Good afternoon, ladies and gentlemen, and fellow shareholders, including those joining online. I am John Strowger, Chairman of Skellerup Holdings Limited. The notice of meeting and 2026 annual report have been circulated and made available to all shareholders. You can also access these at any time via our website. As noted, today's meeting is being held as a hybrid meeting here at Eden Park and online via Computershare online meeting platform. Before we commence the formal business, I should advise those present that in the event of an emergency, please remain calm and follow the clearly marked signs to exit the building safely, I imagine over there. I am pleased to advise that there being a quorum of shareholders present, I declare the annual meeting open. To begin, I would like to take this opportunity to introduce those people alongside me today.
On my immediate right is Graham Leaming, our Chief Executive, probably known to you all. Alongside Graham is Tim Runnalls, Chief Financial Officer. Alongside Tim is Alan Isaac, an Independent Director, and alongside Alan is Rachel Farrant, an Independent Director. On my left is David Cushing, Independent Director. Alongside David is David Mair, Non-Executive Director, and alongside David is Paul Shearer, an Independent Director. Also in attendance with us today are representatives from our auditors, Ernst & Young, and our legal advisors, somewhere, Chapman Tripp. A number of our leaders from across the Skellerup Group are also here today, who Graham will introduce later. The order of events for today will be as follows. First, I will give an overview of Skellerup today, our recent performance, and future prospects. I will then hand over to Graham to give a presentation as Skellerup's Chief Executive.
I will then provide an opportunity for questions at the conclusion of those presentations. I will then put the resolutions outlined in the notice of meeting. We will cover each resolution in turn and invite questions specific to those resolutions. Then finally, there will be an opportunity for any general questions by shareholders on Skellerup's business and performance. For online attendees, you may submit a question at any time. To do so, select the Q&A tab on the right half of your screen. Type your question into the field and press send. Please note that while you can submit your questions from now on, I will not address them until the relevant time in the meeting. Please note that your questions may be moderated, and if we receive multiple questions on one topic, amalgamated together.
Finally, due to time constraints, we may run out of time to answer all questions. Although that has never happened. If this happens, we will answer them in due course by email. Voting. Voting today will be conducted by way of a poll on all items of business. For those in attendance, you should all have a voting paper which has been given to you when you registered. If you did not, can you please indicate that now by raising your hand and a member of the Computershare team will assist you. For those online, I now declare voting open on all items of business. To vote, simply select your voting direction from the options shown on screen. You can vote for all resolutions at once or by each resolution in turn. I will now move to my Chairman's address. Good afternoon, ladies and gentlemen.
I'm pleased to once again provide some chairman's remarks on the last year here at Skellerup as a precursor to Graham's address shortly. Once again, it has been a very successful year for Skellerup. One in which we continue to demonstrate the strength, resilience, and relevance of our business model. You might remember I spent a bit of energy at last year's annual meeting warning shareholders against false expectations around recurring records. That caution now seems a bit cautious. Once again, we have achieved a record result. Let's look at the financials. Financial year 2026's net profit after tax before non-recurring items was NZD 64.2 million. A record result, up 18% on financial year 2025 of NZD 54.5 million. The after-tax effect of non-recurring items was NZD 3.5 million, bringing FY 2026 NPAT after non-recurring items to NZD 67.7 million.
This result is off revenues of NZD 390 million and earnings before interest and tax, again before non-recurring items, of NZD 89.3 million, up 14% on 2025. Stronger post-tax earnings have flowed through to cash flow. The FY 2026 operating cash flow of NZD 83.6 million was a record result too, up 26% on the prior corresponding period. This result was achieved in the context of a world that, I need scarcely remind shareholders, did not have the courtesy to stand still. Global uncertainty reigned. Added to foreign exchange movements and tariffs this year was raw material availability, courtesy of the Middle Eastern developments that no one could have anticipated. This loomed as a significant potential headwind to FY 2026 profitability. But the group has again benefited from disciplined execution, strong customer relations, and sustained demand for high-performance products across our core industrial and agricultural markets.
In terms of operational performance, this year contributions to record results came from both of our divisions, industrial and agri. Stronger sales into potable water, wastewater, dairy, footwear, and sports and leisure applications all contributed. The diversified nature of Skellerup's customer base in terms of geographies as well as markets allowed us to ride out pockets of soft demand. Once again, the U.S. was a key contributor, 38% of total group revenues. As anticipated, we were able to mitigate the impacts of tariffs there through a combination of sales growth, pricing, costing, and manufacturing initiatives. We were also the beneficiary of the U.S. Supreme Court's ruling that certain tariffs imposed by the U.S. administration under the International Emergency Economic Powers Act were not authorized. Inevitably, that relief has been temporary, and mitigation strategies are again now to the fore.
