Earnings Call: H2 2021

Aug 16, 2021

Quarterly report

Good day and thank you for standing by. Welcome to the PGT Horizon Annual Results Announcement Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Stephen Garing. Thank you. Please go ahead. Thank you, operator, and good morning, and welcome to the Future Heights Annual Results Briefing for the year ended June 30, 2021. I'm Stephen Guerra, the Chief Executive Officer of PGG Wright Systems. It's my pleasure today to provide an overview of our results for the 2021 financial year. With me on the call this morning is Peter Scott, our CFO and Julian Danage, our General Manager Corporate Affairs Enno, who is also our company secretary. On behalf of the Board and the executive team, for a start, I'd like to thank our PGW employees for their continued and tireless work and commitment to the business. Some of our employees were again affected by COVID-nineteen and the February lockdowns in Greater Auckland, where 4 of our stores in the zone were classified as essential services. 2 of our sale yards were also affected with our 2 of our sale yards better to operate albeit on a limited sales basis. Our teams reacted brilliantly and reestablished the lockdown protocols that we had in place previously. Also, I think what we acknowledge in support of our customers through their continuous support the results that we're about to talk about are possible. During this call, I will summarize this year's financial results, our trading performance, key themes and initiatives and some thoughts on the year ahead. Afterwards, I'll open up for a question and answer session. I will predominantly refer to operating EBITDA as a key measure for our performance, but I will refer to our ultimate bottom line of net profit after tax, the formal GAAP measure. The key financial results for the group year ended 30th June include revenue of $847,800,000 up $59,800,000 or 7.6 percent year on year operating EBITDA of $56,000,000 up $13,800,000 or 33 percent year on year net profit after tax or NPAC of $22,700,000 up $15,000,000 year on year We've declared a fully imputed final dividend of $0.16 per share payable on the 4th October. We've seen very strong performances from our retail, grocery supplies, livestock and mall and real estate businesses. The group has a strong balance sheet and operating cash flows, leading to lower interest, net interest bearing debt at the balance of 30th June 2021. Continuing strong demand and price efficiency on produce is underpinning our outlook, performance and confidence of farmers and growers in the agro sector. Our team and the business have again proved that our leaders in the field in supporting our customers in the Andean sector rural communities to deliver excellent results. The financial year started and finished stronger with the operating EBITDA of at $56,000,000 up 13,800,000 or 33 percent on last year's COVID-nineteen impact results. PGWP also delivered an impact of $22,700,000 which was up $15,000,000 year on year. These results have been further impacted decisions taken over the last 2 years in divesting the Sige business and the commitment and recalibration of our cost base and systems. Directors are particularly pleased that the business has backed up its strong first half result and has continued to trade well over the second half. This result reflects the collective efforts of the dedicated team we have through the business, our passion about agriculture, supporting our customers and the role the sector plays in New Zealand. This is just how important and critical to New Zealand's success the primary sector is and this has come into stark focus with the global pandemic. I'll now discuss the 2 operating business units, retail and water and then agency. Our Retail and Water operating EBITDA was very pleasing at $37,500,000 and was up $4,300,000 on last year's prior results, which is an increase of 13%. Both the Rural Supplies and Fruitfield Supplies business is trading very well. We have continued to increase our market share. Much of this growth can be attributed to the superior technical expertise of our staff backed up by our leading product range. We have a very stable workforce. We are well supported by a specialist technical R and D team. A significant challenge that we have and many businesses face is around the much publicized supply chain disruption, which has been felt throughout the world. This will continue to have an impact on the timeliness of sourcing the product and grow our imports as well as our exports offshore. Our team continue to work assiduously to grow actively minimize supply chain disruptions to our businesses and customers. Our teams have been working collaboratively with our key suppliers securing and taking product into stock earlier and working with customers to lock in their seasonal requirements 3 to 6 months earlier than would normally be the case. The Rural Supplies business experienced particularly strong growth this year, which is a fantastic result in a highly competitive marketplace. This success is attributable to both the new customers who have shifted business into PDW, also growth in our market share as customers respond positively to our value added technical offering and advice. We have employed some great new child in the business. We have brought fresh ideas and in some instances new business. Our sales culture has grown through increased investment in our people by providing more training opportunities across all levels of our business and with a focus on sales and service. Our fruit feed supplies business has again registered another record year for both operating EBITDA and revenue. The business is diversified across a number of crops, and we continue to adapt to customer and market needs. The horticultural sector is growing and remains buoyant, and we continue to see investment in development. We enjoy impressive market share across a