Welcome everybody. I am Michael Franks, CEO here at Seeka. The Chair has delegated the role to open the meeting to me. It would be my pleasure to invite Turi Ngatai to come up and bless our meeting. Thanks.
[Non-English content]. The company of Seeka. Acknowledgement to our leaders, to the council, the Board Chair, to the Tumuaki, the CEO, to the Kaihautū, the executives, and all the family and followers and shareholders of Seeka. The land has produced, and our efforts have borne fruit. Therefore, let us be happy, be thankful, and celebrate [Non-English content].
Thank you, Turi, and thank you, Michael, for that introduction. It is my pleasure to welcome you all here today. Good afternoon, and welcome. My name is Hayley Gourley, and I am the Chair of Seeka, and it is my privilege to welcome you to this special shareholders meeting today, and stakeholder update of your company. I also take this time to acknowledge and welcome those who are joining remotely and online. Welcome to you as well. I welcome our various business partners and supporters and professional advisors who help out throughout the year for Seeka. So we have Harmos Horton Lusk, Tompkins Wake, our banking syndicate that consists of Westpac New Zealand, Rabobank, ASB, BNZ, and Westpac Australia, our auditors Grant Thornton, and a representative from the New Zealand Shareholders' Association as well.
For those of you who are in attendance, it would be helpful if you could please turn your phones to silent. Please also note the exits to this auditorium. There's actually a lot of them, given the shape of the room. If we do need to evacuate, please make your way out to the car park, as is expedient. Hopefully, we won't need to do that. There will be a designated Seeka person or several of them around to help with that, in terms of designating where you go. In terms of the formalities, the company secretary has confirmed the notice of meeting was sent to all eligible shareholders, and we have a quorum. Accordingly, I declare the meeting open. We will proceed.
In terms of the meeting and the agenda, we will run through this agenda. Following my introductory remarks and introduction, I'll hand over to Michael for a Chief Executive's report and update, before proceeding to the resolution, and then any questions and general business that will follow. We do hold in terms of the meeting the following proxy votes that have been exercised or will be exercised through the meeting. You can see the proxies that are held there on that slide. I won't run through those numbers. In terms of my introduction as Chair, it is my pleasure to be able to chair this first meeting with our shareholders and alongside the board of directors following my appointment as Chair back in August.
It is certainly a pleasure, and I've appreciated the support of the shareholders over the past almost two years since becoming a Director of Seeka. Also appreciate the support of my fellow directors in the appointment of Chair back in August. I'd also like to take this opportunity to publicly thank Mark Dewdney, as a fellow Director and an immediate past Chair, for his wisdom and experience and guidance through his time on the board, and acknowledge his resignation today, having certainly provided a lot of support through that transition and handover period. Wish Mark all the very best in his new role from December as Chair of Tātua, a company he's been long associated with. We certainly wish you all the best from the Seeka family, Mark. Thank you.
Thank you for that. As your Chair, I am looking forward to continuing that successful stewardship of the Seeka business, and the wider Seeka family and stakeholders, and representing your interests, and ensuring that the success can be continued and that growth and success continues to provide rewards for all. That is certainly the intent. I look forward to doing that and learning more about the business as we go forward, and certainly engaging with stakeholders at every opportunity. Thank you for that. In terms of our business, it is a very broad business. We have, clearly, the large part of the business and the core part of the business providing those orcharding services to the kiwifruit community in a post-harvest perspective, but also beyond that, and increasingly growing, processing, supplying into a wider variety of markets, both domestically and internationally.
I think you can see there, just in terms of the various five components of the Seeka business, that it is perhaps more diverse than people might first think at first glance. We do continue to see that growing produce basket that clearly has a very large kiwifruit component, but is increasingly becoming diversified and providing more produce to a greater range of markets over time. We look forward to continuing that. It was our pleasure, and on behalf of the board and management for the hard work that has gone into the first half of this financial year, 2026, and the half year results that we were able to announce a couple of months ago now. Just a quick recap on those, and I know Michael will provide a more fulsome update shortly.
