Good morning, everybody, and welcome to Synlait's Half-Year Results Conference Call. My name's Hannah Lynch, Synlait's Head of Milk Supply Strategy and Corporate Affairs, and it's my pleasure to be joined by our Acting CEO, Tim Carter, and our CFO, Andy Liu, here today, who will provide a short update on our results presentation. We'll then open the line for Q&A, and I ask that when we reach the Q&A portion of today's results, that you keep your questions to two per person so we can keep the call moving with the pace. If you have any follow-ups after the call, please feel free to reach out to me directly. Otherwise, over to Tim to deliver today's result.
Thank you, Hannah. Welcome to our half-year results investor presentation. I'm pleased to share this result as Acting CEO. Synlait has returned to profitability in the first half. This is encouraging progress. It has been achieved through focusing on three priority areas. Firstly, the team has been focused on the fundamentals of manufacturing operations. This includes cost, quality, and yield. Secondly, our team continues to work hard to rebuild farmer trust and confidence. The conversations we are having have been robust and are growing in positivity. Thirdly, we have prioritized delivery and the acceleration of new business opportunities for both existing and new customers. This result is a considerable commercial achievement, and we are really proud to share it with you today. Our progress includes an EBITDA of $ 63.1 million, which is just above the guidance range we provided in January 2025.
Group NPAT is $ 4.8 million, and we are pleased to report a return to profitability, as I mentioned. Lastly, net debt has reduced by 29%, largely due to the equity placement supported by Bright Dairy and the a2 Milk Company. Looking at results at a glance, if you turn to slide three, you see more of our key metrics at a glance. These metrics all have green arrows above them, reflecting the progress made over the last six months. In addition to the increase in NPAT and EBITDA and improved net debt, our revenue is up 16% to $ 916.8 million. This is a result of an uplift in advanced nutrition demand, optimization of our North Island assets, high commodity prices, and improved foreign exchange performance. Our farmer suppliers have seen significant increases in their forecast milk price for the year.
Base milk price remains forecasted at $ 10 per kilogram of milk solids, a record figure. In addition, Canterbury farmer suppliers, who do not have a cease-in-place, will receive secure premiums beginning with $ 0.20 per kilogram of milk solids this season. Add this to the milk incentives many of our farmers receive, and the average forecasted milk payment for Synlait suppliers in Canterbury this season is $ 10.48 per kilogram of milk solids. Slide four has a more detailed overview of our financial result. It shows Synlait is making progress on the road to recovery. Our adjusted NPAT is an uplift of $ 26.1 million compared to half-year 2024. We also had a substantial improvement in our EBITDA, which increased by $ 43.2 million. Solid trading performance has enabled us to optimize operating cash flows and reduce debt. Our recovery is spread across all of our business units, including advanced nutrition, ingredients, and consumers.
We are focusing on the right things and delivering widespread results, which is great news. I will now invite our CFO, Andy Liu, to take us through financial performance for our business units in more detail.
Thank you, Tim. Good morning, everyone, and thanks for joining us. I am pleased to share with you this result. Slide six has an overview of our advanced nutrition business. This business has experienced remarkable growth and success. Revenue increased by 20%, amounting to $ 45 million, with sales volumes rising by 28%. Gross profit saw an impressive rise of 80%, achieving $ 59 million. This growth was driven by demand from multiple customers, along with cost efficiency. This positive result highlights why advanced nutrition continues to be a strategic business category for Synlait. Let's move on to slide seven. Ingredients also saw a notable uplift. Revenue is up by $ 49 million, or 17%, and gross profit has increased to $ 14.3 million, up from $ 1.4 million year- on- year. Key improvements include better foreign exchange management, improved quality delivery, favorable stream returns, and enhanced cost efficiency.
