Good morning, and welcome to the Annual Shareholders' Meeting of My Food Bag. I am My Food Bag's Independent Chair, Tony Carter. Today's meeting is being conducted in person and online, hence why we had to wait till exactly 11:00 A.M. o'clock. We are very pleased to welcome those of you who are participating online through the virtual meeting platform. I will provide you with further instructions later for those attending online, but if you encounter any technical issues, please refer to the virtual meeting guide or you can phone the helpline on 0800 200 220. Before we formally begin, I would like to start by acknowledging board members Jen Bunbury, Chair of the Audit and Risk Committee, Cecilia Robinson, Chair of our Marketing Committee, and one of My Food Bag's founders, Sarah Hindle and Mark Powell, who is Chair of the Nominations and Remuneration Committee.
We also have My Food Bag's leadership team in attendance, including our Chief Executive Officer, Mark Winter, Louise Newsome, who is our Chief Financial Officer, and Jess Reeve-Taylor, who is our Commercial Manager, and she will assist with the online Q&As later in the meeting. Our auditors, EY, are also in attendance, represented by Lloyd Bunyan, and he will be available to answer any questions regarding the conduct of the audit. Finally, you will notice, of course, that we are in the offices of our share register, MUFG Pension & Market Services, and members of their team are available today to help conduct the vote and act as our scrutineer. I have had it confirmed to me that the Notice of Meeting has been sent to shareholders and other persons entitled to receive it, and I have been advised that we have a quorum present.
On that basis, I am pleased to declare the meeting formally open. As always, shareholders were given the opportunity to attend the meeting and vote, or to appoint a proxy to vote on their behalf. Proxies have been appointed for the purpose of this meeting in respect of approximately 30 million shares, representing about 12% of our total share capital. My fellow directors and I intend to vote all our discretionary proxies we have received in favor of the full resolution set out in the Notice of Meeting.
Turning to the agenda for today, following my address, My Food Bag CEO, Mark Winter, will provide a business update before we move on to the more formal agenda items regarding the acceptance of the FY 2026 financial statements and our ordinary resolutions, which are the re-elections of our directors, Jen Bunbury, Sarah Hindle, and Mark Powell, and also a procedural resolution on the auditor's remuneration. There will be an opportunity for a general Q&A. As always, I would encourage our shareholders to exercise their right to vote and to ask questions. You can send through your questions at any time through the online portal by clicking Ask a Question button, and I will encourage you to do so as early as possible. This will allow us to answer those questions at the appropriate juncture of the meeting.
This financial year has seen My Food Bag deliver another year of profitable discipline growth, reflecting our continued focus on growing quality active customers by prioritizing brand value, convenience, flexibility, and great value. Building on this momentum, we broadened our offering for a range of initiatives, expanding our menu, giving customers more ways to personalize their meals, and introducing new menus developed by our nutritional experts to target a range of specific health and dietary needs. At the same time, we also strengthened our operating platform and optimized our packaging, improving performance and the customer experience. Importantly, this growth extended beyond our core meal kit business. The My Food Bag Shop continued to attract new customers by broadening the range of gifts, ready-made meals and one-off occasions, all without the need for a subscription.
At the same time, we also grew our corporate partnerships channel, creating a new source of recurring B2B revenue. Throughout the year, strong free cash flow of NZD 8.5 million allowed for further debt reduction, with net debt decreasing to NZD 1.9 million by the end of the financial year, down from NZD 15.3 million three years ago. This reduction continues to strengthen the balance sheet. While reducing debt, the Board also remained committed to shareholders' returns, and we were pleased to declare a fully imputed final dividend of NZD 0.0115 per share, bringing the total dividend for the FY 2026 year to NZD 0.019 per share. Turning to FY 2027, we are pleased with our performance to date, with revenue in the first four months of the year up 4.5% on the prior year. This reflects the continued strength of our customer base and the progress we are making against our growth strategy.
Importantly, this performance is being supported by continued improvement in customer retention and order frequency. This reflects stronger engagement from our existing customers and reinforces the value of initiatives we have introduced across menu choice, personalization, and convenience. This provides a strong foundation as we continue to focus on growing our active customers through this financial year. We have recently taken a balanced and targeted approach to pricing, supporting customer value while also responding to higher input cost pressures, such as with ingredients and fuel. We expect the gross margin for the first half of the financial year to close in line with the prior year. As shareholders will be aware, earlier in the year, the Board announced a review seeking to evaluate My Food Bag's ownership, capital structure, and strategic options.
