Good morning, everyone. It's now just after 12:00 P.M., and it's a pleasure to welcome you to the New Zealand Rural Land Company 2025 Annual Meeting through our virtual meeting platform provided by our share registrar, MUFG Corporate Markets. My name is Rob Campbell, and I will chair today's meeting. We're holding a virtual meeting which provides the opportunity for a large number of shareholders from throughout the country and overseas to participate and engage with us on a cost-effective basis. You can vote and ask questions online. I'll provide you with further instructions as we progress through the meeting. If you encounter any issues, please refer to the virtual annual meeting online portal guide, or you can phone the helpline on 0800 200 220. I would encourage you to send through your questions as soon as you can.
This will allow us to answer these questions at the appropriate time of the meeting. Please note that in order to provide all shareholders with an opportunity to participate, we do reserve the right to limit questions from any individual shareholder. With me on the meeting platform today are my fellow directors, Chris Swasbrook, Sarah Kennedy, and Tia Greenaway. Also on the platform are Richard Milsom from our manager alongside me here from New Zealand Rural Land Management and our Company Secretary, Ross O'Neil. I'd also like to acknowledge the presence of the company's auditor, Darren Wright, from William Buck. I confirm that there is a quorum present, as we have with us at least three shareholders present in person or by proxy. Accordingly, I declare the meeting open.
The notice of meeting and explanatory notes were dispatched to shareholders on 30 April 2025 in compliance with the company's constitution and NZX listing rules, and I propose to take them as read. Immediately prior to the meeting, we had received valid proxies in respect of 47,211,296 shares, representing 32.55% of the total issued shares. We would, of course, expect some shareholders who have not lodged proxies to vote during the meeting. Where discretionary proxies have been provided to my fellow directors and me, we intend to vote them in favor of the resolutions as set out in the notice of meeting. The financial statements and the reports of the directors and auditors for the 2024 financial year are set out in the company's 2024 annual report for that period.
The annual report was sent to shareholders on the 28th of March 2025 and is also available on the company's website. Before the formal business of the meeting, I'll provide a brief introduction, followed by a more detailed presentation from Richard Milsom. We will take questions from shareholders via the online platform after those addresses, and then we will move straight to the formal business of the meeting. The company recorded a consolidated net profit after tax of NZD 23.1 million in the 2024 financial year, and adjusted funds from operations were FO of NZD 7.1 million, excluding earnings from properties with put-call arrangements in place.
The company has amended its dividend policy targets to a payout of 60-90% of FO in financial year 2024, entered our reinstated dividend payments, paying an interim dividend of NZD 0.0146 per share and a final dividend of NZD 0.0254 per share, resulting in a total financial year 2024 dividend of NZD 0.04 per share, which represents around 80% of FY 2024 FO. The company continues to maintain a selective on-market share buyback program, with 88,804 shares repurchased at an average price of NZD 0.89 per share, bringing the total shares repurchased to 710,131 since buyback was initiated in June of 2023. In February 2024, NZL sold a 25% equity interest in its land portfolio to ROC Partners for NZD 44.2 million in cash. NZL used the proceeds to repay the NZD 11.8 million owing on a convertible note it drew down in April 2023 to partially fund its forestry acquisition.
Further proceeds were used to fund orchard and forestry land acquisitions detailed after this, with the balance retained as working capital while other opportunities were investigated. With the proceeds from the ROC Partners deal, NZL acquired several properties, including a 97-hectare horticultural property in Hawke's Bay, two forestry estates totaling 2,606 hectares in Manawatū-Whanganui, and the first tranche of a 126-hectare apple orchard in Central Otago. The initial purchase was of 47 hectares. The average weighted lease term and yield for the financial year 2024 acquisitions was 24.4 years and 7.8% respectively by lease value. Post-balance date, NZL acquired a blue chip dairy farm from one of the company's existing tenants. The acquired property was then leased back to the tenant. As part of the consideration for the acquisition, NZL sold two pastoral farms at above book value and the most recent valuation to the tenant.
The transaction increases NZL's total rental income by around NZD 290,000 a year. Following these transactions, NZL now owns 17,238 hectares of rural land, 25% of which is owned by ROC, with a 12.4-year WALT by lease value and 100% occupancy across nine tenants. The new properties add meaningful sector income and tenant diversification to NZL's portfolio, with forestry and horticulture now holding a 32% and 8% proportion of the company's annual lease income. In addition, NZL saw the positive impact of rental growth on its portfolio from April 2024, with approximately half of its properties by lease income undergoing a CPI review. This included 100% of its forestry leases and 53% of its pastoral leases. Our strategy is to own quality rural land in New Zealand, growing a diverse portfolio while delivering attractive risk-adjusted returns as a ground-lease or.