All of these have helped a significant improvement of the ingredients' performance, which is something we can celebrate. Onto slide eight now. You can see our consumer business remains stable. Sales slightly decreased this year, half-year, but our gross profit increased by $ 2.2 million. This was a result of a focus on cost control and improved production efficiency, which includes some capital improvements, which we have begun to provide returns. Turning to slide nine now, please. These are the results of our Food service category, which is mostly related with UHT cream to China. Our volumes increased by nearly 115% compared to half-year 2024. Our margin performance was well below expectations because of high-fat pricing. That concluded in a $ 1.4 million profit reduction year- on- year. The good news is demand is expected to continue increasing.
The key focus for management is to ensure this business unit makes a valuable contribution to Synlait's bottom line in the future. My last slide, slide 10, looks at cash flow and net debt. In terms of cash flow, our operating cash performance is the best it has been since half-year 2021. I hope that provides confidence in Synlait. It includes a $ 43 million lift in trading performance and another $ 40 million from working capital enhancement. In the first half of FY 2025, we limited our CapEx to $ 12.7 million. That is the lowest level of spending since 2017. Our focus instead is on optimizing our current assets. Even with increased advanced payments to support our farmers, we have successfully reduced our net debt to $ 392 million. We are making great progress in reducing debt.
By the end of the financial year, we believe that we will have reduced it even further, placing us in a more solid financial position. In summary, we are reporting an encouraging result. It shows real progress. Our team is delivering a real turnaround across all our business units. Finally, we want to reassure you, our efforts will continue. We are committed to making the annual results as strong as possible. Now, I'd like to hand back to Tim.
Thanks, Andy. We are now on slide 12, and I'll start with an update on our advanced nutrition business. This continues to be a strategic focus for us. It is pleasing to see strong growth in sales volumes that have emerged in advanced nutrition. We have ongoing interest in our Nutrabase range and have recently begun commercial sales of this range. Future opportunities for us are significant. After a softer year, we have seen lactoferrin pricing stabilize recently. Our team has been expanding our customer base for this product. We continue to manufacture advanced nutrition products in a range of formats for our customers. This includes cans, sachets, and pouches. Some of these are non-dairy hybrid nutrition products, which are manufactured at our Pokeno site. Our relationship with the a2 Milk Company continues to strengthen.
We're committed to working with the a2 Milk Company to support the growth of the growing infant formula opportunities which have been identified. If you turn to slide 13, our President of China and Director of Foods ervice, Abby Ye, and the team are continuing to drive a range of opportunities. Our Foo service business growth and expansion has been significant over the last year. Our expansion into Southeast Asia has continued, largely due to our partnership with Uhrenholt . We have recently also entered Hong Kong through this partnership. The second-generation formulation UHT whipping cream was developed late last year and has successfully moved through testing. Sales into market are now underway. We expect production and sales volume for the UHT whipping cream will continue to increase. We have the capability and, importantly, the capacity to support this at our Dunsandel factory. Moving on to slide 14 and ingredients.
In support of both advanced nutrition and Food service, we continue to have a strong ingredients business led by our Chief Revenue Officer, Naiche Nogueira . Following the exit of raw milk in the North Island and with advanced nutrition activity, there has been a reduction in ingredients production volumes. However, our sales performance has increased. We have had favorable stream returns across the period and improved management of our foreign exchange. We continue to leverage strong customer relationships for new opportunities to expand ingredient sales. Our team is focused on extracting high-value returns across our range. Touching on Dairyworks, and this is slide 15. Many thanks go to Dairyworks Management and the team for your efforts while I've been Acting CEO at Synlait. The management team has led the business, ensuring we continue to experience strong growth and expanding market opportunities.
Across the New Zealand and Australian markets, our sales volumes and growth have continued to increase, with 23% growth in New Zealand and 28% in Australia. Our brand refresh activity is complete with a new Alpine brand now in market. A recent highlight is the new distribution agreement Dairyworks signed in February, which sees Dairyworks expand into Vietnam. This strategic partnership introduces 14 Dairyworks branded products to the market across 87 stores. Moving to slide 16 and talking about milk supply and on-farm excellence activity. Strengthening our future milk supply is a priority. Our goal is to show every farmer why Synlait is a valuable partner. The conversations we're having with farmers are really positive. We know farmers are watching our performance and the results today with interest. We are making progress with milk retention. The majority of our farmer suppliers are not under cease.