broad range of horticultural crops with particular strengths in grape, foot fruit, stone fruit and kiwi fruit. We've continued to grow the avocado and chinos. Excuse me, Phil, David. Our core focus remains to add value to our clients' businesses through a technical ability of our technical horticultural written receivables, or THRs, as we refer to the mid term E, by supplying specialist products and services. Our technical expertise offering is differentiated by expert technical R and D teams who support our infield and store teams. This team conducts a number of trials through the industry investigating new products and chemistry to assist hemp growers and engage with industry bodies, improve products and resort market conditions. Our wholesale subsidiary, Equitrade, which manufactures, sells and distributors products, continues to demonstrate positive momentum. Retaining inventory during the worldwide supply chain disruption created by COVID-nineteen caused AgriClip to place orders and receive stock earlier than usual. Whilst the inability to travel internationally has hampered product development opportunities, as nevertheless pleasing to note that 5 gs products were registered during the year and have been commercialized. We have reshaped the water business to align with the market conditions. This has resulted in improvement in EBITDA compared to the previous year. Our full service water and aeropaction packages to customers through our rural water business have seen an increase in sales. However, shipping delays will likely put some delivery time lines into the short to medium term. Turning to our agency business. Our agency business incorporates the livestock, wall and real estate businesses. Trading for this group is weighted towards the second half of the financial year. Operating EBITDA was $25,200,000 and was up $9,500,000 on prior year's results. This is an impressive impressive of approximately 60.6%. The livestock business has maintained market share throughout the country with the South Wales achieving very solid results, especially within the sheep and beef sector. During the year, strong values were achieved for sheep farmers and dairy farmers, also achieved increased payouts, which in turn supported our livestock business. Our deer business experienced good farmer season where values offset low venison prices. We expanded our Go Beef and Go Land product offering and launched Go Deer. Next year, we expect to add to our GoStock range with the Go Dairy, which we anticipate will be well received in our GoStock offering. Bidda, which is our virtual sale yards, has run over 400 auctions and sold approximately $50,000,000 worth of livestock since its launch in June 2019. Vidda continued its significant software development in F 'twenty two live streaming from our Fielding Stockton Lodge, which is in Hawke's Bay, Walsallup and Franklin Salyards will be launched with others to follow as we roll out the technology. Excellent livestock genetic results throughout the year, accommodated the bulk sales auction series with further of a hybrid platform coming to the fore. PGWP wool has done a very good job navigating through the ongoing challenges that have been accentuated by the COVID-nineteen. Our team will work closely with growers to reduce their stockpiles of KwaZulu wool, and we did see some benefit from improved pricing in the second half of the year. Our export subsidiary, Black and Bearans, worked diligently with our overseas customers to ensure contracted obligations to our growers were fulfilled. Real Estate Business has seen particularly strong demand across all sectors of the real property market, which has been fueled by lower interest rates. This resulted in the real estate business experience special terms over a decade at both operating EBITDA and gross commission income levels. We also have seen early signs of positive spring sales to the rural sector with higher normal higher normal higher normal appraisals taking place with early spring listings occurring, which we expect will turn into continuing solid demand in the 1st 6 months of FY 'twenty two. With strong commodity values in the rural sector, we anticipate a number of retirement and succession initiated listings coming to the marketplace. The shortage of residential and lifestyle listings may continue with the current low interest rate environment as a contributing factor. Key programs that work to enhance the culture and develop our people have continued over the past year. The focus on leadership, safety and well-being and finishing people and finishing our people related systems and processes. With the revised leadership brand and associated training and coaching programs, we have made positive steps to the elevated leadership across the business, a focus on the behaviors and PGW values that help our people become the kind of leaders they and others wish them to be. Our continued investment in training and development demonstrates our commitment to providing our people with tools and training to be safe and competent in the roles with eye on personal growth and fixed development opportunities. Safety and well-being remains a constant focus on real modernization throughout the year with a commitment from the executive team to keep it that way. As we previously see, our total recordable injury frequency data see reduced reductions of 28% year on year or 51% since FY 'twenty one sorry, FY 'eighteen. Following an extended review of our leading safety by leading safety on our group wide safety and well-being strategy, we have refreshed our roadmap to incorporate the key recommendations that we identified. We've included a continuous improvement focus to strengthen PNW's safety and well-being leadership capability. PNW is committed to protecting our natural environment for future generations. We are aware of a change in focus on farming and increasing pressure on the sector to