Chris Lee & Partners Ltd

Market News 28 October 2025

Johnny Lee writes:

Infratil has confirmed it has purchased more shares in Contact Energy, buying the 4.92% stake held by TECT Holdings. TECT was formerly known as Tauranga Energy Consumer Trust, and was the other major shareholder in Manawa Energy alongside Infratil. Like Infratil, TECT acquired its shares in Contact after the Manawa takeover.

Infratil paid TECT the equivalent of $8.95 for each share, funded with an even mix of cash and new Infratil shares. This effectively means that Infratil shareholders have seen a modest dilution in exchange for the increased holding.

The acquisition puts to bed any thoughts of Infratil exiting the sector in the short-term. Its Manawa holding was always too large to offer liquidity – until Contact’s offer – but Contact Energy shares are significantly more liquid.

Infratil’s stake in Contact Energy is now 14.3%, valued north of $1.3 billion and producing around $50 million a year in dividends. It is now comfortably the largest shareholder of Contact Energy, while TECT will become a small, but significant shareholder of Infratil.

Infratil’s holding in Contact Energy will sit beside its Vodafone/One NZ holding, as a core, cash-generative business, providing reliable income to the broader portfolio. Electricity generation has long existed within Infratil’s wheelhouse, 

The vote of confidence from Infratil sent the Contact Energy share price higher, which rose around 5% following the announcement. The increase in holding is consistent with Infratil’s earlier messaging about holding fewer, but larger stakes in its portfolio. It cements itself as the company’s largest shareholder and gives the company a slightly greater level of control over the fortunes of the business.

Infratil is scheduled to provide its half year results on the 13th of November.

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The NZX issued a rare “Trade with caution notice” last week, urging equity investors to take care when trading in listed company Being AI. The NZX last used this tool in 2024, when it issued the same warning for the same company.

Being AI was also suspended from trading in February of this year, after the NZX stated Being AI no longer met governance requirements specific to the minimum number of independent directors.

The warning was prompted by the sudden, unexplained increase in the company’s share price. Being AI’s share price had risen 150% over the last month, before falling after the NZX announcement. Volume has seen an uptick, particularly in the retail sphere, with trades worth thousands, rather than millions.

Being AI is not profitable and pays no dividends to its shareholders. It would not feature in any income investors portfolio. Its market capitalisation of $25 million places it alongside other small caps such as Move Logistics and Allied Farmers. 

Nevertheless, Being AI appears to have captured the imagination of many small retail investors, whose enthusiasm for the company’s shares has prompted the NZX to issue a public warning. 

Judging by the market reaction, the warning has had its desired effect.

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EROAD’s recent announcement to the stock exchange led to a rapid revaluation, as investors weighed the opportunity facing the business.

Guidance for next year was lower, with the company citing slowing growth out of North America. The company also lost a large North American transport customer. EROAD stated it expects to mark an impairment of its North American assets up to $150 million.

The EROAD’s share price fell over 30% after the news. It remains up strongly for the year, up 70%.

EROAD intends to host an Investor Day in March next year, but used the announcement as an opportunity to highlight its intention to pursue opportunities within Australia and New Zealand. Chief among these will be the opportunity presented by a possible move towards further usage and time-of-use charging of roads.

Indeed, much of the excitement which led to this 70% increase in share price was founded upon this possibility. Shareholders will no doubt be excited to see this take shape and hear more about how EROAD intends to capitalise on further moves in this space.

For now, the downgrade and large impairment have sent the price lower. It remains well up from the start of the year, as investors look forward to hearing more about the company’s plan to further tackle opportunities closer to home.

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Heartland Bank has provided an update, following the conclusion of a strong first quarter.

Profitability, return on equity and net interest margin are all improving. The Reverse Mortgage book was particularly strong, while Heartland continues to exit Non-Strategic Assets.

The Reverse Mortgage business saw receivable growth of $43 million for the quarter in New Zealand, and $86 million for the quarter in Australia. This continues to be a core engine of growth within the company’s book. 

Heartland continues to exit out of its non-core lending, particularly in the Home Loans business. Heartland’s decision in March to discontinue the Home Loan products was part of this move out of Non-Strategic Assets, as the company focuses on higher value sectors.  