This is a significant improvement in our position from six months ago. We are also very comfortable with our forecasted milk supply for FY 2026. These reversal numbers are expected to increase ahead of the 31st of March, which is the final day for farmers to reverse their cease and take advantage of all of the new secured milk premiums. It is also worth noting that interest from potential new farmer suppliers has exceeded expectations over this period. Our on-farm team is doing an outstanding job in this space. Bring on the week ahead. Let's talk about maintaining momentum. As we look to the second half of FY 2025, our priorities are straightforward. Our three priorities for the second half are, firstly, to showcase Synlait's on-farm offering, ensuring Synlait is Canterbury farmers' processor of choice.
We know there is growing competition for milk in the region, and we are committed to being a key player. Secondly, we will seize every opportunity to create and deliver value for our existing and new customers. Thirdly, a laser focus on operational and cost efficiency will continue. The team and I look forward to welcoming Richard Wyeth when he joins Synlait in May 2025 as permanent CEO and the knowledge and experience which Richard brings. Moving to guidance, we must maintain the momentum that Synlait has gained. We will continue to deliver every day, every week, every quarter, and every year. Our outlook statement reflects that. Our continued focus on doing the fundamentals well will enable Synlait to deliver a significant improvement in our EBITDA performance compared to prior year.
Progress in the second half of FY 2025 will be slower than the first half, as we need to balance several opportunities and risks related to milk stream returns and foreign exchange. We will also continue to deliver ongoing operational cost improvements. You will note the large pink box to the right of the slide. It is important to note, as I already have in prior slides, that we are comfortable with our forecasted milk supply for the next financial year. The majority of our farmer suppliers are not under cease, a significant improvement in our position six months ago. At this time, I'd like to open up the call to questions.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Nick Mar with Macquarie. Please go ahead.
Good morning. Could you just talk to the net debt number, so the target range of $250 million-$ 300 million? I believe it was sort of $200 million-$ 250 million at the time of the equity raises. Can you just talk through the differences there, whether it's how it's calculated or what the moving parts are within cash flows that have seen that change?
Thanks, Nick. This is Andy speaking. Regarding the net debt, which we communicated for the full year, actually, if you can remember what we just shared, for the half year, we are about $ 392 million. What we expected, the improvement can come from our better improvement for our inventory and also shift some challenges from the supplier advance payment to the, let's say, the normal payment terms, together with continuously trading performance, which can contribute for the cash flow.
Yes. My question was not from the first half to the second half. It was from the prior guidance for closing FY 2025 net debt, which was $50 million lower across the range, and that was at the time of the raising. What were the key factors that have changed since then? Is it mostly milk price and advance rates, or is there something else?
No, actually, I do remember last time when we communicated, this is regarding this $200-$250. We have the shareholder loss, which is not included. Now we try to make everything clear. Currently, when we talk about $250-$300, it is definitely included for the shareholder loan.
The previous time around $200-$250 did not. That means that the equivalent range would have been $330-$380, and now you are at $250-$300. It is now $80 million better. Is that what you are saying?
Yes. Let's say the last time, it's really a bit, let's say, it's not very clear because at this time, when we stated, it's also we listed for this senior debt. We just want to make it 100% clear regarding the net debt compared with senior debt.
Okay. Sure. In terms of the EBITDA kind of outlook, when you're talking about the second half, progress will be slower than the first half. Are you talking sort of the absolute dollar value in the second half for EBITDA will be less than the first half, or are you talking percentage increase, or are you talking some other kind of delta in terms of how you talk about that financial progress? I'm just trying to understand what you're talking about in there. Because if you then took the net debt number and the net debt to EBITDA covenant ratio, it implies a sort of very, very low EBITDA number to meet compliance. Obviously, you should be above that, but just trying to get some idea of the range.