We were able to announce a net profit before tax at NZD 62.6 million. It was up 5%. It has been extremely pleasing to see the results coming through from the investments in automation and technology that is really driving that efficiency across the business. I think enhanced the range of possibilities as to what that efficiency can actually do in future for the business as well, given that we are now well down the track of understanding the impact that that can have. Accordingly, earnings per share were up 19% at NZD 1.07, and we were able to significantly reduce our bank debt further. I think that has certainly put the company in a very good position now, with a very solid balance sheet to be able to move forward from here, alongside, of course, achieving our sustainability milestones.
Some of that is the efficiency being driven, but also, the other reductions that we have been able to achieve across the business in terms of emissions. We will look forward to continuing to do that as well. Most recently, are very pleased to announce the new capacity investment that is taking place in Gisborne. This is really acknowledging that there are many parts to the business regionally in New Zealand, but Gisborne has been an area that does provide more opportunity and has been challenged in terms of some of the logistics around fruit in Gisborne. To be able to invest there and have the efficiencies as part of that investment, as well as the opportunity to do more, both in kiwifruit and other produce in Gisborne, is really a key part of that investment.
Management are now proceeding full steam ahead to have that up and running ahead of the coming season. Again, a good indication of that ability and willingness to invest where it makes sense and where it can provide returns to stakeholders and shareholders alike. Accordingly, last month, we also took the opportunity to update our full year guidance for this current financial year. Today, we reconfirm that guidance as being unchanged from what was announced last month. Forecasting full year net profit before tax between NZD 41 million and NZD 45 million. That was a slight lift last month. We do confirm that again today.
It is very slightly down on what was that record 2025 year, but still an extremely pleasing range of guidance to be able to have at this time of the year, and looking ahead to the end of the year, but with the majority of the season clearly now behind us in terms of where we're at. It's now my pleasure to be able to hand over to Michael, who can provide a more in-depth update on where we're at from a company point of view, and also elaborate a little more on that guidance of what's happening as well. Michael, I'll hand over to you. Thank you.
Thanks, Hayley. Thank you very much. Just to update you, we are largely now loaded out, all but done for the current year for New Zealand kiwifruit crop. Well under 100,000 trays left in store. It's been a harder year, but we're very satisfied with the results. Just to go back a little bit in terms of the six months results, the kiwifruit crop was down after the exceptional year we had last year, 45.4 million Class 1 trays packed in New Zealand. We had lower volumes for both the orchard and the post-harvest business. Australia was also down. It was actually very hot in Australia. As I look back over time and look into history, I've got up here and explained it's been too hot, it's been too wet, it's been too dry, it's been too hot.
It's another hot year, but we're pretty confident about what we're doing over there. We just got to be a bit more patient. We've delivered excellent operational performance. I think our growers are reasonably happy with the harvest, to be honest. Haven't had too many people telling me we had problems. The queues weren't long. There was efficient harvest management. Actually, we've delivered excellent quality fruit to the market, although we've had to rework a bit more than we might have normally had to do. We're delighted with what Reemoon has brought to the company in terms of capability, in terms of automation. Our strategy of having an array of highly automated packhouses adjacent to where the fruit is grown has been transacted, and has been furthered with our investment to go into Gisborne.
Certainly, our attention now comes back to the center, and as we work out our capacity plans here in Te Puke going forward. All of our business units had positive earnings contributions. We were also likewise delighted with our SeekaFresh business. Our market-facing business in Auckland has done a great job. You may not be aware, but we have an emerging array of new and alternative produce varieties that we are handling. Citrus, big play in citrus more recently. Avocados is continuing. We are now a packer and exporter of persimmons. Kiwiberry continues, and in conjunction with Freshmax, it has been a very, very successful category for ourselves, and in particular for our growers. Highest orchard gate returns in the company have been achieved with our kiwiberry variety. Highest orchard gate return, in case you are interested, more than NZD 600,000 a hectare to the gate. Amazing, really.
