I would now like to hand the conference over to Mr. Andy Borland, Managing Director. Please go ahead.
Thanks, everybody. I'd like to welcome you to Scales' full year results announcement for the year ended December 31, 2025. With me is Steve Kennelly, Scales' CFO, and Geoff Smith, Scales' Chief Operations Officer. Earlier this morning, we launched our results with the NZX, including a presentation pack that we'll base our comments on during this call. We'll run through the slides, and then we'll take questions. If you have further questions after the call, we'll be available for the rest of the day. Our agenda is as shown on this slide. We'll go through the slide two, the FY 2025 results and performance, followed by our outlook for FY 2026. First, a summary of the FY 2025's results. I'm pleased to announce that the group delivered record results across all earnings measures.
Underlying EBITDA was NZD 137.6 million, an increase of 50%. Underlying NPAT attributable to shareholders was NZD 61.8 million, an increase of 82%. Reported NPAT attributable to shareholders was NZD 101 million, an increase of over 200%. There were strong performances across all our divisions. Horticulture produced an outstanding result. There was strong performance from Global Proteins and another record result from Logistics. We'll go into more detail on the following slides. A few of our key numbers are highlighted here on slide six. A couple of items of particular note: revenue is NZD 900 million, an increase of 54%. Mr. Apple exported 3.7 million TCEs of its own grown apples, which is up 21% compared to 2024. I'll now pass over to Steve to run through the financial results for the year.
Thanks, Andy. As Andy mentioned, the group achieved record results across all its performance measures, driven by the growth strategies across the divisions. There was also a positive impact from our increased shareholdings in our joint venture businesses. You'll also note that our prior year comparatives have been restated, which is due to an increase in apple tree valuations in FY 2024 of approximately NZD 6 million. The net impact of this restatement at an underlying NPAT attributable to shareholders' level was around NZD 200,000. Our five-year performance for Underlying NPAT attributable to shareholders, Underlying EBITDA, and revenue are depicted on slide nine, showing the increases in those measures compared to prior years. As Andy mentioned, there was growth in underlying EBITDA across each of our three operating divisions. Global Proteins generated a solid result, with Shelby, Meateor Australia, Meateor New Zealand, and Fayman International performing particularly well.
Esro Petfood continued to progress through its startup phase. The Horticulture division produced an outstanding result through increased volumes, prices, and improved variety mix. Its result was also enhanced by the acquisition of the Bostock orchards in FY 2024. Lastly, Logistics produced another record result, driven by a significant increase in volumes. Our division performance is summarized in the table on slide 11. In addition to its 73% increase in earnings, the Horticulture division also generated a pleasing increase in underlying EBITDA margin. The five-year underlying EBITDA for each of the divisions is shown on slide 12.
As you can see, the prior year comparatives for Horticulture have been restated, but there was no restatement for either Global Proteins or Logistics. The group's overall financial position in net debt reflect the investments made in Global Proteins joint vent. However, our financial position still allows for further investment opportunities. The most significant cash outlay last year were those required for our joint venture investments. Other significant expenditure included dividend payments, including those to minority shareholders and CapEx. I'll now hand back to Andy.
Thanks, Steve. As we've already touched on, 2025 was another successful year for transactions and increased investments in Shelby, Meateor Australia, Fayman International, and ANZ Exports. This takes the Shelby investment takes our shareholding to 67.5% and ANZ Exports to 85%, with Meateor Australia and Fayman International now being fully owned. Due to these investments, we've increased the Global Proteins FY 2027 underlying EBITDA target from NZD 70 million - NZD 85 million. The benefits of these increased investments are noticeable in the division's overall results, with increases in revenue, underlying EBITDA, and underlying EBIT compared to last year. There are also increases in both pet food ingredient volumes and edible proteins volumes of 9% and 10%, respectively. In terms of the businesses within the division, Shelby had a solid performance whilst it has transitioned to a new toll processing facility.