Yes, Nick. I'll try and make it really simple. Don't take your first half EBITDA and times it by two. Is that what we're saying? We do have headwinds coming at us. It will be significantly improved year on- year for the full year, but on absolute dollars, if you times it by two, that's not accurate. Does that make sense?
Okay. No, that's fine. Yeah. We can chat through more later on.
Yeah, no problem.
Your next question comes from Matt Montgomery with Forsyth Barr. Please go ahead.
Hi, guys. Good morning. Well done on a solid set of numbers. Just on next question there, I think your guidance for the second half is in the context of sort of stream returns and FX. Are you able to quantify what the 1H result benefited from both of those factors year- on- year?
Just to try to clarify, your question is more for the second half of the year regarding the stream return FX other than the first half, right?
Sorry, Andy. In the first half, in your first half EBITDA, what was the benefit versus the prior year from FX and stream returns?
Okay. Actually, I only have the FX numbers in my mind, and I can come back to you for the stream returns. For the FX, actually, the impact is around $ 14 million-$ 15 million. This is mostly related with the ingredients business. If we remember last year for the full-year result, we communicated we have some shortage or shortfall for the foreign exchange, and this is really short for the moment. The team, the management is focused on the foreign exchange and happy to see this good outcome.
Okay. Just to clarify, the first half versus last year benefited by $ 14-15 million in terms of FX.
Yes.
Okay. Thank you. Just on the North Island, I think previously you had commented on sort of the drag or the losses that that plant had been contributing. Are you able to talk to that in the first half?
Yes. Look, I think when we talk about the North Island asset, there has been a drag. I think we made a pretty clear decision early on that there was going to come a plant for advanced nutrition, which means we did not need the raw milk. Exiting that raw milk has allowed us to really reset that cost base on that asset. What we have done is we have improved roughly 30% where we were for the first half. We are on, if not slightly ahead of, what we call budget for that plant for FY 2025, first half.
Can you quantify what the drag was in the half?
Yeah. Not specifically. You know that. That's pretty sensitive information.
Okay. Thanks, guys.
No problem.
Your next question comes from Adrian Allbon with Jarden. Please go ahead.
Good morning, team. Just wondering if we can come back to page six of the presentation. Can you just sort of bridge the performance in advanced nutritional a little clearer for us, particularly in the cost per metric ton? I noticed the overall gross margin per metric ton is sort of at $2,000 or close to $2,900, coming off a PCP of kind of closer to $2,000. Also within that context, I guess your inventory provisions are quite high, like $22 million versus $10 million in the PCP.
Yeah. Hey, this is Andy speaking. Actually, I can just give you a bit of color for that, and afterwards, maybe Tim can just give you some others. Regarding advanced nutrition, this is exactly the same as what we communicated before. This is mostly driven by the product mix. That's why the cost per metric ton is dropped. This is the first reason. Secondly, the reason is that due to based on the pricing model, some of the ingredients material will pass through from our supply to our customer. That's why this is the main driving for these cost reductions. This is the first point. Secondly, sorry, what's the question?
The inventory.
The inventory, yes. Coming back to the inventory, because as we said, new customers, new demand, this is more related with this ramp-up of some additional cost. Also, another thing, actually, it's not related with advanced nutrition. It is more what is from the ingredients. What we said before is that the second half year, one of the things balancing is for the headwind of the stream return. Here, just end of January, we already see some kind of these challenges. That's why this is more like what we take it from inventory provision for the net realizable value to booked. Sorry.