Last year, I mentioned a likely need to consider the development of end-market manufacturing, most obviously in the U.S. I said that the luxury of a wait-and-see strategy was highly likely to come to an end in FY 2026. Well, that jolt has not materialized. We continue to target expansion into our offshore markets, having regard to the product demand of key customers. But we'll always seek to resource production in a manner which optimizes results for both Skellerup and our customers. We continue to invest in people and plant for the future. Total CapEx in 2026 was NZD 15.1 million, up NZD 5.9 million on 2025, and comprised ongoing investments in standardized machinery, additional capability, and product development. Standardization of processes will also be a major platform for any expansion of further manufacturing capacity overseas.
The Board is by disposition very supportive of capital expenditure investment where it stacks up, of course. We are in the early stages of a more deliberate expansion of our markets in Europe and China. Our preference in these markets is a direct path to customers. in 2026, we purchased, at a very modest cost, one of our Chinese dairy distributors. Early indications of the attractiveness of our product offering in that market are very encouraging. We have also added additional people and resources in Europe, but it's early days in that market. We continue to explore potential opportunities to accelerate expansion in our overseas markets through acquisition. With very modest levels of debt and a market capitalization of NZD 1.35 billion at 31 July 2026, although that's gone up, it's gone up since then, there is clearly scope for a debt-funded acquisition.
As ever though, we remain cautious about the deployment of capital into acquisitions. A build strategy is slower but will usually carry less risk. The Board is clear that we will only contemplate acquisitions in businesses and/or markets which are compatible with Skellerup's existing core competencies. Our view is that beyond that, diversification is something that shareholders should best do themselves. In the past, we've often talked about the strength of Skellerup's relationships with our OEM customers, where we manufacture customer-branded componentry on the customer's behalf for integration into their products. Meeting customer requirements and solving their problems through our technical team creates strong relationships and embedded revenues. While this remains a core part of what we do, especially within certain business units, Skellerup-branded products represent an increasing proportion of our revenue stream, usually at better margins.
Accelerating investment in our own brands where appropriate will continue to be a deliberate strategy. Climate-related disclosures again comprise a substantial part of this annual report. Our people continue to undertake very effective work in this area. Emissions reduction plans are now in place for five of our largest facilities, and actions implemented as part of those plans are delivering sound environmental and economic benefits. The revenue growth achieved is being aided by investment in more efficient equipment, which again help reduce the intensity of our Scope 1 and Scope 2 greenhouse emissions through 2026. A brief word about succession considerations. We have, of course, seen a successful and seamless change in the senior leadership team. The Board is conscious, though, that succession considerations also apply to itself.
Today, David Cushing offers himself for re-election, and I commend him to you, by the way. But in doing so, has indicated he intends to step down from the Board in a year's time, after 10 years of service to the company. The Board is grateful to David for giving us this early notice of his intentions, as this now gives us time to identify his successor, to replace the irreplaceable. In addition, as none of us are getting any younger, there will obviously be a need for a plan for a medium-term refreshment of this Board. We don't have any of the solutions for any of this yet, but I did want to acknowledge the topic today and let you know we're working on it. Back to some numbers.
As a reflection of the strong cash flows described above, we continue to maintain a strong balance sheet. Net debt, excluding lease liabilities at the end of 2026, stood at NZD 2 million, down NZD 10.4 million on the prior period. This allows the Board to maintain a strong dividend policy. The total 2026 dividend of NZD 0.30 per share equates to an estimated payout ratio of 91.6% of normalized 2026 net profit after tax. This is entirely sustainable considering historic and budgeted earnings, cash flow, and CapEx. Our approach to dividends remains guided by the objective of providing shareholders with an attractive return while retaining sufficient flexibility to invest in growth, capability, and resilience. In FY 2027, we anticipate additional conscious investment in business processes and resources, people and market developments that will likely reduce the rate of growth, at least relative to 2026.
As always, it is a case of managing healthy near-term growth while investing for the longer term. We have, however, now achieved 10 consecutive years of EBIT growth, a record which the investment markets are certainly now very alert to. We have seen some share price appreciation, and that is gratifying for both the Board and management. We continue to target and forecast, as you will hear shortly, further growth and more records. On behalf of the Board, I would like to thank our Chief Executive, Graham Leaming, the senior leadership team, and all of Skellerup's people for their commitment and performance throughout this year. Sometimes it feels like the winds of populism and nationalism are against global businesses like Skellerup.