Lots to be happy with, lots to improve. In terms of our actual financial results, NZD 305.5 million for the six months was slightly down in the year before. Our crop was down 4%, New Zealand kiwifruit crop was down 4%. Our EBITDA, earnings before interest, tax, depreciation, and amortization, up 3% at NZD 86.3 million. The numbers are becoming real now. The automation gains that we have achieved with the new automation put in place, new citrus machine in Northland, new fully integrated Reemoon kiwifruit packing machine in Kerikeri, a new partly built Reemoon machine at Huka Pak. It does not have the automation around it for last season, it will have for next. All of that has actually delivered excellent margins, excellent throughputs, and reduced the amount of labor that we have in every tray that we pack.
Profit before tax, NZD 62.6 million, as Hayley said, up 5%, lower debt, lower finance cost, but actually good improvement in operational earnings. We have a capital management strategy in place. Today, actually, the board considered that, and at some point in the future, we will share it with our investors. In terms of the balance sheet, NZD 591.9 million in capital employed, up 5%.
We have continued to invest in automation across the business. We are investing in seasonal worker accommodation in Australia, and so you know, half funded by the Australian government. We have had a stronger New Zealand dollar, which when we bring it back to New Zealand dollars, has increased our earnings here. We have got the revaluations in the book from last year's December reval process that we go through. We had NZD 1 million of license held for sale that was transacted after the six months.
Some substance now in that balance sheet. In terms of bank debt, NZD 119.8 million continues to decrease over the same time last year, and well down on two years ago. That is why we put the NZD 51.1 million in, so you can see that we have reduced it over the 24 months. We have voluntarily suggested to the banks that we needed to have lower debt facilities, and so at NZD 184.0 million facility is down by NZD 20 million than what we had before. No point in having it, no point in paying for it if you are not going to use it. We can put it back in place if we need it. We did that voluntarily. In terms of the leverage ratio, EBITDA to debt, 1.22 x, is well in a safe place.
It's within the range the board has set for us, and likewise, we're comfortable with that as well. Earnings per share for the six months at NZD 1.07. Understanding that we earn most of our earnings in the first six months. We are a seasonal business. We've paid out NZD 0.50 in shares over the 12 months, June to June. We're paying NZD 0.20 today. If you didn't know that, you're either getting them in shares through the dividend reinvestment plan, or you're getting it in cash. Just to remind you, the shares that are trading today at NZD 5.16 have an asset backing of NZD 7.12 for every single share that's out there. We go through a process every December and every reporting date to make sure that the assets that we're carrying on our balance sheet are at fair market value.
Just a little point I'd make to you. In terms of our orcharding business, headed up by Barry Penellum, currently overseas, actually in the U.S., looking at automation for orchards. In case you didn't know, 39% of the fruit that we handle in our post-harvest business has been grown by us and some for another. Excellent orcharding results across the board. Got a great team of people, but we were affected by the lower yields than we had last year. NZD 63.6 million in revenue is down 8% on the same time last year, NZD 8.1 million in EBITDA down 16%, and our EBIT at NZD 6.3 million was down 20%. The yields were down. They were down across all of our suppliers, ours the same. Understanding that we are orcharding across all regions in New Zealand, not just here in Te Puke.
We are still investing in orchards with Kānoa and iwi up on the East Cape, Raukokore. Those orchards have yet to come into full production. Each year, they take another step forward. Of course, when you look at metrics like return on capital employed, you've got to take that into account because we've invested ahead of the crop. When you're an orchardist, you do that, and so the crop will come into the future and go into your post-harvest business. In terms of our post-harvest business, this is our hotel for fruit. Not just kiwifruit in New Zealand, persimmons, avocados, citrus, increasing range of crops using the same asset. Generated 68% of our revenue in the first half of this year. NZD 206.6 million, up 1%. NZD 83.2 million in EBITDA, up 6% on the previous corresponding period.
