Thank you, Kayleigh. Marina, good morning and welcome to the PGG Wrightson results briefing for the financial year up to June 30th, 2025. My name is Stephen Guerin, Chief Executive Officer of PGG Wrightson, and it's my pleasure today to provide a brief overview of our results for the financial year to June 2025. With me on the call, I have Peter Scott, our CFO , Julian Daly, our General Manager of Corporate Affairs, who is also our Company Secretary. During the call, I'll cover the year's financial results, our trading performance, key themes and initiatives, and some thoughts on the year ahead. There'll be time for questions at the end of the call.
PGG Wrightson's headline results for June 30th, 2025 include: operating revenue of $975.3 million, up $59.4 million and 6% on the prior financial year; operating EBITDA of $56.1 million, up $12 million or 27% on the prior financial year; net profit after tax of $10.7 million, up $7.6 million or 248% on the prior financial year; holding a completed final dividend of $0.04 per share, bringing a total of $0.065 per share for the full year. PGW's businesses reported improved results on the prior year, with FY 2024 appearing to have marked the bottom of the equity cycle. Our retail water group revenue was up $39 million on the prior year, while performance at an operating EBITDA level was an increase of $1.1 million year on year.
While the operating environment over the year was more challenging in the retail space, we're encouraged with the revenue growth in this context and pleased to see the business continuing to consolidate and grow market share. Our agency group delivered a strong upturn around led by our livestock and real estate businesses. Constrained supply for livestock and increased demand drove elevated red meat and dairy commodity prices, supporting good farm gate returns. This has a positive influence on the profitability of farming operations and has reflected in a positive sentiment shift. Rural real estate activity increased significantly as a consequence of improved confidence in the dairy and red meat sectors, with activity supported by the easing of interest rates. This has seen a shift in real estate inquiries in dairy, beef, sheep, and selective horticultural properties, together with new listings coming to market.
The Life Innovative Farmers' Confidence Survey has confirmed that the strong lift in farmer sentiment is at the highest levels in eight years. This is driven by easing interest rates, more stability in import costs, improved commodity prices, and government policies with unions more supportive of the agricultural sector. Farm profitability has rebounded and strengthened investment spending and production expectations. Quarters cleared a fully imputed final dividend of $0.04 per share. The dividend will be paid on October 3, 2025, to shareholders on PGW's share register at 5:00 P.M. on September 11, 2025. This will bring the total fully imputed dividends for the year to $0.065 per share. To the business highlights for the past financial year. PGW successfully implemented its business improvement program with go live of its Microsoft D365 Enterprise reporting platform in April 2025.
This milestone marks a significant step forward in modernizing our systems and strengthening our operational capabilities. With implementation now complete, our focus has shifted to unlocking the full value of this investment. The outcomes include improvements that will drive operational efficiencies, enhance data utilization, and generate deeper insights to support decision making within the business. PGW reset its group strategy this year, reaffirming our long-standing commitment to deliver innovation expertise to help farmers and growers customers achieve production objectives. Our group strategy serves as a framework for decision making that spans the business and ensures alignment and delivers upon our purpose, which is helping farmers and growers succeed with expert knowledge and confidence. Our strategic priorities focus on deepening customer relationships, equipping our people for the future, and leveraging technology to drive operational efficiency.
Enhancing the collective strength in our diverse businesses and investing in product and service innovation, we are building on our prior heritage while positioning PGW for long-term success. While on this topic of strategy, in July 2025, PGW acquired Nexan Group, the manufacturer of the meat and animal health range. This acquisition reinforces PGW's commitment to support local manufacturing and delivering high-quality innovative solutions to help New Zealand farmers thrive. This acquisition is a complementary fit, aligning with our PGW group strategy and supporting business growth. PGW has partnered with Nexan for over a decade, and its commitment to innovation in rural communities aligns with PGW's vision and purpose. The acquisition ensures these products remain tailored to meet the needs of our rural communities. Nexan has a proven record in the R&D space as an innovator, and we've seen the core capability adding to PGW's strengths in this space.
