Good afternoon, everybody. My name is Michael Franks. I'm the Chief Executive here at Seeka. It's my pleasure to welcome you all to this analyst briefing for our unaudited six months results to the 30th of June, 2024 . Alongside me, I've got Nicola Neilson, our Chief Financial Officer, and also Nick Reynolds, our Group Financial Controller, who both of whom are sitting here to help me out in case we get any difficult questions coming in through the stream. And of course, Nicola is about to leave us shortly to go on maternity leave for the second time. So, fantastic news for us. Nick Reynolds will be hopping into the hot seat for a little while, while she's away, supported by Ian Burt and Nick Andrews.
So, seemingly three males to do the job of one female, while she's away on maternity leave. And so, but we welcome them all here, to help us out. We've got a fantastic accounting and finance team, and I'm sure they'll do a good job in her absence. Our material this year, a little bit easier to work with. If it was, if we could get it to go to the next page. Someone's gonna... Okay, thank you. Finally, material this year a little bit easier to work with than last year. And so I'll just give you a quick run through the six-month highlights, talking a bit about our performance, our balance sheet, our focus, and run you through to the end.
Hopefully, out of this, you'll get a good understanding of where the company's at and what we've been through. You know, we had 30 hard months before this year, and seemingly much, much better results in the first six months of the year. In terms of the highlights, we've had a rebound in kiwifruit volumes in New Zealand and Australia. You know, for a big part of our business, we're a toll processor. We process units of kiwifruit. You know, we've grown 17 million trays ourselves. That's up 53% as a grower. We've handled 43 million Class 1 trays, up 44% on the 29.8 million trays last year. Australian kiwifruit volume is up 164%. That all gives us good tailwinds to work with as we work through the financials.
You know, the bigger volumes increased our revenue, our key metrics, financial metrics. NZD 284.2 million in revenue, NZD 68.4 million in EBITDA, Earnings Before Interest, Tax, Depreciation, and Amortization. NZD 45 million profit before tax, compares to NZD 13.6 million last year. That works out to be 74% earnings per share when you remove the impact of the deferred tax on depreciation buildings. We've delivered excellent performance to our growers, but it reflects the excellent fruit that most of them provided us with. We also had full labor availability for the first time in a number of years. We actually were able to deliver the efficiency gains from automation, but we've actually got a balanced post-harvest operation running.
We've actually also got more traditional graders using humans, and we've got some very highly automated machines that actually have worked well for us. To date, we've got low fruit loss. Fruit loss is lower than last year, and last year was remarkable. And our quality, when we look at comparatively what we've delivered Zespri to the markets, our quality is actually excellent. We know lots of things to be happy about, always things to fix, but we're pretty happy with what we've achieved so far. Pretty satisfied with it. NZD 625.6 million in total assets. Our tangible asset backing per share, NZD 5.92, well ahead of the actual current share price. Just under NZD 171 million in net bank debt.
But I should note to you that, you know, and when we run a season, when we run a harvest, we're actually advancing money to growers to actually cash flow them through that harvest, get some of the money from Zespri, but we're also providing services. And so we actually don't charge for that until sometime when we've got the money in. And typically, that's around the 15th of July, and that is a phenomenon that happens every year. So it's right to consider the NZD 53 million that we banked. Record banking for us on the 15th of July this year. Last year was NZD 35 million. We noted you at the same time. So when I've been reading some analyst reviews, have actually missed that point. Our cash flow is actually very strong in the six months and actually very strong for the year.
We have, having been through a loss last year and some hard times through COVID and the pandemic, we've focused on cost management, and we've focused on our capital expenditure. So we have leaned the company up. Last year, as we told you, we have been innovative with mechanisms like the captive insurance mechanism we put in place, which has delivered significant cost savings. The insurance mechanism itself estimated to have saved us over $5.3 million over the two years. We've got the capacity and systems in place to manage our forecast volumes, but noting it takes around 18 months to actually get capacity put in place. We're now thinking two years out about what we need to be doing. We're still pretty positive about the outlook. We've had a favorable weather pattern, albeit there's been a storm in Australia.
Thankfully, it hasn't affected the crop. It has affected some structures, though. We have had great winter chill, double what it was last year, and in some places massively ahead. And so we're actually quite buoyed by that. We've got a long way to go to get a crop, but if you don't start well, you can't end well, and we've started well. Our focus is all about quality. We've had success in our retail services business. It's been a tough game in that part of our business, but actually, it's done gone quite well. And we've got continuing developments in Australia. So to the numbers, which was a great financial performance. Revenue up 34% at NZD 284.2 million. Our gross profit, NZD 79 million, is up 63% from the previous corresponding period.
