Thank you for standing by. Welcome to the PGG Wrightson Limited Full Year Results Announcement. All participants are in a listen-only mode. There will be a presentation, followed by a question and answer session. If you wish to ask a question, you will need to press the star key, followed by one on your telephone keypad. I would now like to hand the conference over to Stephen Guerin, Chief Executive Officer. Please go ahead.
Thank you, Ashley. Morning, good morning, welcome to the PGG Wrightson's Results Briefing for the financial year to the 30th of June, 2023. I'm Stephen Guerin, as you've been introduced by the operator, Chief Executive Officer for PGG Wrightson. It's my pleasure today to provide an overview of our results for the 2023 financial year. It's a beautiful day here in Christchurch, with the snow-capped Southern Alps in the distance, some hints of spring, with some tree in full blossom in the foreground.
That's the hope that spring's ahead of us. Today, I have with me Peter Scott, our CFO, and Julian Daly, our General Manager of Corporate Affairs, who's also the Company Secretary. I'll be covering off the financial results for the period ending 30th of June, our trading performance, key themes, initiatives, and some thoughts on the year ahead. There'll be time for questions and answer at the end, as has been announced by the operator. The key measures of performance I'll refer to is operating EBITDA.
I'll also re-refer to net profit after tax, also known as NPAT, being the formal GAAP measurement. Further details on this can be found in our financial statements. The year's results for the 30th of June, 2023 include operating EBITDA of NZD 61.2 million, which was down NZD 6 million or 9% on the prior financial year. NPAT of NZD 17.5 million, down NZD 6.8 million or 28% on the prior financial year.
Revenue of NZD 975.7 million, which was NZD 23 million, or 2% up on the prior year. Fully imputed dividend of NZD 0.10 per share, bringing a total of NZD 0.22 per share for the full year. This is the second strongest trading performance for the business since its PGW Seeds divestment, which was bettered only by last year's record results. Turn to a bit more detail around our operating performance. This past year was set against a challenging backdrop. PGW delivered strong financial results for the financial year.
These results were realized with margins broadly in line with the comparative period. The resilient performance of PGW in the volatile market conditions is perhaps the most pleasing aspects of this result. Strong operating performances were generated in most business units, with Livestock, Wool, and water all experiencing solid demand. Rural Supplies and Fruitfed S upplies again experienced a standout performance. The exception was our Real Estate business, which continues to operate in difficult market conditions.
Macro trading conditions for the year have been volatile, with increased input costs and inflationary pressures, falling commodity returns for our clients, a wet and cold spring, and a late frost, which affected a number of crops. Two cyclones through late summer also resulted in significant crop and rural infrastructure damage in the North Island. In the context of these market conditions, we are heartened by the performance of the business, which the financial results reflect.
We're proud of the way our team has responded to the demands experienced in their regions, the extraordinary efforts of many of the way they supported each other, our clients, and our communities in need. Since the launch of our refreshed Max Rewards program in November 2022, membership growth has been steady, with noticeable increases in applications following agricultural events.
As well as a brand new look, our clients have an enhanced shopping experience, membership tiers, and access to wider benefits as part of the program. The Max Rewards program differentiates our client offering in a competitive agribusiness market. The business improvement program to simplify IT systems made good progress, with its first phase successfully implemented on schedule in July 2023.
The main component of the program is expected to be completed in FY2024, which is currently targeted for around February or March 2024. The benefits expected from the consolidation of systems and renewal of the old processes are greater efficiency, flexibility, better utilization of our data, and system security. During the financial year, PGW's property maintenance transitioned to a specialist facilities manager.
Using a specialist facilities provider the provider to engage contractors to undertake property-related works, provides efficiencies, and enhances our capability to deliver professional repairs and maintenance work with a greater degree of compliance assurance. I'll now talk specifically to the two business operating groups within PGW. That's the Retail and Water Group, and then the Agency businesses. The Retail and Water businesses incorporates rural supplies, Fruitfed Supplies, water, and Agritrade.
