My name is Fred Hutchings, and I'm the Chair of Seeka, and it's my privilege to welcome you all to this annual meeting of your shareholders, and to all shareholders of our company. I will take this time to acknowledge and welcome those who are joining the company remotely as well. I'd also like to welcome representatives of Harmos Horton Lusk, Tompkins Wake, and our banking syndicate, Westpac New Zealand, Rabo, ASB, BNZ, and Westpac Australia, and the representatives of our auditors, Grant Thornton. For those that are in the room, please turn your phone on to silent. As someone's said to me, it could be expensive.
But please also note the exits, and if we need to evacuate, please make your way to the car park out that side of the building, and a delegated Seeka person will guide you and tell you what to do in that case. The company secretary has confirmed the notice of meeting has been sent to all eligible shareholders, and we have a quorum, and accordingly, I declare the meeting open. On this slide is the agenda that we have for the day. I will make some introductory comments, the Chief Executive report. We will deal with the main business of the meeting. We have five resolutions today, and there'll be questions and general business. You're welcome to ask questions as we move through the agenda.
However, in question time, all questions will be through me as the chair, and I'll either answer or direct your question to the appropriate Seeka person. I'd like to now introduce our, your directors, who are all present today. It has been a challenging time, as we all know, across the horticultural sector, and your directors, together with management, have navigated the company calmly and deliberately to minimize the impact of the challenges that we faced. Director elections today include Ashley Waugh, Ratahi Cross, and Sharon Cresswell. Their profiles have been provided to you with the notice of meeting. Ashley is the current Chair of the Audit and Risk Committee, and is a non-executive independent director who has served the company since 2014.
Ratahi Cross is a non-executive director and a member of Seeka's Sustainability Committee, and has served on the board since 2016. Sharon Cresswell is an independent non-executive director and a member of the Audit Committee, who was appointed by the directors in October 2023, and it is the intention of the board to appoint Sharon to chair of the Audit and Risk Committee at the next meeting, noting her background as a chartered accountant. The remainder of the board is made up of Hayden Cartwright, who is a member of the Audit Committee and a grower, Stuart Moss, who is a member of the Remuneration Committee and a grower, and Cecilia Tarrant, independent director and chair of the Sustainability Committee, and a member of the Remuneration Committee.
There are approximately 7.6 million proxies, as listed on the table. As chair, I hold close to 980,000 proxies, and I intend to vote in favor of all resolutions, with the exception of Resolution 5, which I'm unable to vote on. I'll just take a little bit of time on our business, our strategy, our values. Seeka is an integrated produce business that grows, processes, and supplies fruit to the domestic and international consumers. Our primary product is kiwi fruit. In New Zealand, we have an orcharding business that secures fruit to process at our network of post-harvest facilities, which we then store and supply to Zespri, Seeka Fresh, and other customers. In Australia, Seeka is an integrated produce company, growing, processing, and selling kiwi fruit, European pears, Nashi pears, and jujubes.
Many of you will have visited this business, and it has an exciting outlook. It has been a tough 30 months in the horticultural industry right across New Zealand, and I don't need to remind you of the headwinds we have encountered. But for completeness, they included poor crop yields, wet and windy weather, cyclones and hail. A large part of our business is a toll processing business, and simply, the volume of fruit handled wasn't enough to generate a profit. Thankfully, the immediate outlook is better, and our strategy has guided us, and I outline that to you now. We, the directors and management, are driven to deliver operational excellence to our growers and our shareholders. That means excellent and disciplined planning, adaptation of those plans, efficient utilization of our post-harvest facilities, and delivery of excellent fruit quality to the market.
We strive to deliver excellent returns to our shareholders. We have refocused our cost structure. We have innovated to remove direct costs and overheads. We've reduced our capital expenditure to maintenance levels, and have targeted key risk areas such as fire protection expenditure. We're absolutely focused on lowering debt to a more sustainable level and are continuously looking for opportunities to increase revenue from our core business. In everything we do, we aspire to deliver excellence to our shareholders and our stakeholders. Our values. As a board, we note that this company has outstanding culture. Seeka has six core values that underpin the company. These are the attributes all Seeka people take pride in and live by. Safety. Ensuring the safety of all who work at or are associated with the company is paramount. Founded on relationships.
Long-term relationships is the foundation of the produce industry, and we work to develop enduring relationships. Inspirational people. Encouraging our people to make Seeka a company where people want to work and are motivated to do so. And we encourage them to be independently ingenious. In other words, developing a culture of looking for innovative solutions to problems that the workforce faces as they go about their daily job. A quality obsession. We're obsessed about quality and have a mantra, "Where average is not good enough." And then, growing sustainable futures. This is our understanding of our impact on the environment and making changes to lessen that impact is fundamental to a sustainable business and a sustainable company. Now, this slide is a glimpse of the year ended December 2023.
And the weather events previously noted reduced Seeka's crop volume processed to 30 million trays, and that volume is simply not profitable. Seeka's revenue reduced by 14% to NZD 301 million, generating a NZD 14 million loss after tax. Despite the loss, Seeka still had a positive operating cash flow of NZD 3 million, albeit NZD 9 million less than the prior year. Seeka. Now, we talked about quality. Seeka delivered excellent quality to the market, with 99% of export fruit delivered on time and inspect to Zespri. Operationally, the company performed well, but on volumes that are not sustainable. Thankfully, over the last 6 months, the weather has been more settled, which has led to a good kiwifruit growing period and an expected return to more normal yields.
Seeka is in the middle of kiwifruit harvest as we speak, and is focused on achieving the same level of performance as in 2023 on a larger crop. The business is focused on its strategy and a return to profitability. I would now like to hand over to Seeka's Chief Executive, Michael Franks, to provide the greater detail around the financial review of 2023 and an outlook for 2024.
Thanks, Fred. My pleasure. I'm gonna put this microphone down a little bit. My pleasure to present to you today, and update you, on the year we've just been through and the year in review, and also talk to you a little bit about the current year. From a safety perspective, last year actually didn't have a too better run. We had two serious harm injuries in the company, which we were disappointed by, but those people have made a full recovery and are back. One was a forklift incident, one was a hand incident, up in Kerikeri. And so this year so far, actually, in spite of the pressure we've been under, with heavy volumes early, we've actually had no serious harm injuries to date, so we're pretty happy about that.