While 2026 was another non-dull year on world markets, management has responded to each development with agility and aplomb. 2026 results again reflect a very good performance by our entire team. I thank our shareholders for their support for and confidence in Skellerup. The Board continues to believe that Skellerup is well-positioned for the future with a clear strategy, strong market positioning, and a proven team capable of delivering sustainable growth. Thank you for your time. I now ask Graham Leaming, Chief Executive, to address the meeting.
Thank you, John, and welcome again to everyone here. Today, I will cover the cornerstones of Skellerup's business, review our FY 2026 performance, a little of which John has already covered, so a little bit of double-up there, discuss the opportunities ahead, and introduce some of the people who have helped deliver our results and will be central to our future success. The consistent theme across all of this is clear. We succeed by designing and manufacturing specialized high-performance products for demanding applications, supported by deep customer relationships and disciplined execution. As many of you have heard before and is reflected in the displays on the tables today, Skellerup designs and manufactures precision-engineered products that must perform reliably, often in highly regulated or technically demanding environments. By doing this well, we earn long-term customer trust.
That trust supports ongoing business, creates opportunities for new product development, and underpins the resilience of our financial results. Engineered polymers are the foundation of most of our products. Our material formulation and process expertise enables us to maintain consistent quality, innovate, and respond quickly to regulatory changes or geopolitical events that affect supply chains. The Middle East conflict created significant challenges to sourcing materials during FY 2026, as John touched on. However, inventory planning, rapid action to secure alternative supply, and in-house formulation expertise meant we avoided any interruption to our operations and, importantly, to our customers. Our customers are global. More than 80% of our revenue is earned internationally. Having key commercial and technical people based in our major markets is critical to our credibility with these customers. In the markets that we're in the U.S., we're viewed as a U.S. company.
In the U.K., we're viewed as a U.K. company. We're not a New Zealand business sending product offshore without that presence and support in market. It also ensures that our development activity is informed by committed customers and by our people's deep understanding of local market opportunities. Our in-market people work closely with our development centers, the largest of which are here in New Zealand. Our development teams also engage directly with our customers' technical people. This ensures the solutions we develop are based on a clear understanding of need, allowing us to prioritize effectively and move quickly. Our customers are supplied via our manufacturing facilities in New Zealand, in Asia, the U.K., Europe, and the U.S. The international model has served us well and is something we continue to review to make sure we are best placed to continue to meet customer needs and deliver profitable growth.
In recent years, we have increased capital expenditure, particularly in modernizing our manufacturing capability to ensure it's efficient, flexible, and ready for expansion into other markets if required. Some further comments on the FY 2026 results, which John's touched on. The profitable growth and sustained returns are paramount to shareholders, obviously. In that regard, we were very pleased to report another record result for FY 2026 in August. We achieved our best ever results for group revenue, earnings before interest and tax, net profit after tax, and operating cash flow. Sales revenue reached NZD 390.1 million, up 10% on the prior year, the result of broad-based growth from both the industrial and agri divisions.
Normalized earnings before interest and tax, or EBIT, as John mentioned, reached NZD 89.3 million, a 14% improvement over the prior corresponding period, and this was our 10th consecutive record. At its simplest, that reflects the unrelenting focus of our global team on designing, manufacturing, and delivering the products our customers need. Normalized net profit after tax, or NPAT, was NZD 64.2 million, up 18% on the prior record achieved in the prior year. When I refer, and John's referred to normalized EBIT and NPAT, we're excluding a non-recurring gain, as noted on the footnote of this slide, that we recorded during the year, and that primarily comprises insurance proceeds related to an equipment fire at our Wigram Christchurch facility. The fire affected part of an extrusion line used to manufacture tubing, and the equipment was damaged beyond repair.
Fortunately, and importantly, no one was injured, and we resumed production promptly on an alternate extrusion line, a higher utilization with no negative impact on customers. A replacement line is expected to be commissioned early in 2027. I will now comment a little more on the EBIT results of each of the industrial and Agri divisions. The industrial division recorded its sixth successive record EBIT of NZD 56.6 million in FY 2026, an increase of 17% on the prior period due to revenue growth and improved margins. The U.S. delivered the strongest revenue growth, up 12% on the prior period. Sales into potable water and wastewater applications were well ahead of the prior year, including strong demand for pipe gaskets, where customers value the superior quality of our products and the reliability of supply. Demand from tapware manufacturers also strengthened.
Our vacuum systems continue to lead the market, and you can see one of the examples of some innovation on that on the table over there, and I will introduce the people here a little bit later on. If you have not already had the opportunity to talk to them, please do so after the meeting. Whilst the U.S.A. was the most significant revenue growth, we also realized revenue growth in the U.K., Europe, Australia, Asia, and New Zealand. The Agri division recorded its second successive record EBIT of NZD 39.6 million, an increase of 12% on the prior record achieved in the prior year. Sales of essential consumables for the global dairy industry, again, you can see on the tables over here, they increased by 15% on the prior period.
