Allied Farmers Limited · NZX:ALF
Allied Farmers — Shareholder Meeting (November 2021)
60 slides from Allied Farmers's shareholder meeting presentation, Nov 24, 2021
Slide 1: Annual Shareholders Meeting 24 November 2021
S I N C E 18 8 9 ANNUAL SHAREHOLDERS MEETING 24 November 2021 Since 1889 alliedfarmers.co.nz
Slide 2: Agenda
Agenda 1. Chair’s Introduction 2. Presentation to Shareholders 3. Shareholder Discussion 4. Resolutions Since 1889 alliedfarmers.co.nz 1
Slide 3: FY 2021 Result Commentary
FY 2021 Result Commentary FY 2021 Result Commentary: - Allied Farmers reported a Net Profit After Tax (NPAT) of $2.021mln in FY 2021 vs. $0.767mln in FY 2020. - The result reflected an improved performance from New Zealand Farmers Livestock (NZFL) and an inaugural half year contribution from New Zea
Slide 4: Tax Losses a Valuable Asset for Shareholders
Tax Losses a Valuable Asset for Shareholders Tax Losses: - Allied Farmers had tax losses as at 30 June 2021 which amounted to $40,568,976. - Shareholder continuity remains intact and we have recently obtained advice from KPMG to ensure this valuable asset is maintained. (Business continuity is unlik
Slide 5: Allied Farmers Structure as at 30 June 2021 & Strategic Review
Allied Farmers Structure as at 30 June 2021& Strategic Review (67%) (100%) (50%) Strategic Review: - Strategic Review (undertaken with Northington Partners) revealed finance strategy as a standalone operation would not add value for shareholders given the level of scale and investment required. Acco
Slide 6: Poor Track Record of Historical Performance...
Poor Track Record of Historical Performance... - Up until recently, Allied Farmers had delivered Total Shareholder Returns (TSR) of ~0% since 2017*. * Data Source & Analytics: Northington Partners. ** Fully imputed. ** Since 1889 alliedfarmers.co.nz 5
Slide 7: High Overheads at Parent Company also Weighed Heavily...
High Overheads at Parent Company also Weighed Heavily... - Allied Farmers Parent Company costs have been +$240K higher than the average of its small cap peers*. - The costs detailed below are flattered by tax benefits (e.g., actual costs were $812,000 in FY 2021). ** * Data Source & Analytics: North
Slide 8: Considerable Change in the Share Register over 2021
Considerable Change in the Share Register over 2021 has removed an “Overhang” of Sellers and seen a shift in the Register to those Investors Aligned with New Zealand Rural Land Company (NZL:NZX) Top 10 Shareholders - 30 June 2020 Top 10 Shareholders - 30 June 2021 Top 10 Shareholders - 22 November 2
Slide 9: Change in Share Register by Geographic Location
Change in Share Register by Geographic Location Otago & Southland Otago & Southland 1.94% Nelson & Otago & Southland 2.00% Otago & Southland Nelson & Tasman 1.07% Tasman Gisbourne & OverseasNelson & 1.94% Nelson & Overseas 2.00% 0.98% Tasman Canterbury Nelson & Hawkes Bay 3.18% 1.05% Overseas 2.29%
Slide 10: Governance Structure & Costs have been Realigned
Governance Structure & Costs have been Realigned Governance & Costs: - Allied Farmers is actually an investment company and therefore needs a robust but simple governance framework with an increased vigilance on costs. - Accordingly, Allied Farmers is in the process of restructuring to reduce costs
Slide 11: Governance Structure