I'll now comment on our two business groups: PG Retail and Water and the agency businesses. Firstly, the Retail and Water business. The Retail and Water business incorporates rural supplies, Fruitfed Supplies, water, and Agritrade. Retail and Water recorded operating EBITDA of $42.2 million, an improvement of $1.1 million on the prior year's result. Revenue of $773 million was up $39.4 million. Retail and Water refreshed its five-year plan with a focus on a range of growth initiatives. A key example of such initiatives, and I've already commented upon, was the acquisition of Nexan Group. The acquisition is an excellent fit for PGW and aligns with our strategic ambitions. It ensures that Nexan's trusted range of products will remain New Zealand-made, backed by local expertise, aligned with the needs of our rural communities. In terms of strategic fit, PGW is already a wholesaler and retailer of this range.
This acquisition provides the opportunity to take ownership in product manufacturing from a vertical and location perspective and continue to grow the range. Another key growth initiative is our BlueAG and key private label strategy. Building brand equity in our proprietary BlueAG label provides greater branding recognition and the opportunity to build trust and credibility in our proprietary label. It provides PGW with the price point control while giving customers more product options so that they can trust them. Our rural supplies business performed solidly as sentiment in the farming sector improved over the year and with strengthening in export commodity prices. It has been pleasing to see dairy, sheep, and beef farmers all seeing strong international demand and increased returns, which helped many farming operations return to profitability.
While sales revenue improved on the prior year, farmers took a generally conservative approach, with many using good returns to reduce debt. Fertilizer and stock food were in demand as farmers focused on increasing production to maximize the high commodity returns. There was additional spend on capital items such as fencing in the latter part of the year. However, the arable sector was more challenging with reduced demand in seed crops and prices coming under pressure. Our Fruitfed Supplies business faced a challenging trading environment in FY 2025. Despite the headwinds, Fruitfed Supplies maintained a strong market position. Encouragingly, we have seen renewed optimism in both the kiwifruit and apple sectors. Water and investment, new plantings, and a focus on varietal development signal confidence in the future of these crops. Buying export demand improved post-harvest performance, and stable pricing have contributed to a positive outlook for these growers.
The viticulture and vegetable sectors have been disappointed. Viticulture market contentions were subdued due to global oversupply of wine. Market pressures have impacted grower confidence in the investment decisions in these categories. There was limited development for our Water business in the first half of the financial year. However, the team has seen a momentum shift in the second half in response to the buoyant dairy sector, which has lifted investment confidence and irrigation development moving forward. Our Agritrade business. The year has marked some strong strategic investments and implementation of growth initiatives for Agritrade as our wholesale business. As I've already commented upon, the acquisition of the Nexan Group, which represents a strategic investment in the animal health sector, and launch of our private label BlueAG and [Keem] range, all managed through the Agritrade business. Moving to our second largest business group, which is the Agency.
The Agency group incorporates livestock, wool, and the real estate businesses. Operating EBITDA was $23.5 million, which was an impressive $11.1 million up on the prior year's result. Revenue was $201 million, up $20.3 million. The livestock business recorded exceptional financial returns on the back of elevated meat pricing and increased volumes of beef and dairy cattle. Strong demand for cattle, resulting from significant demand and constrained supply internationally, drove livestock prices to record levels. Pricing remained high throughout the year due to precious demands, good feed reserves, and robust beef schedules. Sheep pricing improved significantly year on year, particularly in the second half of the financial year. Elevated schedules allowed farmers to take advantage of prices where declining feed and dry conditions impact production. The number of sheep transacted were reduced as a result of lower numbers due to continued land use change.
Good pricing for dairy resulted in strong demand and limited supply. Livestock pricing was buoyed by forecast milk price and high-end herd sales. There was also strong demand contracts for dairy herd sales. GO-STOCK sales were buoyed as clients returned to the market with increased demand for sire bulls, with record section selling season. GO-STOCK sheep, beef, dairy, and deer products experienced strong demand. Binding interest rates, improved feed availability in the South [Island], and higher stock values and meat schedules resulted in steady uplift in GO-STOCK contracts. A strategic priority for the livestock business is to strengthen and grow our supply chain partnerships with good meat processors. These relationships add value to PGG Wrightson and our customers by providing consistent high-quality service, certainty, flexible contracts, and finance options.
Even though there's been a year-on-year reduction in livestock sent to meat processors, it's pleasing that PGW 's experience and growth in volume across most species to our supply chain partners is adding a growth in market share. bidr, our online trading platform, as well as established in livestock sent nationally, and its database of buyers grows year on year. This growth was driven by continued demand for hybrid integration, online bidding, live streaming of cattle sale at sale yards, and farm auctions. bidr hosted over 1,000 auctions during the year, and has firmly established itself as a New Zealand leading online platform for livestock. Turning to our wool business, the wool season concluded with improved wool prices up on the previous year, though there remains significant room for improvement to create profitability for wool growers.
