk in the media a lot about that. We saw it go to almost NZD 4, and a lot of our investors did sell out and make a very good return. But like I say, we have been in an area where our industry has been tough, and we have doubled profits in the last 12 months. We are on a very strong and a good path. The board considers this very, very seriously, and there is a lot of discussion, as Alan said, about that. But look, your comments are noted and I am sure they will be taken up by the board.
But we must be reading from a different Burger Fuel dividend policy document. Because the one I am reading from, and the one that is published on the website, while it says the policy remains unchanged of not paying dividends, it also says, in determining whether to declare or pay any dividend, the board will have regard to all relevant factors at the time, including the company's solvency. Well, hell.
Operating performance, again, financial position, cash flow requirements, capital expenditure commitments, growth opportunities. Well, you have not actually articulated any of those. Banking arrangements and any other matters the board considers relevant. Well, what are the other matters? Because you have not actually nailed down anything out of that lot.
Well, I do not think that is correct, Carl, with respect. What we are talking about here is a whole lot of operational requirements for cash and potential acquisition. These are the things. We cannot stand here and talk about all the detail. We are a public company. We have got competitors. We do not know who is sitting in this room, who is working for someone else in this room, and obviously that is where public companies sit. So what we have outlined in here is exactly the dividend policy. So I would say to you that what you are reading is exactly the reason why a dividend is not being paid.
Well, from this side of the table, sir-
Yeah.
-it sounds like I have to say, minority oppression from that side of the table. We are not getting a return, and the arguments you put forward will be made infinitum. You will have NZD 100 million in the bank. Well, necessarily and around the corner will be the possibility of some great, wonderful acquisition, and you run that argument till the cows come home. It is not good enough. You need to rethink this. Thank you.
Thank you. Okay, I am going to hand it over to you.
Thank you.
To you. Sorry, okay.
I can-
I probably interfered. You all right with that?
I can use these.
Yeah.
Thank you for your questions. I think as you saw from the structure of the addresses, it was in anticipation of some of the points that we knew would come up. I would only say as the Chair that, yes, of course the board has to be judged on its merits. I would stress again the performance of the company over the last year, the best-ever performance we have had. We cannot, as Joe has said, determine how the market values that performance. What we do know is that year-on-year performance demonstrating growth and good stewardship of our assets, including our cash, is rewarded with a growing share price. I am not saying that that is what will happen to Burger Fuel, however, that is the accepted wisdom.
At this point, with the opportunities in front of us, with the economic circumstances ahead of us, and with the acquisition opportunities, you can judge us on our merits in a year's time. Which, of course, you will do. With that said, on behalf of the board, I would like to again thank all employees, franchisees, and other business partners for their efforts over the year. I would also like to again thank my board colleagues for their support and the work that they have performed during the year. Finally, directors would like to thank shareholders for their ongoing support. We look forward to continuing our work to support management and direct the business for the year ahead. This brings us to the formal part of the meeting.
We have two resolutions as set out in the notice of meetings, of meeting, that has been previously circulated. The items of business comprise two ordinary resolutions. Each resolution is an ordinary resolution and will be decided by poll, requiring more than 50% of votes cast by shareholders entitled to vote. The two resolutions are Resolution 1, re-election of Director Josef Roberts. The resolution is to consider the re-election of Josef Roberts as a Director of the company who retires by rotation in accordance with Section 9.4 of the company's constitution, and being eligible, offers himself for re-election. Josef's details as a director of BFG Group are contained in the notice of annual meeting of shareholders that has been previously circulated. Resolution 2, auditor's remuneration. Baker Tilly Staples Rodway is automatically reappointed as our auditor for the year ending March 2027.
However, a resolution is required in respect of their remuneration, and with directors being authorized to fix the auditor's remuneration for the ensuing year. If anyone has any questions on these two resolutions that you would like to ask, please either ask online now by typing your question in the Q&A box at the bottom of your screen. If you are a shareholder and you have brought your voting paper to the meeting or were given one when you registered, you should use that to record your vote. If you do have a voting paper, please go to the Computershare registration desk at the entrance. In fact, I see they're in the room with their boxes. There are pens available if you need them. To complete your voting paper, please place a tick in the appropriate box and sign with your usual signature.
Please complete the voting paper in respect of the two resolutions, and the share register will collect your vote. For online voting, if you haven't submitted your proxy vote before the meeting and would still like to vote, we will now open the online poll to vote on the two resolutions. Please only vote if you have not done so already. You should be seeing the two prompts on your screen now. If this function did not work for you and you would still like to vote, please email Computershare at corporateactions@computershare.co.nz. I'll read that again, corporateactions@computershare.co.nz, before 4:00 P.M. today with your CSN number and your vote or email Computershare your completed ballot paper that has been previously circulated. I'll open the floor for any questions on those resolutions. There being none, thank you. I will now conclude No, I won't conclude the resolution voting.
I will invite you to vote and then complete that process. Thank you. I will now conclude the resolution voting. The result will be announced after today's meeting and will be published on the NZX market announcement platform. Thank you everyone. There is no further official business, and I will now declare the meeting closed. I wish you all the best for the remainder of the day. Thank you very much.