Governance Structure Philip Luscombe Mark Franklin Christopher Swasbrook Independent Director Independent Chair Director Philip was appointed a Director of Allied Farmers Limited in Mark has extensive experience in the infrastructure, energy, and Chris is one of the founders and directors of New Zea
Slide 12: FY 2022 Operational Update
FY 2022 Operational Update - The $1.0 mln bond was repaid in September 2021 which will reduce interest costs at parent company level. - Board has been reduced in size from 5 to 3. - Rural Funding SolutioNZ will be wound up and all future lending activities will take place via New Zealand Farmers Liv
Slide 13: New Zealand Farmers Livestock Saleyards
New Zealand Farmers Livestock Saleyards NZFL has ownership interests in the saleyards detailed below: Saleyard Locations Ownership Frankton (Waikato) 50% Rongotea (Manawatu) 100% Stratford (Taranaki) 50% Te Kuiti (King Country) 33% Raglan (Waikato) 33% NZFL also operates from other sales yards aroun
Slide 14: New Zealand Rural Land Management - Investor Update
New Zealand Rural Land Management - Investor Update INVESTOR UPDATE 22 November 2021 listed on: Since 1889 alliedfarmers.co.nz 13
Slide 15: New Zealand Rural Land Co
NEW ZEALAND Rural Land Co S U S TA I N A B L E A O T E A R O A INVESTOR UPDATE 22 November 2021 www.nzrlc.co.nz listed on:
Slide 16: Disclaimer
DISCLAIMER The information and opinions in this presentation were prepared by New Zealand Rural Land Company (NZL). NZL makes no representation or warranty as to the accuracy or completeness of the information in this report. Opinions including estimates and projections in this report constitute the
Slide 17: New Zealand Rural Land Company Highlights
NEW ZEALAND RURAL LAND COMPANY HIGHLIGHTS 01 NZL reported an inaugural net profit after 02 NZL’s audited Net Asset Value (NAV) was 03 NZL expects to pay an inaugural interim dividend tax of +$15.115M as at 30 June 2021 after $1.3968/share as at 30 June 2021. NZL of 2.0 cps in February 2022 and follo
Slide 18: New Zealand Rural Land Company Timeline
NEW ZEALAND RURAL LAND COMPANY TIMELINE 21 December 2020 23 March 2021 01 June 2021 04 June 2021 Completed $75M IPO Announced first $ 10.24M Settled $ 124.25M of Announced 2:3 Rights and listed on the NZX. unconditional acquisition in acquisitions in North Issue at $ 1.10 / share. Southland, New Zea
Slide 19: New Zealand Rural Land Company Background
NEW ZEALAND RURAL LAND COMPANY BACKGROUND New Zealand Rural Land Company (NZL) was incorporated for the purpose of acquiring rural land across New Zealand’s agricultural sector and is the only agricultural land based listed property company on the NZX. NZL separates land ownership and operations. NZ
Slide 20: A Rural Land Owner in a World Leading Agricultural Economy
NEW ZEALAND RURAL LAND COMPANY A RURAL LAND OWNER IN A WORLD LEADING AGRICULTURAL ECONOMY 1 ST COUNTRY PARTNER OF THE GLOBAL FARM 2050 INITIATIVE 90 M PEOPLE COULD GET ALL THEIR DAIRY FROM NEW ZEALAND The Farm 2050 Initiative is a global programme focused New Zealand farmers and dairy companies prod
Slide 21: Portfolio Update
PORTFOLIO UPDATE
Slide 22: FY22 Acquisition - Maniototo
NEW ZEALAND RURAL LAND COMPANY FY22 ACQUISITION - MANIOTOTO On 10 November 2021, NZL completed the acquisition of a large scale dairy asset portfolio comprising of six dairy assets in Maniototo, Central Otago totalling approximately 3,500 hectares. MANIOTOTO purchase price location total ha farm typ
