Investment Diversification Drives 126% Earnings Growth

NZX and Media Release 30 August 2021 INVESTMENT DIVERSIFICATION DRIVES 126% EARNINGS GROWTH The Directors of Allied Farmers Ltd ("Allied Farmers" or "Allied Group") (ALF:NZX) are pleased to report an audited net profit before tax for the year to 30 June 2021 of $2.481 million (FY20 $1.099 million). The result reflected an improved performance from our livestock agency business which recovered from the prior year impacts of Covid and drought. However, this improvement was partially offset by a lower contribution from our veal business reflecting the impact of Covid on in-market pricing and returns. The result also includes an inaugural half year contribution from our recent investment in rural property manager New Zealand Rural Land Management Limited Partnership (NZRLM). The livestock business result reflects the continued hard work of our staff and ongoing initiatives aimed at providing them with the right tools, support and environment to safely and efficiently deliver our services to farmers. We continued to invest in our digital technologies, recognising that while sale yards play a critical role in the rural value chain, there is ongoing need for innovation to support the changing needs of farmers, and ongoing operational requirements and compliance costs. We hosted 303 auctions via our digital platform and now have live auction capabilities at all our sales yards and the ability to livestream paddock auctions on farm throughout New Zealand. We are pleased with the growth of our livestock lending business, with the loan book expanding by an additional $1.6 million to $5.2 million, largely made possible following the successful capital raise in late 2020. In addition, this business concluded a successful first year introduction of a new seasonal store lamb financing facility (Lamb Plan) which we expect to grow over coming seasons. NZRLM produced a strong result in its first six months of operations, delivering earnings of $1.15 million for the year ending 30 June 2021. The NZRLM team undertook extensive due diligence for NZX-listed New Zealand Rural Land Company Limited to enable its significant acquisitions of rural land following its successful IPO on the NZX in December 2020. As we outlined last year, we have been heavily focused on both growing our underlying business and diversifying through targeted investment. The Board appreciates shareholders' support of last year's rights issue and placement that enabled the acquisition of 50% in NZRLM, growth in our livestock lending business, ongoing MyLiveStock digital platform investment, and a modest investment in New Zealand Rural Land Company Limited. These investments have resulted in growth in earnings per share (EPS) of 63%. The Allied Farmers's Board has completed a review of its capital requirements and concluded that its strategic goals can be achieved through utilisation of its current balance sheet, and therefore has determined that it will not undertake the additional share placement that was approved by shareholders at the 2020 Annual Meeting. As at 30 June 2021, Allied Farmers had a net cash position of approximately $1.5 million (compared to a net debt position of $1.7 million at 30 June 2020). Post balance date, we will repay the $1 million Bond which term expires in September 2021, thereby lowering debt and funding costs in the year now underway. Having completed a strategy reset, Allied Farmers will continue to optimise and invest in its existing businesses and evaluate new opportunities and proposals when they present themselves. The reset includes consideration of options such as growing our livestock lending business (through our NZ Farmers Livestock Finance Limited subsidiary), investing to increase our market share in our livestock business, and supporting NZRLM as New Zealand Rural Land Company Limited continues its growth. The Directors will update shareholders at the ASM in November as to whether a dividend (or other forms of capital return) will be paid. The Board wish to thank and acknowledge the efforts of our NZ Farmers Livestock and NZRLM teams over the last year, which had the added uncertainty of the Covid environment. Richard Perry Chair Allied Farmers Ltd 201 Broadway, Stratford, 4332 PO Box 304, Stratford 4352 Phone: 06 765 6199 Web: http://www.alliedfarmers.co.nz Email: headoffice@alliedfarmers.co.nz End CA:00378136 For:ALF Type:FLLYR Time:2021-08-30 08:30:44