The U.S. and European markets were key drivers with increased sales of liners and tubing to OEM customers, that is original equipment manufacturing customers, in both regions and through our Conewango distribution business in the U.S.A. Revenue also increased in New Zealand, supported by the strength of the dairy industry and the growth in sales of our Thriver calf feeding teats. This global demand for milking liners and tubing resulted in record production levels at our New Zealand and U.K. facilities. We have continued to invest in product development capability and manufacturing modernization. These investments are already delivering returns through faster new product development and expanded capacity to meet growing demand efficiently. Across both divisions, but most notably industrial, we were impacted by changes in tariffs in the U.S.A. It is our largest market, accounting for 38% of our group revenue.
The level of tariffs changed several times, so we have a careful management of inventory ahead of and during the imposition of these tariffs, together with management of costs and gradual implementation of price increases, means we were able to offset the impacts in FY 2026. Looking ahead, our strategy remains unchanged: to design and manufacture precision engineered products for demanding applications. The diversity of applications and markets we serve and the growth opportunities within them provide an important counter to economic cycles. We will continue to invest in people and equipment to create excellent value for customers and capture our fair share of that value. Our future success does not rely on any single hero product. Growth will come from serving existing customers well, winning more of their business, and pursuing new customers and applications where we understand the need and have proven capability.
Focusing on agri, the investment in people and capability we have made in recent years has enabled us to innovate more quickly and extend our market and product ambitions. We hold a strong position both with OEM customers and our own branded products, most notably in the U.S., New Zealand, and Australia, but also in Europe and Asia. As John noted, late in FY 2026, we established a technical sales team in China to grow sales of our dairy consumables, including taking on customers previously managed by a distributor. We believe that by getting closer to customers and demonstrating the performance of our products, we can grow more quickly in what is already a sophisticated market, which places value on quality, reliability, and productivity. We also plan to increase sales in Europe and South America with a mix of our own and partner distribution capability.
We expect our focus on high performance, productivity-enhancing product development to support strong revenue growth in the coming years. On-farm trial results with innovative milking liner systems in the U.S., New Zealand, and China have demonstrated measurable lift in milk production. By also making these high-performance liners available in single-use recyclable shells, and again, on the table over there, you can have a look after the meeting and chat to the team and learn more about that, will make for much shorter maintenance windows to change out liners on the farm. A very attractive benefit, particularly to large-sized farms. Similarly, on-farm trials of our Thriver calf feeding range in the U.S. have proved very successful, building our conviction that we can gain a substantial share of this market.
The products manufactured by our industrial division are used in a more diverse variety of applications, reflecting the potential in each market and the expertise we have. Our largest market, as I've said, is the U.S. During FY 2026, we strengthened our relationship with important OEM customers. We met increased demand for existing products and launched a number of new products. We've added extra technical sales resource to ensure we expand the already strong pipeline of new business opportunity. Potable water, wastewater, and flow control continue to provide significant growth potential for our group. Sales into roofing construction applications generated 24% of the industrial division revenue in FY 2026. Most of these products are sold under our DEKS brand, which again, you can see over there on the table. Our historic focus has been on metal roofing systems.
In late FY 2026, supported by committed customers, we expanded our range to include products for tile and shingle roofing systems in the U.S. We also launched a new lead-free product that eases installation and improves cable entry for solar applications in the U.K. market. In addition, we have several new products poised for launch in the U.K., U.S., and Australian markets during FY 2027. We've made a strong start to the new year, FY 2027. Earlier today, we reported our FY 2027 Q1 net profit after tax was up 15% on the same period last year. Demand across most of the applications our products are used in continues to be strong, particularly for our industrial division. Whilst we are pleased with the start, we are cautious that continued geopolitical unrest and resultant cost increases may impact demand.
Accordingly, we project net profit for FY 2027 to be in the range of NZD 67 million-NZD 72 million. The results achieved up to and including FY 2026 and the platform we have in place for FY 2027 and beyond reflect the diligence, accountability, innovation, and energy our people deliver every day. Our global team of almost 850 people bring deep technical expertise and a diverse international perspective. Their work across product development, manufacturing, sales, operations, and support functions underpins the critical products we provide to customers and the 10 consecutive years of earnings growth we have achieved. Some of the key people who have helped deliver these outcomes and who will be critical to our future are here today. I will introduce them in a moment. Others cannot join us because they are based in international markets and are focused on growing the business this year and beyond.