In review, I don't need to tell you, but 2023 was a challenging season for everybody. Came after a challenging couple of years prior to that. I don't need to remind you about COVID. And on top of that, we had a machine outage at KKP. The new machine didn't arrive as we expected, and on top of that, we had fruit issues in Opotiki, for which we've currently still got an outstanding insurance claim. So the, you know, the business has been under significant pressure for about 30 months. We had, of course, Gabrielle, we had hail, we had frost, we had everything. If there's anything more you could think of that we didn't have, well, we probably had it. So, it certainly breeds some resilience.
It wasn't just in New Zealand. Also in Australia, in Shepparton, where we operate, which is semi-desert, it flooded. And so, you know, we've had it all. And a large drop in volume. The volumes went from something like 42 million Class I trays down to under 30 million, 29.8. And, you know, below the level that we require for us to make a profit. We, in a large part of our business, run a hotel for fruit. The occupancy rate was below that which to cover the fixed cost, really. That's it in a nutshell. Of course, we didn't take it lightly. Once we realized that we had a problem, we engaged with the banks early, and I'll talk about that again in a minute. We also moved to suspend our dividends.
We had already prepared ourselves for a shock. The board had innovatively reduced the capital spend, so within depreciation, so to buffer ourselves a little bit. Of course, management had to do what management does. We went through, and we reduced our overhead, taking some NZD 3 million of costs out. In addition to that, you know, we, as a company, have a lot of sandwich panel in our cool stores. We have been facing significant increases in insurance cost, and we're under some pressure to sprinkler those cool stores. Something that you can't do from an engineering perspective. So we looked outside the box, we talked to other players in the industry, and we introduced a structure called a captive insurance company.
That captive insurance innovation, which we did with Lockton, means that we have our own insurance company based in the Cook Islands. Our material damage and business interruption insurance is placed into that entity. There's about a billion dollars of assets and profit losses in that entity, and we went. We placed the insurance company with their own insurance with our own insurance company, and we go to London, and we actually sell that block of risk directly into the reinsurance market. Our estimate from that innovation is from last year and this current year we're in, we've probably saved or avoided some 5.3 million dollars in costs. So it's a significant innovation that we've put in place. We did, after a hard 2022, we did focus on being operationally excellent.
If we couldn't maintain the confidence of our growers, we don't have a business. And thankfully, I think, and I think our growers would agree, last year's performance was pretty good from a fruit loss perspective, pretty good from a timing of harvest perspective. We are focused on that again this year, to build confidence among our grower base and to deliver them superior returns so that we can charge them for it. And so, that's how that's working. And our offshore fruit quality, as assessed by Zespri, was the best in the industry. So not only did we have low fruit loss onshore, we also delivered the market of the best fruit in the industry. Of course, we want the benefit of that. We don't want to share the average returns.
We want the benefit of a lower cost to serve in the market, and so we're talking to Zespri about how we do that. And of course, you know, I've spoken about having been under pressure with COVID, and having three seasons of where we had significant labor shortage and labor inflation and shipping disruptions. This year, I'm happy to report to you, the year that we're currently in, labor is significantly changed. It's significantly changed. We have been full of our labor quota for some time, to the extent that this year we've actually also cut back our RSE component.
In terms of what does it actually mean, in terms of real numbers and a little bit less rhetoric, well, NZD 301 million in revenue was down NZD 47 million in the year before, really reflecting the reduction in the bar graphs and the line graphs on the right from 42 million trays of kiwifruit packed in New Zealand, down to under 30 million. It's the lowest yields that we've had that I can remember for a very long time, and the lowest volume since 2017, even though we had a much bigger business. It's not just us, it was across the industry. NZD 26 million in EBITDA was nearly down by half on the previous year, down by 44%.
You know, we do have a significant fixed cost in operating the network of post-harvest facilities we've got. We've got 12 export pack houses that we run and 1 local market. So the loss of NZD 14.5 million compares to a NZD 6.5 million profit in the previous year, so it's negative NZD 0.34 per share. Our response, we suspended the dividends. I'm sorry about that. I'm a shareholder myself, but it was prudent that we preserved the cash as we went and had a chat to the banks. We restructured the business. As I said, we went through every part of the business to trim down where we could. We reduced our maintenance capital within the cost of depreciation.
Now, in doing that, what I can assure you is that we have not built up a bow wave of deferred maintenance. Actually, quite to the opposite, the company has gone through and looked and done reviews of our key plant. We've gone through and had a register put up of all of our switchboards and plant rooms at every facility that we own. We've got hundreds of switchboards. Then we've gone through and assessed its age class, its risk profile, and we've put in place a program to actually address our oldest gear first. NZD 2 million have been set aside within the depreciation allowance to make sure that we are not taking a bigger risk. In fact, we're bringing the risk profile of the company down.
In some cases, as we change our plant rooms, that is, compressors around cool stores, we're also changing the gas away from harmful gases into new synthetics that don't damage the environment if it leaks. And so, it's innovative. It's going to the next stage in our professionalism and our management of the assets. And of course, I've already spoken about the captive insurance structure, which really has delivered. And the little graphic on the right, which you'll be able to see on the NZX or the company website tomorrow, also plays out to you, rolls out to you, our approach to make sure that we don't have a fire. That all of the processes that we operate within the management team to avoid the risk of fire in any of our cool stores.
Understanding that a significant amount is poly panel, it's EPS, or recent builds since around 2017 is the new PIR fire-retardant cool stores. And so I'm trying to give you some confidence that even though we have reduced our capital spend, we're not taking more risk.
Also, you know, we're prioritizing our capital a little bit more. Where we're spending capital on automation, we're wanting to make sure that it pays back. This year, we have done some upgrades. We have upgraded Oakside, too. We have upgraded Transpac. We're still pushing the automation into the business to try and get ahead of labor inflation. We did go to the banks early. In fact, the banks couldn't quite believe it when we said to them, "Look, we don't think the volumes are where they should be. We think we have a financial problem in the current year. We think we should have a chat about it."
And so what we did, at their request, is we pulled together ourselves and Westpac, and we had a banking update. And out of that, actually, we got a really good response from the banks. They guided us through the process of getting covenant waivers. We've stepped it back from the leverage ratio and interest coverage ratio, so they gave us some relief. We didn't have to hit the numbers that they had previously required us to hit. And they've also given a stepped pathway to bring those ratios back into normality, which we're focused on at the moment. And alongside that, the finance team and the company has put in place a Sustainability Linked Loan.