We generate shareholder value through a combination of asset value appreciation and cash flow from long-term leases. Post the most recent acquisitions and the ROC transaction, the company forecasts financial year 2025 FO of between NZD 7.5 million and NZD 8 million. This excludes earnings from properties with put-call operations in place. That's around about NZD 1.3 million. NZL remains excited about the opportunities ahead of us and is well positioned to continue delivering shareholder value. These prospects are further enhanced by the company's strategic partnership with ROC Partners. We will now move to Richard's presentation. Richard?
Thanks, Rob, and thanks everyone for joining us. I've got a little bit of a cold, so you'll have to excuse a slightly croaky voice. In the presentation in front of you, the vast majority of the information has already come out with our financial year-end result, so I won't labour the points. The 2024 result obviously saw us sell 25% of the portfolio to ROC, further diversification growth within the portfolio, growth of FO per share, lower gearing, and a forcing dividend per share. The portfolio itself increased by total hectares, increased its weighted average lease term, and remains 100% occupied. In terms of the ROC Partners transaction that most of you will be well aware of and familiar with, the key points, key highlights of this transaction were that it provided the company the ability to recycle capital at a premium.
It improved the company's financial position both from a free cash flow per share and gearing perspective, and it brought a strategic partner for growth to the table. In terms of the granularity of new acquisitions in 2024, we saw four main acquisitions. One was apple orchards in Twyford, Hawke's Bay. One was a forestry estate close to some existing forests that the portfolio already owned. A second forestry estate close to Taranaki was purchased, and then southern orchards, which are horticultural properties in Central Otago. These properties were also settled using a combination of cash and scrip, and the scrip was issued at the prevailing net asset value. In terms of corporate actions that we've seen during the year, we instated the dividend. We paid NZD 0.04 per share, representing approximately 80% of our FO. Our share buyback program, we continue to maintain it.
We've bought a total of 710,000 shares since we initiated the program, and we remain an opportunistic buyer of NZL stock on market. In terms of the outlook and the FY 2025 forecast, this remains the same as we put out with year-end financial results. 2024 saw many of its leases having undergone a successful CPI review. 31% of the leases of our pastoral leases are subject to review in 2025, with 100% of our forestry assets due for review in 2025. We are currently forecasting an FO per share of NZD 0.0525-NZD 0.056 per share for FY 2025, and you will see that the FO growth continues to track nicely upwards, and we expect that to continue.
This is a new slide that we've introduced highlighting some select asset transactions since inception, and we'll continue to build out this slide as time goes on, highlighting the ROC Partners transaction, which was done at the equivalent of NZD 1.29 per share versus a prevailing share price of NZD 0.85, the southern orchards transaction, which was which utilized NZL shares issued at NAV to settle a large part of the property. In March, we've sold two farms just above their book value and recent valuation. In terms of forward-looking, we believe that our cash yield will continue to grow. We've increased FO on both an absolute and a per share basis every year since listing, and we're forecasting to continue to do so.
I've already mentioned that we're forecasting FO between NZD 7.5 million and NZD 8 million in aggregate in FY 2025, and this is an approximately 10% increase from FY 2024. Interestingly, research shows that listed property vehicle shares have a high correlation with dividend yields, and our ability to increase FO per share provides NZL the ability to pay larger dividends as time goes on. We've recently released our annual climate change and climate reporting disclosures. Our report represents a significant step in deepening our understanding of how climate change may affect our business over time. It also has given us an opportunity to utilize some of the information for our competitive advantage. At the heart of this work is the New Zealand Earth System model.
It's a cutting-edge, data-driven simulation platform, often referred to as the ultimate climate crystal ball, which allows us to get a lot of insight under a bunch of different sensitivities on the properties we own and on properties we may acquire in the future to form part of our due diligence process. I'd like to encourage everyone to sign up to our mailer on the website. We will be sending semi-regular updates. We promise not to spam anyone, but it's a good way to stay in touch with the company and receive information about what's going on during the year. Lastly, we will be hosting an Investor Day over the coming months to engage with leading analysts and institutional investors. The presentation will be uploaded to the NZX. Thank you, everyone.