Retail and Water's operating EBITDA was an impressive NZD 54.1 million, up NZD 1.6 million on the prior year, or 3%. Revenue was NZD 785.3 million, was up NZD 24 million, or 3%. The financial year has been another record year for the Retail and Water business. Increased sales were recorded in the animal health, feeds, and general merchandise, and horticultural categories. We transacted increased business volumes with the same level of staff, which is something we are very proud of and a testament to the commitment of our team members.
Our clients appreciate the superior technical ability of our people, who are backed by our dedicated research and development team. We will continue to build this point of difference to ensure we can maintain and increase our market share. Global supply chain disruptions following COVID-19 caused us to carry high levels of inventory to ensure we, we could provide our clients with the right products at the right time. Elevated inventory levels caused some challenges with strong and working with storage and working capital management.
As international shipping delays are easing, and there are more certainty regarding delivery timelines, we have adjusted inventory levels given that we do not need to carry the same quantities of buffer stock as was considered necessary in the prior year. Rural Supplies recorded its best performance, it even exceeded last year's record result with strong sales across a range of categories. We continued to grow market share and delivered an outstanding result in a shrinking market.
To achieve growth on last year is an exceptional result, given the climatic challenges, and demonstrates the strength of our Rural Supplies business. Our people are passionate and motivated to go the extra mile for our hardworking clients. We are winning new business and seeing opportunities with key accounts in animal health, forestry, and the ever-changing landscape of our traditional business. Excuse me. The wet spring contributed to additional end item sales in our Fruitfed Supplies, Winery, and Horticulture Merchandise businesses.
Our market share also increased in the vegetable sector, which is an important area we've targeted for growth. The damage caused by spring frost and floods across many parts of the North Island, and the impact from Cyclone Gabrielle on the Tairāwhiti and Hawke's Bay regions will impact the Fruitfed Supplies business over the next few seasons. The longer-term outlook for horticulture remains positive.
Our Fruitfed Supplies strategic plan focuses on adapting to changes in the industry, capitalizing on category growth, and how we proactively and strategically adapt to land use change. The Water business strategic focus is to add value to clients' businesses by the growth, by growing services, delivery, and with the best technical advice.
We're the market leader with the most technically skilled workforce, as verified by our global supplier, Valley, and the only current Valley-certified field technicians and certified Valley designers in New Zealand. Our sales and design crew are actively targeting irrigator upgrade options, and inquiries for in-field irrigation are increasing. Specifically, where clients see the benefit of fixed grid solutions. Agritrade, our wholesale business division, celebrated its 10th anniversary in September 2022, and showed good growth over this period.
This financial year has seen a lift in sales revenue, with growth across horticulture imports and animal health products. Our range continues to expand as the suppliers look to us to supply product, given our large logistics function and growing reach in merchants and vets across the country. Turning to our Agency business. The Agency group incorporates the livestock, wool, and Real Estate businesses. Operating EBITDA was NZD 16.1 million, and was down NZD 5.8 million, or 26%, from the prior year's strong result.
Revenue was NZD 188.8 million, which was broadly in line with the prior year's result, down just NZD 0.6 million. Our livestock business achieved a solid performance in a difficult market. Whilst there were challenges from softer sheep pricing, significantly wet weather events in the North Island, and declining tallies in some stock lines, there was also positive outcomes for the year. The wet conditions contributed to greater pasture growth than normal, which created unseasonal trading during the summer and autumn seasons.
Revenues received for cattle were robust, with higher prices have received compared to the prior year. This was driven by healthy pricing achieved throughout the year, which was assisted by abundant feed and increases in export volumes. Sheep pricing is was below expectations throughout much of the year, as demand was slow to recover in our key export markets.
