Scales (SCL) H1 2024 earnings summary

Executive summary

• Group earnings rebounded in 1H24, with horticulture returning to pre-cyclone levels and Global Proteins maintaining stable performance; revenue for the period was $318.1m, up from $309.4m year-over-year.

• Strategic acquisitions included Bostock orchards and full ownership of Profruit for $47.5m, and an increased stake in Meateor Australia to 50%.

• Blyth and Te Papa orchards were classified as held for sale, with a post-period sale agreement for $34.0m.

• Logistics expanded with a new Auckland warehouse and chiller facility, supporting improved results.

• Directors reaffirmed FY24 guidance for underlying NPAT attributable to shareholders between $30.0m and $35.0m.

Financial highlights

• Underlying NPAT attributable to shareholders rose 97% year-over-year to $28.5m; reported NPAT increased 167% to $38.1m.

• Underlying EBITDA was $60.5m, up 46% year-over-year; reported EBITDA reached $61.5m.

• EBIT reached $51.2m, compared to $20.5m in the same period last year.

• Net debt increased to $81.9m as of 30 June 2024, up from $29.8m a year earlier, reflecting recent acquisitions; a return to net cash is forecast by year-end, assuming orchard sale settlements.

• Basic and diluted EPS were 19.8 cents, up from 2.7 cents year-over-year.

Outlook and guidance

• FY24 guidance reconfirmed: underlying NPAT attributable to shareholders between $30m and $35m.

• Full-year underlying EBITDA guidance remains at $81–91m.

• The impact of recent transactions is forecast to be a marginal net loss for FY24, with Global Proteins expected to outperform original expectations but with a weaker second half.

• Horticulture segment expected to benefit from recent orchard acquisitions and long-term supply agreements.

• Ongoing evaluation of growth opportunities, especially in Global Proteins.