I would now like to hand the conference over to Mr. Stephen Guerin, Chief Executive Officer. Please go ahead.
Thank you, Rachel. Hi, Maria. Good morning, and welcome to the PGG Wrightson results briefing for the six months to 31 December 2024. I'm Stephen Guerin, Chief Executive Officer, and I'm pleased to provide you an overview of the interim results for the 2025 financial year. Joining me on the call are Peter Scott, our CFO, and Julian Daly, General Manager of Corporate Affairs, who's also our Company Secretary. Today, I'll summarise at a high level our financial results and tracking performance, and will comment on my thoughts on the year ahead. There'll be time for questions at the end of my commentary. More detailed commentary on our half-year result is available in our half-year report, which has been released online today. I will refer also predominantly to operating EBITDA, which is a non-GAAP measure that allows us to best describe our business operations.
I'll also refer to net profit after tax, the formal GAAP measure. The key financial performance items for the first six months to 31 December 2024, to note, are operating EBITDA of NZD 41.4 million, which is up NZD 4.7 million or 13% on the prior corresponding period. Operating revenue of NZD 570.3 million was up NZD 9.4 million or 2%. Net profit after tax of NZD 16 million was up NZD 3.2 million or 25%. Interim dividend of NZD 0.025 per share was declared today. We have reaffirmed our forecast FY2025 full-year operating EBITDA guidance of around NZD 51 million to the period ending 30th of June 2025. PGG Wrightson started the first six months of the financial year with improved returns in our Rural Supplies business. There was also stronger demand for beef, which underpinned our livestock results, and there was positive rebound in real estate.
A focus on improved cost control of operating expenses also assisted the group results. The agri-business servicing sector remains competitive, with customers generally taking a cost-sensitive approach and limiting discretionary spend. However, service offering and technical expertise are valued by our customers. We continue to consolidate our position as leader in the markets in which we operate. Economic conditions have shown the early signs of improvement, with several indicators pointing to a healthier outlook. General economic conditions have improved with both inflationary pressures and interest rates easing, with further rate reductions indicated last week by the Reserve Bank in coming months. Agricultural import prices stabilized, generally speaking, in the first six months have remained above historical norms. In addition, our higher forecast milk payout, stronger beef export returns, and generally solid commodity prices are beginning to positively impact farmer and grass input.
Federated Farmers Confidence Survey results released last week noted farmer confidence has risen to its highest levels in over a decade, albeit rebounding from record lows in recent years. The survey saw a sharp lift in profitability, with 54% of farmers reporting a profit, double the number from the last survey six months ago. The Retail and Water business incorporates Rural Supplies and Fruitfed Supplies, Water and Agritrade. Retail and Water operating EBITDA of NZD 39.5 million was down NZD 0.5 million, or NZD 500,000, and operating revenue of NZD 490.3 million was up NZD 12 million on the prior corresponding period. The reduction in interest rates and improved dairy payout have bolstered confidence. The budding optimism is beginning to be demonstrated through farmers looking to invest in their operations again after several years of budgetary restraint.
As farmer confidence levels gradually return, Rural Supplies have seen a positive impact, with all categories showing some growth compared to last year. This has been more evident in our animal health, seed, stock food, fertiliser, water, and fencing categories. Favorable growing conditions across most regions have contributed to growers reporting excellent quality across a range of fruit and vegetable crops. Our Agency Group includes livestock, wool, and real estate. The Agency Group delivered an operating EBITDA of NZD 6.8 million for the first six months of the financial year, an increase of NZD 5.4 million compared with the same period last year. Operating revenue was NZD 79.1 million, down NZD 2.4 million compared to the prior period. Favorable spring weather across most of the country lifted sheep and cattle values. Good feed conditions throughout the country, strong processing demand, and general shortage of cattle have underpinned values.
Sheep pricing has improved, particularly in recent months. The reduction in lamb processing volumes from Australia has provided further opportunity for New Zealand sheep and meat to command strong export prices against last year. Milk payout prices are predictive for dairy farmers. Fonterra's current midpoint forecast of NZD 10 per kilogram of milk solids is at the highest level since the cooperative's formation. We have seen improved crossbred wool prices with some of the highest values in the last seven years. Farming sheep numbers and reduced wool volumes are creating a more competitive environment amongst buyers. The weakness of the New Zealand dollar has encouraged buyers to fill order books. The increased demand and more competitive pricing for strong wool is an encouraging sign for growers in the industry. However, there is still a way agreement achieved more sustainable prices and provides much-needed confidence to wool growers.
Ultra-fine wool remains sought after with strong competition from international buyers. Moving to our real estate business. Improving market dynamics, including ongoing official cash rate reductions, have resulted in increased real estate activity. Our real estate team was busy with strong sales and a diverse range of properties, averaging prices above the prior year. Demand for dairy properties has been solid, buoyed by improving dairy prices. However, there were a limited number of dairy properties on the market. PGG Wrightson real estate facilitated 10 transactions exceeding NZD 10 million in the period, with the highest surpassing NZD 50 million. The number of sheep and beef farms converting to forestry has slowed. Horticulture properties are showing a sign of revived activity after a quiet 18 months. As we approach the autumn selling window, the residential lifestyle and rural sectors are showing growth.