Heartland also sold its entire Harmoney shareholding, as well its shareholding in Alex Bank. Coupled with the decision to repay its $100 million AUD medium-term note two years ahead of schedule – paying penalty fees in the process - it seems clear that the team at Heartland are making a concerted effort to tidy up its books and simplify its focus.

Economic conditions remain challenging, particularly for the New Zealand business. However, costs are being controlled, while its Reverse Mortgage business - on both sides of the Tasman - continues its impressive growth.

An Investor Day is scheduled for later this year, where the company is expected to provide a further update to its long-term plans. 

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David Colman writes:

Friday marked the one-year anniversary of the NZX listed Bitcoin (BTC) and Gold (GLD) Smart ETFs.

The listings above provided New Zealanders with a convenient way to gain exposure to either the world’s largest cryptocurrency and/or the world’s most traded precious metal.

Since listing a year ago, the funds have increased in value dramatically.

BTC is up 65% (from $2.50 to $4.15) assisted by investors looking for digital alternatives to more traditional financial assets. Bitcoin first appeared in January 2009.

GLD is up 53% (from $2.50 to $3.89) with central banks, institutions, and retail investors attracted by an historically safe-haven asset often seen as protection against a market downturn, and inflation.

The GLD ETF was a long awaited addition to the Smart range of NZ listed ETFs with gold used as a store of value for thousands of years.

The two ETFs are classified as higher risk with BTC assigned a 7, and GLD assigned a 6, out of 7 on the NZX’s Smart ETF risk scale.

Neither ETF provide income as neither bitcoin or gold are productive assets.

It would be incredible if the returns in the past year are replicated and it has been a fascinating year in which Bitcoin has been frequently described as digital gold which is a view I do not share. Gold is a real physical material that doesn’t require computers to exist.

Any investors that added small exposures to the above when they listed would have benefited since and the Smart ETF team should be applauded for bringing more asset types within easy reach of investors.

The environment of NZX delistings and greater investor awareness of internationally traded securities may push the exchange to offer yet more ETFs under the Smart ETF banner.

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Travel

27 October (Labour Day) morning – Arrowtown – Chris Lee28 October (morning) – Arrowtown – Chris Lee30 October – Auckland (Albany) – Edward Lee31 October – Auckland (CBD) – Edward Lee

12 November – Levin – David Colman

13 November – Whanganui – David Colman

14 November – New Plymouth – David Colman

20 November – Havelock North – Edward Lee

Johnny Lee

Chris Lee & Partners Ltd

Market News 20 October 2025

Johnny Lee writes:

Precinct Properties has announced a large capital raise as it looks to implement the next stage of its growth strategy.

Precinct announced a $310 million equity raising last week, comprising a $285 million placement to institutional investors and a $25 million Share Purchase Plan for existing shareholders. The $285 million placement closed the next day, while the SPP opened last Wednesday and closes on 28 October.

Precinct also reiterated its dividend guidance of 6.75 cents per share, representing a payout ratio of around 90% of funds from operations, consistent with recent dividends.

The $310 million raised will be used to repay debt as the company looks to reduce gearing ahead of the next phase of its growth strategy. Following completion, gearing will reduce to 33.2%.

A significant part of this growth strategy will be the development of Purpose-Built Student Accommodation (PBSA). Precinct has now commenced two projects in this space – a 638-bed development on Queen Street and a 964-bed development on Stanley Street.

Both projects are expected to be completed over the next three years. The Stanley Street project includes a long-term lease with the University of Auckland, reducing project risk.

The $25 million Share Purchase Plan is priced at $1.23, with a 2.5% discount if the price falls. On current pricing, this implies a price of around $1.21. As part of this capital raising, the conversion price cap of both the PCTHB and PCTHC convertible notes will be adjusted.

The $25 million offer is small compared to the $285 million institutional placement. Applications will likely be scaled based on existing holdings, meaning small shareholders applying for larger amounts may receive limited allocations. Precinct does, however, reserve the right to accept oversubscriptions.

Shareholders who wish to participate in the offer have until 5 p.m. on 28 October to apply.

Uvre Limited completed its listing on the NZX last week, opting to dual list after three years on the ASX.