For those that are here, we have got the Agri team, and I will ask you three guys to set up. We have got Dino Kudrass, who heads up our Agri division globally, based down in Christchurch. Dan Clark, who is responsible for international footwear. Troy Ballantyne, who looks after the commercial operations for our dairy business. Thanks, guys, and take an opportunity to have a chat to them after the conclusion of the formal part of the meeting. On the industrial side, if the rest of you five gentlemen could stand up. Over on the right-hand side there, we have got Adam Klopper. Adam has escaped from Australia. We gave him a bit of an escape route at the beginning of this year to come to New Zealand. So he has joined to run the Ultralon Foam business in New Zealand, has been here for almost a year now.
So thanks, Adam. Shaun Spacey heads up our industrial development team based here in Auckland. A lot of the work that Shaun's team is doing is for global customers in the U.S., and he has been integral to the growth the industrial division has achieved over the past five, 10 years. Mike Draper, the man with all the hair, he runs Talbot Technologies in Christchurch, a business we acquired back about five years ago now, Mike. Doing an excellent job down there, so thank you. Richard Cosmann, he has worn many hats in his time with Skellerup, currently working with the Ultralon Foam group globally, but also responsible for global health and safety and does an excellent job there for us. Logan McKenzie, who I think is probably the longest-serving person here standing up. How many years, Logan?
38? Yeah, he started quite young. Logan is integral to the success of our vacuum systems business, and I pointed out before we have got the outcome of some of Logan's innovation. Not singularly Logan, but he has made a hell of a contribution to it over there. So have a chat to Logan after the meeting. Take a chance to talk to these people after formalities today, if you have not already. Lastly, we have got Kim sitting over there, who is going to be curating the questions that come through, and Laura, our EA. So thanks to you guys, too. To close, I again express my appreciation to all of the Skellerup team and those of you here representing them, to our Board, and to you, our shareholders. Our team is supported, and you, our shareholders, are represented by an excellent Board.
Our Directors bring commercial nous, experience, leadership, energy, and robust discussion to every interaction we have. Their engagement is invaluable, and it's always available. We remain committed to developing and improving our products and business so that we continue to deliver great value for customers and increasing return for you, our shareholders. We're well-positioned to meet the challenges ahead, ambitious about the opportunities before us, and determined to build on the proud entrepreneurial history of Skellerup. Thanks for investing in Skellerup, and thanks for joining us today.
Thanks, Graham. I'd just like to point out that we do not, as a matter of practice, compare notes when we write our respective speeches before annual meetings, and it's nice to know we're consistent, isn't it? Before we move to consider the resolutions before the meeting, we'll open the floor and to online participants for any questions on the presentations provided by Graham and myself. A reminder to please state your name and whether you are a shareholder or proxy holder. I'll take questions from the floor first. How long has this thing been paused?
One minute.
Joda Spencely Wood, shareholder. Oh, thank you. I just wanted to ask what role AI plays across Skellerup Group and what considerations there are for the role that might play in the future?
Do you want to talk?
Sure. We're a collection of businesses, and our business model is very much. One of the strengths of our business model is that we have accountability and responsibility in each of our businesses. We're not a large, single integrated business. The use of AI is very much relevant to the business that we're in. In a general sense, for most of our business, it's still really about a productivity gain, a productivity tool. We had an expert in this area present to us in the U.S. about 18 months ago, and the way he suggested we think about it was as a junior analyst, as a productivity tool. That's really how it is. We don't have an enterprise platform across the business. I don't see that's something that we would go down.
I know all of these people here are using it as a productivity tool, as are people in our businesses. Some of the engineering tools that our people use increasingly have AI capability in there. It really is a case-by-case basis. It's not a massive investment for us. We don't see it as a significant disruptor to our customers. We're not burying our head in the sand and saying, "Hey, the things we make." AI is clearly relevant to our customers and to us, and to our suppliers. We're not on the bleeding edge, but we're certainly using the tools increasingly as a productivity enabler for our business.
Thank you.
Kim Summerhays, our Group Financial Controller is our moderator. Hi, Kim. Are there any questions online?
There are no online questions at this time, Mr. Chairman.
Okay. We will now move to the formal business, my favorite part of the afternoon. We will now turn to the formal business, following which there will be an opportunity for you to ask questions of me, Graham, and other Directors and Executives in attendance today about the business and performance of your company. We have three resolutions to be voted on today, the first two relating to the reelection of David Cushing and Paul Shearer as Directors, and the third being the auditor's fees. I shall give an opportunity for discussion on each resolution, and we will also monitor the online platform for questions. At the appropriate time, should you wish to raise a comment or question, please raise your hand and we will bring a microphone to you, or submit your question to the online platform.
