2025/26 Interim Accounts

2 Livestock Improvement Corporation Interim Financial Statements for the six months ended 30 November 2025

Key results and position 4

Our results for the period 4

Our position 5

Our cash flows for the period 6

Changes in our position for the period 7

More details 8

Accounting policies 8

Business analysis 9

Bull team 10

Equity 11

Other information 12

‌STATEMENT OF RESULTS FOR THE PERIOD

For the six months ended 30 November 2025

‌STATEMENT OF POSITION

As at 30 November 2025

SIX MONTHS ENDED YEAR ENDED

Director

Date: 21 January 2026

Director

Date: 21 January 2026

‌STATEMENT OF CASH FLOWS FOR THE PERIOD

For the six months ended 30 November 2025

SIX MONTHS ENDED YEAR ENDED

‌STATEMENT OF CHANGES IN POSITION FOR THE PERIOD

For the six months ended 30 November 2025

‌Accounting entity

These financial statements set out the performance, position and cash flows of Livestock Improvement Corporation Limited ("LIC" or the "Company") and its subsidiaries (the "Group") for the six months ended 30 November 2025.

LIC is domiciled in New Zealand, registered under the Companies Act 1993 and the Co-operative Companies Act 1996, and listed on the Main Board of the New Zealand Stock Exchange Limited ("NZX"). LIC is an FMC Reporting Entity for the purposes of the Financial Reporting Act 2013 and the Financial Markets Conduct Act 2013.

These financial statements should be read in conjunction with the annual report for the year ended 31 May 2025.

Basis of preparation

1. Statement of compliance

   These financial statements comply with NZ GAAP as appropriate for Tier 1, for-profit entities, NZIFRS and IFRS.

2. Basis of measurement

   The financial statements have been prepared on a GST exclusive basis, with the exception of trade receivables and trade payables, which are reported inclusive of GST.

   The financial statements have been prepared on a historical cost basis, except for the Bull team, Land & Buildings and investments, which are all measured at fair value.

   The majority of the Group's business does not follow

   a clearly identifiable operating cycle, therefore the balance sheet is presented in order of liquidity as it is more relevant to the users of the financial statements.

3. Functional and presentation currency

   The functional currency of the Company and the presentation currency of the financial statements is New Zealand Dollars ("NZD"), with amounts rounded to the nearest thousand.

4. Use of estimates and judgements

   The key estimations and judgements made in preparing these financial statements are the valuation of the Bull team and the impairment testing of software and other intangible assets.

5. New or amended standards adopted in current year and standards issued but not yet effective

   Accounting policies have been applied consistently with prior periods. No new or amended standards were adopted in the current year that had a significant impact.

   NZ IFRS 18 Presentation and Disclosure in Financial Statements is effective for the year ending 31 May 2028 and will impact the presentation of the Statement of Results

   for the Year, with an allocation of income and expenses between operating, investing and financing categories, and new sub-totals such as Operating profit. Financial performance measures used to explain the Group financial

   performance in public communications outside the financial statements will also be required to be disclosed, and there is enhanced guidance on the aggregation and disaggregation of information. The Group is assessing the effect of applying NZ IFRS 18.

6. Climate risk

   Climate change and how farmer shareholders, regulators and others respond may an impact on the Group's future revenue and the recognised amounts of assets and liabilities. While the effects of climate change are a continuing source of uncertainty, climate-related risks have been assessed as not having a material impact on these financial statements.

   Reviews of accounting estimates (including the valuation of the bull team and the valuation of land and buildings), judgements and impairment testing assumptions have considered potential future impacts of climate change.

   1. ‌Business analysis

      1. Operating segments

         The Group operates in four key operating segments as set out below, and across four key geographies as set out below. The information below reflects the information regularly reported to the Chief Executive on those key operating segments:

         • NZ market genetics: provides bovine genetic breeding material and related services, predominately to dairy farmers

         • Testing: herd testing, on-farm support and DNA and animal health testing services

         • Farm software: data recording, tags and farm management information services

         • International: provides bovine genetic breeding material and related services to offshore markets

NZ Market Genetics revenue is primarily recognised at a point in time, upon delivery of product to the customer. All other revenue lines are primarily recognised over time, as the service to the customer is provided.

In thousands of New Zealand dollars

SIX MONTHS ENDED 30 NOV 2025

(Unaudited)

NZ market genetics

Testing

Farm software

International Other Eliminations Total

External revenue 116,480 36,604 28,743 7,218 6,201 - 195,246

Inter-segment revenue - - - - 1,562 (1,562) -Total revenue 116,480 36,604 28,743 7,218 7,763 (1,562) 195,246

Depreciation & amortisation (2,089) (4,316) (1,659) (74) (5,962) - (14,100)

Segment gross profit before tax expense 53,755 4,629 17,351 1,703 1,240 78,678

Bull team revaluation -

Unallocated amounts (31,854)

Profit/(loss) before tax expense 46,824

software

1. ‌Business analysis (cont.)

   (i) Operating segments

   In thousands of New Zealand dollars

   YEAR ENDED 31 MAY 2025 (Audited)	NZ market genetics	Testing	Farm software	International	Other	Eliminations	Total
   External revenue	119,933	79,442	61,800	16,037	17,895	-	295,107
   Inter-segment revenue	-	-	-	-	2,133	(2,133)	-
   Total revenue	119,933	79,442	61,800	16,037	20,028	(2,133)	295,107
   Depreciation & amortisation	(3,476)	(10,377)	(3,742)	(169)	(10,287)	-	(28,051)
   Segment gross profit before tax expense	31,138	11,609	33,232	2,963	2,263	-	81,205
   Bull team revaluation							12,292
   Unallocated amounts							(53,220)
   Profit/(loss) before tax expense							40,277

   The Other operating segment includes research & development and support services. Unallocated amounts include personnel costs, other expenses and net finance costs. Operating segments have been updated, including comparatives, to more closely align with LIC's strategy. The changes consolidate LIC's testing services and provide greater insight on the performance of LIC's international business.