GoStock, our trading program, which frees up capital in order that farmers can invest in other areas of business, achieved another record year, with the highest balances recorded in terms of values and tallies. GoBeef, including the new GoPrime Beef offering and GoStock Dairy, performed well. During FY2023, two significant milestones were reached, with over 350,000 cattle and 2.3 million lambs purchased through GoStock since its launch during the 2016 financial year.
Velvet business achieved a strong performance, achieving its best results ever. This was achieved through increased volume trade in South Korea with South Korean health food customers. China's extended shutdown caused lower sales with reduced prices on the prior year. With all development stock sold and exported, it remains a profitable income stream for deer clients and continues to grow in both production and quality. Our Genetics business achieved some outstanding results with its bull sales.
AgResearch are investigating the value add of beef over dairy strategy, which will benefit dairy farmers seeking genetics that shorten gestation, maximize ease of birth, and increase profitability of cattle. Overall, our wool business had a solid year, with total bales procured at the store in line with last year. Wool growers continued to be negatively impacted by crossbred wool prices. PGW Wool had another steady footing, fine wool season, growing market share supported by high value long-term breeding contracts with growers.
The real estate market has experienced one of the toughest years in some time, with higher interest rates, stricter regulatory requirements, some softened commodity prices, and uncertainty regarding the outcome of the general election on October 2023, all contributing to negative sentiment in the rural property market. This was reflected in operating results for the Real Estate business, with decline in market activity leading to significantly fewer sales being made in the prior financial year.
On a positive side, we have maintained our market share and increased, in fact, increased this in some regions. Our people were key to making this business a success. As at June 2023, PGW had 1,572 permanent and temporary, including fixed-term employees, and 323 casual and commission agents, giving us a total of 1,895 people on our team.
Our people are the heart of the business, and their efforts continue to ensure PGW is not only a great place to work, but also develops great people who have a place from the heart of our clients and the local communities in which we operate. Investing in our people is a strategic imperative for PGW, as we support and develop our team members to be able to deliver on our strategy. Three key pillars of leadership and expertise, safe and certain, and recognition provide the focus of our people and safety strategy.
We have revitalized our learning and development and technical training programs, and have made improvements in our safety resources and systems. In the past year, we concentrated on leadership development, health, safety and wellbeing culture, leadership and fundamentals, sales training, team culture, and a wide range of e-learning courses.
Turning specifically to the safety and wellbeing of PGW, we continue to take a disciplined approach to controlling our critical risks and our revised health and safety and wellbeing roadmap. Resourcing, and our resourcing model has made significant progress this past year by engaging in learning for those who are closest to the identified critical risks.
It's also encouraging to see an increase in our people going above and beyond their contributions to health and safety and wellbeing, which has been demonstrated through receiving excellent examples of other benefit solutions and initiatives from across the business, such as, which includes nominating colleagues for our bi-monthly executive safety leadership recognition award.
Turning to environment and sustainability. PGW is guided by the environment and sustainability embedded within PGW's group strategy. PGW was pleased to release our sustainability strategy in 2020-2030 in the past year. The strategy establishes PGW's position on a range of key environmental, social, and governance issues, as well as targets for our greenhouse gas emissions, fleet management, energy efficiency, and other social and governance metrics.
PGW has committed to reduce its operational Scope 1 and 2 greenhouse gas emissions by 30% by FY2030 from its FY2021 baseline. As part of this commitment, PGW has undertaken a comprehensive process to calculate, calculate its historic emissions profile, including seeking external assurance on these numbers. PGW has identified its largest sources of emissions and put in place a series of strategic actions to address these over time. PGW is also committed to transparency through public reporting.
It has aligned our annual report to the Global Reporting Initiative, known as GRI Standards. GRI Standards assists organizations to understand and communicate their impacts on a range of issues such as climate change, human rights, and corruption, to name a few of the requirements under the standards. There have been a number of governance changes over the past year. Lee Joo Hai stepped down as chair and as a member of the Audit Committee on the 4th of July, 2023.