By way of introduction, please advise your name, whether you are a shareholder or a proxy holder, and if a proxy holder, the name of the shareholder represented. As noted earlier, in accordance with the NZX Listing Rules, voting will be by poll. Those here at Eden Park should all by now have a voting paper, which was given to you when you registered. As noted before, online attendees can vote at any time. A number of shareholders have cast a postal vote or have appointed proxies to cast their vote ahead of today's meeting. I advise the Board is holding discretionary proxies, which will be voted in favor of all resolutions. Resolution number one, the reelection of David Cushing. In accordance with the company's constitution, David retires at this meeting, and being eligible, offers himself for reelection.
The Board recommends David to you as a Director of Skellerup and unanimously supports his election. Before you consider the resolution, I would invite David to briefly talk in support of his election.
Thank you, John. Good afternoon, ladies and gentlemen. It has been a great privilege being a Director of Skellerup for nine years. It is a fantastic company. We have amazing people. The first thing David Mair said to me this morning was, "Skellerup is a beautiful company." I agree with you, David. It is a beautiful company. I have been delighted with the progress we have made over the last nine years. I would just like to share a few highlights. Revenue has doubled from NZD 210 million to NZD 390 million. We are now a more global business. Nine years ago, about 27% of our revenue came out of the U.S., and now it is roughly 38%. The U.S. is a huge opportunity for this company. There are so many possibilities, I am really pleased to see the company become more global.
Net profit after tax has tripled from NZD 22 million to NZD 64 million. Earnings per share has tripled from NZD 0.115 to NZD 0.328. Operating cash flow has quadrupled from NZD 21.2 million to NZD 83.6 million. Dividends have tripled from NZD 0.095 to NZD 0.30. I would have liked dividends to have quadrupled, but sadly, they have only tripled. I love dividends. Probably you do too. My favorite, the market capitalization has increased by more than NZD 1.1 billion. Today, we are right on NZD 1.5 billion and virtually no debt. We were one of the strongest companies in New Zealand, which was so good to see. We have also had a master class in succession planning. Liz Coutts, who did a great job as Chair, obviously retired, and John, the new Chair. Nine years. Yeah. Well, it is over nine years.
David, Managing Director, retired, and Graham is in as CEO. Tim has stepped up to be the CFO, and they are all performing incredibly well, and it has just gone like clockwork, which we are really pleased about. The other thing that I am really, really pleased about is the improved depth of our overall management team across the board. We have some really talented people in this business. Innovative, great thinkers. These guys, people in America, Australia, China, just some amazing management, and it makes me feel really good that it is probably the best management depth I have ever seen. I think it bodes well for the future for us all.
There have been a lot of highlights, and we are off to a cracking start, as John said, and we are up 15% for the first quarter, so I think we are keeping the roll on, which is good. ISS, the proxy advisors, have recommended shareholders vote against my re-election. They have recommended that shareholders do vote for Paul. Where is Paul? Paul's there. You should definitely vote for Paul because he's a fantastic Director. In terms of my own situation, the reason they gave was that I missed two Board meetings in 2026, which is actually true. I would like a right of reply. One meeting I missed, my father died 12 hours before the meeting started, and the other one, I had a family member in hospital on the day.
It's amazing, and I've been a Director for nine years in this company, and there have been 68 Board meetings out of this year, and I've attended 66 out of 68, 97%. Skellerup has been one of the best-performing stocks on New Zealand Stock Exchange in the last nine years. I assure you, I take my responsibilities very seriously as a Director. In my view, the ISS analysis is absolutely infantile, and that does a disservice to all the infants out there. Anyway, let's move on from that. Notice of meeting, you will see I am retiring in September next year. That will be after 10 years' service. This will be the last time I ever speak at a Skellerup Annual Meeting. Given that, I would like to acknowledge just a few people.
Firstly, over the nine years, we've had two brilliant Chairs, Liz Coutts, John Strowger. They are fantastic Chairs, very astute. Leadership starts from the top. They have been really, really good to work with, so thank you to them. My Board colleagues, I've been a Director of listed companies for 30 years. This is a fantastic Board. Everyone makes a really good contribution, and we have some quite robust discussions about certain topics, but done very respectfully, different views. Fantastic Board. They serve us as shareholders well. Graham Leaming, well, he had a hard act to follow, didn't he? Graham is playing a blinder as Chief Executive. As you've seen, we've had record profits. We've started the year off up 15% going to next year.