operate environmentally and clean sustainable manner. Many of our activities are designed to support more sustainable farming practices. Our overall strategy and framework for environment reporting is evolving, and we have a range of initiatives in play to assist in achieving those purposes. Of growing importance, we need to further understand and evaluate PDW's impact on the environment, and we recognize the need to report our environmental footprint, in particular, our carbon emissions. We have established a working group to develop an inventory of PGW's emissions, and we've engaged Toitu Envirocare to assist us on this journey. The outputs from this work have supported will support the development of PGT's environment and sustainability strategy and will assist with setting environmental goals and reduction targets based on risk and opportunity. The Board has made two changes to the membership during the year. David Cushing will tie up with the Board on the 23rd February 2021 and have served as Director and Chair of the Audit Committee for the past 2 years. The Board has acknowledged and thanked David for his excellent contribution as a director during this period, and I personally thank David for his support during his time on the Board. Doctor. Charlotte Zaverin recently joined the Board as an independent director on the 18th June 2021. PGW has experienced strong operating cash flows during the year, which benefited from good operating EBITDA performance and a focus on working capital management and particularly our receivables. This focus has seen PG and E's overdue debtors balance continue to track at historical levels with our book in very good shape. Capital expenditure of $6,800,000 was $2,300,000 lower than FY 'twenty and was impacted by slowing and implementation of projects as a consequence of COVID-nineteen related disruption. Our net interest bearing debt was approximately $6,500,000 at 30th June 2021, This is the last recorded at June 30 and over a decade, excluding 30 June 2019 with the proceeds from the seed sale were held in funds and trust. Based on the strong year full year, earnings, the Board has declared a fully imputed final dividend of $0.16 per share. The dividend will be paid on the 4th October 2021 to shareholders on PVW share register at 5 pm on September 10, 2021. This will effectively bring the total included dividends paid for the year to an impressive $0.28 per share, I'm sure which shareholders will imply from this. Turning to the outlook for the F 'twenty two financial year. As a business, PDW is clear about its strategy for driving growth. We're providing our customers with second leading expertise and innovative solutions for our farming and production needs. Look to lead the markets through specialist knowledge and technical expertise of our people. We're doing this through our best in their capability and identifying the bring to market new products that we source and improve in the near market conditions. Our customers value PGN's technical offering. We see this as a distinguishing service, and we continue to develop and foster. Our strong balance sheet allows us to cultivate earnings accretive growth ambitions both internal and external. The rural outlook is positive for the sector and strong farm gate with strong farm gate and commodity prices. Roadhouse demand is expected to continue for land and sheep meat, and cattle prices are anticipated to remain high. There is confidence in dairy sector with positive outlook for next year with solid payout reductions. Looking ahead, the board is confident that PDW is well placed to continue to grow. We recently undertaken a thorough review of our PDW strategy and have reset our group objectives and priorities we are rolling out through the business currently. This exercise is safe to confirm a number of key themes that are continuing to drive the improved performance of the business. Key to this is the continued focus of the technical expertise of our people, technical offering that we give for our associates from our competitors. There does remain a degree of uncertainty globally and increasing geopolitical risks and the new variants of and as new variants of the COVID-nineteen emerge. Implications for the pandemic will continue to impact consumer markets and global supply chains. PGW is committed to supporting our customers through these ongoing challenges and has demonstrated that it could do this effectively and profitably. We would hope to be in a position to provide further market guidance with our expectations of '22 year at our Annual Shareholder Meeting in the Hawke's Bay in October. Our 2021 annual report will be available on the Stock Exchange website under our PGW ticket and our website as of the end of September. Finally, on behalf of the management team, I would like to extend our sincere thanks to our customers, suppliers and shareholders and most of all of our staff for the continued support of the company. That ends the formal part of the presentation. I'll now open the call to questions, and I'll hand the call formally back to the operator. Thank you. Your first question comes from Guy Hooper. Your line is open. Yes, good morning team and congratulations on what's a strong result. I guess my first question is just around the supply chain disruption. Could you possibly give us a bit more color on how that's affecting you? I mean, you talk about helping farmers lock in seasonal requirements. Is that creating a pull forward? And if so, where is it a pull forward in sales? Or is it a pull forward into the level of inventory that you're holding? Thanks, Guy. So a couple of things there. Firstly, we haven't seen a pull forward in sales. What we're seeing for is a pull forward in customers sending to us near product volume demand and the timing of need. That's allowed us to work with suppliers to ensure the product is in country at the appropriate time. In