Adrian, just talking to you off the metric ton, two drivers of that decrease, certainly volume. You've seen that. We've talked about that strong volume coming through. That's actually been coupled with, I guess, a relentless focus on conversion costs and the drivers of conversion costs. We're able to get more through those lines at a less cost. Whether that's shift structures, consumables, all those sorts of things, those fundamentals that good businesses focus on every day. When you get those two combined, you start getting those benefits. I'll go as far as to say we should be able to get that lower again. Real focus in that area.
Okay. Just, sorry, there's quite a lot in there. I guess there's a reasonable amount in the question, and there's quite a lot in the answer. In terms of if we just start, with the provisions, were they mainly, is the big uplift in provisions mostly related to ingredients and views on stream return products?
Yeah. I should say half-half. Half is because of what you just mentioned. Another is that for the nutrition. That part.
Okay. Probably just to simplify my next question, as a sort of for modeling purposes, would we expect the gross margin per ton that you've achieved in the first half to be closer to what you should achieve going forward, like second half and into next year, given all the other things that you mentioned?
Yep. 100%.
Okay. Very good. Next question. Just on the cessation notices and the milk supply, I know you've made the comment that there's evidence that you've made demonstrable progress over the last six months, and you're comfortable with the FY 2026 milk supply. When do you think you'll be in a position, I noticed in the going concerns sort of commentary, when do you think you'll be in a position to sort of have comfort around the FY 2027 balance? I mean, it's kind of important also in the context of you've got quite a lot of debt refinancing. Firstly, the bank debt in October, and then you've got the Bright Loan that follows that in July of the next year.
Look, we're reasonably comfortable now with 2027. As we've said, the majority of our other milk is not under cease. A lot of our farmers we're looking for today that are under cease still, we're looking for today and today's result. We're pretty confident, or very confident, that we've got momentum, and that'll take us through. In that sense, look, we're in a really good spot from where we were six months ago. Andy's met with our banks just recently. Really positive signs coming out of that in terms of, one, the result, but more importantly, as we look forward and the momentum we've got. Across those two, a lot more confidence today than we were six months ago, for sure.
Okay. That would be because I guess the statement in the account still kind of throws a bit of caution on the FY 2027 year. You are saying, as you say here today, you have good momentum against that statement?
Spot on.
Okay. Thank you.
Your next question comes from Marcus Curley with UBS. Please go ahead.
Good morning. I just wondered if we can have one more on that milk supply. When you say majority, it's obviously a pretty loose description. Could you give us a little bit of a range in terms of what the percentage is that you have at the moment secured?
Yeah. Majority is majority. We have 204 South Island suppliers, right? What I can't give you is an absolute number because of the commercial sensitivity with that. What I'll also say is the number's changing daily. At the moment, it's probably changing hourly as we're working with our farmers and working it through. Right now, 204 South Island farmers, majority aren't under cease. We have a very minimal amount that have already made that choice. As I said, the rest of them, the feedback they've given us is, look, they like what they hear, but they want to see it, I guess, in black and white, which is what today's about. Over the next week, we'll be meeting with those specific farmers. The momentum we have, we really encourage that we'll be in a good spot for 2027 milk supply.
When's the cutoff date for the decision around milk supply in 2027?
Yeah. So look, we have two dates. March 31 with our revised secure premium that we put out in January, which is in effect a $0.20 plus a 10, 10, 10. That closes the 31 of March, and then the straight $0.20 closes at the end of April.
At the end of April is a close-off for milk supply in 2027?
Basically, by May, you have a close-off. Yeah.
Okay. 1 May of this year?
Sorry. 1 June.
1 June.
Sorry. 1 June of this year for FY 2027?
Yep. Correct.
Okay. Secondly, I know your comments around sensitivity of the North Island, but could you just give us some color? Is it loss-making at the gross profit level? Not asking for the level, but is it still a negative number?
Yes.
Yeah. Okay.
It is still a negative, but it has improved versus a year ago.
Okay. Could you talk just extending that? The presentation talks about improvements in manufacturing costs. You couldn't quantify that. Previous presentations, you have talked to the overall level of manufacturing costs. I just wondered if you've got back to hand what the year-on-year savings in manufacturing costs were at absolute dollars?