NZD 73.3 million in earnings before interest and tax, up 7% on last year. Team's done a great job right across the business, supported by our contractors and our growers and our own orcharding staff, but really are very good. They've deployed new technology. The Reemoon gear has been excellent. The loss rates across that machinery that we've got at Huka Pak in particular and our organic fruit is unbelievably good. Excellent. Along with our offshore fruit quality. It shows you the power that we've unleashed. We're learning how to drive it. We've got excellent people, and we're pushing on and doing more of it. Post-harvest assets at NZD 450.4 million are significant, 66% of the business there in one part of our segment. Paul Crone heads that bit up, and I should have said that at the beginning. He's sitting here somewhere.
In terms of SeekaFresh retail services operation, this is our market-facing business led by Kate Bryant, also supported by the Delicious Nutritious Food Company, the DNFC, which is headed up by Jim Smith. It is where we connect out to the market. This is our market-facing business.
Wholesale marketing in Auckland, really what it is about, importing and exporting produce. It is a business that has got some momentum behind it. NZD 12.7 million in revenue is up 12% on the first half of last year. NZD 2 million in EBITDA is up 28%. NZD 1.4 million in EBIT, up 39%. This business has got momentum. Second half of this year, we have actually added citrus to that category. We are probably more than 20% of New Zealand's citrus industry now. So it is an amazing business. It has got great momentum. We have also launched LUVO, the avocado oil brand.
It is part of our recovery process, value recovery process happening in the business. We have launched it. It is going out. This product used to go to waste. We are actually using it to manufacture oil. We have established a retail brand. We are now pushing it out into sales along with our Kiwi Crush business, and it is picking up. It is getting momentum.
It takes a while for retail customers to do their category reviews and therefore get you onto their shelves, but increasingly, we are signing more and more customers. Recently also signed Foodstuffs South Island, and so we are now arranged in their stores in that part of the world. As category reviews happen, we will get more sales. Look, in a few years' time, we will be very happy with what we have established. In terms of our Australian business, a fully integrated business in that part of the world.
Most of the produce that we grow there is sold within Australia. It is led by Jon Van Popering. It is a fully integrated orchard-to-market business. Kiwifruit, European pears, Asian pears, jujubes, and plums are the main categories that we are involved in. NZD 22.2 million revenue is the same as last year. NZD 4.5 million in EBITDA is down 29%, which really reflects our volume being reduced. In terms of it was a very hot year to grow there. NZD 2.9 million in EBIT is down 40%. It was hot, and we were not quite prepared to it as we might have been. We are now preparing ourselves for a hot year this year, too, but we have got orchards in Australia that are coming into production, and we have got more canopy tied down this year. The orchards are taking another step forward.
I hope that our patience is rewarded because I am confident that next time we report these numbers for next year's harvest will be much better. Focus for 2027. As always, we want to deliver excellence. Delivering operational excellence through strict planning, contingency planning, understanding what we are doing, and of course, we want to, and we are focused on delivering excellent financial results. We are pushing for more automation, new machines going into Gisborne. Just in case you did not realize this, traditionally, it takes 18 months to order a machine and get installed, and with Reemoon, we can do it in three. So it is unbelievably fast, and what we have got with them is really very good. Capacity increases are being considered now to meet demand for our services, and our intention is back here, back in Te Puke.