That review is ongoing, and while we have no further updates at this time, we expect to provide shareholders with an update on the Board's strategic review before or alongside our interim results in November. I would like to finish by acknowledging and thanking all the team at My Food Bag. It's their effort, passion, and innovation that makes this year positive results possible. I'd also like to thank you, our shareholders, for your continued support of the business. As I recently announced, I will be retiring from the Board later this year, bringing to close over five years with the company. It has been a privilege to serve as chair and to work alongside such a talented and committed team, and I leave with great confidence in the future of the business and the opportunities ahead. I'll now invite Mark Winter, our CEO, to address you. Thank you, Mark.
Cool. Thanks, Tony. [Non-English content] . Welcome, everybody. Thanks for joining us here today in person, and also to those of you that are online. It is always a pleasure to meet with our shareholders. We always appreciate the opportunity. FY 2026 was a year of continued progress for My Food Bag. We delivered revenue growth, increased profitability, strengthened cash flow, and further reduced debt. We also continued to improve the experience we provide our customers and invest in the capabilities that will support future growth. Importantly, that progress reflects the consistent execution of our strategy, strengthening our leadership in meal kits, while continuing to expand ways consumers can engage with My Food Bag across the wider meal solution and online grocery market.
Today, I will take you through our FY 2026 performance, the progress we made against our strategy, and some of the momentum that we are carrying into FY 2027. Starting with our financial performance. FY 2026 revenue grew by 5% to NZD 170.2 million. This was driven by higher customer average order values, increased order frequency, and improved customer retention. Gross margins were maintained in line with historical levels despite higher inflation, with supply chain initiatives and pricing actions helping to recover ingredient cost pressures. This top-line growth and strong cost management flowed through to EBITDA of NZD 16.4 million and net profit after tax of NZD 6.7 million, up 5.3% on FY 2025. Free cash flow increased to NZD 8.5 million from NZD 7.6 million in the prior year, which enabled further debt repayment and distributions to shareholders via further dividends.
Turning to the year in review. Set against the backdrop that I have just described, FY 2026 was a year in which we further strengthened both our consumer offering and our business' operating platform from which it enables. Some of the key achievements included improved customer retention and order frequency, reflecting stronger engagement and stronger customer loyalty. Expansion of the My Food Bag Shop and our Ready Made meal range, creating more occasions and more ways for customers to buy outside a weekly subscription. Continued development of our health-led offerings to help support more New Zealanders manage their diabetes, their use of GLP-1 weight loss medications, or provide high-protein or gut-friendly options.
Strong cash generation, enabling a further NZD 5.1 million in reduction in debt while also increasing dividends to shareholders. My Food Bag's strategy remains consistent: be relevant and grow active customers by delivering flexibility, convenience, and great value. With improvements delivered in FY 2026 reflecting continued execution against our four strategic focus areas, building our brand to drive higher customer advocacy and loyalty, enhancing convenience across our brands through shorter order lead times, faster recipes, and continued growth of our ready-made meals, offering more personalized solutions so customers have more flexibility and choice to meet their individual needs, and introducing new customers and audiences to My Food Bag by unlocking new segments and occasions through initiatives such as the My Food Bag Shop and B2B partnerships. These focuses are underpinned by an efficient operating model and continued investment in our people, supply chain, data, and technology.
Our portfolio of brands, My Food Bag, Bargain Box, and Fresh Start, continue to build brand value and advocacy by delivering differentiated offerings across the premium, value, and health and wellness segments. My Food Bag was awarded the Canstar Blue's Best Rated Meal Kit for 2025. Our partnership with Nadia Lim remains central to the brand, with a new season of Dinner with Nadia featuring well-known Kiwis alongside our sponsorship of Nadia's Farm Kitchen. Bargain Box launched a Bargain Win campaign across TV, YouTube, and radio, with a strong focus on value, affordability, and quality. We also kicked off a multi-year sponsorship of the Weet-Bix Kids TRYathlon to reinforce its value and family positioning. Fresh Start continued to strengthen its position in the health and wellness segment. Across the portfolio, we invested in expanding the number of recipes on offer each week to support customer retention.
