M.P. Evans Group (LSE:MPE) — Annual General Meeting

0:04 Have we have I been given okay. Ladies and gentlemen, it is now twelve noon, the time appointed for the Annual General Meeting, and I have much pleasure in welcoming you. And I see there are just enough seats.

0:36 A quorum of two members is required, and I confirm that more than this number is present. I'm pleased to inform you that the meeting today is being live streamed and recorded so that shareholders and other stakeholders who cannot be present can view it live or watch it on the company's website in due course. I'm also pleased to confirm that I'm joined today by my colleagues on the Board. As you may be aware, the company released a trading update this morning covering the first five months of 2026. Copies of the reports have been distributed in the room, should you wish to review it.

1:24 I might just pick out sorry?

1:29 Are there any more? I think there were 50 or 60. Sorry if we don't have quite enough. But anyway, it is

1:46 I might, in the meantime, just pick out one or two of the highlights from the report. Pleasingly, total crop harvested in the group managed areas, that's those areas owned by ourselves and our associated smallholder farmers, was up by 10% to 575,100 tonnes. Oil extraction rates in group mills increased to an average of 24.2%, which is extremely high by industry standards, was already high for the same period of last year at 23.5%, but this is a staggering increase of a further 0.7%.

2:38 And every 0.1% straight to the bottom line. So it's a real credit to the team with field, the agronomic team and the engineering team working more and more closely together in harmony to produce these excellent extraction rates. And they strive to improve on these further. Crude palm oil production up by 8% to 157,600 tonnes with 82% now certified sustainable. Pricing has remained strong with Millgate CPO prices at $880 per tonne, which is similar to the price for the same period last year And palm kernel prices at $824,000,000 which actually some 7% up on last year.

3:28 Palm kernel competes with coconut oil where there's been which has been some short supply, which has helped to boost palm kernel prices. Production costs have been stable with input increases mitigated by generation of our own energy and also the weaker Indonesian rupiah. As you would have noted, I'm sure that in the last two, three weeks, the share buyback program was restarted. And of course, there is a resolution to authorize the renewal of the program for the following year coming up shortly. And the proposed final dividend of 42p per share is in line with the Board's progressive approach on dividends.

4:22 There is also in the statement an update on the palm oil export position in Indonesia, of which I know Matthew will say a little more shortly.

4:37 And in fact, I think on that note, I will pass on to Matthew, our Chief Executive, who will now make a short presentation.

4:52 Thank you very much, Peter. I note the point about a short presentation. Shall certainly try and keep it brief for everybody here. But I think it's probably worth just saying a few words. First of all, actually just to recap on last year for shareholders. Firstly, a quick reminder, not that we probably need to dwell on that either, but some important facts about how the group has continued to develop. Last year, we were very pleased to hit a milestone for the group of now having 70,000 hectares under cultivation across Indonesia. As you know, our estates are spread widely across Indonesia from the very northern part of North Sumatra all the way through to the Eastern tip of East And we grew in 2025 by both planting more hectares at our estates, but also acquiring more hectares.

5:56 We acquired further hectares at our Bumimas estate in East Kalimantan. So we achieved that milestone of now being more than 70,000 hectares under cultivation. And very pleasingly, we continue to increase the proportion

6:13 of our output that qualifies as certified sustainable oil. More than three quarters of our output now qualifies as certified sustainable. And actually, if you measure that output by output from our own mills, it's now up to 80%. And as you just heard from the trading statement, it continues to grow in 2026. And 2025 was a record year for the group in many ways. We benefited from strong pricing during the course of the year, but the growth was a big factor in terms of our output as well. And we ended the year with a very robust financial position. We paid off all debt during the course of the year and ended the year with a significant net cash position.

7:09 In terms of financial and operational highlights during the course of the year, I won't go through all of these, but a couple to highlight. Earnings per share were up by almost a quarter in 2025, so up to over 160p per share. And we benefited there, as Peter said, from a very strong oil extraction rate in 2025. It's growing in 2026, which is great, but it was very good in 2025 as well. And we also benefit from an increasing yield from every mature hectare that the group cultivates, so 21.5 tonnes from every mature hectare that the group is cultivating.