We continue to review, look at, think about our capacity and automation plans. They are constantly in revision. We have a capital management strategy in place that has been reviewed by the board, will be refined a bit further, and at some point, shared. We are driven to ensure that we reward our shareholders with excellent returns in what is a very competitive environment, with some inflationary pressures. That is it from me. I am happy and relieved to hand it back to the Chair. Don't drop—
Thank you for that update, Michael. I appreciate that. Now we move into the formal part of the business, moving towards the resolution that was outlined in the notice of meeting. There will be an opportunity for shareholders to ask questions on this resolution, and then a further opportunity to ask more general or business-related questions at the end of the meeting as well. As is our normal practice, a poll will be held on the resolution, and shareholders in the room, you should have received your shareholder voting card on arrival from MUFG at the entrance. If you did not and you wish to vote, then please make your way to that registration desk now to receive that voting card, and they will assist you. We will also talk through for those people online how to vote online as well.
In terms of the resolution, it is outlined in the notice of the meeting that Seeka does intend to undertake an issue of shares to its growers under the Grower Loyalty Share Scheme. This scheme rewards loyal growers who supply all of their fruit to Seeka over a three-year period. That is a 100% supply of fruit from those growers. This loyalty benefits all shareholders by securing fruit supply in what is a very competitive post-harvest environment, as Michael mentioned. The intention of the scheme is to incentivize growers to provide a longer-term supply commitment, which helps us to make decisions, particularly around things like capital expenditure, investment and capacity, and those types of decisions. The share scheme will operate in the same way as the prior share schemes that were issued in 2024 and in 2019, as longstanding shareholders will recall.
The scheme offers a maximum number of 1.5 million shares issued at a share price over a specified period. The maximum loan is NZD 9 million, and should the share price go beyond NZD 6 per share, then the number of shares issued would be prorated down. As the shares are issued at the current market price with no discount applied, there is a limited loss in value to shareholders. The resolution itself, I now propose the following resolution: That Seeka issue up to 1.5 million new ordinary shares in Seeka at the issue price described in the explanatory notes pursuant to the Grower Loyalty Share Scheme described in the explanatory notes. Further, make loans of up to a maximum aggregate amount of NZD 9 million, as described under the heading loan in the explanatory notes to fund the issue price of the shares referred to in point A.
I would like to remind shareholders that if you vote in favor of the resolution, you will be ineligible to participate in the scheme. It's a very important point. At this point, I'd like to see if there are any questions from shareholders on this resolution that they would like to raise now. No? Just checking if there are any questions from shareholders in attendance online.
No, there are no questions online.
No. Thank you. Okay. On that basis, I will ask the registrar, MUFG, to move through the room, and they will collect those voting cards. For those shareholders that are online, you can now submit your vote if you haven't done so already. Voting will be open until five minutes after the conclusion of this meeting.
For those of you online, there is a slide now that just explains what to do in terms of on your screen to cast your vote using an electronic means. You will need to have obtained the voting card beforehand electronically through the online meeting platform, and you will be asked to enter your shareholder or proxy number to validate. Please then mark your voting card in the way you wish to vote by clicking For, Against, or Abstain against the resolution on the voting card. Then once you have done that, you need to actually click on Submit Vote. I think that last piece is probably the most important, to submit the vote. Then we will be able to collate those votes. Okay.
As I mentioned, voting will remain open until five minutes after the conclusion of this meeting, and the results of the vote will be announced via the NZX. The resolution in the notice of meeting is an ordinary resolution, and therefore, must be approved by a simple majority of the number of votes cast. So that will determine the outcome of the resolution. Okay, thank you for that. I'd now like to move on to the final part of the meeting, and that is the general business, and to really provide shareholders the opportunity to ask any questions of myself or of Michael. Are there any questions from shareholders? Please.
Just Chris with NZSA. I noticed one thing we can't change, [inaudible] .
Just, sorry, just a—
Sure.
—microphone. Thank you.
Just making the comment of decreased yields every year, unfortunately due to climate change. Is the key to diversify that product mix to sort of offset that loss in yield, those other lines you are introducing in the food basket?