Yeah. Marcus, actually, there are two kinds of main drivers for this manufacturing cost reductions or let's say optimization. Part of it is purely from absolute value point of view. We are talking about $ 2.6 million. Just bear in mind, this is based on our 28% or 25%, I don't remember the exact number, for volume increase. For the moment, I can only provide you with an absolute value. If we are talking about apple-to-apple base, I can calculate the number and get back to you later.
Yeah. Yeah. That would be useful in terms of what the absolute manufacturing cost base has moved by, and obviously collectively across the North Island and South Island. Finally, just in terms of lactoferrin, again, normally you'd give some sort of directional color. Could you talk about the incremental contribution to gross profit? I assume it's an increase for lactoferrin given you probably had inventory. I think you had inventory on hand that you've probably sold down, plus manufacturing. Can you give us any color what lactoferrin contributed to the gross profit improvement in the half?
I think, Marcus, we probably can't right now. It's pretty commercially sensitive in terms of what you're asking. I think what we can say is the pricing has stabilized. Pricing has stabilized for lactoferrin in the market. I think we're now more around $ 570-$ 600, $ 650 per kilo. That's helped. Certainly from a stock position, we're in a really good spot in terms of selling that through. The actual question you're asking is very sensitive, so we can't give that.
How about directions? Was the gross profit from lactoferrin up or down year-on-year?
It's just stable. As mentioned, actually, the price is more stable. Let's say, for a while. That's why we didn't see big changes from profit perspective.
Okay. That is it for me. Thank you.
Once again, if you wish to ask a question, please press star one on your telephone. Your next question comes from Stephen Ridgewell with Craigs IP. Please go ahead.
Yeah. Good morning. And first of all, well done on the much-improved performance this period. Just had a couple of questions. Look, first of all, I'm just trying to get a sense of how sustainable the 28% volume growth for advanced nutrition in first half 2025 is. Can you give us a sense of how much of that growth roughly was due to restocking from your major customer during the period following some production issues over September, July, August? Is that restocking now finished? Relatedly, how much of that growth, 28% growth, is kind of being driven by new customers at Pokeno and Dunsandel, please?
I think, yeah, the demand for I'll try and answer in a couple of ways for you. Obviously, what you're asking is quite sensitive information, certainly from our customer's perspective. I think from an advanced nutrition perspective, we're seeing good demand for the end of FY 2025. It's solid demand. You would have seen that through other results that have come through as well. We're really confident we can meet that demand and realize that opportunity. In terms of new customer demand, look, it's relatively small but growing at a pretty good rate. That's an encouraging part. That's what I'm base powder , as opposed to a canned finish. That is a multinational customer. In 2026, we have two additional, I would call, customers of scale that are coming through the process, whether that is their international trials, quality audits.
Again, that outlook around that advanced nutrition-based powder looks quite promising. The team have done a great job to qualify these customers and really sell some of these benefits to them.
Okay. It sounds like it's comfortably under half of the growth that's being driven by new customers, just reading between the lines there.
Yeah. Yeah. That's fair.
Yeah. Yeah. Okay. Cool. In terms of your cautious commentary on the second half or more cautious commentary, I guess, can you outline at a high level expectations for Dairyworks' performance in the second half?
Sorry. Can you just repeat that?
Are you expecting growth? Just in terms of the second half outlook, are you expecting improved performance from Dairyworks or reduced performance relative to BCP in the second half?
Yeah. Look, expecting an improved performance again for the back half of Dairyworks. That business has strong momentum. We've talked about Australia, Southeast Asia. They're navigating the commodity price as well. They've got cost and optimization. We talked about some of the capital efficiency projects that have gone into them, and we're beginning to realize the benefit of those. Yep, they'll have a strong back half.