EBITDA, $68.4 million, is up 88%. We've got $45 million profit before tax, it's up 230%. $17.1 million profit after tax, that's after allowing for the deferred tax adjustment of some $13.9 million. Also noting that, while we've gone, had the tax consultants go through that number and assess it, that will be subject to audit at the end of the year. That's our best number at the six. We operate in a seasonal business, so it's the same business we operate in every year, and so the second part of the year, typically we go backwards, but we're pretty happy with where we're at. If you'd like to see that graphically, here it is in front of you. You can see the EBITDA, how that has progressed over time.
So at NZD 68.4 million is the highest it's been in the last five years or six months. Same with the net profit before tax, and same with the total assets. So if you like graphs, they all look pretty good. Well, here in terms of our operating segment performance, so in our orcharding business, last year we booked a loss. At the sixth, this year we've rebounded at NZD 3.2 million. Of course, when we do the six months results, we actually don't have a forecast from Zespri to work with, so we're estimating what that forecast will look like. And so over the next little while, we'll take a look at our forecast again to make sure it's in alignment, whether we've been too conservative or not.
Post-harvest EBITDA, $69.3 million is the highest it's been in the last five years. Seeka Fresh, $1.1 million, a little bit behind where it was last year. Tougher trading conditions. If you look at the other listed companies that operate in the wholesale retail services space, actually quite a good performance there. Still ahead of the line. In Australia, $4.9 million, much better than where it was last year, and a very good performance on the back of much improved kiwifruit volumes. Our new crop protection program over there, using a product for the first time last year that we hadn't had before, has had good effect. And so we're pretty confident about what's happening in Australia.
Looking at our balance sheet, in terms of capital employed, NZD 18.5 million increase in capital employed at the half year at NZD 559 million. NZD 18.6 million dollar increase in property, plant and equipment since the half year last year, but that also includes end-of-year revaluations of land and buildings. It also includes the automation and capacity investments put in place, which I'm about to talk about again. It also talks about, it includes our investment in switchboards and plant rooms. We have deliberately controlled our capital expenditure. We do every year, but we've actually cut it back a little way. And so what we've done in doing this, we've focused it.
NZD 2 million a year has been spent on our plant rooms and switchboards to make sure that we don't have deferred maintenance building in the business and therefore increasing our risk profile. As part of our captive insurance program, we've also focused on risk areas in the business and diverted money to go and make sure that we're addressing any plant any switchboards that needs to be addressed and renewed in the process, and so pretty happy about that. Orchard developments continue to be invested in. Strategically, they will deliver us more fruit in the future, and they are coming on stream this year and next. In terms of our balance sheet continuing, NZD 771 million in bank debt.
Only $6.1 million lower than last year, but actually, these take into account the fact that we banked $53 million on the 15th of July. And that's actually a truer reflection of our debt, because we actually take money, and we actually advance money to our growers through the harvest. We've harvested more fruit, more money advanced, and so we've actually banked more money on the 15th of July, and that brings it all down. $201 million is a facility from the banking syndicate. We increased it to $221 million along the way, so we could actually fund the advances going to growers. That's come back down on the 16th of July, so $201 million is the facility now.
Our ratios, our leverage ratio, all of our ratios are back within banking covenants, understanding that they are calculated on a twelve-month basis, not a six-month basis. Our forecasts are that they will be well within the long-term banking covenants by the end of the year. Our EBITDA multiple calculated on a six-month basis, 2.37 times. If we take out the leases, so make it pre-IFRS 16, 2.69 times, and so well down on where it was in all cases the year before. Our forecast is, for the end of the year, that we'll be well within our banking covenants. EPS, 41 cents a share, understanding that that is after the deferred tax adjustment. It's up from 25 cents in the PCP, and includes that 35 cents one-off non-cash adjustment for the deferred tax change.
$5.92 net tangible assets, down 2%. At this stage, the board has decided that it's not appropriate for us to consider a dividend just yet. The board has resolved that they'll think about a dividend just a little bit later on in the year, when we have confirmed full year guidance, just to make sure that we're not stepping over the edge, and declaring a dividend right now and making sure it's a prudent thing to do. They'll assess our operating performance, our financial performance, our debt, our ratios, when they come to make that decision, and think about it again a little bit later in the year. So, it won't be too far away, I think, for that determination. The Company has increased its full year guidance. The guidance was $15 million-$19 million at a profit before tax level.