What that means is, we have an interest rate that would normally apply to the loans that we've got with the bank. If we hit certain targets around safety, solar, carbon emissions, we actually get an interest rate rebate in a structured calculation. If we don't hit one or a number of those measures, we will get a penalty. So there is an incentive to do what we want to do anyway, which is to lower our carbon footprint and improve our performance across a number of different target areas. In reality, I think for our growers in 2023, and with the support of the contractors and the support from our growers in delivering us a much improved crop, actually, we can say that the inventory performed excellently within the engine without any hesitation.
I normally wouldn't say those sort of words, but I think it's justified last year. Of course, our focus is to do it again this year. Of course, we had excellent in-market performance, as measured by Zespri. And, you know, we would say to you that delivering high-quality fruit to the market encourages demand, it encourages better pricing, and it supports a single desk. Now, I should take some time to go through each of the segments in the company. Orcharding business, where we grow kiwifruit, avocados, and kiwi berry on landowners, on leased lands, management, and long-term leases. I'll talk a little bit about our post-harvest infrastructure network, where we pick, where we schedule the picking, the packing, the cool storage, and the dispatch of fruit through to market.
I'll talk a little bit about our retail services business, which we sometimes call Seeka Fresh, which handles and markets, distributes all fruit that we don't supply to Zespri. Also, the importation of overseas imported fruit pro, types as well, and of course, Australia. If I look at the revenue, the size of the pie by each, NZD 87 million into orcharding, NZD 182 million into post-harvest, NZD 21 million into Seeka Fresh, and NZD 10 million into Australia. Orcharding, 38% of the fruit that we handle is grown by our own orchard managers in some sort of arrangement with an orchard owner. Their focus is on growing high-quality crops for post-harvest and generating high returns for orchard owners. And actually, and unashamedly, I'd say to you that they've done a fantastic job of doing that. Last year and this year.
Although last year, the yields were down, they actually, they've done comparatively a very, very good job. They grew 11.4 million trays of Class One kiwifruit. It's down from 17 million trays the year before on a poor growing season. But you know, it is what it is. We're growers. We're people of the land. NZD 87 million in revenues, up NZD 6 million, but on higher tray returns. NZD 1 million in EBITDA was down NZD 3.6 million on lower yields. We've got NZD 16 million invested in developing orchards that we're waiting to get through to production and will be coming through to production in the near future. A lot of those are partnered with iwi and with Kanawa and orchards up in Raukokore that are all Hayward, which will come through in the next two or three years.
That'll work out quite nicely because Hayward is the new gold. When you're a post-harvest operator, it comes in after the pressure of SunGold. It's when we've got capacity, it will add to our earnings as a company and makes a lot of sense. So we've got 53 hectares of new kiwifruit entering production in 2024, to a small extent, and much more in 2025. Sorry, our orchard business is obviously headed up by Barry Pennell, who should be in the room if he has acceded to my request. He's waving at me. Post-harvest operations is headed up by Paul Crone, who's also here. 61% of our revenue generated in 2023. Their job is focused on delivering a high quality and timely service to our growers, and fantastic quality fruit out to the market.
29.8 million trays is well down on the 42 million the year before. Challenging growing season. But as you would expect, without the pressure of volume, delivered excellent performance in terms of fruit loss and excellent performance to the marketer. And so I don't have to get up here and make some excuse for that operation, saying, "Oh, but this happened, but that happened." Actually, I can say we can get some ticks there. But NZD 182 million in revenue was down NZD 52 million on low volumes, and NZD 44 million of EBITDA is down NZD 15 million. We are using automation and information systems to deliver better outcomes for our customers. We are using automation and information systems to deliver efficiency and try and beat the inflation curve. Costs are going up.
The way to beat that is to invest and remove labor out of the engine room. The labor per tray used, we might have more people employed, but if we're actually not going up proportionately as much as the volume is going up, we should be able to do it, and automation information systems seems to be the way that we do it. In terms of SeekaFresh, that is, the business where we have a wholesale market in Auckland, and it handles all fruit that we don't supply to Zespri. It completes our supply chain. It takes the fruit that we've grown, and where we don't supply that fruit to Zespri, we take it to the customer ourselves, locally in New Zealand and in Australia, delivering that fruit through to our customers, who normally will sell it to a consumer. It creates new revenue streams.
That business has actually turned around. It's going quite strongly. NZD 63 million in fruit sales, up NZD 8.4 million. Stronger performance in imported produce. That means we're importing a lot more bananas. We've got down to 1 container a week. We're now back up to 7 or 8, depending upon how we're going. It is a fundamental produce type in New Zealand, and we've got fantastic new supplier relationships in Auckland, predominantly, that is bringing demand through and just sucking that fruit through our system. Of course, we're selling kiwifruit, we're selling avocados. The market is building commission, building its commissions as it goes. We also produce and sell KiwiCrush and avocado all through that business segment. And at the moment, you know, it's not without its headwinds in some places.
Avocados has been a challenge, and we're working through that business to rationalize the supply chain to deliver better returns to our growers. NZD 21 million in revenue, is up 9%. EBITDA, NZD 2.6 million, is up NZD 1.8 million. While it's a small part of our business, I'll say that again, the EBITDA is up NZD 1.8 million at NZD 2.6 million, and I can say, having another good year ahead. And so, you know, we're quite satisfied that that business has turned, and out of the COVID influence, seemingly, building its momentum and building profit. Australia, really, that's an integrated orcharding, processing, and supply business in Australia, delivering fruit through, into retail there, into Coles and Woolworths, and others. It complements what we do in New Zealand.
We're selling New Zealand kiwifruit in Australia and avocados. We're selling in Australia, kiwifruit, nashi pears, European pears, plums, and jujubes. Had a tough year, just like we did here in New Zealand. We grew and sold 3,300 tons of fresh fruits, down 32%, in an integrated supply line. Revenue of NZD 10 million was down 26%. EBITDA of NZD 700,000 was down NZD 300,000. But over there, you know, that business is developing. We've got 63 hectares of kiwifruit coming into production, as well as new variety pears and nashis, and we've got expanded jujube plantings happening. So it's NZD 13 million invested there, and it's set for significant growth. And actually, I can say to you that the volumes this year growing in that business look far more exciting.