Uvre first listed on the ASX in June 2022, raising $6 million at 20 Australian cents per share to explore a mining prospect in Utah for uranium, vanadium, and rare earth minerals.

In May 2025, the company announced it would issue 75 million new shares at 8 cents per share, raising $6 million to acquire Minerals Exploration Limited and its subsidiary Otagold, a New Zealand gold explorer.

Minerals Exploration Limited’s major shareholders, Norman Seckold and Peter Nightingale, later joined the board of Uvre.

Otagold holds three prospecting permits across New Zealand, with Uvre looking to first advance exploration within its Waitekauri Gold Project near Waihi, a few kilometres from OceanaGold’s operation.

At the same time, Uvre raised $4 million from shareholders via its broker Bell Potter, strengthening its balance sheet, which now carries more than $5 million in cash.

Since the acquisition, the share price of Uvre has climbed considerably, now trading at 27.5 Australian cents (approximately 31 New Zealand cents). In New Zealand, the same shares trade around 34 cents. This currency discrepancy often occurs in the early days of a new listing, as limited liquidity can take a few days to resolve.

This is not a recommendation to buy or sell Uvre. The company remains in very early stages, having only begun drilling its Waitekauri prospect on 11 October. Still, it is encouraging to see new listings return to the NZX after a long run of takeovers and delistings.

A number of shareholders have reached out in recent weeks regarding difficulties dealing with the Australian share registries.

This follows the recent Santana Minerals capital raising in August. The offer closed oversubscribed, meaning shareholders received a refund of the scaled amount. Some received this in the form of an Australian dollar cheque.

For those with an AUD bank account, this was simply a matter of providing details to the share registry and requesting the cheque be cancelled and the payment reissued.

Without an AUD bank account, the process becomes more difficult. Services such as Wise and Revolut allow New Zealanders to open an AUD account quickly but add an extra step for investors.

Going forward, Santana’s dual listing allows shareholders to switch between registries. Those with NZX-listed holdings reported a much simpler process.

Having dealt with share registries on both sides of the Tasman for many years, the New Zealand-based teams remain far superior. Calls are answered promptly, emails receive a response, queries are understood, and problems are resolved quickly.

Australia intends to cease issuing cheques in June 2028.

David Colman writes:

Liquidity is often an important part of an investor’s requirements.

Higher liquidity indicates that an investment can be bought and sold easily in higher volumes or values, and that the difference in price between a buyer and seller is relatively small.

Lower liquidity means it may take longer to buy or sell an investment and that there may be a considerable difference between what a buyer will pay and what a seller will accept.

No liquidity applies to an investment that is not traded at all.

The categories shown on client portfolio reports refer to a liquidity scale from 0 to 5, summarised below:

0 – Cannot be tradedInvestments that cannot be traded or transferred, such as bank deposits.

1 – Transferable but not tradedInvestments that can be transferred but are not traded on an exchange, such as property syndicates and rental properties.

2 – Traded but poor market depthShares in companies that are listed but have a small shareholder base. Shell companies, small companies (valued in the millions or tens of millions), or those with a dominant shareholder often have limited numbers of buyers and sellers at any time. Listed options, rights, and warrants also often fall into this category.Examples include Iperion (IPR), Me Today (MEE), Enprise Group (ENS), and others, which may trade in only small daily volumes under normal conditions.

3 – Trade reasonably well but may weaken in times of duressShares and bonds in moderate-sized companies (typically worth hundreds of millions and held by a reasonable number of investors).Examples include PGG Wrightson (PGW), Skellerup (SKL), Tourism Holdings (THL), and Winton (WIN).

4 – Trade well under most market conditionsShares and bonds issued by large, established companies (typically valued above $1 billion and widely held), as well as Exchange Traded Funds (ETFs).Examples include Fisher & Paykel Healthcare (FPH), Meridian Energy (MEL), Auckland International Airport (AIA), and Infratil (IFT).Smartshares ETFs have a market maker to provide liquidity by maintaining continuous buy and sell positions.

5 – Tradeable even during times of market duressLimited to cash and government bonds, which remain exchangeable even during market turmoil.