To enhance convenience, we launched a dynamic box and ice initiative to tailor box size and insulation to each other, cutting cardboard use and waste, and enhancing the customer experience. To offer greater flexibility, we launched our first recipe customization initiatives, starting with double protein options across all three brands. The results have been positive, with customers willing to trade up, supporting growth and average order value. We have since added further customization, including the ability to swap proteins on selected recipes. The My Food Bag Shop continues with its full year of operation and broadened the ways customers can engage with us beyond subscription meal kits. We expanded the range, introduced same-day and twilight delivery, extended distribution coverage, and continued to build our corporate customer base. We also grew our network of corporate partners, delivering tailored meal and grocery solutions through our existing operating model.
We began a partnership with WM Robotics to trial Ready Made meal vending machines in offices, apartments, and hotels, a useful test and learn opportunity that has further validated demand for convenient, healthy meals in new settings. Health continues to be a genuine competitive advantage for My Food Bag, with Fresh Start at the center of how we support customers' health and wellness needs. Supported by three New Zealand registered dieticians, we launched our Diabetes Plan in partnership with Diabetes New Zealand, introduced high- protein and gut-friendly preferences, and developed a tailored meal plan for customers using GLP-1 weight loss medications. We have also developed partnerships with organizations and health professionals to build awareness and engage with new audiences. We continue to invest in our operational foundations, with strong performance across quality and accuracy reflected in higher customer Net Promoter Scores.
We went live with a new ingredient management platform, providing real-time stock visibility and traceability, improving inventory control, and strengthening quality assurance. Health and safety also remained a priority, and we sustained the reduction in our total recordable injury frequency rate during FY 2026. Employee engagement remained positive and stable throughout the year, supporting the pace of execution across our teams. Our investment in people was recognized externally, with My Food Bag named a finalist in the Learning and Development category of the HRNZ Awards for the impact of our leadership capability initiatives. We also continued to scale our proprietary platform, enabling more personalized customer experiences, more efficient operations, and better real-time decision making. We are beginning to use AI in practical areas where it can improve productivity and decision making, including menu planning and optimization.
We maintained our focus on waste minimization, including the dynamic box and ice initiative to right-size packaging and reduce cardboard use and waste. We are proud to source over 98% of our proteins and produce locally, and we expanded our range of local and sustainably sourced fish. Other achievements delivered in FY 2026 included our partnership with New Zealand Post, which saw distribution coverage expanded to over 91% of New Zealand households, up from 87%. Our Ready Made meal range, expanding further into soups and desserts, and the quality of that range being recognized externally with five medals at the New Zealand Artisan Awards, and a second consecutive final placing in the New Zealand Food Awards for Nadia's Shepherd Pie. Christmas was another highlight. Building on last year's protein swaps, we introduced dessert selection and launched an oven-free barbecue Christmas bag, delivering our highest-ever Christmas Net Promoter Score, over 70%.
While today is principally about FY 2026, I want to briefly touch on some of the initiatives now underway in FY 2027. We continue to execute on our strategy with pace and discipline, translating our priorities into tangible outcomes for customers. Some of the initiatives already underway include rolling out a new customer loyalty program to reward repeat customers, encourage deeper engagement, and build longer-term relationships with our most valuable customers. Launching same-day delivery for new and returning customers, providing a faster and more convenient way to experience our meal kits and helping remove a key barrier to trial. We are also introducing greater menu personalization, including the ability to swap proteins and customize ingredient preferences so that customers can shape meals around their tastes, dietary needs, and lifestyles.
With the shop offering targeted gift bundles, including our Taste of Winter and Parent Essential Boxes, to introduce new audiences to My Food Bag through relevant occasionally gifting. In summary, FY 2026 was another year of meaningful improvement for My Food Bag. We grew revenue, increased profit, generated strong cash flow, and strengthened the balance sheet, while continuing to broaden our customer offering and invest in capabilities that will support future growth. The momentum we are seeing has been created through consistent delivery against our strategy. Our focus remains on growing active customers through expanding our leadership in meal kits and continuing to grow into the broader meal solution and online grocery market. We enter FY 2027 with a stronger business, a broader platform, and a clear set of priorities, and our focus is firmly on maintaining that momentum through disciplined execution. Before I finish, I want to acknowledge Tony.