And now we've got the challenge of telling, turning that into cash through the selling process. So that business is poised to bounce back just the same as SeekaFresh has. Across the business, it's not just about money. It is also about safety, and it's also about sustainability. Team's done a great job in understanding our carbon footprint, how we impact on the environment, and the things that we can do to lower that impact of around 20,000 tons of carbon. We've got to reduce carbon footprint, but let's get it right, largely because we had lower volume. But you know, we're working on those four areas that actually we impact on the environment. That is gas leaks out of our cool stores that damage the environment. That is our use of energy and fuels.
That is our waste streams, and it is our use of artificial fertilizer. They are the big four, and our team is focused, and through Lloyd Franks, who is no relative of mine, is working dedicatedly on reducing our impact. So we've trialed now retrofitting existing cool store plant with different refrigerants to lower our carbon footprint if there is a leak. We've installed 345 kW of solar at Katikati this year. We're up to 750. Our plan is to be at 1,000 kW of power at the end of this year. In our published plan, it's the end of next year; we'll probably get there this. We've promoted cadets into orchard managers. We've reduced the gender pay gap, and we've opened our own 140-bed RSE accommodation facility in Ongare Point, Tauranga, Whetu, Starbase.
And the board took the time yesterday to go and look at that. It is our intention, and has always been our intention, to sell that facility and lease it back. It's not our intention to have our money tied up in accommodation facilities. It's not our business. We far prefer to have it in post-harvest infrastructure there, or orcharding than that. Also shown there for shareholders is the mind map around how the company thinks about sustainability, and what we're doing. And so when you get to see that in some more detail, you may ponder what, and ask Nicola Neilson any questions you might have, or Lloyd Franks, 'cause they lead it in the company.
One of the steps that the company is taking, and we're sort of maturing, and I think that's right, is our drive around information systems. And driving those information systems to add value, rather than just report the information in a flash away on your screen. And so it's trying to make ready information available to people in the company who make decisions that they need when they want to make them. It's more than just, you know, another spreadsheet. And so, of course, better reporting. We are working on a tool now, which I would call AI, but the other people tell me it isn't.
When we have an order from Zespri to deliver fruit to the wharf, and we have to make a decision about which fruit we should deliver from which facilities to actually optimize all fruit, we've got people working night and day trying to work that out. Actually, a system that suggests to our inventory managers: "Here's what you should do in this circumstance. Here's what the system knows about that fruit, whether it's triple girdled, whether it's had a benefit on it, whether it's performed poorly somewhere else, whether in another store it's performed poorly, with beyond just a slide-out priority, is there something that we, that the system knows?" So it can actually call the priority to the inventory manager when they're actually trying to decide which fruit to load. That will take this company to the next level.
If you walk into one of our sheds, and if you want to, you're most welcome to, but you need to be hosted. All sheds now have the screens that you can see in the picture at the top. That pretty much is like one of those yacht racing mimics, you know? When you go and take a look at the 3-D yacht race, you can see how we're going compared to the other boats. Well, exactly, this is what these screens are doing. They're telling us everything about that fruit. How is it traveling? What's its reject rate? What's its Class I, Class II, or Class III? Why is the fruit being rejected? What's its fruit size profile? What markets is it restricted from going to? What's the rate per hour that we're actually pushing across the machine? And actually, what's its margin?
So if we match race every single line of fruit to its optimum and to the optimum of the company, they need to have ready. So if you're a grower at Seeka, you don't have to come to our shed. You're welcome to, but you can get all the information live on your phone through the Seeka app or through the Seeka portal. So, you know, we are taking the next step. The outlook for the current year, before I hand you back to the chairman, is we are single-mindedly focused on returning the company back to profit, and in doing so, reduce the debt level in the business. The early season volumes look much better than 2023. Look, we've packed at this morning around 9.5 million trays.
In the early part of the season, I think, well above our market share. Our technical team has done well in enabling us to find fruit with growers, and then working out which of that fruit, which is at maturity, we should pack. And so we have optimized for our growers and the company, our early volumes fruit through the business. Zespri is forecasting a higher crop, although those forecasts are coming back a little bit at the moment. We have packed far more than our market share in the early parts of the season, and so now we're slowing back as we head to main pack. Loadouts are going really well. The loadouts of this business are now just mind-boggling. We have and will load out 11.5 million trays in 4 weeks.
2,500 pallets a day, every day. It's phenomenal. It's huge. 11.5 million trays of fruit in spec across that wharf every day. So, you know, that's pretty amazing, really, and we've done it without damaging anyone, which in itself is a relief, and testament to the safety focus we've got operating in the business. Australian crop looks positive. The volumes look good. You know, we have had a lot of battles over there, including PSA, but the access to the new spray program, in particular, Actigard, would seem to have been a game changer over there. So we've got much, much better kiwifruit volumes and much more confidence about those orchards we've got coming into production in the next few years.
Kiwifruit harvest started ninth of March, and for those of you who grow, it started at 5.8 Brix. So, and over here, of course, all sites here have had a fantastic labor supply. We've been full, and in fact, open all sites, all shifts for the first time in a long time, and we had them all running about week 3 of harvest. So, really good start. I'd say to you that the fruit that we've packed in the regions have been a little bit lower than what we might have expected, probably reflecting the water stress that those orchards have had in the regions. So up north, Coromandel, Gisborne, Hawke's Bay, perhaps the volumes in there have been a little bit lighter.
But the volumes that we're experiencing now in Te Puke and in Katikati, much better than what we might have anticipated. And so we appreciate that. And those crops, particularly in Te Puke, pretty clean. So actually helping us out a lot as we head into main pack. Our focus is on delivering excellent operational performance and delivering excellent financial performance to you, as well as getting our debt down. So that's my summary on the business. My pleasure to be up. I'm happy to answer any questions through the chairman a little bit later on. But Fred, we're back to you. Thanks.