U Kean Seng was appointed acting chair as a member of the Audit Committee, while an independent director, Sarah Brown, was assumed the role of deputy chair. Mr. Lee has announced he will retire from the Board from October 2023, annual shareholder meeting, and has served as director since 31 October 2017. The Board acknowledges and thank Mr. Lee for his contribution over his tenure.
At the annual shareholder meeting on the 18th of October 2022, Meng Foon and Garry Moore joined the Board as Independent Directors. Mr. Moore is also a member of the Audit Committee. Cash flow and debt. PGW recorded operating cash flows during the year of NZD 25.5 million, which was up NZD 1.8 million higher than the prior year, impacted by higher income tax payments on last year's exceptional result, together with higher funding costs.
PGW invested in working capital during the year, including the limitation of our strategy to grow our GoStock receivables book to NZD 74 million as at 30 June 2023, an increase of NZD 7.9 million, or 12%, from 30 June 2022. Capital expenditure of NZD 70.1 million was NZD 8.4 million higher than 30 June 2022. This increase was driven by significant investment in our IT systems business improvement program, which includes both operating expenditure and capital expenditure components, as yet to go live in the FY2024 financial year.
Our debt, interest bearing debt was NZD 65.3 million as at June 30, 2023, an increase of NZD 32.5 million from the prior comparative period. shareholder distributions. The Board have declared a fully imputed final dividend of NZD 0.10 per share. The dividend will be paid on October 3, 2023, to shareholders of PGW share registered at 5:00 P.M. on September 15, 2023. This will effectively bring the total of fully imputed dividends for the year to NZD 0.22 per share. Turning to the outlook.
There's a significant degree of volatility in the global economy and the financial markets currently. New Zealand, like many other key trading partner nations, are keen but into targeting inflation with central banks lifting interest rates. The effect of this monetary policy is to be felt with inflation levels beginning to trend lower, but with elevated interest rates, raising borrowing costs. Growth in emerging economies is forecast to increase faster than developed countries.
The longer-term outlook is positive, with the government projecting extended growth in New Zealand's primary exports and revenue projected to reach NZD 62 billion by 2027, which is up from NZD 56.2 billion in the year to 30 June 2023. As a market leader in the agri sector, PGW has a strong position to assist our client growth, clients growing their businesses to respond to the export demand.
Our country's farmers and growers are renowned for their resourcefulness, and pioneer spirit, continues with creating new solutions to adapt to climate change and become more efficient. Regardless of the regulatory framework that is ultimately adopted, the primary sector will adapt and continue to enhance its social license to operate.
It's too soon to forecast the performance for the year ahead, but we hope to be in a better place to provide guidance to the FY2024 from the start of the important spring trading period at our annual shareholders meeting in October 2023. In the meantime, we note the following positive things: PGW continues to pick up market share, and we're seeing this in key categories and new client inquiry businesses, business. Maize orders in the coming year, coming spring, are strong, tracking ahead of the same time last year.
Our viticultural sector has had a good harvest, and New Zealand wines are in demand internationally. The new planting plan in our food suppliers business is well placed to support our growers. We are well positioned operationally as we move into the current financial year. We're seeing continued volatility and softened commodity prices from our clients, even more challenging macro market conditions out over the short to medium term they experienced in recent years.
A positive trading results in the markets we have seen over the past year are a testament to the incredible dedication and resilience of our PGW team. Throughout our One PGW philosophy, our nationwide team pulled together to serve our clients, communities, and each other with some incredibly trying circumstances. It was especially gratifying to witness the contribution, integrity, and ingenuity demonstrated by our colleagues to support those impacted by the cyclone.
We could not have delivered the outcome without the loyal support of our clients and suppliers. It was, what was another, it was a year for business. PGW's 2023 annual report will be available on the Stock Exchange website under the PGW ticker and our website at the end of September. This concludes our financial results presentation, and we are open to call for questions. Thank you very much, and Ashley, I'll turn the call back to you.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Christian Bell with Jarden. Please go ahead.