It was a challenging year for wool production due to difficult trading and growing conditions and a notable decline in shearable share, leading to a reduction in bales handled across our stores. Despite the reduced bale numbers, we maintained our market share. PGW partnered with the iconic Kiwi brand North Square to strengthen the value of effort to produce New Zealand wool and support domestic manufacturing. The partnership connects PGW growers directly with custom manufacturers, delivering better returns for wool growers through long-term contracts by ensuring demand, certainty, and supply of fully traceable New Zealand wool. The Wool Integrity New Zealand trademark, PGW's wool assurance brand, identifies the wool meets the world leading standards in animal welfare and sustainability. Our wool exporting subsidiary, Bloch & Behrens Wool New Zealand Limited, achieved an increase in wool export volumes to key markets, predominantly in Europe.
This was particularly pleasing, given wool volumes exported from New Zealand declined in the past year. Our real estate business improved sentiment in the real estate market has continued to contribute to a pleasing performance on PGW Real Estate, with revenue activity up 55% on the same period last year. Markets have been buoyed by a gradual downward trend in interest rates, strong dairy payouts, robust red meat pricing, and farm crop prices breeding confidence in the sector. Volume of property listings and sales activity reached levels not seen for some time. Turning to our balance sheet, PGW recorded cash flows from operating activities of $12.4 million for FY 2025, including significant growth in our cash outflow. Growth in GO-STOCK receivables, which increased $28.9 million over the 12 months to 30 June 2025, to be $81.4 million.
This growth compares to a cash inflow for GO-STOCK receivables of FY 2024 of $21.5 million. Working capital balances increased to $1.4 million from the prior comparative period. Cash flows from investing activities included a capital expenditure of $17.4 million, inclusive of our investment in Microsoft D365 Enterprise reporting platform implementation. PGW amended and extended the syndicated banking facilities on 30 June 2025 for a further two-year period through to 30 June 2027. In terms of the outlook, the agricultural sector has experienced a strong rebound, sort of supported by encouraging economic indicators. Buying export prices and good demand mean constrained supply has boosted confidence in production decisions. Easing inflation and interest rates, together with greater stability in input prices, have created a more positive operating environment. These factors have contributed to renewed optimism and a noticeable shift in farmer confidence, which is a positive for rural service and businesses.
Despite our momentum, forward-looking sentiment is not uniform across the sector, with a more challenging operating environment for arable farming, viticulture, and strong wool. Ongoing geopolitical tensions and uncertainty around international trade terms, with increased tariffs and protective policies driven by the current U.S. administration, are a source of uncertainty. While dairy and red meat remain resilient, caution continues to influence parts of the sector, reflecting a mix but stabilizing outlook for the New Zealand primary sector. Strong commodity prices are expected to remain throughout FY 2026 across dairy, red meat, and horticultural crops, particularly kiwifruit and apples. Overall, the outlook is positive for the sector. Confidence in rural real estate markets is expected to persist at FY 2026, with quality listings continuing to attract interest and increase farm sales.
While there's a mixed picture across the New Zealand economy, with some industries facing difficult trading conditions, the agricultural sector is a bright spot and is leading the recovery again with strong export commodity prices and payouts that are boosting rural areas. Despite the global uncertainties, the agricultural sector as a whole remains resilient and profitable. The implication of the increased U.S. tariffs on New Zealand exports from 10% to 15% have yet to be seen. The sector's strong fundamentals provide a solid foundation for continued growth and investment. Supported by our strengths and technical expertise, innovation, and enduring customer relationships, PGW is well positioned to support our customers to grow their businesses and capitalize on the forecast growth in export revenue. Achievements this year are a direct result of the dedication, resilience, and talent of our exceptional team.
We also extend our sincere thanks to our customers for their loyalty and trust. This concludes the 2025 financial year results presentation. I'm going to open the call for questions. Thank you very much, and Kayleigh, I'll turn this call back to yourself.
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 are on a speakerphone, please pick up the handset to ask your question. We will just pause for a moment to allow questioners to enter the queue. Once again, that's star one on your telephone and wait for your name to be announced. I will do one last call for questions. Perfect. Thank you. We have a question from Paul Grant. Please go ahead, sir.