Thank you, Michael. I hope you got a sense of some of those core, core values that the business operates by through Michael's presentation. Ladies and gentlemen, it's now time to deal with the formal business of the meeting today, and that is to deal with the five resolutions that were outlined in the notice of meeting. There will be an opportunity for shareholders to ask questions on each matter as they are put to you. For the sake of good order, shareholders' questions raised should relate directly to the matter at hand, and as is our normal practice, a poll will be held on each of the resolutions. Shareholders in the room, if you should have received your shareholder voting card on arrival.
If you did not register it on arrival and wish to vote, please make your way to the registration desk outside the room, and staff on Link will assist you. Please mark your voting intention to each resolution, and the voting cards will be collected at the conclusion of the meeting. Shareholders joining online will be able to cast their vote using the online platform, which looks like that. Voting will remain open until five minutes after the conclusion of the meeting. Results of the vote will be announced on the NZX. Each resolution set out in the notice of meeting is an ordinary resolution, and as such, must be approved by a simple majority of the votes cast by shareholders entitled to vote and voting on the resolution. The outcome of proxy votes will be displayed for your information after voting on all the resolutions.
Resolution one is, involves the director election of Ashley Waugh. I now invite Ashley to address the meeting.
Good afternoon, everyone. Three minutes to explain to you who I am and what I'm about, and I thought, I know, I've got a good idea. I'll give this little presentation a title. So I decided to call this presentation, Not Just a Bum on a Seat. Not me. If all you want is a bum on a seat, then probably I'm not your guy. You are all familiar with the roles and responsibilities of directors. You don't need me to stand up here and tell you what it is directors do on the board. But in prior presentations, I have emphasized to you that I have a very strong personal interest in strategy, because I think strategy is one of the key responsibilities that drives and determines value long term in any company. In that regard, for me, in terms of strategy, there's unfinished business at Seeka.
How quickly our business lives move on. How easy it is to forget that four years ago, we were ravaged with COVID, and COVID disrupted two years of Seeka's deployment of its expansion in terms of geography and expansion in terms of fruit variety. COVID, then the climate, and now a very high interest cost environment. That strategy that we determined three to five years ago is yet to fully play out and create value for you as shareholders in this company. But I'm confident that this year is the year that those green shoots will start to benefit the business in the medium to longer term. The key to our future in terms of strategy, there are a couple of key questions for me right now: How do we make Seeka's balance sheet more resilient to climate change?
The fact is, we can't just fall in a hole every time we have a climatic event. We have got to build resilience into our balance sheet, so that we can come and go as the climate comes and goes. And if you've read our sustainability report, you'll know that the likelihood of climatic disruption to the horticultural industry is not minimized in the next five years. Secondly, we're in a very high interest cost environment. How do we position the company for growth and deliver sustainable returns in a volatile interest rate environment and deliver the growth that you, as shareholders and stakeholders, expect? They are two key deliverables from my point of view for the board as we move this company forward.
Not just a bum on a seat, someone who thinks deeply and seriously about where this business is headed, and is willing to work with management and my other directors to make sure that this company continues on a successful trajectory. I would appreciate your support in staying on this journey. Thank you.
Thank you, Ashley. I now propose the following resolution: to reelect Ashley Waugh as a director. Are there any questions? There's a microphone somewhere, and that will be brought to you.
Thank you. So question for Ashley. My name is Oliver Mander from the New Zealand Shareholders' Association. This just simply, y ou have been on the board for a while. Your own board charter states that, "Where a director has served a term greater than 12 years, the board will explain to shareholders the rationale and the factors considered for recommending the director for re-election, and why their independence from management and Seeka substantial security holders has not been compromised." Just in the context of your term, you'll be 13 years at the end of this. So I guess I'd be interested in your response to your own board charter, and just how you can explain to the room how you should be considered for election in that context.
And also, how does that relate to the sort of ongoing succession program for directors to ensure that balance of institutional knowledge and fresh thinking?
Welcome, Oliver. Oliver, and the rest of the shareholders in the room, I'll leave the chairman to answer the question on the program for succession within the board, because it's really a program that's driven by the chair in discussion with the board, but in my view, it's, it's something that the chair might want to comment on. Before I decided to re-stand for the Seeka board, the first thing I do and have done on prior occasions is ask myself by looking in the mirror: Am I making the contribution that I think I bring to the table? I check with the chairman: "Fred, do you think I'm still of some value at the board table?" And, I won't tell you what he said, but he, he's allowed me to re-sit. But I also check with my other, directors as well.
And, I want to feel that if I have the interest, and the capability, and some of that institutional knowledge you talked about, Oliver, that, before I make the decision to commit another three years to the Seeka board, I wanna be sure that I'm actually in a position to add that value, and that there's an honest assessment made as to whether I'm doing that or not. So that's the process I go through personally. And so, in the broader context of the rules and regulations around how long you sit on the board, I think that I represent a good option as a continuing director, and I want to see further succession of some of the young, energetic people coming through the board, and I believe I can play a role in that process as well.
Thank you, Ashley. Sorry. Sorry, I don't know if that's on. Thank you for that. So can I take from that, that this is likely to be your last term as a director, as you mentor some of those new individuals coming through the board?
I would have thought you wouldn't be far off the mark, but I never say never.
Fair comment. Thank you, Ashley.
Maybe I can just comment on the point about the board succession. As you will observe, there are already two relatively new members to the board, and we're constantly looking for directors for the board as part of a refreshment program. Unfortunately, we started a few years ago, where a lot of people joined the board at much the same time. So we're now in a process of trying to spread the terms of the directors to a more normal, what you might call a more normal profile, where you've got shorter-term directors as well as longer-term directors. So, but we are definitely moving to do that. But I must admit, it's a fine line to find the right people with to do the job as well.
It's not, they don't hang under a canopy as prevalent as kiwifruit.
You can probably find Russell Butterworth now, 'cause he's very minimal.
Thank you, Michael. Right. So I've put that, that resolution to the meeting, so I'll now move to, resolution two. Resolution two is to re-elect Peter Ratahi Cross as a director. And I'll ask Ratahi to address you.
Kia ora tatou. Firstly, to the Rangatira, Neil, so I just said thank you to Neil for blessing our hui to start with. I'm just looking around the room, and I see Marty over there and Malcolm up in the middle there. These are guys that inspired us to actually participate in being directors in this company, long-term directors that have great respect for. Kia ora koroua to both of yous. Now, I could talk about being a director, but most of you know how to do that. So I thought I'd tell you a story, 'cause the last time I got up, I told you a story about how we got bashed down in the Hawke's Bay, if you remember, and we really got slaughtered.