Yep. Good morning, Stephen and team. Thank you for the presentation this morning. My, my, my first question is, just, despite some early Board indicators that you've kind of, pointed out, it, it does feel like you're managing expectations down, which is understandable in the current environment.
Just, just trying to understand how, just given, you know, farmer sentiment is really low, and it has been for, for a long period of time now, I guess. Just trying to understand how bad things could be. Like, how bad would things have to be for EBITDA in FY2024 to have a four in front of it?
It's pretty bad.
That'd be pretty bad, Christian.
Okay.
That, that would be seriously, that's not, not, not what we're thinking currently, Christian.
Okay. Okay, yeah. The, the scenario that you're kind of, I guess, budgeting for, or setting, managing expectations for is, is better than that type of scenario?
Correct.
Okay. I know that's useful. So, like, I guess, just to dig into that a little bit more, the last time, farming sentiment was so low, I think it was during the GFC. Acknowledging that the Retail and Water business would have changed a lot since then, are you able to sort of give a like for like comparison between the Retail and Water business in 2009 versus what it is in 2020, what it will be in 2024? Like, what kind of, what, what's changed since then?
Couple things, Christian, because I was actually leading the water business. I took over leading the water business in 2010 for a period before becoming CEO. Kind of perhaps in, you know, 2020, let's see, I was reading the Retail and Water business. At that point in time, there was a sort of lack of clarity of strategy. There was, you know, an alignment through the business. We didn't have such a focus around our R&D capability and technical support for our people.
The size and footprint of the Fruitfed Supplies business was different. There's been significant land use change in terms of the area, planted areas in the viticultural space. The fruit areas, we've targeted the market, the vegetable market, and our market share as a result, has improved significantly. We've also grown our Agritrade footprint in terms of our product availability and range for the business. You know, that's also assisted the business to grow accordingly.
As I say, that's, that's, as a result of them, a clear result from clear strategy, execution through the business, support of our people, and some of those operational things that we've talked about. We've, we've done some more subtle things around, you know, improving our footprint as well, in terms of our look and feel of our stores. At the end of the day, clients will often not make decisions to do business with you without capability and credibility of your people.
Right. Thank you. That, that's awesome. I guess the follow-on question would be, I guess I'm sort of, I'm gearing this towards the Retail and Water still. Like, what, what proportion of that business would be more consumable type items, and hence would be more defensive, like, given, you know, you know, the items that farmers can't do without during, during the year? Like, what, what kind of % would be, I guess, more defensive than as opposed to more, more discretionary?
Yeah, I get the question. We, we, we probably don't use the word consumer, but I understand why you might use it, Christian. We talk about the core agricultural inputs that are required. For example, if you think about, you know, crop, or a permanent crop and planted crops, so maize crops or viticultural crops, et cetera, they have a requirement every year for inputs of NPK, fertilizer, you know, seed if you, if you're growing maize crops, for example. They are reasonably well protected because there are physically planted areas.
There are certain number of animals you need feed, and it's the nature of New Zealand. We have a good proportion, which is weighted towards a good, high proportion of demand that is required year in, year out. Having said that, there is discretionary speed each year. You see that particularly in the categories such as fertilizer. To some degree, you see it in the fencing area, those sorts of things. Obviously, the Hawke's Bay and Tairāwhiti, they have some replacements because of damaged infrastructure.
If you are in a tight economic environment, you will, you will reduce your spending on things like fencing, for example. You may reduce some of your capital fertilizer spend as well. The third factor, of course, is the nature of the season, the weather, the climatic conditions.
The, the season ahead, if you believe the forecasters, we're moving, you know, to change the weather pattern, from what we've experienced last year, although we see that play out. Summary, there is a degree of certainty around the spend, because those are crops that our customers need to protect the crops, the permanent crops, and they need to plant feed crops for animals for the winter, to experience about this time next year.
