New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Equity Bottom-Up

<ul><li>Scales (SCL) has reconfirmed its FY22 underlying NPAT guidance range (NZ$23.5m–NZ$28.5m), but now expects it will be “very unlikely” that the top end of the range is achieved</li><li>SCL has been unable to fully sell its 2022 harvest in FY22 (adversely impacting horticulture earnings), with some slippage into FY23. </li><li>SCL also provided first time FY23 underlying NPAT guidance, which is consistent with FY22 and an underlying EBITDA guidance range of NZ$68m–NZ$77m (we forecast ~NZ$73m)</li></ul>

Scales (SCL) has reconfirmed its FY22 underlying NPAT guidance range (NZ$23.5m–NZ$28.5m), but now expects it will be “very unlikely” that the top end of the range is achievedSCL has been unable to fully sell its 2022 harvest in FY22 (adversely impacting horticulture earnings), with some slippage into FY23. SCL also provided first time FY23 underlying NPAT guidance, which is consistent with FY22 and an underlying EBITDA guidance range of NZ$68m–NZ$77m (we forecast ~NZ$73m)

<ul><li>Scales (SCL) confirms the completion of recent Australian acquisitions Meateor Australia (a 33% stake of a new Melbourne-based petfood plant), and 50% of edible protein by-product exporter Fayman International’s Australian operations.</li><li>SCL has flagged that current export crop sales continue to be below the prior year.</li><li>We expect lower sales through the Mid-Autumn Festival may be a key factor in lower than expected sales since the 1H22 result announcement in August.</li></ul>

Scales (SCL) confirms the completion of recent Australian acquisitions Meateor Australia (a 33% stake of a new Melbourne-based petfood plant), and 50% of edible protein by-product exporter Fayman International’s Australian operations.SCL has flagged that current export crop sales continue to be below the prior year.We expect lower sales through the Mid-Autumn Festival may be a key factor in lower than expected sales since the 1H22 result announcement in August.

Scales (SCL): Acquisition Completion and FY22 Trading Update

<ul><li>Scales (SCL) has announced investments in: (1) a 33% stake (A$4m) of a new Melbourne-based petfood plant, and (2) a 50% acquisition (A$23m) of Fayman International, an edible protein by-product exporter</li><li>We view the acquisitions to be a positive outcome, supplementing SCL’s growing global proteins division by increasing petfood capacity and opening new channels for human consumption</li><li>The structure of these acquisitions closely follows the roadmap laid out by the Shelby US acquisition</li></ul>

Scales (SCL) has announced investments in: (1) a 33% stake (A$4m) of a new Melbourne-based petfood plant, and (2) a 50% acquisition (A$23m) of Fayman International, an edible protein by-product exporterWe view the acquisitions to be a positive outcome, supplementing SCL’s growing global proteins division by increasing petfood capacity and opening new channels for human consumptionThe structure of these acquisitions closely follows the roadmap laid out by the Shelby US acquisition

Scales (SCL): Australian Investments in Global Proteins Division

<ul><li>Global protein EBITDA surprised to the upside, as a result of favourable product mix and SCL's ability to deliver product to market during supply chain challenges</li><li>Horticulture was weighed down by a range of external headwinds</li><li>1H22 net profit attributable to shareholders (underlying NPAT) declined -12% from 1H21 — this excludes minority interests in Shelby (global protein subsidiary) and is our preferred earnings metric</li></ul>

Global protein EBITDA surprised to the upside, as a result of favourable product mix and SCL's ability to deliver product to market during supply chain challengesHorticulture was weighed down by a range of external headwinds1H22 net profit attributable to shareholders (underlying NPAT) declined -12% from 1H21 — this excludes minority interests in Shelby (global protein subsidiary) and is our preferred earnings metric

Scales: 1H22 Result — Pet Food Outweighs Bad Apples

<ul><li>Scales (SCL) has reported a mixed 1H22 result driven by very strong food ingredients performance but offset by horticulture underperformance</li><li>Cost inflation appears to have driven higher costs, reducing EBIT and net profit margins in the first half</li><li>1H22 net profit attributable to shareholders declined -12% from 1H21 – this excludes non-controlling interests (NCI) and is our preferred earnings metric</li></ul>

Scales (SCL) has reported a mixed 1H22 result driven by very strong food ingredients performance but offset by horticulture underperformanceCost inflation appears to have driven higher costs, reducing EBIT and net profit margins in the first half1H22 net profit attributable to shareholders declined -12% from 1H21 – this excludes non-controlling interests (NCI) and is our preferred earnings metric

Scales (SCL): 1H22 Result – Initial Impressions

New Zealand

Scales Corporation Limited is a New Zealand provider of essential supply chain services for primary exporters, importers and FMCG businesses. The Company's horticulture division involves the global exporting of apples while its storage and logistics division includes nationwide cold storage coverage and a logistics business specialising in sea and air freight of primary produce.

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Scales Corp Ltd (SCL NZ)

Scales: Readjusting the Scales

Scales (SCL) has reconfirmed its FY22 underlying NPAT guidance range (NZ$23.5m–NZ$28.5m), but now expects it will be “very unlikely” that the top...

Forsyth Barr

Scales (SCL): Acquisition Completion and FY22 Trading Update

Scales (SCL) confirms the completion of recent Australian acquisitions Meateor Australia (a 33% stake of a new Melbourne-based petfood plant), and...

Forsyth Barr

Scales (SCL): Australian Investments in Global Proteins Division

Scales (SCL) has announced investments in: (1) a 33% stake (A$4m) of a new Melbourne-based petfood plant, and (2) a 50% acquisition (A$23m) of...

Forsyth Barr

Scales: 1H22 Result — Pet Food Outweighs Bad Apples

Scales (SCL) reported a mixed 1H22 result driven by very strong global protein performance but offset by challenges in the horticulture division

Forsyth Barr

Scales (SCL): 1H22 Result – Initial Impressions

Scales has reported a mixed 1H22 result driven by very strong food ingredients performance but offset by horticulture underperformance

Forsyth Barr

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