Slide 23: FY22 Acquisition - Makikihi
NEW ZEALAND RURAL LAND COMPANY FY22 ACQUISITION - MAKIKIHI On 1 August 2021, NZL completed the acquisition of a 493 Ha Hybrid Dairy Farm. NZL has already entered into a lease of this property with Performance Dairy Limited that will be for 11 years with two 12 year rights of renewal. MAKIKIHI ROAD p
Slide 24: Portfolio as at 22 November 2021
NEW ZEALAND RURAL LAND COMPANY PORTFOLIO AS AT 22 NOVEMBER 2021 The charts below detail by Financial Year NZL’s rural land portfolio - including revaluations gains/losses (if any). NZL’S ACQUISITIONS PER ANNUM (P.A.) NZL‘S TOTAL (CUMULATIVE) RURAL LAND PORTFOLIO NZ$ Millions $240 24,000 Hectares NZ$
Slide 25: Portfolio Overview as at 22 November 2021
NEW ZEALAND RURAL LAND COMPANY PORTFOLIO OVERVIEW AS AT 22 NOVEMBER 2021 location otago/southland canterbury total land area (ha) 4,482 6,330 10,812 rural asset class Dairy Dairy Dairy purchase price1 $83.61M $113.68M $196.89M weighted average 5.79% 5.44% 5.56% cap rate2 walt (years)3 10.43 10.55 10
Slide 26: Lease Profiles as at 22 November 2021
NEW ZEALAND RURAL LAND COMPANY LEASE PROFILES AS AT 22 NOVEMBER 2021 NZL’s WALT (Weighted Average Lease Term) is currently 10.50 years. NZL’s leases all have 3, 6, and 9 year CPI increases with rights of renewal in years 10 and 11 (tenancy dependent). NZL LEASE EXPIRY BY TENANT 100% 90% 80% 70% 60%
Slide 27: Tenant Concentration as at 22 November 2021
NEW ZEALAND RURAL LAND COMPANY TENANT CONCENTRATION AS AT 22 NOVEMBER 2021 NZL’s current tenant concentration is detailed in the pie chart (right). NZL expects its tenant concentration to reduce as it continues to grow its asset and tenant base. NZL Tenant Concentration as a % of Lease Value 11% 33%
Slide 28: Capital Structure Overview as at 22 November 2021
NEW ZEALAND RURAL LAND COMPANY CAPITAL STRUCTURE OVERVIEW AS AT 22 NOVEMBER 2021 As at 22 November 2021, NZL’s total debt is $88.50M with Rabobank (NZ). NZL’s Average Cost of Debt = 2.9% as at 22 November 2021. [NZL has swaps in place for ~27% of its debt facility with Rabobank.] NZL Debt NZL Debt F
Slide 29: FFO/AFFO/Dividend Forecasts
FFO/AFFO/DIVIDEND FORECASTS NEW ZEALAND RURAL LAND COMPANY 15
Slide 30: FFO/AFFO Forecasts Based on Current Portfolio
NEW ZEALAND RURAL LAND COMPANY FFO/AFFO FORECASTS* BASED ON CURRENT PORTFOLIO Forecast Funds from Operations (FFO): FY2022 to FY2024 FFO is the organisation’s underlying and recurring earnings from its operations. This is determined by adjusting statutory net profit for certain non-cash and other it
Slide 31: Net Cash Dividend Yield Forecasts Based on Current Portfolio
NEW ZEALAND RURAL LAND COMPANY NET CASH DIVIDEND YIELD FORECASTS BASED ON CURRENT PORTFOLIO NZL’s dividend policy is to payout 95% of AFFO; NZL is currently forecasting a FY22 net cash dividend of 4.70 cps this equates to a net cash dividend yield of 4.23%* rising to 5.50%* in FY24; Forecast net cas
Slide 32: NAV Growth
NAV GROWTH NEW ZEALAND RURAL LAND COMPANY 18
Slide 33: Attractive Growth in Net Asset Value per Share
NEW ZEALAND RURAL LAND COMPANY ATTRACTIVE GROWTH IN NET ASSET VALUE (NAV) PER SHARE FOR PERIOD ENDING 30 JUNE 2021 WHICH WE EXPECT TO CONTINUE NZL’s growth in Audited Net Asset Value (NAV) for the year ending 30 June 2021 highlights a combination of attractive large scale acquisitions and industry t