As a result of more recent information, that guidance has been increased between $17 million and $21 million. So we've lifted it at both ends by $2 million, and so that's a positive signal to the market about where we think we're at. That's at profit before tax, and reminding you all, last year, - $21 million. So effectively, if we get to there, it's something like a $40 million dollar turnaround in one year. Looking into the segments, the part of the business that makes us all up. Our orcharding operations, $56.9 million dollars in revenue, up 42% previous corresponding period. Total volumes at 17 million trays, I think. 17.1. It's up 53% on 11.2 million trays the year before. That's what they've grown. EBITDA, $3.2 million.
It's up from a loss last year. We've seen much improved yields in SunGold and Hayward. That's occurred right across the industry, but importantly, it has occurred here. The orcharding team has done a fantastic job with its network of regional orchard managers, led by Barry Pennell. Top 20 SunGold orchards exceeded 21.5 thousand trays a hectare. Top 20 Hayward orchards exceeded 14,200 trays a hectare. The division picked around 170,000 bins of fruit. We have invested $90.3 million in orchards, which will provide us with fruit in the future, and we've continued our partnerships with iwi, and regional investors, and the government, and so pretty satisfied with the performance and the rebound in that part of our business.
There'll be some refinement in those numbers going forward when we get the individualized orchard gate returns calculated for each of the orchards that we steward. Post-harvest operations, likewise, has a very good network of regional post-harvest managers who are in every respect fruit handling professionals. They're led by Paul Crone. Just under $194 million in revenue, up 28%. $69.3 million in earnings before interest, tax, depreciation, and amortization, up 46%. Total volumes, SunGold up by 36%, Hayward by 60%. Upgrades are undertaken and initiated at Oakside and Transpack. Did a camera grading and pre-sizing at Oakside, camera grading at Transpack, and of course, we've got the continuing performance from our investment in KKP, which has gone very well.
This season, in spite of much higher volumes delivered across most regions, a timely service for our growers. Perhaps a little bit of a queue in Northland, that's something that management is looking at the moment. We've achieved our operating margins, and we've done it with a keen focus on quality, and we look at our quality statistics delivered to Zespri in the market, we've got every right to be very, be very proud of them. We're among the best of the fruit quality delivered, so that crew's done a great job, really. Worked very hard. Season stretched out very early start with the Red and quite a late finish, and so they've done very well. Still got a little way to go, maybe six or seven weeks of loading to go to get the kiwifruit go, done.
And of course, now we're packing avocados and citrus just to keep their lives complicated. The third part of our business is SeekaFresh. This is where we connect fruit to the market that's not supplied to Zespri. So it's more than just kiwifruits, also avocados, kiwi berry, some imported fruit, bananas, pineapple, and papaya. We're producing and selling Kiwi Crush. Revenue at NZD 13.4 million, up 36%. NZD 1.1 million in EBITDA, down 34%, but that's really about the margins, sales prices. Prices for avocado is very low, so our commitment comes down. And so as growers aren't making money, we can't make a lot of money in terms of running that business, and so it's really reflective of what's happening in the domestic market, supply and demand.
We have got some things happening exciting in that business. We are in the process at the moment of tendering for the Foodstuffs banana supply. If we get our share of that, or some share of that, then that will be positive to earnings in that part of our business. The team, led, under Kate Bryant, with Melissa Hannon , the team in Auckland is doing a great job. And so we know we are continuing to focus on that business, and we do expect further success, has been through a tough six months. In terms of our Australian business, $19.5 million dollars in revenue, up 67%. EBITDA of $4.9 million, that's up some 455%. So it just shows you how tough it was last year.
EBITDA last year at $900,000, this year's $4.9 million. As they have benefited by being resilient. They've had a rebound in yields, they've had a much better crop in their kiwifruit, primarily from the new crop protection program they're running over there, with new sprays available to them. Last year, they were not available to them before, and they prevent and help plants. So in a PSA environment, they are products that we use here regularly in New Zealand. Kiwifruit volume is up 164%, 2.3 million kilos. We've got exciting new developments over there with the jujubes and the Red Nashi from Prevar, which is exciting. The $16.4 million invested in orchards, which are gonna produce us forward volumes as we move forward.