In conclusion, the liquidity guide provides an indication of how easy or difficult it may be to transact a certain value of an investment based on typical market participation on either side.

Travel

21 October – Lower Hutt – David Colman22 October – Wellington – Fraser Hunter22 October – Blenheim – Edward Lee27 October (Labour Day) morning – Arrowtown – Chris Lee28 October (morning) – Arrowtown – Chris Lee30 October – Auckland (Albany) – Edward Lee31 October – Auckland (CBD) – Edward Lee

Chris Lee & Partners

Market News 13 October 2025

Johnny Lee writes:

SHARE investors will be doing a double-take at their portfolio valuations after last week’s announcement by the Reserve Bank, which saw new records reached amid strong demand for yield.

The share market index reached 13,600 following the 50-point cut, before easing back to 13,500 by the end of the week.

The Reserve Bank’s cut was not totally unexpected, with economists divided as to whether a 25- or 50-point cut would be made.

The RBNZ noted that the New Zealand economy has had a weak 2025 so far, due to both local and international factors. Households are behaving “cautiously”, with discretionary spending still being restrained. Economic growth has struggled. High power prices were cited as constraining growth, particularly for manufacturing.

Agriculture remains a bright spot, with the RBNZ noting very high commodity pricing over the period. 

Internationally, the RBNZ notes that investment in Artificial Intelligence and the infrastructure surrounding this sector is helping to boost overall economic activity. 

The commentary regarding cautiousness from households is an interesting one. The relationship between lower interest rates and mortgage costs is obvious and well understood – lower rates tend to flow through as lower interest costs eventually. However, whether households use these savings to boost consumption, or retire debt, is an individual choice. 

Lower rates should also spur willingness to borrow, and willingness to invest. 

The concern around Artificial Intelligence is also an interesting point. 

The increasing use of AI is absolutely real and evident throughout the globe. Use of AI - whether to proof-read, analyse, generate content or a multitude of new purposes - is now ubiquitous. 

The question may instead be whether the investment by the owners of these technologies will pay off. Billions are being spent on model training, data centres and new electricity generation to power these facilities. Nvidia famously reached a market capitalisation of $1 trillion in May 2023. 26 months later, Nvidia became the first company to reach $4 trillion. The gains have been staggering.

And in the case of Nvidia, revenue is climbing. Revenue in 2023 was $27 billion. In 2024, this figure was $61 billion. In 2025, this figure reached $130 billion. 

Still, fears of an “AI bubble” will likely persist, given the huge valuations being afforded to these companies. Investors want to see a return on their investment.

Last week's rate cut by the RBNZ may not be the last of the year. The next meeting is scheduled for November 26, with economists raising the possibility of another cut before the summer break.

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THE decision by the RBNZ had a notable impact on the sharemarket.

The yield stocks, in particular, saw a rapid rise in value. Virtually every yield stock on our exchange has now enjoyed a rally this month as the attractiveness of alternative investments - cash and term deposits - declines further.

Vector’s share price is now up 28% for the year, Argosy is up 29%, ANZ Bank is up over 30%, while even Spark has begun a modest recovery, up 18% from its low.

A few stocks, including Contact Energy, are down for the year, after soaring in late December last year and beginning 2025 at historical highs.

These gains even exclude dividends for the year. Most of these companies pay a significant proportion of their profits out in the form of dividends, retaining very little for growth.

As one would expect, bond yields fell. Meridian Energy issued a 6.5 year bond one month ago at 4.55%. This is already trading below 4% on the secondary market. These values represent the effective yield of a buyer today, meaning that low yields equate to a higher price for the bond.

Growth stocks have not followed the same trajectory. 

Fisher and Paykel Healthcare is actually down for the month, as are Infratil and Mainfreight. EBOS is modestly higher, but that is a reflection of a bounce from the post-result lows.

Overall, yield stocks have enjoyed a strong 2025 and this continued after the RBNZ announcement. With cash rates heading lower, expect 5% and 6% returns to look increasingly attractive, particularly in defensive industries.

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LAST week ended on a sour note for markets, however.

The US administration’s decision late on Friday to hike tariffs on China led to a modest sell-off of shares, and a very sharp decline in various cryptocurrencies.