7:55 And the chart that we show all the time, and we're very proud to show this chart all the time, our progressive approach to dividends for shareholders. This shows the track record over the last ten years. As shareholders know, we can trace this chart back many, many more years than this of progressive dividends for shareholders. Thirty five years plus is now our track record of a one way street of returns for shareholders. And you can see the acceleration in recent years, dividends in respect to $20.25 now 60p per share.

8:39 No presentation is complete without a slide on sustainability. As you know, I'm very tempted always to do many, many slides about sustainability, but I've managed restrict myself to just the one. This one focuses on one of the aspects of a zero waste approach we have in our mills. And apologies if you've heard this before, but this is very important to us. As part of our zero waste approach in our mills, we make sure that the wastewater from our mills goes into covered ponds from which we capture the methane that's emitted from that wastewater. So we turn something that would otherwise be a problem and a liability for us in terms of greenhouse gases into an asset and a real benefit for us because we use that methane to generate a huge amount of renewable electricity.

9:36 We estimate that by using that renewable electricity last year, we saved over $4,000,000 in alternative costs for alternative fuel sources.

9:50 That estimate was based on last year's fuel prices. When we do the estimate for this year, as we continue to generate more renewable electricity this year, it'll be very interesting using this year's fuel prices to see how much we're saving. It's going to be a bigger number. Peter has already touched on some of the key numbers coming out of the trading update for the first part, the first five months of twenty twenty six. And I hope you get the very clear impression that we are continuing to grow and we are continuing to develop with our own harvest up by 10%.

10:32 We continue deliberately to reduce therefore the amount that we're buying in from outside suppliers. Our extraction rates are up. We are processing still more crop and our output is up because of the benefit of that increasing oil extraction rate. Absolutely, we are supported by a very strong price environment. And whilst this is a five month analysis and therefore does not really reflect any price impact from announcements recently out of Indonesia to do with changes to export arrangements, I think it is worth just dwelling on that for a moment because whilst, as I say, five month prices are not impacted by any of that, as we look forward into pricing into June, we see a very stable price environment actually. And prices as I apologize if you can't read all the detail in the bottom of the slide, but the point is that prices in June continue to be at a very, very similar level even after the announcements that have come out of Indonesia in the last couple of weeks.

11:44 As it says in the detail of the trading statement, any changes to export arrangements in Indonesia will not come into force until the start of 2027. And our understanding at the moment is that the primary purpose of any of those export changes is really about recognizing that there needs to be proper recording and proper accounting for exports coming out of Indonesia. Now as I'm sure you all know, we are not exporters. So any effect of any of these changes will be very much second degree to us. And the indications at the moment of any effect of that being very, very limited. And the clear indication of that is the way in which prices have remained very stable since those announcements have been made.

12:38 So I hope I've successfully kept that brief. And at this stage, I'll hand back to Peter. Thank you very much, Matthew. My colleagues and I shall now be pleased to deal with any general questions or particular points on the report and financial statements which shareholders present at the meeting would like to raise. So do please raise your hand and wait until the microphone reaches you before speaking. Any questions?

13:10 Yes, please. Thank you, Chairman. My name is Phil Clark. I'm a long term shareholder. It's a pleasure to be here. Thank you so much for another excellent year. You've come forward by leaps and bounds. It's very impressive. So congratulations to you and all your staff. Fabulous. Thank you. Can I raise just two questions, please? First of all, on Page 25 of the accounts, you talk about the incident frequency rate,

13:39 which is the rate at which accidents occur, and it's increased dramatically from seven point one percent in 2024 to eleven point one percent in 2025. What's gone wrong there? And what are you going to do to fix it? And let me give you my second question as well. Yes, it's completely fabulous. You're sat on this cash mountain of £87,000,000 at the balance sheet date and presumably one heck of a lot more by now. Can you give us some indication of what you're going to do with that? I know you've been buying back shares because they're cheap, which is marvelous, and I must admit we bought some more as well. But can you give us any clue as to what you'll do with that?