This will be Tony's final Annual Shareholder Meeting, as he mentioned before. Tony, on behalf of the management team, thank you for your leadership, support, and commitment to the business. I personally valued your counsel and support, and we all wish you the very best for the future. I would also like to acknowledge Mark Powell, who, subject to re-election, will succeed Tony as Chair. I look forward to continuing to work closely with you, Mark, as we build on the momentum created thus far. Finally, I want to thank our team for their continued hard work and commitment, and also thank you to you, our shareholders, for your ongoing support of My Food Bag. I look forward to updating you on progress at our interim results in November. Back to you, Tony.
Thanks, Mark, and thanks for those kind words. We now come to the more formal part of the meeting. We come to item 3, which is to formally receive and consider the Annual Report for the financial year ended March 31, 2026, including the financial statements and the auditor's report. Copies of the Annual Report have been made available to shareholders before the meeting and are available on the investor website. As a reminder, there will be an opportunity for you to ask general questions shortly. However, this is the opportunity to ask any questions specifically on the financial statements, the auditor's report, and the 2026 Annual Report. Can shareholders present in the room please wait until a microphone is provided to you.
We need that so that you can ask your question online, and clearly state your name and whether you are a shareholder or a proxy holder. Are there any questions from shareholders in the room in relation to these specific matters? I am not seeing any. Are there any questions from the shareholders online, Jess?
No, nothing from online.
Cool. Okay, thank you. We will now move on to item 4 of the agenda, and you see there are four resolutions to be voted on today. The re-election of Jen Bunbury as a Director of My Food Bag, the re-election of Sarah Hindle, the re-election of Mark Powell, and the approval for the directors to set the auditor's fees for the ensuing year.
A poll will be held on each resolution, and each resolution is required to be approved by an ordinary resolution. That means that a majority of votes cast by shareholders in favor of that resolution. Shareholders will be able to cast their vote either online or in person. Shareholders joining us today here, you would have been given your shareholder voting card. If you are a shareholder that did not receive your shareholder voting card, please make your way to the registration desk outside the room for assistance. Please mark your voting intention for the resolution, and the voting cards will be collected at the conclusion of the meeting.
Shareholders joining online, you will be able to cast your votes, using the electronic voting card. To vote, you will need to click the Get Voting Card within the online meeting platform. You will be asked to enter your shareholder number or proxy number to validate. Please then mark your voting card in the way you wish to vote on each resolution by clicking For, Abstain, or Against on the voting card. Once you have made your selection, please click Submit Vote on the bottom of the card to lodge your vote. Voting will remain open until five minutes after the conclusion of the meeting, and the results of the poll will be announced after the meeting on the NZX platform.
Resolution 1 relates to the re-election of Jen Bunbury as a Director. Jen joined the Board of My Food Bag in January 2021 and acts as Chair of our Audit and Risk Committee. She has an extensive background in financial services, including NZX listings, acquisitions, mergers, and strategic advisory. Jen, an Investment Banking Director for nine years following investor relations and other investment banking roles in New Zealand and Europe. Jen is currently an Advisor to the Stewart Family Investment Office. She was previously the CFO of NZX-listed Tourism Holdings. Jen is a member of the Institute of Directors and participated in the Future Directors programme with the Board of Agribusiness Scales Corporation. She completed a Bachelor of Commerce, majoring in Finance, graduating with first-class honors from the excellent university, the University of Canterbury. Jen retires, and being eligible, offers herself for re-election.
The Board recommends Jen Bunbury to you as a Director of My Food Bag and unanimously supports her re-election. I invite Jen to come up to the lectern and address the meeting.
Thanks, Tony. Thank you, and good morning, everyone. It has been a privilege to serve on the My Food Bag Board, and I am very pleased to be standing here for re-election today. During my time on the Board, the business has operated through a period of considerable change, both in the macro and consumer environment and within My Food Bag itself. It has shown resilience, and today is well-positioned with a strong platform for future growth, as Mark has outlined. As Chair of the Audit and Risk committee, I bring a particular focus to financial discipline and risk management of the business, but more broadly look to bring an independent and constructive voice to the table, continuing to really challenge ourselves around strategy, capital allocation, and creating opportunities that can build sustainable long-term value for shareholders. I remain genuinely enthusiastic about My Food Bag.