Slide 34: Company & Management Structure + Shareholdings
COMPANY & MANAGEMENT STRUCTURE + SHAREHOLDINGS NEW ZEALAND RURAL LAND COMPANY 20
Slide 35: Key People as at 22 November 2021
NEW ZEALAND RURAL LAND COMPANY KEY PEOPLE AS AT 22 NOVEMBER 2021 NEW ZEALAND Rural Land Co S U S TA I N A B L E A O T E A R O A ROB CAMPBELL SARAH KENNEDY TIA GREENAWAY CHRISTOPHER SWASBROOK Independent Chair Independent Director Independent Director Executive Director Chair – WEL Group Limited Dire
Slide 36: Externally Managed Structure
NEW ZEALAND RURAL LAND COMPANY EXTERNALLY MANAGED STRUCTURE Accountants NEW ZEALAND Rural Land Co S U S TA I N A B L E A O T E A R O A Auditors NE W ZE AL AND Rur al L and Management Registry Listed 50.0% Listed Clyde & Rena 20.0% Holland 16.5% Richard Milsom 7.5% ROB SARAH TIA CHRISTOPHER CAMPBELL
Slide 37: Manager & Director Ownership Interests
NEW ZEALAND RURAL LAND COMPANY MANAGER & DIRECTOR OWNERSHIP INTERESTS NZL’s Director and Manager Shareholding Interests as at 22 November 2021: All Directors & Shareholders of the Manager are investors in NZL (including Independent Chair of the Manager - Shelley Ruha). # Shares % Ownership Clyde & R
Slide 38: Foreign Ownership
FOREIGN OWNERSHIP NEW ZEALAND RURAL LAND COMPANY 24
Slide 39: Foreign Ownership
NEW ZEALAND RURAL LAND COMPANY FOREIGN OWNERSHIP NEW ZEALAND BUYER CURRENT LISTED CURRENT NZL FOREIGN COMPANY FOREIGN OWNERSHIP NZL is highly advantaged OWNERSHIP RULES because it is a New Zealand As at 30 September 2021, Under the Overseas Investment NZL has foreign domiciled buyer of rural land Am
Slide 40: Investor Contacts
INVESTOR CONTACTS
Slide 41: Investor Contacts
NEW ZEALAND RURAL LAND COMPANY INVESTOR CONTACTS Christopher Swasbrook Richard Milsom chris@nzrlc.co.nz richard@nzrlm.co.nz +64 21 928 262 +64 21 274 2476 Level 4, The Blade Level 4, The Blade 12 St Marks Road 12 St Marks Road Remuera Remuera Auckland 1050 Auckland 1050 New Zealand New Zealand
Slide 42: New Zealand Rural Land Co
NEW ZEALAND Rural Land Co S U S TA I N A B L E A O T E A R O A New Zealand Rural Land Company +64 9 379 6493 Level 4, 12 St Marks Road info@nzrlc.co.nz Remuera www.nzrlc.co.nz Auckland 1050 nzrlc New Zealand nzrlc listed on: NEW ZEALAND RURAL LAND COMPANY 28
Slide 43: NZ Farmers Livestock Report - CEO Steve Morrison
NZ Farmers Livestock Report CEO - Steve Morrison Since 1889 alliedfarmers.co.nz 42
Slide 44: NZ Farmers Livestock Report
NZ Farmers Livestock Report - NZ Farmers Livestock Agency - MyLivestock Platform and App - Redshaw Livestock - Farmers Meat Export - Livestock Finance – NZFL lead -Bullplan, Lambplan and General - Associated Auctioneers JV interests (Saleyards Management Ltd) Since 1889 alliedfarmers.co.nz 43
Slide 45: NZ Farmers Livestock Report - Working with Farmers for Farmers
NZ Farmers Livestock Report Working with Farmers for Farmers - To be the best solution provider to livestock farmers, growing value for them and our investors. - Experienced and growing team - Adding value for clients - every day - Sales/purchase channel & Deal closure - Win-Win business - Moving wi
Slide 46: NZ Farmers Livestock Report - An Improved Year