Meateor Australia and Meateor New Zealand performed significantly ahead of forecast, with margins up on expectations. Fayman International had a strong performance, increasing sales to both Southeast Asia and U.S. markets, and Esro Petfood continued to move through its startup phase, while also transitioning to a new processing facility. Revenue and margin per kilogram of volume sold within pet food ingredients business have been in business mix, which resulted in a small decrease in revenue per kilogram. However, improved margins across Meateor New Zealand, Meateor Australia, and Esro resulted in an increase in underlying EBITDA per kilogram. There's been excellent progress on the nine key strategic projects that support Global Proteins' growth target. Its new processing plants in the United States increased volumes, and the Netherlands facility is producing high-quality product.
The U.S. blending project is operating successfully, and the first U.S. in-plant collection and cooling system is functioning well. Pleasingly, the second new in-plant collection and cooling system in the United States was commissioned in December 2025, which was ahead of schedule. In terms of ongoing projects, we're currently establishing a joint venture to trade fish and poultry in the U.S. Our feasibility study for a second European site is progressing, and we're close to finalizing the options for additional processing capacity in New Zealand. Each of these initiatives are expected to contribute positively to Global Proteins' earnings target in future periods. Turning to horticulture. As previously mentioned, 2025 was an exceptional year for the horticulture division, with increased volumes, higher average prices, and an increased proportion of premium variety volumes such as Dazzle and Posy.
The addition of the Bostock orchards helped to fast-track these factors. Profruit continued to perform extremely well, delivering another excellent performance, aided by strong sales prices in its export markets. Trading business, Fern Ridge Fresh, also had a very strong year. Mr. Apple's own growing export volumes increased 21% compared to last year, with external grower volumes increasing 49%, helped by very good growing conditions and the integration of the Bostock orchards. Premium apple volumes accounted for 74% of export apples sold, a slight increase on last year, with significant growth in Dazzle and Posy apples. Sales into the Asia and Middle East market also grew compared to last year, with marketing, sales, promotions, and customer support in these key markets supporting the volume increases. I'll touch on those activities soon.
As I've mentioned, Profruit delivered an excellent result, whilst volumes of juice concentrate sold returned to a more normal level. On slide 22, the graph on the left of this slide illustrates the level of increase in premium apple volume sales last year. You'll also see that 2025 volumes are significantly higher than all previous years, 16% increase, percent higher than 2021, which was our previous record year. The graph on the right shows the upward trend of the proportion of premium apple compared to traditional apple sales. This aligns with our strategy, positioning us in the right direction to meet our target premium volume percentage. The forecast percentage of premium variety apples is depicted on the current slide, 23, along with our forecast volumes.
In addition to integrating the Bostock orchards and continuing our orchard redevelopment program, we're continuing to develop new, exciting premium varieties, which have been grafted onto existing trees and are expected to supply a new wave of growth. We achieved increases in pricing for both our premium traditional variety apples. This was helped by strong demand for our apples in our key markets and by the Bostock orchards, which performed ahead of our initial expectations. Favorable exchange rates were also a positive factor. Pricing also benefited from targeted marketing and promotional activity, which leads me nicely onto the next slide, 25. A selection of consumer marketing activities carried out by our Mr. Apple team are shown on this slide.
This included relaunching our Tmall store, the Alibaba business-to-business, to business-to-consumer online marketplace, launching Mr. Apple channels on Red Note and Douyin, two Chinese social media and e-commerce platforms, continuing to provide Dazzle sponsorship of activity, of active events. We continued with metro advertising in Shanghai, Guangzhou, and Taipei to reach busy commuters, and launching a store locator on Mr. Apple's official WeChat page to help consumers find our apples with our retail partners. The team more than doubled Mr. Apple's branded presence in retail stores across Southeast Asia markets, increased its in-store point-of-sale material tenfold, and tripled its in-store sampling sessions. Moving on to logistics. For the second year running, Scales Logistics produced a record result, while both ocean freight and air freight volumes were up on last year.
Air freight showed significant increase, 81% increase, due to strong volumes from the dairy sector and a positive cherry season. The division also benefited from strong apple volumes. This helped Scales Logistics produce a 21% increase in revenue and a 10% increase in underlying EBITDA. Moving on to capital management. Our overall group ROCE was 14.6%, compared to a restated 14.3% last year and our group target of 12.5%. Horticulture and Logistics produced excellent increases in returns, whilst Global Proteins' ROCE was impacted by the investment in Meateor Australia, Fayman International, and ANZ Exports. As is the nature of the business, the horticulture division accounted for the majority of CapEx during the year.