What percentage would you put on the, on the discretionary type items? Like, is it 20% of your sales, or?
I'd have to go and, I don't have that number at the top of my fingertips, Christian, but it would be kind of in that magnitude. Yeah.
80, 25%.
I'd say. Yeah, 15%-20%, I'm thinking. I base that, Christian, based off my, you know, as I was, on my career at PGW, I was 25 years in the retail business, so it's based on, on gut feel rather than, than some science, science, science. I do have a lot of experience in that space.
Yeah, I mean, it's, it's all I'm kind of looking for, just a, just a rough.
Yeah
Kind of guidance that.
It'll be in that, it'll be in that 15%-20% category, Christian.
Yeah. Yeah, then within the sort of more core inputs, like, is there any wiggle room for farmers to pull back on that? Just, I mean, obviously it's tough times at the moment, so just trying to understand that a little bit.
They, they do have some wiggle room, depending on the, on the season as it plays out. A wetter season will see a higher spend, a drier season will spend, see some different types of spend. Then they have some, they have some choices in terms of, the price bands in which they purchase that.
To, without getting into, products names, you know, the glyphosate market, there are premium branded products that are higher, at a higher price, and there are the more, there are brands that are available at a cheaper price. Clients can make those sorts of choices, but they can still need a glyphosate.
Okay. That, that's awesome. Thank you for the, for the context. And then on the Agency, on the Agency side, obviously real estate was the kind of key detractor this year. The total, total EBITDA was $16 million. Are you able to say how much of that was real estate? Just to give us an idea of, like, kind of what, what this year is, given that next year is kind of looking like it's gonna be pretty depressed as well.
Yeah.
On the real estate, in the real estate?
it's around NZD 5 million.
It takes a lot of the actual variance, to be honest, Christian, between last year's operating EBITDA results for Agency and, and this year's.
Right. Okay.
Actually, yeah, it's real estate.
It, it, it does get a wee bit, there is one, one difference we put down, Christian, is the operating costs for our IT program of work, which is in the FY2023 result, not in FY2022, because, as you know, with IT programs of work versus now split between OpEx and CapEx, and yeah, the Real Estate business does pick up, does pick up a wee bit of that, that cost as well.
What is the total OpEx spend for the IT project that's going through the P&L?
What was it in?
Yeah, yeah. What was it in FY2023?
It was roughly $3 million.
And so-
Yep. That would... In the previous year, it was only about $700,000, for example.
Okay. Then in FY 2024, you were sort of saying that the project completion is about March or so. Would the spend in FY 2024 be about NZD 2.5 million or something?
The spend actually, because it'll take, that's when it would have been implemented, towards the end of February, beginning of March, Christian, but the spend will go longer than that in terms of, you know, settling down on implementation.
We've talked to others who have implemented it, D365, that is, and you know it does take several months for you to get back to actually where you were in terms of, you know, getting your close, your monthly close to be to be where it was. It would, it will go more or less the whole year from a, from an expense point of view.
Okay. So, like, it's like probably another NZD 3 million in FY2024 then?
Yeah. Yeah.
Okay, cool. Oh, actually sorry, just going backwards a bit. In a, in a, in a year, given that FY2024 is obviously gonna be tough from a farming, farmer, on-farm spending perspective, what's the... Typically in the following, in, so if it's down in FY2024, in FY2025, do you typically expect a bounce back as, you know, farms, I guess, farmers sort of play catch up, assuming that conditions have sort of normalized a little bit by then?
Two things, Christian, yeah. That may depend on, the outcome of the election, in terms of-
Right
The regulatory environment and so forth. You know, that's, that's clearly a factor within government government thinking. The second point is if you if you look at those macro trends that inflation will start to ease off through the 2024 calendar period, we'll see some softening of interest rates and the demand from a global food perspective is set to move up, as we talked about in the, our announcement. You would expect to see some more positivity returned. There are some caveats on that, Christian.