Yes, I've just got the brief market report. I'm just wondering what the debt level now is for PGW . I didn't see that, sorry, on the report. I'm just wondering about the Fruitfed Supplies, with you, how that's going at the moment.
Thank you, Paul. I'll just turn the debt question over to the CFO, Peter Scott, for a moment to ask that question.
Yeah, Paul, the net debt level at the end of June 2025, so including cash being reduced, that's about $86 million.
In terms of your question, Paul, around the Fruitfed Supplies business, we continue to grow our market share. The sector has had a good growing year. There were good climatic conditions across the sector, so the crop quality was very good. That actually, in fact, had an adverse impact on our Fruitfed Supplies business because there was actually less inputs required from our clients. They themselves have actually received good returns, good crop quality in the international markets, particularly in kiwifruit crops, apple crops, and the likes of avocados, for example, which we actually welcome in a strange way because coming off a second year out of the cyclones of the 2023 growing season, that's actually good for growers in terms of their balance sheets. As I commented on our presentation, we're seeing some renewed investment in their plantings and expanding their production areas.
The viticultural area, in terms of that sector, which is another part of a key crop within our Fruitfed Supplies business, the crop quality is very good. We see some good vintages coming out of the production cycle, the winemaking cycle, I should say. Again, because of the climatic conditions, some of the inputs that we supply into the market weren't actually required by those growers. It does result in a good quality and thus wine quality. Having said that, that sector, the international wine market, and in fact, more broadly in the whole alcohol market, is actually on the decline. We, as a world, and we as New Zealand are actually drinking less alcohol, less wine. Therefore, the confidence in the sector has reduced. They're very much managing their input costs. We're not seeing the new plantings come into market. Hopefully, that answer helps what you're looking for.
Paul, it's Peter Scott again. I thought maybe I should just give you one other comment on the net debt levels, actually. The net debt level, as I said, is just under $86 million, but that actually includes $81.4 million of GO-STOCK receivables. When you take that out, we get to $4.1 million if you were to exclude the GO-STOCK receivables.
That's at the 30th in June, Peter. Thank you. Thank you for the question, Paul.
Yeah. Yeah. Just with the good commodity prices and good real estate market, that sort of thing, I'm just wondering, with tariffs and everything like that happening, how you're going to get some growth in your impact. You have mentioned in the interim report that you've had some tight control on costs, but you haven't given any clarity on what cost-out actions you've taken. Can you give us some more understanding of cost control and cost-out initiatives?
Excuse me. Sorry, I've just got to run up.
Yeah. In terms of the growth, I think I was too far asked your question, Paul. There's the growth and the earnings of the business. As you, as we've acknowledged, we see the sector being positive out over the next wee while. Yes, there are tariff barriers in terms of the U.S. market, but that is but one market from a New Zealand perspective. We are seeing good demand out of other areas, like in the Asian markets and the European markets. We talked a wee bit about that for our wool business. We didn't specifically talk about it, but our velvet market has bounced back a wee bit in the latter part of this financial year. We are confident that the other parts of the sector are going to underpin those strong returns for crop demand. We're seeing that that's not a position that PGW holds.
That's also a position that the general markets hold as well. In terms of the cost management, there's a couple of things in that space. Initially, our costs this year do include some operating costs in respect to the implementation of our D365 platform. We won't receive a repeat of those. We've also switched off some of our legacy systems in terms of dual licenses, etc., that we had operating in the business up until now and consolidating all those onto the D365 platform. Bearing in mind we were running whilst the D365 platform was, we talked about it as a new implementation. It was new in terms of our finance and our core systems, but it wasn't new to us as we've been running it for about five years now in our retail environment.
That switching off of those systems does reduce our operating expenditure in our IT area. We see a more stabilized spend in that space. In terms of other areas, we continue to watch our costs, such as our travel and those sorts of things. Those fundamental things that you do as far as our business is concerned. We continue to review our vendor pricing in terms of inputs into the business. Like any organization, we continue to monitor those. People are still our core. We've been managing how we go to market and what people we bring into the business when we have vacant positions. We take a very, very prudent approach as far as that is concerned. Those are a couple of areas just to call out.
Okay. 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 Mr. Guerin for closing remarks.
Thank you all. Thank you for taking the time today to listen to our results. I wish you all the best for the day here.
That does conclude our conference for today. Thank you for participating. You may now disconnect.