Projects of note included the ongoing orchard redevelopment program and our new high-pressure apple washer at Pukekohe Packhouse, both of which are expected to improve margins. We've undertaken a significant upgrade to the RSE accommodation at Mr. Apple. This investment included additional Portacom to sleeping and dining rooms, as well as additional furniture and whiteware. Other significant pieces of CapEx included the second in-plant collection and cooling system in the United States, as mentioned earlier. On to sustainability. Sustainability continues to be a key focus for us. During 2025, we completed a refreshed double materiality assessment in order to understand our stakeholders' priorities. In terms of people, we undertook an engagement survey for all our New Zealand businesses, with our plan to roll this out globally in 2027.
We continue to integrate health and safety and wellbeing into our businesses and have developed an improvement roadmap covering the next few years. In terms of environmental projects, we're looking forward to releasing our climate statement in April, which will be our third report of this nature. During the year, an assurance exercise was undertaken to confirm our Scope 1 direct and Scope 2 indirect greenhouse gas emissions data, the analysis of Scope 3 raw material emissions was progressed. Our regenerative planning trials at Mr. Apple, which aim to restore soil health, increase biodiversity, and enhance ecosystem function, has continued. Pleasingly, these show early indications of improved soil health and fruit quality.
We look forward to sharing more details of these and other projects in the sustainability section of our annual report, as in our climate statement. Moving on to governance. At last year's annual shareholders meeting, Alan Isaac signaled his intention to retire from Scales' board prior to the end of his current term. Having secured a replacement director, Alan retired in October last year. Alan was a major contributor to Scales' governance program, serving on the board for over 11 years. Not only was he chair of the Audit and Risk Committee, Management Committee, but he also chaired the Due Diligence Committee as part of Scales' listing process. With his accounting and finance background, he provided excellent financial knowledge and wise counsel. In Alan's place, we're pleased to welcome Paul Munro to the board in October last year.
Paul also has a significant accounting and finance background, as well as extensive governance experience from a wide range of public and private entities. We also announced that Steve Kennelly is stepping down as CFO in May of this year, with Ben Washington replacing him. Steve has been with Scales since 1993 in a variety of accounting and finance roles, being appointed as Scales' CFO in 2011. However, we are pleased to say that Steve isn't leaving us completely. He'll take up a new role as company secretary. We're pleased to welcome Ben Washington in Steve's place. Ben will start in June, joining us from KMD Brands, where he's held several senior leadership positions, most recently as CFO of Kathmandu. Lastly, our outlook for 2026.
In terms of the overall group outlook, we're pleased to confirm our previously advised guidance range of underlying NPAT attributable to shareholders of between NZD 50 million and NZD 55 million. Underlying NPAT and underlying EBITDA also remain as previously advised. In terms of the divisions, we expect Global Proteins to continue to perform strongly and realize the benefits of its increased joint venture investments. In horticulture, picking and packing have started for the 2026 apple season, with a crop of around 3.5 million TCEs forecast. Pricing is expected to be positive, impacted by a number of factors, including favorable foreign exchange rates. Profruit is currently experiencing positive demand. We expect Logistics to continue to contribute positively and are pleased to note that it's continued to experience strong air freight demand in the year- to- date. We're happy to take, obviously, questions from now on.
Thank you. Ladies and gentlemen, if you would like to ask a question, please press star, then one on your telephone keypad 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. One moment, please. The first question comes from the line of Rob Morrison with Craigs. Please proceed.
Hey, good morning, guys. Congratulations on a record result. Best of luck for the new role, Steve.
Thanks, Rob.
I'd like to start off. All good. I'd like to start off. Obviously the UN NPAT to shareholders for next year is down a fair amount, and it looks to be driven by normalization of horticulture. I'd like to assess how sustainable the horticulture gains are. Kicking off with that, I know we got a few headwinds. What are the headwinds? One of them is, some of the land's gonna be redeveloped in orchards. What reduction in land area are you assuming for next year, roughly?