And Seeka came to our aid down, down there and helped us recover immensely, sending down teams of experts to help us regrow the Hawke's Bay, specifically when we're the largest kiwifruit growers in the Hawke's Bay, in Ngaruroro, and we were grateful for that. But this is part two of that story. We're successful. We're growing back. We're growing fruit down there. We had an early start, so yay, we're back. And with that, I'd say, you know, yay, Seeka's still here. And I once again want us to reflect to those of us here who are Seeka family, and we all are, is that thank you. Thank you very much for helping me and my family recover our orchards, helping me and my family become a great contributor to this nation's economy.
I really want to say thank you to that, and it's important that I get to say thank you to the owners of this company. It, it's important, because without your help, I could never have got there. So thank you very, very much. That's important, message number one. Second one is that, being a director of this company, has always been a great privilege. It's not something that I've taken for granted. So I've been a director of this company for one major reason: to bring a cultural twist to, to our company, a cultural lens, one that is basically about my own culture, my own Māori culture, and, and where we've grown that. And I'm sitting here with Neil over here as a director of Māori, and this, this company has invested such a huge amount of it, their own.
The staff themselves and their own personal time into getting to know and interrelate culturally across this nation of ours. And our stable of growth in the Māori field has grown extensively, and, and I'm grateful for the investment of this company in that development. All the new areas for us in Māori are predominantly poor areas, and one of the best ways of growing ourselves out of poor areas is the investment of time in us, in doing things with our hands and with the land that we had available. And Michael alluded earlier to the extensive developments down on the East Coast, predominantly very poor area. Now, we've got some great developments happening there, and we appreciate that. So this is all about.
There is no other company in the kiwifruit industry, and I'd say in just about across hort and other industries, that have invested such amount of time in the development of great growing areas which are predominantly Māori owned. So I once again, thank you very much, shareholders, 'cause without your commitment to that, it wouldn't work. And, and that's, that's the second most important part to it. It brings to us economic wealth to poor areas, employment, the ability to get off that food chain of handouts and to actually create their own future, done by this company. So, so thank you, Michael. Thank you, Fred and the board, and thank you, most importantly, the shareholders, for doing that.
But really, really what's important is the one thing I like about being director of this company, is I can get out, and I can talk to lots and lots of people, especially our staff. Our staff work really, really hard on the front end of the season. And you as owners, if you could just get out and see what they do and appreciate what they do for us, it's amazing. And by the end of the season, they've got a few more gray hairs like us, and it's well worth appreciating their hard work. So does, for the staff that are here, I really, really do appreciate you, you guys. And you know, when I get around the plants, I say hello, and I try to chat as much as I can, 'cause it's important.
Seeka, first and foremost, is a family that my family joined about 16 years ago. We joined this family, and, and we became a part of this family. Every one of us here is a part of the family. If we were here just for the shareholding, we would have gone about two years ago because we didn't make a bloody divvy. So, so but we- we're here still. We're still here 'cause we're Seeka people. So I hope that, you will let me continue on to serve you. Kia ora tatou.
Thank you, Ratahi. I put the resolution to re-elect Peter Ratahi Cross as a director. Third resolution is the election of Sharon Cresswell as a director, and I now invite Sharon to address you.
Thanks, Fred. Hello, everyone. It's great to be here. As the new name and face at the table, I thought I would just take a moment to actually give you a little bit of background about myself and my experience, and why I'm very honored to be at the table here today. So I'm an accountant by trade. I'm a chartered accountant in England originally, and New Zealand as well. I've also historically been a licensed auditor for the Financial Markets Authority and an appointed auditor of the Office of the Auditor General. So you can say I've got a pretty sound understanding of finance, accounting, and audit. My background has been predominantly in professional services. 25 years of helping people with their own businesses.
Then about five years ago, I left that land and went into a mix of directorships and CFO roles. My client base has been, all the businesses I've helped, have been really, really broad-based. But about 15 years ago, that turned into more infrastructure and primary sector. That coincided moving out of Auckland and getting to the Waikato and spending more time in the regions and really understanding that it is the regions that drive the economy. You don't necessarily believe that when you live in Auckland, but you certainly understand it when you move down and out of there. I'm an independent person. I'm independent in the business construct, in that I don't have business interests that are at conflict, but I'm also independent of thought.
I haven't been in the kiwifruit, or fruit industry for long. I do bring that fresh perspective, and I'm not afraid to ask the questions that might be obvious if you've been here for a while. But if you're new, sometimes it doesn't hurt to ask why we do things the way we do them. And finally, I'm really, really, excited to be on this journey. I've had the opportunity to visit a number of the orchards and the packhouses. The people are excellent, the facilities are excellent, the processes are excellent. And with the new volume coming in this year, or the additional volume, I'm really looking forward to see how we can translate that into added value for shareholders and for growers alike. Sorry, that was presumptuous, if you elect me. Thank you.
Thank you, Sharon. So I put the resolution to elect Sharon Cresswell as a director. The fourth resolution is the appointment and the remuneration of auditors. So the resolution is to record the reappointment of Grant Thornton as the auditor of the company, and to authorize the directors to fix the remuneration and expenses of the auditor for the coming year. Grant Thornton were automatically reappointed as auditors of, under the Companies Act 1993. The resolution authorizes the board to fix Grant Thornton's fees and expenses for 2024. So I'll now move on to the third resolution, having put that one. And I'll just introduce this resolution. I just might need to refer to my notes so I don't make a mistake on this. So I open resolution four with an overview.
As outlined in the notice of meeting, Seeka is proposing to offer a grower share scheme this year. The post-harvest sector is very competitive. And in some respects, we, as a company and as a board, discussed this yesterday, and we struggled to understand why it needs to be as competitive as it is, but it is. Offering a grower share scheme encourages and rewards the loyalty to the company and secures higher supply and earnings to the company. The industry standard is for annual contracts as opposed to long-term supply contracts, which leads to greater uncertainty of supply looking forward. Seeka doesn't want to enter into a scenario where excessive discounting is used to entice growers, which erodes margins to the company.