PGW recorded operating cash outflow of NZD 31 million for the first six months of the financial year. Outflows were NZD 24.2 million higher versus the prior comparative period of NZD 6.8 million. The higher operating cash outflow is a result of seasonal increases in capital from group, with Go-Stock receivable movements NZD 27.4 million higher. This was partially offset by NZD 4.7 million higher operating EBITDA and NZD 1.5 million lower income tax payments on the FY24 financial year's results. Cash flows from investing activities included NZD 8.2 million of capital expenditure during the period, an increase of NZD 1.3 million in terms of further investments in our business improvement program. PGW sold its interest in Kaikoura Saleyards during the period, with fixed asset disposals generating NZD 2.7 million. Excuse me for a moment. Lease liability payments increased NZD 0.9 million versus the prior period to be NZD 11.2 million.
Interest bearing debt was up NZD 9.8 million from 31 December 2023 to be NZD 106.7 million. Orders declared a full period dividend of $0.025 per share, which will be paid on the 3rd of April 2025. This year held us on PGW's share register as at 5:00 P.M. on the 26th of March 2025. We've included an update in our sustainability progress in the first half-year report. These are referenced on page 14 of the half-year report, which has been released on the internet. PGW's outlook for New Zealand's agriculture sector is promising and cautious. With the economic signals improving, including lower inflation and interest rates together with increased commodity prices, farming and grower confidence is improving. Good feed conditions throughout the country and strong processing and export demand have underpinned solid cattle pricing and improved sheep values.
With a positive payout effective for dairy farmers, the outlook for the livestock sector is more positive than a year ago. There's also strength in horticulture prices, with the kiwifruit industry likely on track for record exports. Federated Farmers Sentiment Survey noted this spending intensity having strengthened, with 23% of farmers paying to increase spending over the next 12 months. This is a positive signal. A recent report by MFAT and expects exporters should benefit in the current year from the strengthening of global commodity prices and the weakened New Zealand dollar. Supply and demand fundamentals are expected to underpin more optimistic farm gate pricing for many key commodities in 2025. Several of these key factors we expect to influence the sector through the remainder of the current financial year and beyond include dairy farm margins likely benefit through 2025 from strong export demand and farm gate milk pricing.
Beef farm gate pricing is expected to remain above the five-year average throughout 2025. Sheep meat values are looking stronger in 2025, with current lamb farm gate pricing now above the five-year average. Horticultural exports outlook as positive, with strong key signals for 2025. Exports predicted to reach NZD 3.5 billion for the first time. The farm import pricing is generally predicted to be more stable during 2025, and weak New Zealand dollar is likely to keep imports such as fertiliser and chemical prices at elevated levels. New Zealand's agricultural sector is well positioned to respond to a global demand, and PGG Wrightson is well placed to support our farmer and grower customers and their production needs. We're cautiously optimistic about the remainder of the financial year and know that PGG Wrightson remains on track to deliver our forecast FY25 full-year operating EBITDA guidance of around NZD 51 million.
We extend our gratitude to all our stakeholders for their support. We're grateful for our valued customers' loyalty, trust, and their support. We also recognise our dedicated nationwide team, whose passion and expertise is critical to our success. Our 2025 half-year report is available on the New Zealand Stock Exchange website under the PGW ticker and also on PGW's website. Thank you for your time and joining today's call. This concludes the formal part of our presentation, and I will now take any questions. hand it back to you , Rachel.
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 Tim Hunter from NBR. Please go ahead.
Hi, good morning, Stephen. Thanks for the presentation. Just a couple of questions from me. You mentioned in your presentation about farmer confidence survey finding farmer confidence at the highest levels in almost a decade. Just wondering if you've noticed whether these confidence surveys, I don't know how frequently they're done, but whether there's a correlation between farmer confidence and the performance of PGW.
The confidence survey has been going for a few years now. I think it's about 15 years too, but they come out every six months or so. There is a strong correlation between farmer confidence and commodity prices and the performance of PGW. That's a fair summary. There is a slight difference. There is a slight, sorry, I should make one caveat on that, on the survey. The survey, of course, is for what we call rural farmers, so it does not include horticultural. You can get a sector difference in that space depending on where the, and so there can be a bit of a lag in that window as well. Just to clarify what the contents of the survey and what makes that.
Stephen, It is nice to see that turnaround. It is very encouraging. Just on the return to the dividend, you are obviously feeling that confidence reflecting in the ability to resume dividends, and that is sustainable from now on?
Yes. The directors go through a process around that, looking at our forward forecasts, looking at our future need for cash within the business. Based on that, we have confidence in resuming dividends, albeit it is at a bit of a cautious level as well.
I mean, I noticed that you have got strongly negative cash flow in this half, the seasonal effects and so on. I'm just wondering whether the board considered it might have been prudent to delay the dividend till the full year and see how things were going just to manage cash flow. I mean, there's quite a significant increase in working capital debt.
You look at our, that's true. If you look at the working capital, as I explained, our GO-STOCK has increased by NZD 24.2 million. That does have a timing factor in it in terms of when those contracts roll on and roll off. We have a good look through of all those contracts, and then they're going to roll off in the cash flow. That gave the directors confidence in terms of their decision-making in this process. That was a big driver of the decision, the movement of cash flow, and also what that means for our year-end results in that regard.
That's cool. That's it for me. Thank you.
Thank you, Tim.
Thank you. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. There are no further questions at this time. I'll now hand back to Stephen for closing remarks.
Thank you all. Thank you for your time, and we wish you all the best for the day ahead. We appreciate your attendance on the call today. Thank you.
Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.