most situations for our products, we do have a couple of alternative sources of supply. So once you know the demand, you can actually work through as to what those logistics are. Customers don't like to see products stored on farm any earlier than they actually need it for a couple of reasons. Firstly, there's potentially some cash flow implications for them. There's security issues on farm, but more importantly, there's actually regulatory issues around how much volume that they could actually store on farm as well. So whereas our store network managed that a bit more effectively because we're set up for that world. How it plays out for us is that we're seeing price increases for shipping costs and we're seeing logistical challenges. You have product that you will normally you may normally take 3 to 4 weeks from the shipping out of the Asian markets or the U. S. Markets is taking 6 sorry, 8 to 12 weeks. So that means we're having to plan more from a logistical perspective than that we've got. Our inventory at the moment, we've held a hold of more inventory than we were at the same time this time last year. But we have budgeted that into our cash flows, but we're not exceeding those expectations right at the moment. So we're near and near about what thought would happen. But the spring demand, particularly our Rural Services business, is ahead of us. And this is an active watch and brief for us. On the outlook supply side, of course, in our wool market, we're a direct exporter of wool. So it's a matter of us working with supply companies. We have seen supply disruption. Wool is least perishable. So critical supplies, we could work a bit easier on that space. Of course, we're not in the process of being for meat production. So that would be a question just to make it to the meat companies in that space. Hope I answered your question, John. Yes. No, that was great. Good amount of detail. I guess just on those, I mean, cost pressures are a pretty common theme across all industries, particularly labor and freight rates. I mean, how are you seeing this? And what sort of, I guess, pricing power do you have? And I guess, there's a bit of a follow-up. I mean, how is the sector as a whole absorbing those cost pressures? We are going like all sectors, it is a point that becomes where you could able to absorb costs. But we are going to see costs move up in the sector. And that's not that's not a surprise. Having said that, we do have 2 strong national competitors that operate in the marketplace against us. And they do operate a cooperative model, and the cooperative model is got to have a focus around price. So that will equally keep us honest in that space, Guy. I guess, in reality, the message is there's going to be price pressure, but I'm probably not going to detail a whole lot around technical market, position to our pricings. You probably understand that. Yes. No. And I guess just one more from me on the working capital. I mean, there's a reasonable increase in payables. Can you give any more color around that? I'll turn that question over to CFO, Guy. Yes. Thanks, Laurie. Look, I think as Stephen said, we have we are conscious of our inventory levels and probably are holding them a little bit higher than we would normally under normal circumstances happening, Guy. So we have got a bit more in terms of payables, and that's really probably the main reason. We've actually got quite a lot of, obviously, accruals in there as well. So that's the main reason carve was probably a little higher than previous years. Your next question comes from Tina Morrison. I have three questions. I'll just roll them all out. First, I just wanted to clarify if the $0.28 dividend for the year is a record. And I wanted to know if you have considered paying back the wage subsidy. And I'm interested in your view on carbon farming. Thanks. I'll just take the note of this. Sure. So the first question was the $0.286 I think from at least my time, Tina, here at Hincher, it's the highest I've seen apart from the cost of capital return to a shareholder. But that would be the highest dividend I've seen from PQW. Julian Daly, our company secretary has been here longer than me, but I don't recall seeing anything for an annual period from my time here as well. Yes. So we have to go back through all the records, Tina, to actually absolutely verify that. But certainly in the time that we've been here, it's the highest we've seen. And I'll be a little bit longer. And that's my recollection, well, apart from the capital distribution at the time of the seed sale, which causes in a dividend, but it is a return to shareholders. And also, you have to assess that against the consolidation of our share regions. So it's a larger dividend since the consolidation of our share regions. So I think now for just years. And I have a question for you. Yes. The second question was about the consideration for the wage subsidy repayment. Yes, that was considered by the board. That was a discussion that the board did have. Their position is that they are not going to we're not going to repay the wage subsidy. I could leave the answer to that, but I won't. The logic to that is that PGW, in terms of that, it's a bit typical about this. We made an assessment around the requirement for a 30% reduction in earnings revenue, I should say. And we made our assessment after we'd actually seen that reduction. We did not pre assess. We made the assessment after the reduction had actually taken place. And we only put the subsidy in respect to the business units that were closed during that period. Those business units were livestock business, our real estate business and our wall businesses. So it was no surprise that we saw a 30% reduction. And that was in the 1st wage subsidy period, not the second one that was a second one. We did not take the wage subsidy in respect to our retail or shop network or our corporate functions. We