We have strong brands, a loyal customer base, and a talented and committed team, and I believe there are meaningful opportunities ahead of us. I would very much value the opportunity to continue contributing to My Food Bag over the coming term. Thank you for your support.
Thanks, Jen. I move as an ordinary resolution that Jen Bunbury, who retires at the Annual Meeting and is eligible for re-election, be re-elected as a Director of My Food Bag. Are there any questions on the floor on this resolution? Again, I am not seeing any. Are there any questions online? Jess.
Nothing from online.
Great. Thank you for that. Resolution 2 relates to the re-election of Sarah Hindle. Sarah also joined the My Food Bag Board in January 2021. She has a broad range of experience in management and governance across food, beverage, and consumer goods, technology, and commercial law. Sarah leads the defense and aerospace sector at the New Zealand Trade and Enterprise, where she has held several leadership roles across food, beverage, consumer goods, manufacturing, and technology. Prior to New Zealand Trade and Enterprise, Sarah was the Founding General Manager of the Tech Futures Lab, which is now academyEX, where she helped grow New Zealand's most innovative tech-led learning institute. Previously, Sarah was based in the U.K., where she had held a number of roles including as Chief of Staff to the CEO of Direct Wines, responsible for the international delivery of key strategic initiatives.
She began a career as a solicitor for MinterEllisonRuddWatts in New Zealand and is enrolled as a barrister and solicitor of the High Court of New Zealand. Sarah's passionate about helping businesses address the challenges facing our food system, and has held governance roles as Chair of the Executive Council of AgriTech New Zealand, and as a Director and Deputy Chair for New Zealand Tech. Sarah holds a Bachelor of Arts and a Bachelor of Laws from Victoria University of Wellington, along with an MBA from the BI Norwegian Business School of Management. Sarah retires, and being eligible, offers herself for re-election. The Board unanimously recommends to you her re-election, and I invite Sarah to come to the lectern to address the meeting on her re-election. Thank you, Sarah.
Thank you, Tony. I have very much enjoyed working alongside you in your role as Chair of My Food Bag. Good morning, ladies and gentlemen. It's great to be here this morning. I always enjoy meeting shareholders and hearing your personal experiences with My Food Bag, and I'm also grateful for this opportunity to address you briefly in offering myself for re-election. As Tony said, I joined the Board in 2021, drawing on my experience across fast-growing customer-facing sectors and global markets. Since that time, my family has been a weekly customer of My Food Bag and shareholders in the business. During my term, I was part of establishing the Marketing Committee in 2022, and I've remained a member of that committee since, helping install the trading rhythm the business now runs and supporting the plans that have driven sustainable growth.
This is the kind of contribution I want to keep making to the business. Alongside that, I work with a number of New Zealand's most successful exporting businesses. I see how they're growing, the leadership challenges they're navigating, and how global shifts are landing on them. That gives this Board another early read on how consumer behavior, competition, and channel shifts are moving, often before they might show up in our own numbers. I've genuinely valued building this Board's marketing capability and bringing an external lens to its thinking. I want to continue this contribution, particularly as we work through the strategic review ahead. Thank you for your support. Thank you.
Thanks, Sarah. I move as an ordinary resolution that Sarah Hindle, who retires at the Annual Meeting and is eligible for re-election, be re-elected as a Director of My Food Bag. Are there any questions from the floor on this resolution? Again, I'm not seeing any. Jess, any online?
Nothing from online.
Thank you. We will then move on to the next resolution, which relates to the re-election of Mark Powell. Mark joined the My Food Bag Board in November 2022 and acts as Chair of the Nomination and Remuneration Committee. Mark has extensive and diverse experience, having worked in a number of different industries in New Zealand and overseas as part of his executive and governance career, including retail, property, logistics, food services, financial services, agriculture, mining, and education. Mark moved into governance following a successful executive career, where he established and led Wal-Mart Canada's logistics operations, served as a Logistics Operations Manager for Tesco, and spent 13 years at The Warehouse Group, ultimately as Group CEO for five years. Mark is currently a Director of STIHL Australia, STIHL New Zealand, and the ASX listed JB Hi-Fi.