NZ Farmers Livestock Report Working with Farmers for Farmers - An Improved Year – still challenging - Improved market conditions - Just behind of budget YTD - Covid 19 – Essential service & Yard operations at L3 - Supporting our staff, appreciated the Goverment support - Worked hard for farmers - Di
Slide 47: NZ Farmers Livestock Report
NZ Farmers Livestock Report Working with Farmers for Farmers Since 1889 alliedfarmers.co.nz 46
Slide 48: NZ Farmers Livestock Report
NZ Farmers Livestock Report Working with Farmers for Farmers Since 1889 alliedfarmers.co.nz 47
Slide 49: NZ Farmers Livestock Report - Annual Average Daily Users
NZ Farmers Livestock Report Working with Farmers for Farmers 400 MyLiveStock - Annual Average Daily Users 350 300 Annual Average Daily Users 250 200 337 150 252 100 181 50 0 1 July 2018 - 30 June 2019 1 July 2019 - 30 June 2020 1 July 2020 - 30 June 2021 1 July 2018 - 1 July 2019 - 1 July 2020 - Per
Slide 50: NZ Farmers Livestock Report
NZ Farmers Livestock Report Working with Farmers for Farmers Since 1889 alliedfarmers.co.nz 49
Slide 51: NZ Farmers Livestock Report
NZ Farmers Livestock Report Working with Farmers for Farmers Since 1889 alliedfarmers.co.nz 50
Slide 52: NZ Farmers Livestock Report - Earnings Performance
NZ Farmers Livestock Report Working with Farmers for Farmers Earnings Performance: NZFL Group Earnings and Equity, $000s 12000 10000 8000 6000 4000 2000 0 FY 2021 FY 2020 FY 2019 FY 2018 FY 2017 Earnings Equity Since 1889 alliedfarmers.co.nz 51
Slide 53: FY2022 Performance - First 4 Months
NZ Farmers Livestock Report Working with Farmers for Farmers FY2022 Performance – First 4 months: Livestock - Slow livestock start, accelerating in November - Farmer caution, weather/grass - Dealing Ok with Bovis and Covid - Very strong market pricing - Herd forward sales underway - Positive - with
Slide 54: Health & Safety & Compliance
NZ Farmers Livestock Report Working with Farmers for Farmers Health & Safety & Compliance: - Health and Safety of our staff a key priority – Audit, charter, car-tracking, operational focus - Compliance - Structure, resource and focus to ensure compliance, animal welfare and risk management Since 188
Slide 55: Looking Forward
NZ Farmers Livestock Report Working with Farmers for Farmers Looking Forward: - Working with farmers for farmers - Building & supporting teams - Digital – tools/hybrid auction/information portal, CRM, immediacy - Developing/refining FMEL business - Broader farmer finance options - Building value & c
Slide 56: Questions...
NZ Farmers Livestock Report Working with Farmers for Farmers Questions... Since 1889 alliedfarmers.co.nz 55
Slide 57: Resolutions
Resolutions Resolutions & Other Business: Resolution #1: Director election: That Mark Franklin be elected as a Director of the Company. Resolution #2: Director election: That Christopher Swasbrook be elected as a Director of the Company. Resolution #3: Auditor’s fees: That the re-appointment of KPMG
Slide 58: Proxy Votes
Proxy Votes Proxy Votes: Since 1889 alliedfarmers.co.nz 57
Slide 59: Appendices
Appendices Appendices: Appendix #1: Allied Farmers Full Corporate Structure - as at 23 November 2021 - Pre Amalgamations Since 1889 alliedfarmers.co.nz 58
Slide 60: Appendix #1: Allied Farmers Full Corporate Structure
Appendix #1: Allied Farmers Full Corporate Structure - as at 23 November 2021 - Pre Amalgamations Since 1889 alliedfarmers.co.nz 59