Look, not, none, really. We've been able to, you know, work through the process of the redevelopment without material reduction and production, if you wanna call it that, because don't forget this new, you know, redevelopment done in prior years is coming on to maturity.
Yep. No, that makes sense. There's this 5% guided fall in volume. I guess therefore, you're assuming about a 5% fall in yield per hectare. It's driven by fall in yields, right?
Yeah, look, we use a sort of a rolling five years average model for, you know, for our yields, and it's proven to be pretty reliable. You know, I mean, last year's was a significant crop, you know, in terms of yield per hectare. This is probably just a normalization to how we normally predict our yield.
Yeah, yeah, that makes sense. I guess, yeah, I'm not too sure how one season would inform the other, but, put another way, so the harvest has started in late January, and, you know, I know it's really early days, but the exports are tracking very strongly. To date, from what you've harvested, are you seeing this assumed reduction in yield?
Probably not, but as you rightly pointed out, Rob, there's a long way to go. We don't try and, you know, sort of forecast our results until, you know, we've got a lot more certainty. It is, you know, just still the end of February.
Yeah. No, no, fair enough. Just a little bit more color on the pricing. So you say you've assumed positive pricing for hort, and I think the premium varieties have been growing high single digits over the past five years on average. So would you be assuming, you know, high single digits again, or does that normalize to something, you know, like inflation?
Yeah, look, we've obviously cognizant of our currency cover we've got, we're cognizant of the, how the markets are going and, you know, color and size also contribute. The size is down slightly this year compared to last year's bumper crop, so, yeah, that might have, you know, a small impact on pricing as well. You know, at this early stage, we are pretty, you know, positive about how the markets are going.
Excellent. Pleased to hear that. That's all super helpful. Thank you. Just transitioning to Global Proteins. The second in-plant collection and cooling system in the U.S. has been commissioned ahead of schedule, and obviously that was the key driver of the big uplift in Shelby in FY 2026. I note that you've kept Shelby guide or, you know, the implied guidance for Shelby flat. How should I reconcile that? Is there a bit of weakness elsewhere, or is it just conservatism?
I don't know if we've actually guidance for Shelby, have we? We've guidance for Global Proteins, and, you know, we do see a bit of a positive uptick in the U.S. I mean, we. There's no mucking around with tariffs, so that's a big plus for the Shelby business. Yeah, look, we're seeing a positive uptick just through the normal trade, but the increase in net volumes coming from the new plant as well.
Just on the Shelby, you can kind of work it out because you guys guide to NPAT, and then also NPAT to shareholders. I mean, kind of see what the payments to Shelby are and then use the percentage...
Yeah
... ownership you have in that to work it out. Just it sounds like maybe things are tracking a bit more positively than you thought when you gave guidance in December for Shelby. Is that right?
Yeah, possibly. Yeah, well done for spotting that.
Cool. Cool. Thank you. I'll squeeze one more in, if I may?
Sure.
Cool, cool. Thank you. Tyson, obviously a massive meat processor in the U.S., they shut down this big plant in Lexington, and it looks like that's about 5% of daily U.S. cattle slaughter. It's kind of in your neighborhood, and obviously, that 5% will be magnified quite a bit for that area. You know, long story short, it looks like there would be a decrease of supply. Are you expecting to see some pressure on Shelby margins from that going forward?
No. We, look, we generally can replace supply. I mean, supply for beef in America is tight. you know, the cattle kill is down, you know, across the board, that's pretty well known. it's, you know, we're, I guess having diverse product range, even within beef, like, you know, the various offal categories and MDM, we can, we can sort of move around, if you like, and be quite flexible to source product from either other plants or, you know, the different hearts, and other organs. it's, it's certainly, yeah, we did notice that that plant had shut, but, you know, it's, we're not seeing it impact our financial position right at the moment.
Cool. That's wonderful. Hey, thank you very much for your time, and congratulations again.
Thanks, Rob.
The next question comes from the line of Guy Hooper with Jarden. Please proceed.
Good morning, team, congrats on what was a really strong result. Can I just pick up a little bit more on the guidance settings, you know, and how you set that initial guidance, particularly within horticulture? If you assume sort of an average five-year for the yields, what sort of, what goes into the pricing assumptions that feed guidance?