Mark graduated from the University of Wales with a Bachelor of Mining and Engineering with honors before completing a master's in Logistics at Cranfield, and later an MBA at the Cardiff Business School in the U.K. He also has a Bachelor of Applied Theology and an MA in Christian Apologetics degrees. He is a Chartered Member of the Institute of Directors, a Graduate Member of the Australian Institute of Company Directors, and a Fellow of the Chartered Institute of Logistics and Transport. Mark retires and, being eligible, offers himself for re-election. As recently announced, the Board has determined that subject to his re-election today, Mark will be appointed as the new Chair of My Food Bag, replacing myself. Mark will be an excellent Chair, and I have every confidence in him.
The Board recommends Mark Powell to you as a Director of My Food Bag and unanimously supports his re-election. I will invite Mark to address the meeting.
Thank you, Tony. I will not go through my background because Tony has covered that really well. It is a privilege standing here again for re-election. As Tony said, I came on the Board in late 2022, almost the same time exactly that Mark became CEO. When I came on this board, a big part of it was I was a customer already. I had been a customer for at least nearly a couple of years. I loved the product, I thought the service was great, and I thought this company is wonderful from a customer perspective, and it has only got better and better, I think. In that time, the company has stabilized. It was challenging.
It has definitely reduced debt and used this cash generation to do that and share that with dividends with shareholders, and it is now I feel very much back on a sustainable growth path, which is exciting as well. It has been good to be a small part of that with the Board and with supporting the Executive team in achieving that. Also, if re-elected, as Tony said, I would be succeeding Tony as Chair. It has been a privilege to be on the Board with you, Tony, and I genuinely mean that. I am not just making ASM speak there. It has just genuinely been a privilege to be on a board with Tony as Chair.
They are big shoes to fill, and I hope to do that well, bringing all my experience to bear to that and endeavor to at least partly fill those shoes as we move forward. The job of the Board and the Chair is to support management in delivering strategy that we have agreed and to appropriately challenge them to drive on and keep delivering for you, our shareholders, and that is what we intend to do if I am re-elected. Thank you very much.
Thanks, Mark. Right. I move as an ordinary resolution that Mark Powell, who retires at the Annual Meeting and is eligible for re-election, be re-elected as a director of My Food Bag. Are there any questions on the floor on this resolution? Gentleman over there. Can you just wait for a microphone to come to you? Thank you.
Hi, Mike. Oh, sorry. Hi, Mark. Regarding your background in theology and apologetics, I do not know how it relates to the and whether you might have a problem or conscience because the Bible says you cannot serve both money and God. The Companies Act 131, I think, as a director, you need to look for the best interest for the company, right? So how do you resolve this philosophical issue in your life? Thank you.
That is the first time I have ever been asked a philosophical and theological question at ASM, but I do welcome it as well. I do not see any conflict. It is the love of money that is what is warned against, shall we say, theologically. But money is not bad. We need wealth generation. It is interesting when it even comes to politics. I am a market capitalist for moral reasons because I think it raises everyone else up. I should not get into politics. I will get in trouble. So I do not see any conflict there. The good of the company helps others flourish, and my background in that area is all about helping others flourish. So I see no conflict whatsoever. Yeah.
Okay. Thank you. Any other questions on this specific resolution? Jess, anything from you?
No questions online.
Okay, great. The final resolution is very much a procedural one. It happens at every AGM, and that is as set out in the Notice of Meeting, it relates to our auditor's remuneration. The current auditor of My Food Bag, which is EY, will automatically be reappointed at this meeting under our governing legislation. There is a requirement for the auditor's fees and expenses to be fixed at the Annual Meeting or in a manner that the company determines at that meeting. Shareholder approval is therefore sought for directors of My Food Bag to fix EY's fees and expenses for the ensuing financial year. The Board unanimously supports this resolution and recommends you vote in favor of it.
I now move as an ordinary resolution that the directors of My Food Bag be authorized to fix the fees and expenses of the auditor of My Food Bag for the ensuing year. Are there any questions from the floor on this resolution? Jess, anything online?
Nothing from online.
That is good. Great. At this time, I would like to advise the outcome of the proxy votes that were lodged in respect of all those resolutions. Those are now shown on the screen. For those shareholders online, please note that you can continue to submit your vote if you have not already done so, and voting will be open until five minutes after the conclusion of this meeting. For the shareholders in the room, members of MUFG Pension & Market Services team will now move through the room and collect your voting cards. Perhaps give you a minute to do that. Excuse me.