You know, there are there are the, you know, change of government point. There are the, you know, the regulatory, not the regulatory, but the central banks getting on top of inflation and so forth. Those are things that are outside the control of PGW. We would say that we are buoyed by the global outlook for agriculture.
We see that in the medium term, so, you know, years two or three away, start of years two or three away, so, you know, your timelines are probably, you know, within, within our thinking. They do, they do tend, tend to start to spin quite quickly with, as we've seen in the past. One year to the next can be quite, quite significantly different in agriculture.
Okay. I guess another way of asking the question, like, so for that, for that, sort of, 15%-20% more discretionary type spend, how long, how long can you actually stretch those items? Like, can you leave them for 2-3 years before having to? Like, what's the replacement cycle on those type of things, like paint and things like that?
It does depend on the weather patterns, Christian, but three years would be a long time. Two years, you know, you, you could survive.
Okay, sweet. As usual. Sorry, the last question I had just around the dividends. NZD 0.22 for the full year. Just wondering if FY2024 is a difficult earnings year, would you be looking to, given your balance sheet's still pretty strong, would you be looking to support a flat dividend? Do you envisage the dividend going down, or would you be more likely to support a flat to, you know, some growth type of dividend profile?
The dividend question is one for the Board to answer, Christian, so I will leave that to the-- I'll leave that to my masters, if you don't mind.
Okay. Yep.
It's natural to assume if there's, if there's a result that is lower than this year, there will be factors that the Board take into account when they set a new dividend.
Yeah, no worries. Cool. That, that, that was all from me. Thanks, guys.
Hey, Christian, it's Peter here. Just going back to your question about the business improvement program that we've got running for this year. This was about $3 million in FY2023, but FY2024, because we've got more implementation in FY2024 rather than, you know, actually, writing or developing code, you would expect that we'd actually have a higher OpEx component in FY2024. The $3 million might be, you know, might be $2 million more than FY2023, just to clarify that.
Okay. NZD 5 million?
Yeah.
Okay, cool.
Of course, those costs don't get repeated.
No, that's right. They don't. That's.
That's a good deal, they don't get repeated, Christian.
Yeah, yeah. one off in 2024.
Yeah.
2025 onwards. Yeah.
Yeah. That's right. That's right. Yeah.
Is it, is, is it about an even split between CapEx and OpEx?
No, it's more, it's more actual CapEx, Christian, but, you know, with the changes in Software as a Service, that was introduced a couple of years ago, traditionally we would have actually probably capitalized just about a whole lot of these, you know, more or less a whole lot of the costs. Now, of course, anything that's out of the box, if you like, you're expensing. Yeah, you know, the intangibles this year was $10.7, so that's, that's roughly, most of that's actually our program. You know, and you talk about sort of $3 million worth of...
We- we're sort of, the CapEx component is, is, is, you know, a lot bigger than the, the OpEx component, but as I said, in previous years, you would have had most of it being, if not, you know, 90%, 95% would have been, CapEx. Now, the split's much, much more, weighted towards, still weighted towards CapEx, but, much lower in terms of in comparison to previous years.
Yep. No, understood. Thank you.
Once again, if you wish to ask a question, please press star one on your telephone. We'll pause momentarily to allow questions to be registered. There are no further questions at this time. I'll now hand back to Steven Guerin for closing remarks.
Thank you, Ashley. Thank you all for your time today, and we'll listen to the presentation that we've given. As we've indicated, it's a result that we are pleased with, and the environment in which we see in agriculture in New Zealand and the conditions we experienced in the past year. Acknowledging again, the efforts of our people, they are the heart of PGW.
They are success of the organization. They are our connection to our clients, to community, so they need to be acknowledged. Thank you all, and look forward to talking to you again, early in calendar year 2024 with the half year results. Thank you.
That does conclude our conference for today. Thank you for participating. You may now disconnect.