So the team over there has done a great job. Happy that it's back to positive. And if and when those orchards get into production, more volumes to handle, it's a sign of what could happen next. Closing out to our focus, and looking at our forward focus going forward. Well, we are very much sticking to our knitting at the moment, very much trying to be boring and doing a good job operationally, and deliver operational excellence and improving financial results. So we're there. We've got active cost management underway in the company. Last year, we did restructure, saved some NZD 3 million. We have innovated, with mechanisms like the captive insurance structure we've deployed into our insurance book for material damage and business interruption.
We are putting in place a new HRIS, a new payroll and human resources information system, so we know about what we've got where, so we can better manage it. We've also been very happy about the latest announcements from the government about the RSEs, that we now can spread the thirty hour per week. Before that, we had to pay an RSE a minimum of thirty hours every week, regardless of whether they worked or not. Now, we can make it thirty hours per week on an average over four weeks. Prior, we were very exposed to weather. If we had bad weather for three or four days, it meant probably couldn't get them to work thirty hours a week out in the orchards because the work wasn't there, and we're having to top up.
This way, we can manage their work program and make sure they're gonna earn the thirty-four hours a week on average, without having to be topped up by the company, and so there is perhaps some significant improvement next year when that actually kicks into gear, so we're happy about that. We are looking at capacity always. We are looking at projects, and we're working through those ahead of next year's harvest. We believe we've got the capacity in place in the current footprint of around fifty million trays. We are looking at ways to expand that, perhaps leasing facilities or cool stores or automating further to actually increase that without further indebting the company. We're continuing on our looking at any deferred maintenance to make sure it's not happening.
The focus on our switchboard and plant room upgrades, which will give us further savings and insurance. The material damage and business interruption policies this year cost us less than last. They have been going up by more than NZD 1.5 million a year prior to that captive. And of course, we're looking at further consideration of automation opportunities, taking a measured approach to automation, because when you make that investment, you've got the depreciation and interest cost, regardless of whether you've got the crop or not. At the moment, we've got a balanced book. We've got a balanced number of machines which are highly automated and manual. And so what sensible changes that can we make to our manual machines or our automated machines to improve their performance with investments that actually financially pay back?
We did build a facility at Sharp Road, which accommodates 140 RSEs. That's up there by, between Tauranga and Katikati, near Aongatete. We built that with always the intention to sell it and lease it back. At the moment, we've been to the market, we tendered it. We didn't get a price back to us that was compelling enough for us to take the deal. In fact, it was significantly more than debt. So that property remains on the market, and when the right offer comes up, we intend to sell it. And so we're being patient about that and not just taking any deal that comes in the front door. We don't need to do that. The current winter conditions support good kiwifruit yields for next year. Of course, we've got some way to go.
We're expecting good bud break, but we've got to get through pollination, we've got to get through summer, we've got to get through next year's harvest, and so there's some way to go, but as I said before, if you don't start well, you can't end well, and we've started extremely well and much better than last year, and last year was good, but, a good return. In the current year, we've had some issues in the regions where they've got a lingering hangover from water pressure, so in Northland, Coromandel, out towards Gisborne and the Hawke's Bay, we've had yields perhaps lower than what we might normally expect because of the lingering effect of the water on those plants. We expect that to come back to normal as time goes on, so perhaps some more cause for optimism, measured optimism, nonetheless.
Sustainability and our ethical ethos remains part of the company. We have got a carbon footprint reduction plan underway. We are working on it. We are investing in solar. We are diverting waste. We are retrofitting harmful refrigerants with new hybrids, and we will continue to do that and measure our performance. Five years now, we've been doing that with independently verified carbon footprint data. We have got a further solar installation plan for Kerikeri that will take us over a thousand kilowatts of generation on the roof. There'll be a lot of conversation in New Zealand about power prices at the moment. A few years ago, we signed what I thought then was an expensive contract, a term contract for electricity.
It was suggested to us by Total Utilities, our advisors, around NZD 135 a megawatt. 5 MW of that expires or terminates at the end of next year, 2025. 40 MW of that expires sometime December 2026. So we've got a little bit of a time in the settle before that all runs out. Probably we'll test something next year with the 5 MW as it renews, to see what's going on. But luckily, we don't have that exposure to the peak power prices right at the moment. So that's pretty much where we're up to. I'm gonna leave my name up there, and Nicola's up there, and conveniently, they haven't put Nick Reynolds up or Ian Burt up or Nick Andrews, but don't panic, we'll put that up next time.