Bitcoin fell 9%, equivalent to about 350 billion New Zealand dollars.

The Dow fell only 2%. Technology stocks fell around 3-5%.

Of course, this is not the first instance of sharemarkets falling on the back of tariff threats.

Previous declines saw rebounds in the days or weeks after the decisions were reversed or softened.

Indeed, one wonders how many more times we will see this pattern play out over the years ahead. Certainly, the initial reaction to this announcement pales in comparison to the reaction observed in April.

The next US election is not scheduled until November 7, 2028.

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ANOTHER announcement late in the week, regarding infrastructure company Chorus, has led to some confusion.

The Government announced it is looking to off-load some of its investment in Chorus. The Government owns both equity and debt assets in Chorus.

However, the structure of the securities devalue them significantly.

The debt securities are non-interest bearing and unsecured, while the equity securities are effectively non-voting, redeemable preference shares - and redeemable in the form of equity conversion.

The debt securities mature in tranches over the next 11 years. Their value to an investor may be in the price at the time of sale, and the remaining duration until maturity.

These investments were made by the Government at the beginning of the fibre rollout to provide initial funding for the project. However, these are not ordinary shares (yet) and carry no voting rights. The debt has a zero coupon, and some tranches do not mature until 2036. 

More details of the potential sale are expected over the coming months.

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Travel

21 October – Lower Hutt – David Colman

22 October – Wellington – Fraser Hunter

22 October – Blenheim – Edward Lee

24 October – Nelson – Edward Lee (Full)

29 October – Auckland (Ellerslie) – Edward Lee (Full)

30 October – Auckland (Albany) – Edward Lee

31 October – Auckland (CBD) – Edward Lee

Johnny Lee

Chris Lee & Partners

Market News 6 October 2025

Synlait Milk Limited (Synlait) made several announcements last week that were received positively by the market.

SML announced its results for the 12 months to 31 July 2025, along with a binding conditional agreement to sell its North Island assets.

It also advised that it has finalised bank refinancing totalling $350 million, with new banking syndicate support provided by ANZ, China Construction Bank, Bank of China, Rabobank, Industrial and Commercial Bank of China, HSBC, Bank of Communications, and Bank of East Asia.

SML Financial Results Highlights:

Net profit after tax of $0.8 million (unadjusted: $39.8 million)EBITDA $107.2 million (unadjusted $50.7 million)Net debt of $250.7 millionNew record milk price for the 2024/2025 season of $10.16 per kgMSEntry into a binding conditional agreement to sell the North Island assets to Abbott for approximately US$178 million (NZ$307 million)

FY2026 guidance represents a reset for Synlait, with completion of the North Island sale targeted for 1 April 2026.

Majority shareholder Bright Dairy Holding Limited (which owns 65.25% of SML) has irrevocably cast its postal vote in favour of the asset sale and all other resolutions before the Annual Meeting, which will be held on Friday 21 November 2025.

The sale proceeds will be used to significantly reduce debt and strengthen the company’s financial position.

SML plans to refocus on its core operations in Canterbury, with renewed emphasis on operational stability at its Dunsandel facility to drive longer-term profitability. The company sees continued growth in its Dairyworks business supporting this focus.

No further financial guidance for FY2026 was provided.

For now, the company will concentrate on executing the North Island sale, with the board aiming to have an updated strategic plan in place by March 2026.

The share price rose on the back of these announcements, increasing from below $0.70 before the announcement on Monday to close on Friday at $0.85 (an improvement of over 20% in a week).

Overall, the announcements suggest improved investor confidence in Synlait’s deleveraging strategy.

In contrast to frequent corporate actions this year, including takeovers for Bremworth and Restaurant Brands announced last week that have resulted in a shrinking number of publicly listed companies, the NZX welcomed a new company on Monday with the listing of Manuka Resources Limited (MKR), which is now dual listed (MKR listed on the ASX in July 2020).

MKR is a diversified critical and precious metals developer, producer, and explorer, adding exposure to a sector with limited representation on the NZX.

The company holds 100% interests in New Zealand and Australian assets, including Trans-Tasman Resources (TTR), a vanadiferous titanomagnetite (VTM) iron sands project located 22km offshore in the South Taranaki Bight.