Yeah, in market, as Andy said, we use a rolling average, there's probably a little bit of normalization in market prices assumed. We've got tailwind and FX, and we think freight rate's probably about the same. That's the sort of, I suppose, the net picture for pricing.
Yep. Okay, when you say, logistics, expectation is to contribute positively, for FY 2026, is that, are we to assume year-on-year growth? Can you sort of talk about, you know, where that might be coming from, especially if we assume normalizations in sort of yields?
It's sort of talking sea freight here, when we say logistics.
Sorry, I'm missing.
Sorry. If you're talking sort of logistics and at, you know, the cost of freight, we would see that being pretty similar to last year.
Yeah, sorry.
Yeah.
I meant, I mean the logistics business.
Yeah, we can see some reasonable growth coming in that business. You know, there is, you know, the cherry season is not as good as this year wasn't as good as last year, but there's other products, you know, that are looking quite strong, that'll offset that. We would like to see, yeah, the business. You know, we expect to see some, you know, good, reasonable, positive growth in the earnings.
Yeah. Can you just maybe talk a little bit, even just sort of high level, what run rates are looking like within some of those Global Proteins divisions? It looks like, as you say, Australia's really ramped up to the back end of the half. You know, Shelby was a flat year-on-year, but you had some sort of transitioning going on. Can you sort of talk about the moving parts within those different businesses into 2026?
I think there's sort of a, yeah, bit of change within the various areas, but pretty positive overall. We're sort of seeing good trading performance out of the Fayman International business. Clearly, the pet food is out of Australia, has, you know, had the tariff impact, so we're working through that. I mean, they've just... If we believe the latest announcement there, 10%'s going to 15%, but we're having, you know, pretty positive discussions with our customers already on that. Yeah, Shelby's a fantastic business that, you know, and it's got a little bit of growth coming this year, having had, you know, very, very good performance over the last three years.
Okay, maybe just one last one from me. I think part of the rationale from going earlier on acquiring the additional stakes in the Aussie JVs was just around a better alignment and getting, I suppose, fast-tracking some of the opportunities that you saw. Can you talk a little bit about how those are playing out and, you know, what those might look like?
Yeah, I think there's just a bit of more, you know, able to be slightly more collaboration between Meateor New Zealand and Meateor Australia. We're able to, you know, support each other slightly better. I mean, they were working together anyway, so it was sort of an incremental change there. On the other side of the trading business, again, it was just good to get, you know, the continuity there of the business and the relationships back to Meateor Australia as well with the meat companies. You know, we felt like it was, you know, a good move, you know, to bring that into the grand plan, if you wanna call it, of where we're heading with this Global Proteins thing. You know, in the end, we want to, you know, have a, you know, a, you know, a global footprint, possibly with the same brand.
Great. I'll pause there. Thanks for taking the questions.
Thanks, Guy.
The next question comes from the line of Matt Montgomerie with Forsyth Barr. Please proceed.
Hey, guys. Good morning. Might start on the Global Proteins project. On the slide deck that you've presented today, looks like there's a few changes, I might ask sort of a three-part question to start. Firstly, on the second in-plant cooling system in the U.S., noting ahead of expectations, maybe just how that's come about? Is that a better market demand generally for pet food in the U.S., or is it, customer-specific pull forward of demand? Secondly, on Europe, I know you've paused the feasibility study there, just any comments you could give? Thirdly, sort of the establishment of a JV in the U.S. is new information today, just any more color you can give there?
Look, on the second implant cooling, it was just, you know, just got hit, you know. It was. The equipment was put in slightly ahead of schedule, so that got us off to a positive start. We were forecasting a start from the 1st of January, and it, you know, that hit the ground running, if you want to call it that. That was just positive. I'll do the fish and poultry first, because the second, forgot the second question already.
Europe.
Well, look, we continue to investigate the second, the second plant in Europe, but it has taken us longer to get the transfer. We remember we started in Hasselt, in Belgium, so we've gone back to the Netherlands, which has been a net positive move because we're right beside our business joint venture partners facility there. That is, Europe is taking longer to, you know, get to where we want it to be, but we're still very positive about it. We are still investigating the option of, you know, a second plant up there.