He's done incredibly well, and he's a very dedicated man. A couple of weeks ago, he had to get up at 3:00 A.M., would you believe, to sign a document over Zoom in Verona, in Italy. Not many other Directors were too keen to get up at 3:00 A.M. and sign that document. He did it, and he got daylight saving wrong and got up one hour early, I understand. That's not very good. Poor old Graham. He's doing brilliantly. David Mair, he's been Managing Director and now a Director. Where do I start? For Skellerup, he has just done such an amazing job for all of us as shareholders. David is a world-class executive. He's doing obviously a great job at Sanford, which is good to see.
He is really focused on maximizing shareholder value, and it's so good to see people focused on maximizing shareholder value and return on capital and all the things we love. I think his greatest skill is identifying talent from all sorts of places, and then he brings these people through. He's identified some incredibly talented executives, and it's a real skill. He's been amazing. Thank you, David, for all the great work you've done for Skellerup. Last but not least, I'd like to thank the shareholders, who have all supported me over the last nine years. I appreciate it, never take it for granted. Skellerup's been a brilliant investment for all of us. I'm absolutely thrilled about it. Well done. You've done well on your investment, as we all have, and that's what it's all about. Anyway, that's it for me, and I wish you all the very best.
Thank you.
Well, that's the best re-election speech I've ever heard in my life.
It's easy when you're leaving.
Yeah, I guess. Don't go. I'd like to commend everything David's just said, and it occurs to me we won't have an opportunity to observe again, and acknowledge the contribution that he's made over the last nine years, which has been outstanding. It's been an honor and a privilege to be on this Board with you. Just to acknowledge more broadly the enduring contribution that the Cushing family has made to this business.
Cushing.
Oh. Sometimes people ring the least. Go away. The enduring contribution that the Cushing family has made to Skellerup over the last, really, 20 years, and I can see that Ben's in the audience this afternoon. We've got our eye on you as a third-generation Board Representative in due course. I now move as an ordinary resolution that David Cushing be elected as a Director of the company. I will now pause for any questions on this resolution and will again take questions from the floor first. Kim, are there any questions online?
No online questions, Mr. Chairman.
Thank you, Kim. We'll now move to Resolution two, which is the re-election of Paul Shearer. In accordance with the company's constitution, Paul Shearer retires at this meeting, and being eligible, offers himself for re-election. Before I continue, I'd just like to digress briefly. For those of the shareholders at the meeting today, you will have seen as you walked in signs loudly proclaiming that it's the 68th birthday of the Red Band brand. This is fact. For those of you who have Skellerup calendars, and that should be all of you, when I went to write in, months ago now, the date of this annual meeting, I noticed to my pleasure that it also coincided with the birthday of that brand, 68th birthday of that brand.
We'll commemorate that in due course with a cake in the form of a gumboot, which you saw as you walked in. You'll be offered that for afternoon tea, amongst other things. That's not the only coincidence today, because it just transpires that it's also Paul's birthday today. I can't really talk about what age he is, but I will say it's the 68th birthday of the Red Band brand. The Board unanimously recommends Paul to you as a Director, and we support his re-election. Before you consider the resolution, I'd ask Paul to briefly talk in support of his election.
Yeah. Thank you, John. Couldn't keep a lid on that one. I think I'm going to have to go back and see if I've got any baby photos with Red Bands on. David, that's a pretty hard act to follow. You've done a fantastic job, as we all know, and we're going to miss you greatly in a year's time.
Yeah.
Good afternoon. It's been my privilege to serve on the Skellerup Board for the past six years. Let me start by just thanking both shareholders and fellow Directors for the opportunity to contribute to this iconic company, because it is iconic. It's a fantastic company. During this time, I've learned a great deal about Skellerup. It's a very, very impressive company. It's grown into a very sophisticated international business over the years, and it's run by a very committed, high-performing management team. David said it before, but I just want to really reinforce it. I've been around a lot of management teams in my professional career, and this is a fantastic management team. I think we're very fortunate to have such a dedicated group of people doing fantastic jobs. So well done.
Our business is performing very strongly in variable trading conditions and is well-positioned for the future. We have talented people. We've got a great company culture, and we have fantastic products. I think products are something I'm very, very passionate about. I think that we've got some great products. We're investing in R&D. I think when you've got great products in the world to sell them in, you've got some great opportunities, and we certainly have. We have very good institutional knowledge, strong, enduring customer relationships, and a robust business model. So Skellerup's in great shape today and for the future. A little bit about me. Well, it's my birthday. Not sure about that age, but I'll go with it. During the past 33 years, I've worked for Fisher & Paykel Healthcare. Actually, I'm still there.