TTR is advancing the Taranaki VTM Project through the Government’s Fast Track Approvals process. VTM ore contains iron, titanium, and vanadium.

MKR also fully owns the Wonawinta Silver Project and Mt Boppy Gold Project, both fully permitted and located in the central Cobar Basin, NSW.

Manuka’s current Australian focus is to bring the above precious metal projects into production during early 2026. The company also plans to use significant resources to ensure the New Zealand TTR project is favourably received by the Fast Track Approvals panel.

TTR is considered to have substantial potential due to the scale of the resource and lower comparative cost. The project hosts a JORC (Joint Ore Reserves Committee) compliant mineral resource of 3.2 billion tonnes @ 10.17% iron oxide; 1.03% titanium dioxide; and 0.05% vanadium pentoxide, with production plans targeting the extraction of up to 50 million tonnes per annum (Mtpa) from the seabed.

A yield of approximately 5 Mtpa of exportable heavy mineral sands concentrates at expected grades of 56 to 57% iron, 8.5% titanium oxide, and 0.5% vanadium pentoxide is anticipated.

A Pre Feasibility Study released 26 March 2025 indicated:- 20 year mine life- US$312 million average annual EBITDA- US$1.26 billion NPV (net present value)- 39% IRR (internal rate of return)

An independent NZIER Economic Impact Assessment (2 April 2025) estimated the project could deliver:- NZ$854 million in annual export revenues- 1,125 regional jobs- NZ$234 million in annual local expenditure- Over NZ$190 million in annual tax and royalty contributions

TTR holds Mining Permit MMP55581, and its environmental consent application was accepted into the Fast Track Approvals process on 15 May 2025.

If the Expert Advisory Panel confirms TTR’s Fast Track consents in early 2026, Manuka would then need to complete the following steps (estimated to take a year):Bankable Feasibility Study (anticipated cost NZ$15 to NZ$20 million)Construction and commissioning phase requiring approximately NZ$1 billion of debt and equity investmentFinal environmental consents and operating conditions for the initial 20 year mine plan

Both vanadium and titanium are deemed critical minerals in the USA, EU, Canada, and Australia, and in January New Zealand issued its own list of critical minerals, including both vanadium and titanium.

In Australia, MKR owns 100% of the Wonawinta Silver Project and the Mt Boppy Gold Mine, both located in the Cobar Basin, New South Wales.

The Wonawinta Silver Project includes a significant JORC Mineral Resource of 38.3Mt @ 41.3g/t Ag (51Moz Ag) and an Ore Reserve of 6.2Mt @ 56g/t Ag (11.16Moz Ag). It includes an 84 person mine camp and a 1 Mtpa processing facility. Wonawinta was formerly the largest primary silver producer in Australia and is central to the company’s 10 year production plan targeting 19.2Moz of silver.

The project has an estimated NPV of A$153 million and IRR of 173%.

The Mt Boppy Gold Mine consists of an existing open pit, a 48 person camp, and adjoining exploration tenements with a JORC Probable Ore Reserve of 290kt @ 4.2g/t Au (39,100oz of gold).

Gold recovery operations had briefly started through screening and haulage to the Wonawinta plant and will recommence in early 2026. Options are being assessed to increase mine life and production scale.

As at 31 December 2024, Manuka Resources Limited reported total assets of A$61.2 million and net assets of A$8.6 million.

Total liabilities stood at A$52.6 million, with borrowings representing the largest component of current liabilities.

For the half year ended 31 December 2024, the Group recorded a net loss of A$8.7 million, reflecting ongoing investment in its development assets and project pipeline.

Cash flows during the period were primarily allocated toward exploration, care and maintenance, and project advancement activities.

MKR released its Annual Report for the 2024 to 2025 financial year through both the ASX and NZX on 30 September 2025, providing extensive detail on the company and its development plans.

Overall, Manuka’s dual listing brings renewed attention to the NZX’s limited exposure to critical minerals.

Scales Corporation Limited (SCL) on Tuesday announced that it has agreed to increase its shareholding in its Australian Global Proteins joint ventures through the acquisition of 50% of Meateor Australia, 50% of Fayman International, and 42.5% of ANZ Exports.