also kept all employees employed within the business, and we paid people 100% of the wage entitlements through that period in full on time. And as a result of that, we met the definitions that we set out the criteria that we set out within the program of work. And we also there was no dividend declared to shareholders for that particular period as well. So as a result, the board settled and settled. Your question your third question was around carbon fiber. Can you perhaps expand just a bit more on that if you would not? I think I know what you mean, but perhaps expand to me more. So you might have seen in the news recently, beef and land report about carbon farming. And what they're talking about there is the sale of whole farms for carbon offsetting? So not about farmers putting some of their farm into forestry, but the sale of whole farms going into forestry for carbon offsets. Yes. Yes. I thought that's where you were coming from. Thank you for the clarification. So I've got a couple of views here. Firstly, the people decisions that people make around their private properties, that's the decision that they have to reflect on. That's the decision that PGW would take a view on. Having said that, we would acknowledge that there has certainly been a movement in our land into forestry. We've got data around that. That was, as you said, out setting up the beef and land report, and we've seen that report and been through that. We've seen that impact on our business. That's changing the number of animals that our livestock business can is available to transact. So there is an impact on us from that perspective. There's a flipside impact, of course, that will result in carbon reduction. So there's a positive and negative in that space. PDW's view, of course view there was that we'd like to see that the land use types in terms of capacity of land are not the high quality ones. That's and I know that the government has put us in Turkey and work into that area. We have seen of course, not all production rural production land has moved into carbon. We have seen movement of land into horticulture and not nowhere near to the extent of forestry, of course. But there is a benefit to PGW in that space for our footprint supplies business. Okay. Thank you. Your next question comes from Christian Bell. Your line is open. Hi. My first question was just how much of the revenue growth or sales growth 8% this year was from market share gain? If you're able to give a sense on that. I can't give you a number on that. We have sorry, I can't give a specific number on that, Christian. But we have we've got a mix. Pretty loose, Can I leave can you leave that question with us? Christian will try and come back to you on that one, right? Okay. Well, I mean, like just could you roughly say like fifty-fifty between that and other things? I would like to come back to you on that one question. Okay. And then just talking about future growth. So I need to start it across the retail businesses in Saudi Arabia. Okay. Cool. I mean, like, do you expect to see similar market share gains, say, in FY 'twenty two as you did in FY 'twenty one? Or how are you actually going to go where is the growth going to come from in the future? So we are seeing we continue to see market share gains. We're seeing market share come from our competitors, And we're seeing market share come from or increased profitability come from the burden to horticulture. Horticulture reality is horticulture crops are more profitable for PGW than we would see for pastoral farming. So and as you see for production area, kiwi fruit, cherries, avocados, etcetera, that is driving profitability of the business. Okay. Is that part of life? Sorry? In grapes, sorry, the grapes, the culture sector. So would you kind of For example, it's predicted there's another 5,000 empties of grapes to go into Bulbor over the next couple of years, for example, that was just recently. Okay. So there's the combination of markets you're going plus the sort of water culture, you've kind of got like the underlying markets actually growing itself at the same time? Yes. But a hectare of Q3 versus a hectare of pasture there that is considerably more beneficial to pitch it up in the water culture space. Okay. So a bit of product mix as well? Yes, yes, yes, yes. Okay. So that's why I'm just a bit low, but your first question is just a bit challenging question. Yes. Sorry, I didn't fully expect you to put in like a specific number, just like a rough kind of guide because the sort of the tone of the commentary that you put out sort of seems like the main driver of growth was market share gains. I was just trying to get a sense for how much of it was actually attributed to that versus other forms of growth. The main driver of market share there are there are which is why we put a position in the statement, but now there are these underlying things going on as well. Okay. Cool. So yes, just on the M and A stuff, how would you actually expect to pay for that? Like and then so just actually firstly before that, when you're thinking about M and A, could that be something as large as the farm rents or are you thinking of something much smaller? And then how would you actually pay for that? Just noting probably you've got your restrictions around leverage from your Go products and stuff like that. Yes. We have so firstly, the need to have a willing seller. I'm sure the shareholders and farmers may have a view about whether they're willing to sell or not. There are also competitive issues competitive constraints in that space. So our EBITDA has a couple of criteria around it. Firstly, that it needs to be within our sector. So from a rural sector perspective, that's our lane. That's what we're focused on. Our second criteria is that it must be New Zealand based. So we our emissions are tightly focused around the New Zealand space. The third point is that it must be