   LIC's business, particularly the Parent's artificial breeding business, is highly seasonal. November results, since they incorporate the majority of the artificial breeding revenues but not a similar proportion of total costs, are not indicative of the second half result nor, therefore, the full year result.

2. Bull team

   The bull team is the cornerstone asset of LIC's genetics business. The bulls from which the bull team are selected are carried at their fair value, which is based on LIC's modelling of future cash flows from the bulls (a "Level 3 valuation"). Changes in their fair value are reported in profit/(loss) for the period. The fair value from the bulls is partly dependent on the future sales mix of LIC's genetics products, which correlates to movements in the cow population and Farmgate Milk Price. The valuation is also sensitive to changes in the WACC rate used to discount future cash flows and the run-off profile of bulls (revenue attributable) that make up the bull team. Further information on the bull team and key drivers of the valuation is available in the annual report for the year ended 31 May 2025.

3. ‌Equity

   All Ordinary Shares have voting rights and the right to receive dividends based on the profits of the Company.

   At reporting date there were 142,344,836 Ordinary Shares on issue, excluding 5,337,584 shares held as treasury stock (2024: 142,344,836 Ordinary Shares, excluding 5,337,584 shares held as treasury stock).

   Other reserves and equity

   In thousands of New Zealand dollars	Hedge revaluation reserve	Investment revaluation reserve	Land & building revaluation reserve	Foreign currency translation reserve	Other Reserves
   Balance at 1 June 2025	(230)	1,652	47,425	(108)	48,739
   Revaluations	825	228	-	426	1,479
   Balance at 30 November 2025 (Unaudited)	595	1,880	47,425	318	50,218
   Balance at 1 June 2024	(80)	1,456	46,291	(60)	47,607
   Revaluations	304	251	-	116	671
   Balance at 30 November 2024 (Unaudited)	224	1,707	46,291	56	48,278
   Balance at 1 June 2024	(80)	1,456	46,291	(60)	47,607
   Revaluations	(150)	196	1,134	(48)	1,132
   Balance at 31 May 2025 (Audited)	(230)	1,652	47,425	(108)	48,739

4. ‌Acquisitions and disposals

   SIX MONTHS ENDED YEAR ENDED

   In thousands of New Zealand dollars	30 Nov 2025	30 Nov 2024	31 May 2025
   	Unaudited	Unaudited	Audited
   (i) Land, buildings and equipment
   Acquisitions *	7,631	6,146	14,665
   Disposals	(88)	(86)	(524)
   (ii) Software and other intangible assets
   Acquisitions	7,647	7,478	13,808
   Disposals/Impairment	(1)	-	(183)

   *Excludes the impact of NZ IFRS 16: Leases, which increased Land, buildings and equipment by $6.478 million in 2025 (November 2024:

   $2.898 million, May 2025: $7.563 million).

5. Transactions with Related Parties, Directors and Management

   The Group has had the following short-term transactions with key Management and Directors during the period, noting sale of goods and services were on normal trade terms:

   SIX MONTHS ENDED YEAR ENDED

   In thousands of New Zealand dollars	30 Nov 2025	30 Nov 2024	31 May 2025
   	Unaudited	Unaudited	Audited
   Remuneration of key Management and Directors	3,102	2,480	4,622
   Sale of goods and services to key Management and Directors	782	650	996
   Purchases of goods and services from key Management and Directors	-	-	-

6. Reconciliation of the Profit/(loss) for the period to Net operating cash flows

   SIX MONTHS ENDED YEAR ENDED

   In thousands of New Zealand dollars	30 Nov 2025	30 Nov 2024	31 May 2025
   	Unaudited	Unaudited	Audited
   Profit/(loss) for the period	33,808	39,075	30,643
   Adjusted for: Depreciation and amortisation on all assets	14,100	13,553	28,051
   Bull team revaluation	-	(7,512)	(12,292)
   Deferred tax expense	694	1,603	2,388
   Working capital movements and other non-cash items	(36,384)	(35,359)	7,597
   Net operating cash flows	12,218	11,360	56,387

7. Audit

   In accordance with the Financial Reporting Act 2013 these interim financial statements are not required to be audited and therefore, in line with previous years, have not been audited.

8. Dividend

   In relation to the 2025 financial year LIC declared a dividend of 12.22 cents per Ordinary Share, or $17.397 million (2024: 5.84 cents per Ordinary Share, or $8.314 million). The fully imputed dividend was paid on 15 August 2025.

9. Significant enterprise system implementation costs

During the period LIC embarked on a significant multi-year investment into replacing and improving aged enterprise and customer facing systems. The investment is predominantly into Software as a Service tools, the costs of which are generally expensed as incurred rather than amortised over future financial periods. As a result, Net profit after tax has been negatively impacted by $3.013 million implementation costs in 2025 (November 2024: nil, May 2025: nil). This expenditure has been excluded from LIC's Underlying Earnings, which is a supplementary non-GAAP measurement considered useful to investors as it is the basis on which LIC has historically reported and used to determine dividends. Non-GAAP financial information does not have a standardised meaning prescribed by GAAP and therefore may not be comparable to similar financial information presented by other entities..

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Newstead 3286 Hamilton

New Zealand

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