ARB-ArborGen Holdings Ltd

[ari]

Perhaps now is the time...if DJT can do it...just saying....

[biker]

Perhaps now is the time...if DJT can do it...just saying....

What exactly are you saying ari?

[clearasmud]

What exactly are you saying ari?

This has been a lifestyle company aye.
Sad as I have a few and participated in a capital raise.

[winner69]

Guidance update …good news

http://nzx-prod-s7fsd7f98s.s3-websit...303/416453.pdf

[TheHunter]

Not a bad result indeed but unfortunately slow sales vol in the US is still holding back the overall potential growth.

That said, Brazil is doing nicely, and the debt story is sounding promising... operating cash flow hopefully starting to hum.

I think growth in both US margins and vol is needed to really get the SP moving. Arguably we have one out of two... perhaps another year before the stars fully align.

Still happy holding. I look forward to seeing the volume data in more detail, and specifically how MCP conversions are going.

[TheHunter]

Also, don't forget the inventory impairment previously announced; the statutory result won't be as pretty as adjusted.

Hopefully cleans the cobwebs for FY25...

[TJ1]

Trying to determine if this is a further buy time as apart from the improving financials surely the IP alone is worth a bit - any views currently purchased at an average 25 cents. Recognising could be a year or two before reward

[Felix]

Hopefully cleans the cobwebs for FY25...

The consistent messaging from management over the years is that good times are just on the horizon. That messaging loses credibility over time. I do think there is real value in their IP I just wonder how long it will be before we see the rewards of that value. We’re not seeing it in share price appreciation or dividend stream.

[ari]

It's been a long time coming...ARB
30/05/2024 13:34
FLLYR
PRICE SENSITIVE
REL: 1334 HRS ArborGen Holdings Limited

FLLYR: ARB: ArborGen Holdings Results for Year Ended 31 March 2024

ARBORGEN ANNOUNCES STRONG FY24 RESULT

30 May 2024: ArborGen Holdings Limited (NZX: ARB) (ArborGen or the Company)
has today announced its results for the financial year ending 31 March 2024
(FY24), reporting record sales Revenue and an Adjusted US GAAP EBITDA result
ahead of guidance.

FY24 Snapshot (in USD, comparatives to FY23):

o Seedling unit sales of 373 million, consistent with prior year. Advanced
genetics seedlings made up 44% of sales.
o Revenue $67.7m, up 21% on prior comparative period as a result of strong
pricing and margins.
o 32% year-on-year increase in gross profit to $24.0m.
o Improvement in net loss after tax from $(2.5)m to $(0.2)m.
o Net debt (excluding capitalised leases) at $14.4m as at 31 March 2024, with
borrowings reduced to $20.0m.
o 39% increase in Adjusted US GAAP EBITDA1 to $12.8m, ahead of guidance.

Strategic Momentum

The strong result highlights the value of the strategic reset undertaken
three years ago, which saw ArborGen divest its Australasian operations and
expand in Brazil, while maintaining its strong presence in its traditional US
market. This has proven to be a winning formula, with Brazil contributing 39%
of ArborGen's seedling sales revenue in FY24, up from 30% in the prior year.
Despite the challenging conditions in the US South, which have had ripple
effects across the industry, ArborGen's US business also turned in a
satisfactory result with solid pricing and margins delivering a 5% increase
in revenue despite reduced volumes.

Cost inflation and economic headwinds have continued and were particularly
pronounced in the US. ArborGen has responded with a concerted effort to
streamline the organisational structure, reduce costs and enhance operating
efficiencies. In line with this, the company has entered into a purchase
agreement to sell its in-vitro business for $4 million with settlement
expected at the end of June 2024. The proceeds will be used to pay down debt
and allow for investment into growth and productivity opportunities. The
company has also closed a nursery in the US. Together, these two initiatives
will free up cash for investment into higher return opportunities and realise
around $1m in savings per annum, positively impacting ArborGen's bottom line.

FY24 Adjusted US GAAP EBITDA was a record at $12.8m (excluding $5.2m in one
off, unusual and other costs) and was boosted by increased sales revenue.

Noteworthy this year was the revitalisation and reinforcement of the
leadership team, spearheaded by Justin Birch who commenced as Group CEO in
June 2023, followed by several other key leadership appointments. A review of
ArborGen's business model and strategy has been undertaken, providing a clear
roadmap to achieve growth objectives.

Market Performance

ArborGen's focus remains on its two regional markets, being the US South and
Brazil, where it has identified strong growth and commercial potential, and
can build on its existing footprint and market share.

CEO Justin Birch commented: "ArborGen remains a market leader in the US
South, with a production capacity of more than 350 million seedlings
annually. Our strategic focus remains on bolstering the adoption of higher
value, advanced genetics seedlings throughout the region. These seedlings
offer customers the opportunity to achieve higher yields and returns from
premium grade timber, meeting the projected future market demand. Despite the
flat market, we were able to increase our mix of MCP sales and expand margins
in FY24. The 2023 cone harvest was lower than expected due to the freeze
event in late 2022. This will result in a higher cost of seed to plant in
FY25. Nonetheless, we maintain sufficient inventory to meet projected
customer demand. With an intensified sales focus and energy, we aim to
maintain our market share, continue the shift to higher value products and
grow our margins.

"In Brazil, we are leveraging our strong position in the pine and eucalyptus
seedling markets to build a sustainable, highly profitable business.
Consistent with our growth aspirations, we have been expanding our production
capacity. This now sits at over 135 million seedlings per year, through our
own nurseries as well as contract growers. We are evaluating opportunities to
further expand production to meet growing demand in Brazil. In addition, we
have identified promising opportunities across the broader South America
region. We are excited about the potential to continue our growth momentum in
Brazil and anticipate another strong performance in FY25."

Outlook

Chair of ArborGen, David Knott, said: "Looking to FY25, we expect ongoing
momentum in Brazil, while the current conditions impacting US sales are
expected to continue, resulting in flat year-on-year sales volumes. Our team
remains focused on transitioning customers to higher value products, and we
will continue to expand our production capacity to meet demand, particularly
in Brazil.

"The increased investment into the expansion of our team, nursery
improvements and other strategic initiatives will be reflected in the FY25
year. This will be partially offset by savings from the ongoing cost
reduction programme including savings from the closure of the Taylor Nursery
and the sale of the in-vitro business.

"ArborGen is undeniably a market leader in advanced genetics seedlings and
has a robust strategy in place. Our momentum is building, and we are looking
forward to another stronger year in FY25."

Shareholders are referred to the Investor Presentation released today for
more information.

ENDS

1 Adjusted US GAAP EBITDA is a non-GAAP financial measure and excludes
one-off and unusual items which may include restructure costs, impairments
and write downs on assets, acquisition/sale transaction costs and other
one-off items. In FY24, one-off and unusual costs were $5.2m comprising: a
non-cash $1.8m provision for obsolete seed inventory, a non-cash $1.0m VAT
valuation allowance, and $1.9m CEO transition costs, the majority of which
were non-cash equity grants, (itemised as CEO transition costs, seed review
and other in the Financial Statements), and other restructuring costs of $0.5
million. Management believes this measure provides useful information, as it
is used internally to evaluate performance, and it is also a measure that
equity analysts focus on for comparative company performance purpose. See the
Investor Presentation for more information.

Authority for this announcement: Justin Birch, President and CEO, ArborGen
Holdings Limited

For assistance, please contact: Jackie Ellis, Ellis and Co e:
jackie@ellisandco.co.nz, t: +64 27 2462505

_________________________________

ArborGen