The grower share scheme gives growers an incentive to make a longer-term supply commitment to Seeka and provide Seeka with certainty of crop volumes over the next three years, which aids in capital expenditure decision-making. As Ashley mentioned, with high interest rates, it's important to be able to have good information around the capital expenditure needs. The non-cash cost of the scheme is estimated at NZD 1.2 million over the course of the outcome of all shares, if all shares were taken up. This amounts to around four hundred and ninety thousand a year or NZD 0.17 a tray per year. The scheme has a 3.7 dilutive impact on earnings, not on value, but growers will have to pay because growers will have to pay the cash for the shares at the market value when the shares vest, without any discount applied.
In terms of this resolution, I'd just like to remind those who are grower shareholders that if you vote in favor of resolution five, you will be ineligible to participate in the scheme. So I put the resolution for the shareholders to consider and, if thought fit, pass the following as an ordinary resolution: That Seeka issue up to 2,400,000 ordinary shares of Seeka at the issue price described in the explanatory notes pursuant to the Grower Loyalty Scheme described in the explanatory notes. And B, make the loans required pursuant to the scheme and described under the heading "Loan" in the explanatory notes, to fund the issue price of the shares referred to in A. Now, while that talks about funding, the issue price is actually a book entry, so it creates an obligation, but there's no cash passes.
I'll just remind you again, if you're a grower, and if you vote in favor of Resolution 5, you will be ineligible to participate in the scheme. Is there any questions? Hold on.
Thank you, Fred. Look, just in terms of the vesting of those loyalty shares under the scheme, under what terms do those shares vest? I mean, there's scant information in terms of the sort of the metrics, the targets, and the scaling of those shares in terms of the actual production targets that are associated with that. Is it possible to provide some more color in terms of how that incentive is structured in terms of benefit-
Right. [crosstalk]
In terms of vesting benefit?
The first thing is they'll need to remain supplying for three years. That's their full support - that's their full production. At the beginning of the scheme, I can't remember the ratio. Where's Nicola? She might better answer that question. At the beginning of the scheme, it's based on the 24 production.
Twenty-three.
23? 23 production, and the ratio is?
There's different ratios depending on the crop, like kiwifruit, avocados, and kiwi berry.
Right. So there's. So let's keep just, can anyone remember the kiwifruit?
1 for 15.
So there's different ratios for the different crop. Different ratio for kiwifruit, different ratio for avocados, and different ratio for kiwi berry. But to give you an indication of the main one being kiwifruit, it's one share for 15 trays.
Of crop that you've picked with us in 2023.
So that of crop that's already been picked. And 20. Remember, 2023 is a low yield year.
Right, but how does that translate in terms of the vesting, the award and the vesting over the subsequent years?
So that's how you work out that ratio, based on 2023 crop, is how you work out how many shares they would be entitled to, provided they provide crop for the next three years. So that's for 2024, 2025, and 2026.
Okay, so it's at the same ratio. So if you've provided 10 trays-
Yes. [crosstalk]
In twenty-three- [crosstalk]
It's the same ratio that's set on the 2023 crop.
Yep.
That's right.
That's right.
The number of shares don't change.
The number of shares don't change.
You've got to provide us all your crop in the next three years for you to be able to be eligible to take those shares at the end of the scheme.
Okay, so it's not, it's provide all the crop. It's a percentage of your crop, 100% of your crop.
Hundred percent.
Hundred percent.
Okay.
It's a loyalty scheme. If you're not loyal, you don't get them.
Yep. If the crop goes up or down, it's not linked to the actual volume they provide-
Correct. [crosstalk]
It's the percentage of your output.
Correct.
Right.
That's right.
The number of shares you get is the number of shares you pack with us for 2023, 1-15 for kiwifruit.
Okay, thank you.
Just listen, Mr. Chair. You chose 2023, which some growers in this room might have been frosted quite severely in the first couple of days. I don't know why people are looking at me.
No, no, jump, Nicola.
Oh, Nicola.
So we've put a minimum in place across kiwi berry and kiwifruit. So your calculated tray won't fall below that level, and that level is determined to make sure that the bottom is consistent at a normal level, and then a high-producing grower would get offered a high number of shares.
So the mechanism allows for it, Marty.
It allows for it?
Yeah.
Okay. Thank you.
Right. So, if there's no other questions on that one, the resolution has now been put.
Great.
Oops, there's one?
There's one in the front.
Fred Harvey. Whereabouts do the shares come from? Are they new allotted shares, or are they-
New shares.
New shares.
New shares.
Okay, thanks.
They're new shares which, the grower will have to pay market value for.
So, it doesn't water down our shares, no way?
Not, not really. It only waters down earnings-
Yeah. [crosstalk]
- because you've got more shares on, more shares on hand. Doesn't water.
Thank you.
We have a question online. A question from Pare Taikato online: Can you explain what this means for growers vis-a-vis the loyalty share scheme, please?
Well, Mike, Michael looks like he wants to answer that. I want to enable him to answer that.
Kia ora, Pare. The answer to that question is that if you are a grower of Seeka, and you provide us all your fruit, you will have the opportunity to take shares based on what your production was last year, in three years' time. And so you'll get those shares at a price, less the dividends over the three years, offered to you, you have to pay cash. That's it. It's just a way to reward you for your loyalty. If you decide for other reasons that you don't want to supply us your fruit, you will not be eligible to take those shares up.
It's a loyalty scheme only, and in a competitive environment where you've got people going up and down driveways, offering all sorts of discounts or rumors or misinformation, it's a way to reward those growers who choose to take Seeka or use Seeka as their service provider. It's a way for us to secure their supply, and so that's what we're encouraging you to do. And as shareholders, we're encouraging you to support that, because it's a way for us to maintain and build earnings in a competitive environment.
Mm-hmm. And it also gives you the opportunity to participate in the downstream profits that arise from processing your crop in terms of the dividend that you may receive. No other questions on five? That brings us to general questions, and just remind people that there will be a, We have people online, so we'll need to make sure you use the mic if you do have any questions. So first, any questions from the room? Marty.
Yeah, I just had one question. There was comment in, I think it was the chair's report here, that the debt was NZD 178 million at thirty-first of December, with a top target of 202, 202, I think. Now, that must have been close to reaching that by the time packing came, packing started. But I guess what I'm getting at, what would be the optimum debt for the company in a normal season, and what might be the target of the board?