14:24 Thank you for your question, Phil, particularly in relation to the incident frequency rate. You're right to highlight that in 2025 it went up. I think it's important to note that it remains a relatively low figure overall. The figure we report is the number of incidents per two hundred thousand hours worked. So whilst it's moved up from seven to 11, that is still within the context of 11 for every two hundred thousand hours worked across all of our operations.

15:13 Nonetheless, we're not complacent. Absolutely, we're not complacent. There are two areas that contribute most to incidents in relation to our operations. One is the harvesting task and one is very simply traveling on estate roads on motorbikes. In both cases, our operational health and safety team are very focused on increasing training in both of those areas to ensure that people are very focused on maintaining and deploying all of the appropriate safety conditions associated with minimizing risk in both of those activities on our estates.

16:00 But yes, thank you for highlighting this. And it is an area we're aware of and something that our team are very, very focused on. Thank you.

16:10 First one, if there are one or two people at the back, there are actually three or four seats in the front if you'd like to come by all means do come forward. And just on the second part of your question regarding the nice problem, if you like, to put in those terms of having the extent of cash that we have on our balance sheet. And really, as before, we would deploy the excess capital in a number of ways. Matthew has already touched on the program of progressive dividends. So we would like to continue to give

16:54 money back to shareholders. You've all been patient in watching the company grow those. Many of you are long term shareholders and it's good to be able to give back increasingly high returns by way of dividends. But also as you've mentioned, we've started particularly as prices have come off from the high levels that we saw to take the opportunity to buy back some of our own shares. And thirdly, there are still areas where we would like to grow, particularly around our existing mills because we do have some spare capacity at most, if not all of our mills to a greater or lesser extent.

17:40 And if you consider that on average, say, a hectare that one might buy could be at least if it's planted $10,000 per hectare, we have room around our mills for what, 10,000 to $12,000 So I mean that alone, if we were successful in acquiring suitable areas close to our estates in each instance, then that would take up a lot more of that cash. But of course, it's not always possible to do that. But nonetheless, we keep an open mind on all three aspects of that. It is something which is debated by the Board. And but that really is consistent with how we've approached things and how we will continue to approach things. So thank you for the question.

18:33 Yes.

18:37 Hello and thank you for your very helpful report. My name is Richard Snelling. I'm a long term shareholder and as is all my family. You've mentioned the Indonesian President proposed alterations. From what I understand, you're not primarily an exporter and your accounting is in excellent condition. So what do you envisage the worst that can happen to the company? Privatized or on?

19:08 What is the worst of Yes. So what is the What I was wondering whether the Board had made any projections of the worst possible outcome as a result of the present and of Indonesia's deliberations. Well, I've been involved with the company for, well, probably in a sense all my life because my father was involved with the company. And so he probably saw things at about their worst when all of our plantations were expropriated, so we had nothing left in Indonesia for a period of three years. And then those estates, that was back in the 1960s, were offered back no longer on a freehold but on a leasehold basis, which in a sense is a good thing because it means that there's no sort of emotive issue about foreign companies owning Indonesian soil as it were. That's not the case. The government owns the estates. There's nothing to expropriate because they own the land.

20:09 We lease it from them. And I would like to think that we have been very good custodians of that land through the leases, which incidentally have been renewed without any problem whenever the leases over that period of time, since the time that we were offered the land back in the late 1960s. And there's never been an issue. I mean, one says never, but touching wood, but nonetheless, there's not been an issue in having those leases renewed. So I would feel reasonably optimistic that there won't be as anything as dramatic as that. And if anything, as Matthew says, the what maybe there was a bit of almost an undue negative reaction to the announcement that was made the other day based really on very little because it seems unlikely that we will be affected or affected to any significant extent. We can't say for sure, but that would seem unlikely.

