Farm Pride Foods : 2023 Annual Report2022 Annual Report

PRIDE IN EVERY EGG

2023

Annual Report

Farm Pride Foods Ltd

Farm Pride Foods Limited and Controlled Entities

Corporate Information

Farm Pride Foods Ltd.

ABN 42 080 590 030

Directors

George Palatianos (Non-Executive Chairman)

Malcolm Ward (Non-Executive Director)

Bruce De Lacy (Non-Executive Director)

Darren Lurie (Managing Director)

Management Team

Darren Lurie (Managing Director)

Tony Enache (Chief Financial Officer)

Company Secretary

Bruce De Lacy

Registered office and principal place of business

551 Chandler Road

Keysborough, Victoria 3173 [phone]

Solicitors

Gadens

Level 25 Bourke Place

600 Bourke Street

Melbourne, Victoria 3000

Financiers

MC FP Pty Ltd

Level 18, 90 Collins Street

Melbourne, Victoria 3000

Tradeplus24 Australia

Level 2, 696 Bourke St

Melbourne, Victoria 3000

Share Registry

Computershare Registry Services Pty. Ltd.

Yarra Falls, 452 Johnston Street

Abbotsford, Victoria 3067

ASX: FRM

Auditors

Pitcher Partners

Level 13, 664 Collins Street

Docklands, Victoria 3008

Internet Address

www.farmpride.com.au

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Farm Pride Foods Limited and Controlled Entities

Directors' Report

TABLE OF CONTENTS

Chairman's Report	3
Directors' Report	4
Auditor's Independence Declaration	18
Financial Report for the year ended 30 June 2023
∙ Consolidated Statement of Profit or Loss and Other Comprehensive	19
Income
∙ Consolidated Statement of Financial Position	20
∙ Consolidated Statement of Changes in Equity	21
∙ Consolidated Statement of Cash Flows	22
∙ Notes to the Consolidated Financial Statements	23
Directors' Declaration	51
Independent Auditor's Report	52
ASX Additional Information	57

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Farm Pride Foods Limited and Controlled Entities

Directors' Report

Chairman's Report

2023 has been a year of change. The appointment of 2 directors in August 2022 who helped steer us through change, Bruce Delacy as interim CEO, capital raised from the NREO and Placement, new CEO and director appointed in February, further changes to reduce the board size and appointments of industry experienced Operations Manager and Chief Financial Officer.

The Group's net revenue from contracts with customers increased by 12% to $82.78 million (2022: $74.04 million). Revenue for the second half of FY23 was $44.58 million an increase of 17% from the first half of FY23.

The Group incurred a loss after-tax of $9.11 million (2022: $19.78 million loss).

Earnings before interest, tax, depreciation and amortisation (EBITDA) was a loss of $0.2 million (2022: $4.62 million loss). The EBITDA in the second half of FY23 of $2.61 million represented a significant turnaround in the financial performance of the Group.

During the second half of FY23, there was significant focus on improving farming activities, production, grading, and processing efficiencies, across the business. The re-instatement of our owned rearing facilities is progressing well with the first birds to be transferred to our laying farms in coming weeks. This is expected to reduce costs and achieve improved egg production. A number of new farm managers have been appointed as well as improvements in our farming operations. With greater focus across our grading floors and product plant improvements have also been achieved with further improvements identified.

Cost pressures, like all businesses, remain high including labour, utilities, transport, feed and interest. We have sought to reduce unit costs by increasing efficiencies and obtain price increases to off-set these higher costs.

In December 2022 we exited a large leased cage egg farm. While this is part of the Group's strategy to transition to non-cage production, occurring during a time of national shortage impacted egg supply and our ability to meet additional customer demand.

The Group has entered into a contract of sale for a parcel of surplus non-arable land at Lethbridge, Geelong which on the satisfaction of a number of pre-conditions will deliver proceeds of $2.35 million, the majority of which will be applied to debt reduction.

The Board thanks all our customers and suppliers for their continued support and our employees who are working hard to ensure the successful turnaround in the profitability of the Group.

George Palatianos

Chairman

30 August 2022

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Farm Pride Foods Limited and Controlled Entities

Directors' Report

The directors present their report together with the financial report of the consolidated entity consisting of Farm Pride Foods Limited ('the Company') and the entities it controlled (the 'group'), for the financial year ended 30 June 2023 and auditor's report thereon.

Directors

The names of directors in office at any time during or since the end of the year are:

George Palatianos	Non-executive Director, Chair
Malcolm Ward	Non-executive Director
Bruce De Lacy	Non-executive Director
Darren Lurie	Managing Director
Peter Bell	Non-executive Director (appointed 30 May 2008, resigned 17 November
	2022)
Beth Mathison	Independent Non-executive Director (appointed 25 August 2022, resigned 9
	March 2023)
Roland Roccioletti	Independent Non-executive Director (appointed 25 August 2022, resigned 9
	March 2023)

The directors have been in office since the start of the year to the date of this report unless otherwise stated.

Principal activities

The principal activities of the group during the financial year were the production, processing, manufacturing and sale of eggs and egg products.

There has been no significant change in the nature of these activities during the financial year.

Review of operations and financial results

Statutory consolidated net profit after tax attributable to the members of Farm Pride Foods Ltd ("Statutory Profit") for the year ended 30 June 2023 was a loss of $9.112 million (2022: $19.782 million loss). Earnings before interest, tax, depreciation and amortisation (EBITDA) was a loss of $0.205 million (2022: $4.615 million loss).

The following table reconciles the Statutory Profit to EBITDA for the year ended 30 June 2023:

	30 June 2023	30 June 2022
	$'000	$'000
Statutory (loss)	(9,112)	(19,782)
Add back:
- Interest (finance costs)	2,518	2,177
- Income tax (benefit) / expense	-	5,827
- Depreciation	6,389	7,163
EBITDA	(205)	(4,615)

For further discussion of the review and results of operations of the group reference should be made to the Chairman's Report dated 30 August 2023.

Significant changes in the state of affairs

There have been no significant changes in the group's state of affairs during the financial year, other than as disclosed in this report.

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