Marty, the board would like to see the debt at an EBITDA ratio of 1.5-2.5, but that's not gonna happen overnight. This will take a, w e need good, strong winds, tailwinds, and a couple of years, probably to be able to achieve that. Because that's, it's at that level, we think it would give us the resilience that Ashley was talking about, at a debt level at around 1.5-2.5 times the EBITDA. Oliver?
Thank you. So just to continue that particular theme. So if I've read this correctly, you've got NZD 50 million of debt maturing this year, NZD 58 million, NZD 60 million next year, and NZD 58 million the year after that, which is pretty much the entire debt burden. Is there, how are you planning to address that from a broader balance sheet perspective in terms of that funding stream?
We already have a plan in place to talk to our banking syndicate. The two loans that mature in January, if I remember rightly, we'll have a process of having those renewed by the end of June this year. The first part of that plan was Michael hosted them in Australia together with one of the directors as well. So in the process of working to have our syndicate start their bids to refinance those two loans.
So you're looking to maintain the confidence of the banking syndicate to refinance?
That's right.
This year. [crosstalk]
We have a practice in this company to talk to the banks early, not late.
Thank you.
And to be open and transparent with them, and they appreciate that. Any other questions in the room? Lloyd.
Question for Michael.
Is it Lloyd?
Harry.
Harry.
Sorry, Harry.
There's a big push on companies at the moment to do more in the sustainability and diversity space. You've talked a bit about sustainability, but could you give us an update on diversity at Seeka? Can I do that, Michael?
Yeah.
Yeah. [crosstalk]
What a surprise that question came, Harry. Might have had a chat to him before. Look, I think, I think it was in reflection, the diversity in the company, you know, the business is really different now from what it used to be, even when I started. This business used to be one that was male-dominated, tall males, and all of them white. And if I look across the, I survey the company today, not just at the board, but around the management table, we've got Kate Bryant, and Nicola Neilson. In the case of Nicola, we appointed her a CFO actually when she was pregnant. And so, and we're delighted that that happened, and there she is doing it again.
If we look into our operating business, you know, two of our regional managers in post-harvest, we've got Michelle Bennett running Oakside. And she started there eight years ago, putting plastic bags into boxes, and she's now running which is our biggest post-harvest facility. In the far north, we've got Steph Britt heading our Northland post-harvest business. I mean, we've got fantastically experienced regional managers right across the business, but we've got females making a difference. And they are appointed because they're the best person for the job. If I look into the company and think about our CRMs, we've got females there as well. We've also got Darshan Singh, who, you know, has added a new dynamic to our company, and we're richer for it.
And so, you know, I quietly applaud the changes that are happening around us that allow diverse, more diversity in our company. Our company is nothing other than a group of people. We've got assets, that's for sure, and we've got plant and equipment and buildings, but actually it's the people that make this company really special, and we're richer for the diversity that we've got in the company. We-
And our cadets. [crosstalk]
Yeah, and our cadets, absolutely. We've got a way to go with the pay equity, the gender pay equity. Predominantly, because when we look into the business and we look at the seasonal jobs that we're running on the graders or on the machines or grading, they're female. A lot of those people are earning, you know, not too far off the minimum wage. They're in here earning extra cash. So when I look at the gender pay gap, it's something like 20%, it's because we have a high proportion of females in those lower paid roles. So the remuneration committee is thinking about that a little bit. We've got further to go as a company in terms of building our culture and building diversity.
But I am also quite proud, I think, satisfied about the changes that were made as a company, whereby regardless of your gender or regardless of your race or your background, you can actually have a positive career in this company. And of course, you know, I've admitted there, our Māori community, which is a big constituency of ours, but likewise, in this company, you succeed. You can succeed on your merits. I'd also say one last thing. At the International Women's Celebration Week Celebration, a few months ago, where a number of our female leaders were asked to present, they sent a female into certain senior roles. That's actually not true. It is absolutely not true, because each of the females in this company who have stepped up deserve to be where they are.
Absolutely do. So that would be my answer, Harry. Thanks for asking it, bro.
Thank you, Michael. And the Rem committee monitors that and sees that and can see that the company is actively working on the gender pay gap that Michael referred to. Over.
Thank you. Just to extend the theme of remuneration. So the NZX released a new remuneration reporting template back in December. In terms of your own disclosures relating to CEO remuneration, so Michael's REM, what are the barriers for Seeka, if any, to use that template in future annual reports in terms of Particularly when it comes to the reporting around the incentive scheme and short-term payments made?
There's probably no barriers. As we suspect, if we'd seen it, we probably would have complied with it. We have a policy of transparency, and we'll take a note and have a look at that and comply with it.
Thanks, Fred. Look forward to it.
Don't have an issue with that. I think one of the questions also is whether the Chief Executive has termination terms in their contract. Well, I can assure you that Michael does not have a parachute.
I'm too short.
Thank you, Fred. Appreciate it.
Any other questions in the room? Otherwise, I'll go to online. Nick, you have one?
Yeah, thank you. We've got a question asked here by Peter Barraclough. He's noted the captive insurance scheme and the innovation in that, and asked: "Can you please reassure me that the reinsurance you've obtained is gold-plated?
Well, I don't know about gold-plated, but certainly, that was one of the considerations that we discussed with the brokers, is that we wanted to be assured that all the reinsurance people that we're involved with are highly credit rated, and I think they're all triple A. Is that right, Nicola? Yeah. And they're all Lloyd's rated. And yeah, so they're all triple A, and they're Lloyd's rated as well. Any others, Nick?
Yes, we have a question here from Lance Tasker: "When does the board expect to see a return to regular dividends?
That's a good question, but that will depend on how much profit we can make. And also, whether we think it's better suited for the company to exercise the debt-lowering strategy that we have. So look, I can't give an answer as to when we might pay, next pay a dividend, but it'll dependent on profitability and our ability to reduce debt.
There are no further questions online.
Well, if there's no further questions, look, can I just thank everybody online and in the room for the interest you show in your company. It is a great company, and we appreciate you attending. Someone's now going to come and collect all your voting forms, and the voting will stay open for another 5 minutes following the closure of this meeting. So don't forget to hand in your voting forms to the Link people. It'll be published on the NZX, the results of the polls. And thanks again, and also those that have been in the room, you're welcome to join us for refreshments, and please do. And take the opportunity to talk to management while they're here. Thank you.