As a result, SCL will own 100% of both Meateor Australia and Fayman International, and 85% of ANZ Exports.

The acquisitions bring forward the existing Put and Call options between SCL and the Fayman family to take full ownership of Meateor Australia and Fayman International, and to increase its ANZ Exports stake.

SCL Managing Director Andy Borland described the businesses as demonstrating strong performance and good strategic alignment with Scales’ long term growth objectives.

Meateor Australia’s manufacturing facility in Melbourne is strategically important to SCL’s Global Proteins division and its Australian growth plans.

Fayman International and ANZ Exports have exceeded expectations since the initial investments were made and will play an important role in the edible proteins sector, particularly in relation to Australian exports.

SCL Chairman Mike Petersen commented that the acquisitions align with the Global Proteins division’s strategy to increase joint venture shareholdings over time and accelerate a single brand approach. He noted SCL will continue its relationship with the Fayman family.

The total acquisition price was A$91.05 million, comprising cash (A$49.4 million, funded from cash reserves) paid immediately, shares (A$5.25 million worth) to be issued in a month’s time, and cash instalments (five equal payments over the next five years totalling A$36.4 million).

As a result of the acquisitions, SCL is now forecasting a net debt position of $57 million by year end.

The acquisitions are subject to a locked box arrangement, entitling SCL to earnings from 1 April 2025 on the acquired interests.

SCL’s half year results in August showed a strong performance, lifting its full year 2025 profit guidance to between $45.0 million and $50.0 million. As a result of the acquisitions, full year 2025 guidance has increased further to between $51.0 million and $56.0 million.

The Global Proteins EBITDA target for FY2027 lifts from $70 million to $85 million.

This is an ambitious step for SCL, accelerating its previously outlined plans to grow its proteins business in Australia. Scales Corporation has proved resilient in recent years and performed well in 2025.

Its shares are up 40.3% year to date, compared with the NZ50G’s 2.9% rise over the same period.

The Warehouse Group (WHS) announced its FY2025 Annual Results.

The results mark a year of reset, with the operating model reshaped and progress made in pricing, products, and cost control.

FY2025 Highlights:

- Group Sales up 1.6% to $3.1 billion- The Warehouse Sales up 1.4% to $1.8 billion- Warehouse Stationery Sales down 2.5% to $226.0 million- Noel Leeming Sales up 3.3% to $1.0 billion- Gross Profit Margin down 140 basis points to 32.2%- Cost of Doing Business (CODB) reduced as a percentage of sales by 40 basis points to 32.2%- Operating Profit (EBIT pre NZ IFRS 16) of $1.3 million, down from $28.9 million in FY2024- Reported Net Loss After Tax of $2.8 million (a substantial improvement on the $54.2 million loss a year ago)- Capital Expenditure of $12.4 million (down from $39.0 million in FY2024)- Net debt was $96.1 million, though on a like-for-like basis it would have been closer to $13 million- No dividend declared for the financial year

It is clear the economic environment for The Warehouse Group remains challenging, with unemployment rising and consumer confidence low.

The 84 Warehouse (red shed) stores made an operating loss, but both Warehouse Stationery (66 stores) and Noel Leeming (66 stores) were profitable.

WHS highlighted the following strengths:- 27 private label brands (H&H and Living & Co being its two largest)- Consumer preference for shopping at its stores- Geographic reach (85% of New Zealanders live within a 20 minute drive of one of its stores)

The group reiterated its purpose to build exceptional retail brands, its ambition to be a highly desired retail stock, and its values of thinking as a customer.

The business remains reliant on an economic recovery, although innovation to improve its competitive position would be welcome.

WHS shares last traded at $0.785, down 24% year to date.

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Travel

7 October – Palmerston North – David Colman

8 October – Christchurch – Johnny Lee (Full)

21 October – Lower Hutt – David Colman

22 October – Wellington – Fraser Hunter

22 October – Blenheim – Edward Lee

24 October – Nelson – Edward Lee (Full)

29 October – Auckland (Ellerslie) – Edward Lee (Full)

30 October – Auckland (Albany) – Edward Lee

31 October – Auckland (CBD) – Edward Lee

David Colman

Chris Lee & Partners