Thank you. Thank you, Richard. Before we move to the formal business of the meeting, we will now take questions from shareholders via the Link online platform on today's address and presentation and on the 2024 annual report. Have we received any questions online?
Yeah, there's a couple of questions, Rob. The first question is, given the substantial difference between net tangible asset backing per share and the current share price, why are you not buying back more shares?
Thank you. The board pays a lot of attention to this gap. Obviously, it is of concern. We do buy back shares under our share buyback program, as Richard and I have outlined, and we do remain an opportunistic buyer using the small amount of discretionary cash we have alongside other activities to further drive value. We have to weigh up, not trying to influence the price because that's not the right way for us to act. The relatively small volume of transactions limits our ability to do that, and we always have to weigh that up against other immediate opportunities we have to improve the yield of the total portfolio. It is not a straightforward exercise, but we are still active, and we do review.
In fact, we were reviewing again this morning at our board meeting the prices at which and the way in which the buyback program will continue. We believe we are giving the due attention to that matter. Are there any other questions, Ross?
Yeah, there's a question from New Zealand Shareholders Association.
We note the audit qualification around the valuation of carbon credits and would ask the company to look towards resolving the issue in the interests of shareholders. We would also ask why the discount rate is higher than that used to value other assets.
Thank you. Thank you, Ross, and thanks to the New Zealand Shareholders Association who have valued continued contribution to the company. Obviously, no one likes their accounts to be qualified in this form. The board has worked and management has worked very closely with the auditor to reconcile views on this matter. The board believes that we adopt an appropriate commercial approach to our valuations. There is nothing unusual about it. It is in line with industry practice. The auditor, driven by the rules to which they have to adhere, takes a different view. What we try to do in the accounts is to set out clearly the basis of difference so that any investor can see what the reason for the qualification is and make their own judgment about its importance in terms of assessing the asset value of the share that they are investing in.
We spend a lot of time on trying to make that as clear as we can. There will be ongoing efforts to resolve the issue as between ourselves and the auditors. I'll ask Richard to comment on the more detailed question about the discount rate that's applied, which arises out of the valuation. This whole issue really arises, it does arise out of the valuation of forestry properties. There's some complexity to that, but Richard, if you can quickly give that response, it would be helpful.
The discount rates that we use for different assets in the valuation process are simply market-driven. When the valuers are doing the valuation of the forestry assets, they're deriving the discount rate from market evidence using weighted average cost of capital.
I make the point that all of these elements that make up the net asset value are derived from appropriate expert opinion and analysis. They're not simply positions adopted by the board on its own account. They're critically examined by the board, but they are from valuation experts in the field.
Yeah.
Are there any other questions, Ross?
No, not at this stage, Rob.
Thank you. If there's no further questions, we'll move to the formal business of the meeting. Today, we will put just one resolution to the meeting relating to the auditor's remuneration. The resolution set out in the notice of meeting is to be considered as an ordinary resolution and as such must be approved by a civil majority of the votes cast by shareholders in total vote in voting on the resolution. As I mentioned, shareholders will be able to cast their own vote, sorry, using the electronic voting card received when online registration is validated. To vote within the online voting platform, you will need to follow the following four steps. One, click Get Voting Card. Two, enter your shareholder or proxy number to validate. Three, mark your voting card by clicking For, Against, or Abstain. Four, then click Submit Vote on the bottom of the card.
Please refer to the virtual meeting online portal guide or use the helpline specified if you require assistance. Voting will remain open until five minutes after the conclusion of the meeting. The resolution before the meeting relates to the requirement to authorize the auditor's remuneration for the ensuing year and reads as follows: that the board be authorized to fix the fees and expenses of the company's auditors. Ross, have we received any questions online regarding this resolution?
No.
Thank you. If there are no further questions on this matter, we will ask you to now select either For, Against, or Abstain for resolution on the voting card. This concludes the formal part of the meeting. You should now submit your votes if you haven't done so already. Results of the poll will be announced on the NZX website after the conclusion of the meeting. We now give shareholders one more opportunity to ask further questions online whether related to the presentations, the annual report, or the management of the company. Ross, have we received any questions online?
No, no further questions, Rob.
Thank you. If there are no further questions on the matter, I will now declare the meeting closed and thank you both for your participation and for your ongoing interest in the company. Thank you.