EPS accretive in terms of driving value to shareholders from day 1. Two questions around funding. We would do a combination of our medium areas of focus on throughout our current banking facilities. But we have also got options outside of that. But the current thinking is sort of our current balance sheet. It will depend on how big an opportunity was, of course, Christian. Our funding lines at the moment are $130,000,000 And we've only got net debt of just over $6,500,000 But that's expected that rises in seasonality. So as we go through spring, obviously, that goes up quite a lot. So it would depend on how big the size it was in terms of the target. Do you have kind of a target size range? Was it would it be $100,000,000 to $200,000,000 or something like that? No, I don't think we have a specific we don't have a specific target number, if you like, that we're looking at. It's about the opportunity, not about what we've seen on it. So it's really sort of logic, good strategic bets, potential bolt on or bigger. It's going to have that strategic effect. So we haven't so the cash is not burning a hole in our pocket. We've been looking for the right thing. And that's stated. It has to be EPS accretive from day 1. Okay. And like does your go product financing sort of put in restrictions around that? Or is that not much mentioned? No restrictions, Christian. We obviously want to grow our go product range as well. That's part of our banking facilities. So that's all effective in order to work with you're taking into our thinking. Okay. Cool. And just on the gold products, what was the reason behind the figures they were basically flat? Yes. Good question. We if you go back to this time last year, Christian, the 2 things are going on, the country's degree of uncertainty around what coming out of COVID looked like. There was capacity constraints within the meat processes. There would also be a significant drought within the North Island. Going forward a couple of months, there was still was this confidence in the sector. With prices lifting, etcetera, there's still capacity constraints. And that drought was starting to make itself even for a second season, particularly in the North Island. So people were reluctant to take on board animals on farm from a feed perspective and be knowing that they may be constrained in that space, but they might be able to get processed this is something that process again on the other side. So that resulted in some reluctance to take on additional animals and therefore fund them. Have you seen a change in FY 'twenty two? As it comes through the last couple of months of the year, and into FY 'twenty two, we're seeing the demand increase. Cool. Practical on farm stuff. Okay, cool. And then just on the dividend, just wondering why was it so high? Was it a bit of a catch up for not paying final dividend last year? And will it go back to normal levels going forward? We will have the dividend reflects the strong operating performance of the business, also reflects our strong balance sheet, and we want to certainly reward shareholders for their continued faith in the business. And as you know, we didn't pay a dividend last year, Christian. So the dividend reflects the performance the underlying performance of the business on any given year. And last year, our results didn't allow us to do that. So this year, they do. In terms of what we do going forward, we'll make those decisions based on the results that we see from the business. And we've obviously got a budget in or around that. But it's too early to predict what those what that's going to look like. Just because I mean, at $0.28 per share, it's more than 100% payout ratio. Well, we wouldn't let's say EPS is about $0.30 per share. Okay. Yes. A little less than 100%. Yes. I understand your point, though. Sorry, sorry. My calculation is based off the operating impact. I'd sort of taken out the non operating gain. Yes, sorry. Okay. And then finally, sorry, just one real opening question for the shareholders. Just on the like, do you is the ag receipt there like we how do you sorry, let me rephrase that. Do you think we're at the pace of the ag recycle at the moment? Or is there still a way to go? It is a very academic question. But let me try and answer this. We'll certainly see I've been around 30 odd years in this business for 30 plus years. So I know that we have restricted carbon cycles. It comes in cycles in 2 ways in terms of commodity prices and weather conditions pave it apart. So those factors are always there. Currently, we're seeing strong commodity prices. We're seeing productions in the dairy payout space that's going to lift in the F 'twenty two year versus the F 'twenty one year. So fundamentally, demand is strong there. The New Zealand Inc. Story is still in demand, although getting to marketplace as I as it can be a challenge for our exporters. So in the short to medium term, all the factors that I'm seeing and we're seeing underlying investment in I should say, underlying investment in the land going into horticulture. We're seeing strong demand for rural properties. So that tells you that from an investor perspective, there is good demand there for properties because I see confidence in the sector. Certainly, in the short to medium term, I'm confident about the sector. I see that we've had generally speaking, we've had some kind of normal winter than normal. We've had, generally speaking, some good rainfalls across the country, so that's encouraging. But yes, beyond that, I who knows? But in the short to medium term, certainly, I'm confident about the sector, and I think others are as well. Awesome. I really appreciate that. That was all my questions. So thank you very much, guys. Thanks. There are no further questions at this time. Please continue presenters. Thank you all. If there's no further questions, just one last chance. Yes. Thank you all. Thank you for your