It's another iconic New Zealand company with substantial presence in global markets. I have a quality of experience developing and implementing a successful and sustainable business strategy, and establishing direct sales organizations, building international distribution networks, and partnering with OEM customers. So I think that some of that is very relevant to Skellerup. It's a challenging time for business, but there's also many exciting opportunities for growth. I think that with my experience and track record, that'll help support Skellerup's international growth strategy. With the support of shareholders, and on my birthday, I'd like to continue contributing to the ongoing success of the Skellerup business, and I put myself forward for re-election to the Board. Thank you.
Happy birthday, Paul. I now move as an ordinary resolution that Paul Shearer be elected as a Director of the company. I will now pause for any questions on this resolution and will again take questions from the floor first. Kim, are there any questions online?
There are no online questions, Mr. Chairman.
Thank you, Kim. Resolution number three, remuneration of the auditor. Ernst & Young are the existing auditors of Skellerup. Pursuant to Section 207T of the Companies Act, Ernst & Young are automatically reappointed as auditors for the ensuing year. The Board seeks the approval of shareholders to be authorized to fix the remuneration of Ernst & Young for the 2027 financial year. I now move as an ordinary resolution that the Directors be authorized to fix the remuneration of the auditor for the year ended 30 June 2027. Are there any questions on this controversial resolution from the floor? No. Kim, any questions?
There are no online questions, Mr. Chairman.
Does not surprise me. Ladies and gentlemen, that concludes our discussion on the resolutions. If you wish to vote on the resolutions, whether in person or online, and have not already done so, you should do so now as I will shortly close the voting. Once all of the votes have been cast, they will be counted by the company's share registrar, Computershare. The results of today's meeting will be released to the NZX on the completion of verification of voting. Voting is now closed. For those of you here in the room, I now ask Computershare to collect the voting papers. At this point, we will open the floor to any questions on Skellerup's performance and any other matters shareholders now wish to raise, including questions submitted online during the course of the meeting.
A reminder to please state your name and whether you are a shareholder or proxy holder. I will take general questions from the floor first.
Good afternoon. Peter Kamel, shareholder. Question for Graham. Now we know that the business is going very, very well, and I am very grateful as a shareholder for that. Graham, what concerns you most, and what do you think you could do better as a company?
I guess you can worry in terms of what concerns you most. You can worry about the things outside your control. What is happening in the Middle East, what it does to raw material prices, what extra risk does that bring for our business? I think we respond to those things pretty well. Part of it is often got very little to do with me, but more the people down here. One of the reasons we are able to respond well is that we have people in markets, as I talked about before, so we have relationships in many markets. I know when we were trying to source some critical raw materials for the dairy business earlier this year. It was earlier this year now. It was a relationship we had through one of the other businesses to source material in South America.
So, those international things are things we can't control. I guess the pleasing thing for me is we've been able to overcome those pretty well. I know I'm not probably answering your question about what's worrying you, but I think we manage the risks of our business pretty well. As Paul Shearer talked about, we're investing, I think at the right rate and tempo, to ensure we can continue to grow into the future. It's a question I was asking Dino Kudrass again last week, and I talked to Shaun Spacey about and our other leaders, "Do you think there's anything we need to do a little bit more quickly?" It's a question the Board always ask me and asked again today as well. So, things we can do better, there's always things we can do better. Can we execute on our product developments a little bit more quickly?
Can we put resource in a little more quickly, a little sooner, to realize the revenue gains a little bit more quickly, and the profitability gains a little more quickly? So, there's always things we can do better, but is there any big, single, fundamental sort of weakness that I don't think we're addressing? No. But I think incrementally we'll keep on making improvements. We've got a good pipeline of opportunities. As I said, there's not a single hero product we're reliant on. I think that's a strength of ours, that sometimes people confuse Skellerup and say, "Oh, you're in a whole wide range of applications.
Perhaps you'd do better if you narrowed that down." I reject that absolutely because our approach in different markets differs based on the opportunities we see in those markets, the relationships we have in those markets, and where we see the best opportunities in those markets. So plenty we can do better, and we'll keep on striving to do that. Any big, single, fundamental worry? No. There's stuff out there that we can't control. We'll keep on working hard to reduce the risk of that impacting on our business. At half year, we'll see our inventory will have gone up. We're now carrying more raw materials at our Wigram facility, so that we can to reduce that risk of not being able to supply customers. So I guess that's the best response I've got for your question, Peter. Nice to see you.
I think that was an answer. Yeah. Any other questions from the floor? Kim, are there any questions online?
There are no online questions, Mr. Chairman.
You haven't had much to do today, have you? Given that there are no further questions or discussion, thank you for your attendance. Just a reminder, there is some cake in the form of a gumboot down there somewhere, and other refreshments of course. I declare the meeting closed and invite you to join directors and management for a gumboot cake, afternoon tea, and refreshments. Thanks for your attendance. Cheers.