It is a good question. I think climate change is something that is front and center of every business, I would say, but particularly those operating in the primary sector. I think the diversification of the nature of the Seeka business is not just with climate change in mind. I think it is actually broader than that. We have an expertise that clearly has been honed over the kiwifruit sector, and still absolutely intends to have the kiwifruit sector as core and central in the business, but does see the opportunity. It is very much an opportunity as much as a risk mitigant to actually spread that, not just across a product mix and a basket of fresh produce, but also actually geographically. Both within New Zealand, we are already a big regional player, which I think is also partly that risk mitigant that you mentioned.
But even broader than that, operations in Australia are a nod to that as well, and more than a nod, in fact. But I think the opportunities in that larger consumer market is more than outweighing an offset to that risk against climate change. I think that adaptation is necessary anyway, but this is part of a broader business strategy. Yeah. Any other— Thank you, sir.
Yeah, this is not a criticism, and it's probably also a little bit belated now that we've also voted on the proposal to give growers shares. But my question is, and I'm just curious, how much of that proposal was due to this new player in town? I mean we've all seen the advertisements on the internet, in the newspaper. It's been flooded with them.
And I'm just sort of wondering, is that a reaction?
It's a good question, because we all see structures from the expressway as well. But it's a good question. I'll get Michael to elaborate a little more, but I think from my perspective and from the board's perspective, we've recognized that this is an extremely competitive environment, and arguably always has been, and certainly is currently. The fact that we've had these schemes both in 2019 and in 2024 demonstrates that this isn't something new. It's not a reaction to something new that is happening in the immediate vicinity, but it's very much part of ensuring that we provide a competitive offering to growers who clearly have a choice in supply. But also equally, we can provide a differentiated offering that rewards loyalty, which is really what Seeka's business is about. We want to have long-term relationships.
We want to be able to grow and provide a really quality service to a wider range and a wider number of growers. Michael, I'm happy for you to add to that.
I probably can't add too much to that. Thanks, Hayley. It is a competitive environment. I'd point out to you that people who participate in the scheme have still got to pay for their shares. They're only getting the benefit of the dividend discounting the loan. We make far more money as a company from the fruit that they're committing to us than it is that we're actually subsidizing their dividend or their share price with. Actually, it's well in a shareholder's favor to support the scheme.
If you think about it, probably one of our points of difference is that we are listed, and so we are able to give the grower the benefit of the capital gains or dividends that they might get by being a shareholder, and you don't get that when you are packing or having your fruit handled by someone who's a sole trader, because all you're doing is facilitating them to drive a new Ferrari or buy a new NZD 25 million house over at the Minden or something. In our case, therefore, we've got a competitive offering, and all we're doing is exploiting that for the benefit of our shareholders.
Thank you, Michael. Any other questions in the room? Can I just check if there are any questions online?
Yeah. We do not have any online questions.
Okay. So I'll do a third and final look for questions, but it looks like we're done. Okay. Thank you. Appreciate that. In closing, I would certainly like to thank you all for your attendance today, and for your continued support of Seeka. For those that are here in person, we will look forward to joining you over some refreshments provided after the meeting. Actually, for everyone here, I do appreciate, and online, the involvement and your support. I'd also like to take the opportunity to thank management for their efforts over the past season, and more to come as we're already, the planning's well underway for next season.
And to thank my fellow directors and board for support as well. We look forward to, obviously next season, but also towards the end of this year as well. In closing, I would like to invite Mr. Turi Ngatai to close the meeting. Thank you, Turi.
[Non-English content] . I would just like the final karakia, but two Māori proverbs. One,[Non-English content] . When one chief moves, another takes its place. [Non-English content] , for your energy as we go forward. [Non-English content] . Another Māori saying, [Non-English content] . The front of the house looks great, but without the back of the house, things cannot run efficiently. We need one side and the other side to function well. [Non-English content] .
What it all adds up to is we work as one in [Non-English content] , in the family, in the company of Seeka. [Non-English content] . To everyone here, may your road be smooth, may your evening be great, and enjoy the paramanawa, the refreshments. [Non-English content] .