Okay. That's helpful. Last one from me. Just on cost out, I guess, a year ago or even nine months ago, when the financial position of the company was a bit more in question, there were plans to take out a lot of cost from the business. I'm just wondering, to what extent does the strong result you've reported today reflect that cost out? Is there sort of further cost out that you see, material cost out you see sort of that the business can take out in the next period or two?
Yeah. Look, for the moment, we are on the way, still very focusing on the cost. Definitely for the half year, we see some of that benefit, mostly focused on consultancy fees and also some legal fees. Here in the business, it's very clear we try just to do it by our own. We see that this can be a very long journey. For the moment, we are on the way to further optimizing or reduce the cost.
I mean, is there any even high-level quantification in terms of the potential to take cost out of the business? We're talking about the tens of millions or relatively small opportunities to further optimize. Just a rough idea would be helpful.
Yeah. Let's say for the first half year that we have a number around, let's say, the $ 2-$3 million, which has reduced, but this is already taking into account the inflation. Without inflation, it can be $ 3-4 million for the half year. Let's say for the four years, around $ 10 million, something like that.
Yeah. I think your question going forward, what we've done is we've realized that we can operate at a shift structure or a headcount and improve on that. Andy's talked about 2-3 now. I think there's at least a further 2-3 as we head into 2026 that we'll realize in that 2026 year. It's funny, when you start focusing on it, you get cost out, you start lifting up a rock, and you realize there's more value to be had in the value chain in other areas. There's definitely more to be had, no doubt about it.
Cool. Thank you. That's all from me.
Your next question comes from Jonathan Snape with Bell Potter. Please go ahead.
Yeah. Thanks. Can you hear me okay?
We can hear you, John.
Great. Look, first one's probably the easiest, so I'll get that out of the way. The assigned receivables facility, I couldn't see any reference to how much that was utilized in the half. Was there much of a change relative to the first half position, given I think there's some references in there that you'd increase your sales, it will worsen, I would assume that would have been in there. Is there any material change in that off-balance sheet facility?
Yeah. Hey, Jonathan, I don't have a number for the moment, but definitely, I can send you some kind of numbers afterwards. Because for the moment, what I do remember, yes, we have some additional ones which join for this account receivables facility . I will send you some information afterwards.
All right.
Great. Look, just on the nutritional side, I noticed the inventory position was down quite a lot. It's probably the lowest in a few years. The prepayments were also down quite materially, half on half. I'm just trying to reconcile those two numbers coming down with forward-looking indications, I think, of where you think that business kind of goes. Because it ain't kind of line up unless you intend on really ramping up production in the second half. Is that, I guess, the plan? It does look like quite a low emergency position to exit the period.
Yeah. Look, absolutely. You're spot on. From a nutritionist perspective, we are ramped up. We'll continue to be ramped up to make sure that when we end the season and start the season, we're in a good spot for our customers. Yep, you're spot on. Lots of effort going into that area at the moment.
Okay. I guess just as a quick follow-on around, base powder in this half, was there much in terms of sales of just pure base powder?
Look, our new customers that were brought on, our base powders, so that's certainly been helped a lot. Coming back, cans certainly have dominated coming through. As we said, we need to make sure we've got the right appropriate stock cover for end of season to beginning of season. Yep, that advanced nutrition base powder has increased due to the new customers that have come on board.
Okay. That was almost negligible in the PCP, is that right? Off memory?
Say that again, sorry?
There was next to none of that in the first half of last year, was there? Instead of just pure base powder sales.
Yeah. You're right. The new customer that I'm talking about has only come on in 2025, so yes, correct.
Yeah. All right. Great. Thank you.
No problem.
There are no further questions at this time. I'll now hand back to Hannah Lynch for closing remarks.
Thanks, everyone, for your engagement and participation in today's call. As always, if there's any follow-up, feel free to reach out to me directly. Otherwise, we look forward to connecting with many of you over the coming days. Thanks for joining us.
That does conclude our conference for today. Thank you for participating. You may now disconnect.