Yeah, number 12, thanks.
Right. Now we come to the more interesting part of the meeting. I would like now to give shareholders the opportunity to ask questions, whether in relation to the presentations today, the Annual Report, the management of My Food Bag generally. Shareholders online can continue to provide questions through the portal, and we can also address questions from the room. When I call for questions, can shareholders please present in the room, please use the microphones, and clearly state your name before you ask a question. I ask in the interest of fairness to all shareholders attending that any question be as concise as possible and be considerate to other shareholders who are also wishing to ask questions. I will either endeavor to answer it myself or more likely I will deflect it to Mark or someone else.
Before moving to a question. What I will do is I will basically rotate between questions online and questions in the room. I have seen that flow works quite well. So we have had a question submitted in advance of the meeting, and it was from [Kenjit Singh]. At the launch of the strategic review, the Board noted that Cameron Partners would explore all options to maximize shareholder value, including assessing expressions of interest from external suitors alongside continuing as an independent NZX-listed entity. Given that our net bank debt has been successfully reduced to just NZD 1.9 million and underlying profitability has stabilized, could the Chairman please provide an updated timeline on when shareholders can expect a definitive conclusion or formal recommendation from Cameron Partners regarding this process?
As I mentioned in my principal address, we anticipate being able to have a report back to shareholders either at the results announcement or prior to then, when the results announcement in mid-November. Cool. So questions in the room. Just wait for a microphone, sir. Yep.
[Richard Jenkins], shareholder. I am just curious about the meal vending machines. How long do the meals stay in the machine, and how do you ensure freshness?
Yep.
Yeah. Yeah, we are working with WM Robotics to make our Ready Made meals more accessible, ride on convenience. Pilots involved about 10 vending machines deployed around Auckland. They are fresh, ready-made meals. WM Robotics have effectively developed a technology that tracks the shelf life, and therefore promotes the availability of those getting closer to the end of their shelf life, towards the top, to ensure stock management and mitigate write-off. What we are recognizing is that to further scale this up, based on the demand that we are seeing, an option is actually to move into frozen ready-made meals, thereby providing a longer shelf life. We are doing some work on that at this point. But so far, we have been really pleased with the pilot in terms of the uptake, and interest. Yeah, we will certainly continue to pursue it.
What is your wastage levels?
The way that the commercial arrangement operates is that the meals are purchased off us and that risk sits with WM Robotics.
Thank you, sir. Jess, anything online?
We do, from [Joe Johnson], who asks, "I see there is a Fresh Start GLP-1 support meal plan. Does My Food Bag have any other plans to address the disruption to food markets caused by GLP-1 weight loss drugs?
Mark.
It is certainly disrupting the market, and what we have seen with our GLP-1 support offering, which is currently only single serve. We are seeing continued growth in that uptake. We will, in time, look to make that more available to not only single person, but also two person, and also complement our core offering, recognizing that not all households will be on GLP-1, potentially only part of it. So an order can be made that perhaps benefits someone who is on a GLP-1, but the rest of the household continue to eat other nutrition. At this stage, we do not have any intention to go beyond week night meals, are all ready-mades in that format.
Okay. Thank you, Mark. Sir.
[Michael Driver]. I would like to address the issue of the vending machines as regards to the financing of them, placement, and who takes the risk.
Yep. So, as I have outlined, we have got a partnership with a local company called WM Robotics. They own the vending machines. It is their capital, which is being deployed to acquire and put these vending machines in place. We have a commercial arrangement where we are selling our Ready Made meals to WM Robotics. They are then taking ownership of that stock, and it is then on them to then sell that through their vending machines.
Thank you. Jess.
Nothing else from online at this time.
Okay. In the room.
[Roger Clark]. Tony, a question on the debt level at the moment.
Sure.
We've just about paid it off?
Yep.
Good. So that is a yes, it is paid off?
Yeah. That is subject to, obviously, weekly cash flow movements.
Okay.
In terms of without giving guidance. You can project forward sort of where things are at, and there has been no abnormal CapEx spend.
Okay.
Yeah.
On last year's issue I raised about the incentive scheme that you've got. Have you tried to benchmark that against similar size companies, Tony?