On the fish and poultry, we just sort of teamed up with a young chap who's been in the industry with a supporting team, and ourselves and Brett Frankel from Shelby and [Michael Turney], is this guy's name, have done a three-way joint venture to get us started trading in fish and poultry. Obviously, we've looked at various different avenues to get into that sector, and we're just, I guess, taking it slowly. There's, you know, it was virtually a start from scratch business and, you know, just getting us to understand the dynamics of a bit more of, you know, processing, well, trading at this stage, both fish and poultry.
Just on the last part there, Andy, so it won't be material in FY 2026 and maybe not even 2027, 2028. It's just sort of.
Yeah, it's a slower burn. Yeah. It's a good way to, for us to get, you know, you know, work with these guys and, you know, ultimately, it'll be good business, no doubt.
Yeah. Just on Profruit in FY 2025, appreciate you for giving us volume numbers, but I might have missed it, but I can't see what the either EBITDA or impact contribution was in FY 2025.
Yeah, about the same as the prior year, Matt.
Okay, perfect. Okay, and then just on horticulture, maybe I'll try to ask Rob's question a different way. I think if we go back 12 or 18 months or so ago, we were talking about maybe NZD 55 million in EBITDA post-efforts, including Profruit. You've obviously just done NZD 65 million. Is it fair to assume or maybe glean that number that you gave us a year or two ago is possibly on the conservative side, if we look out two or three years in sort of normalized conditions?
Possibly. Possibly conservative. We do, we haven't moved our modus operandi of assessing, you know, of forecasting that business. You know, it's, you know, obviously, we'd like to get the yield right, and, you know, the markets and the pricing, you know, remain positive. Yeah, we've still got a long way to go in the season.
Yeah. No, that makes sense. Then, Steve, one for you, just on the net debt. I suspect myself and the other analysts maybe just missed it at the time of the Australian acquisition, but your debt came in meaningfully higher than what at least I was expecting. It looks to me there's some debt acquired with the Fayman acquisition. Is that just like a working capital facility, and is there any seasonal component to it? Then maybe if you could try to give us a steer on where you think net debt will be at FY 2026 on your current guidance?
Yeah, yeah. I think in the pack we released when we did the acquisition, we were guiding to NZD 57 net debt. We've ended up at NZD 84, and yes, you're right, it's an increase in working capital. The, you know, there was an increased level of trading towards the end of the year. Working capital, you know, responded to that. It's already started to work its way sort of back out. It wasn't only in the famous and major Australian businesses. We had slightly elevated levels at Mr. Apple as well. As far as guidance for the end of this year, Yeah, the forecast currently would say something around NZD 60 million. Yeah, we still got a bit of work to do on that.
Yeah. That makes sense. Andy, just one on Shelby revenue in FY 2027, and this is just sort of circling back to the initial targets you gave us a couple of years ago now, which I think was $330 million in revenue in FY 2027. That was basically all Shelby revenue, you know, obviously, because of the ownership, stated at that point. Is that still roughly the right number we should be thinking about? Obviously, you know, yeah, it sounds like the projects are going well. You're guiding for solid growth in Shelby this year.
Yeah, I'm probably not as close to the revenue number as perhaps you're spotting there specifically, but I think on our target, revised target of NZD 85 million EBITDA in 2027, you know, that's been restated post the Aussie transactions, and we remain confident about that number. Shelby's got a, you know, as you've spotted, a contribution to that growth, but we remain confident about that, the assumptions there.
Yeah. Yeah. Is there a world in which you do it in FY 2026? Like, you're guiding to pretty strong Shelby growth. Sounds like the Aussie businesses are going well, and then the rest are pretty small contributors now.
It's very Matt.
Understood. I'll leave it there. Thanks for your time.
Thanks. Bye.
Thank you. There are no further questions at this time, and I'll now hand the call back over to Mr. Boylan for closing remarks.
Yeah, look, thanks very much, everybody, for participating in the call and, you know, your support. Yeah, we're obviously very pleased with the result and proud of the team's effort across the globe. Yeah, thank you, and happy to have calls later if anyone's got anything else to discuss. Thank you.