I'm happy to answer any questions if they come through. They're gonna be read out from the back. From the front.
So, optimal debt in the company to achieve it?
The optimal debt level from the company is probably measured at the moment in our leverage range, leverage ratio. And while it's not, it's not a prerequisite for a dividend, it's actually not in the dividend criteria that the board considers. Their stated range is somewhere between one and a half and two and a half times. So at the moment, debt is one and a half to two and a half times our pre-IFRS 16 EBITDA. At the moment, we're suggesting we're slightly above that, but a significant improvement on where it's been for a long time, and perhaps not really a constraint from paying a dividend, but it's something the board's got its mind on. Certainly, towards the end of the year, we'll be much closer.
I have- [audio distortion]
I'm 100% confident that we will sell it if the right price comes in. If the right price doesn't come in, we'll hold on to it. But I should also point out to you, selling it is not necessary, because if we sell it, we're gonna lease it back. You're gonna switch an interest cost with a lease cost. So you've still got the cost of the facility there. It is paid for by RSE, people who stay there at the moment. If I sell it, we'll pay off some bank debt, interest will go down, but we've got the lease to pay. And so when we actually consider that at the moment, because the lease cost is quite a bit more than the interest cost, commercially, it doesn't make any sense.
But I'll commit to you, if we get a good enough offer, we'll sell it right?
Sure.
The company's able to use controlled atmosphere storage, and has a capability to do it. We've done it traditionally for Hayward fruit. We set out to do it this year for SunGold, and we were quite happy to do that, but actually decided not to do that. Management decided that we're right up over the top of the harvest, didn't need to put them to CA. The amount we could put into CA is, you know, half a day's packing, so it wasn't worth it. Our fruit quality in the market is reportedly much better than the fruit that's delivered to the market through the three CA. So management's come to the conclusion, apart from some marketing to our growers, there's little benefit from doing it this year.
We'll set up to do it again next year, and if we need to, then we'll use it as one of our contingency plans.
[audio distortion] communication between expecting your company.
So, as per our normal process, in October, and I don't have the date in front of me, we will have our stakeholder update. That'll be the next time the company formally talks to its shareholders and stakeholders. If we have some reason to adjust guidance, then we'll announce that as required to the market, and we will tell our shareholders immediately. If there's any determination around a dividend in that time, that doesn't coincide with the stakeholder update, we'll specifically tell you.
[audio distortion] region and the region.
At the moment, we've got a strategic network of post-harvest sites from Gisborne, Hawke's Bay, Te Puke, Katikati, Coromandel, and Northland. If you think about it, it's actually a very good network. We've moved fruit around between those sites, cool stores and packing, just to keep everything running where we need to, in the season. Perhaps, you know, if we're thinking about rationalizing anything, perhaps Coromandel would struggle, but we've actually got big markets here in the Coromandel there, in that facility. Doesn't cost us a lot to run it. We don't own it. It's leased. And we're able to give the growers in that region, you know, very good service, very close. Outside of that, probably nothing that we would rationalize out at the moment. We constantly are looking at our book of cool stores.
We lease about 30% of the cool stores that we use, so we're constantly thinking about: Is there a better configuration of cool stores we could use? Should we be building one and leasing one somewhere else, or getting someone else to do that? That is, cool storage is a real constraint, not packing, and so we're constantly thinking about that, and we're constantly testing the network of cool stores that we use.
The company considered doing a share buyback to reduce the share price gap.
The answer is no, because we're, we've... You know, when we had the volumes down, we're up to our eyeballs in debt. There is a big difference between asset backing and share price, and so seemingly, if we did do a buyback, well, the other shareholders will be benefiting by it, but we're probably better to close that gap through performance, and we don't have to spend any money and take more debt on, and so that's what we're focusing on doing. There is a big gap between the share price and asset backing, and we can close that gap with performance and perhaps when a dividend comes back on stream. That's what we're focused on doing.
Okay.
Righty-ho! So on the screen in front of you, you have got both my contact and Nicola's contact. You can email also us michael.franks@seeka.co.nz or nicola.neilson@seeka.co.nz, if you want, to email us instead. Is there one more question? No. So, thanks very much for taking the time to come onto this call. We appreciate your support. We appreciate the support of all, everyone associated with the company, but very much our shareholders, so thanks very much for that, for coming on.