Yes, we have. I will get Mark Powell, as Chair of the REM committee, to perhaps answer that.
Yeah. I think it's PwC data we use as well. It's not the only thing. You do not just look at the pure benchmarking. We look at the retention, making sure it's aligned with shareholders, and it's going to be based on performance, the variable reward. Back to what you see in the annual report, that relates to the FY 2025 STI paid in FY 2026, and to the FY 2024 LTI paid in FY 2026. If you look at those, their payments are very much performance related and aligned with performance. So yeah.
Okay. Thank you. Final one from me. The cost of the Cameron Review, will that impact FY 2027 profit or?
Obviously, the structure of those sorts of arrangements typically involves some form of retainer, which is not huge, and some form of success fee if there is a. It depends very much. But at this stage, we are not anticipating we will have a material impact on the financial statements.
Okay.
Is that fair, Mark?
Yeah.
Thank you.
[Yuri Saltz], JS Alpha. Good morning, everybody. I had to attend the AGM of Turners Automotive, was 10- minutes late, so I am not sure if you have covered that. If not, can you update us on competitive dynamics a little bit, please? Is there any of the New Zealand players gaining or losing market share? Have you observed irrational price behavior, or is there anything worthwhile mentioning in that context? Thank you.
Mark, do you want to talk about market share?
Yeah, sure. Yeah. Hi, Yuri. So, we operate in the wider online grocery market. What we've probably seen is in terms of our most direct competitor, which would be HelloFresh in New Zealand, we've seen their revenue decline around 20% year-on-year for the last two to three years. We don't have their latest financial statements available. They're overdue, and we're waiting for those to be published through the company's office. Effectively, we posted NZD 170 million of revenue in the last 12 months. That compares to HelloFresh, which were at about NZD 117 million at last count.
From a direct competitor standpoint, I'm pleased to say that we've had a positive trajectory with 5% growth in the most recent year, and that would contrast to their decline of 20%+ the last couple of years, year-on-year. More broadly speaking, we've seen the market continue to be promotionally led with strong dollar off offerings to acquire or reactivate lapsed customers. Equally, the effectiveness of those offers seems to be somewhat limited. We've found that with customers, the focus has been much more around their experience in terms of the reliability, the variety, and the quality that they get. That's ultimately been where our focus is. We're seeing that play through in terms of the level of retained customers continuing to grow year-on-year. Around 60% - 65% of our customers are what we call retained customers.
That's been growing consistently, which is good, because it provides us with a strong, ongoing, recurring revenue model. Also within that retained base, we're seeing our customers buy more regularly, and spend more with us. So really healthy. That's not to say that we need to continue to grow. We continue to need to bring new customers into our funnel. There's a level of promotional activity that supports that. The wider online food market, while there are underlying macro trends that's supporting the growth of that, it has been quite lumpy. We get access to some data through Datamine, and we tend to see that sort of move up and down, not too dissimilar in terms of the growth rate that we've experienced over the last 12 months. So yeah.
Okay. Thank you. Sir.
Good morning. My name is [Jeremy Cooper]. I am a Physician, and I have a different perspective, as well as a shareholder. You have got engaged with the topic of GLP-1 agonists, and you have got engaged with diabetes, but I wonder if you have been in touch with the 200 gastroenterologists that live in New Zealand about other opportunities for the interaction between medicine and what is good for your gut and what you could offer. Thank you.
Yeah. Thank you. First and foremost, I think, pleased you recognize the role of nutrition in terms of improving health outcomes. In terms of the direction of My Food Bag, health absolutely sits at the core of that in terms of consumer preferences towards improvements in health and wellness. We have seen real success with our health-led offerings, and I have talked about a few of those, and you have recognized them. Gut health sits within that. We have had some conversations in that space. I think I can say that we have a FODMAP product due to be released later this financial year, which talks into gut health, and some of the areas that you have identified. By no means is that the end for us, and it is going to be a continuation of continuing to use nutrition to help people with their health needs.
Thank you, sir. Other questions? Jess, you got anything online still? No. Any other questions in the room? I am not seeing any. That then formally concludes our Annual Meeting. I would like to thank all of those shareholders who attended in person and online. We look forward to providing you with a further update when we release our half-year results in November. For those attending in person, we would like to invite you to join for some light refreshments after the meeting. Thank you very much.