21:17 There has also, one or two of you may have noticed, the Indonesian government has taken back some land from companies whose titles are not properly in order or where there's been illegal deforestation and the government has taken that land back or imposed fines. But we have been assessed and we have been found to have clean titles or in clean, good apple pie order. So we have not been affected by that. No investment is without risk, but I personally am a great believer in Indonesia and are proud of what we've achieved and what we can still look forward to. Any other questions?

22:10 Yes. I'd like to ask a question, which has nothing to do with MPEvans at all. When the accommodation we build for our workers, the tap they turn on the taps, water comes out of them. In Tunbridge Wells, I need to say no more, no water comes out. I think it's just absolutely ridiculous that this situation goes on. And perhaps, we ought to try and do something about it. I don't know what we can do. Perhaps close our accounts with NatWest Bank, who seem to pension fund seems to own most of this rotten water company.

23:00 But certainly, something ought to be done. And it's quite ridiculous. So perhaps you could try and do something. It was our best efforts, but thank you. Yes, it was annoying, particularly as we were affected for almost a week by that. So the office was somewhat inconvenienced by that. But anyway, hopefully they will get their act together and make the system rather better than it is. But as you say, it works better and ends it easier. Any other questions? Yes? Davies, ordinary shareholder. Sorry, we've got yes. Hello.

23:47 Well, how do you feel about the dire warnings from the United Nations and climate change experts in the Met Office about the coming weather in The Pacific from the Humboldt currents and all that? Yes, okay. Do you want to talk about this is presumably a reference to the recent reports about a bigger El Nino possibly coming. Would you like to talk about that, Matthew? Absolutely. I think I suspect given the amount of coverage it's recently been receiving, everybody has heard of the likelihood an El Nino event beginning in The Pacific, but affecting weather patterns in the latter part of this year.

24:39 We've obviously been keeping in very close contact with our team in Indonesia on this. Thus far, we see no impact of that in terms of our operational locations. The effect if indeed it does emerge in the latter part of this year, this will be we will feel this in an extended period of drier conditions in Indonesia. We will wait and see exactly what emerges and how this may or may not affect our crop. If there is that extended period of drier conditions in Indonesia, then the way it tends to affect not just us but other producers in Indonesia is actually somewhat delayed because of the way in which crop forms and the impact on overall harvest.

25:41 So we may not actually see an impact on this until into the cropping levels until 'twenty seven or even the latter part of 'twenty seven. So we will see what happens. Of course, one of the things that might also happen if such an event occurs is if there is then a lower cropping level. And when I talk about a lower cropping level, it tends to be a relatively minor impact because of just how robust and hardy the oil palm is. But if we do see that, then as I say, it won't be us. It will be a wider phenomena across the largest producing part of palm in the world. And so if there's a restriction on availability, then you tend to get a corresponding impact in terms of pricing, the pricing goes up.

26:30 So we will see. But it may be the case that if there is an effect, it will be a delayed effect and we may well see a corresponding pickup in terms of pricing, which would negate any impact in terms of cropping levels. So we don't the short answer is we don't know. We will wait and see, maybe delayed and we would get a corresponding benefit in terms of higher pricing. So more on that to follow. Thank you. Any more questions? Okay. Yes, one more. You very much. It's Richard Snelling again. Not a very profound question, but this covered pond, I know how you get rid of the methane. What do you do with the water?

27:17 Sure, the pond is going to get bigger and bigger and bigger. And can you grow carp or something into what? So the answer to that is then the treated water is then actually used for actually land application and actually forms part of again in the spirit of zero waste and everything having a benefit. It actually is applied back as in land application as part of returning to the soil and getting a benefit there. It's a bit like what we do with the empty fruit bunches where the empty fruit bunches go into a composting facility and are returned as compost to the soil. So that applies in terms of land application with the water.

28:14 Sorry, there was a yes. Mr. Chairman, my name is Derek Kalro. I've been a shareholder, as you know, for many, many years, from the days of Singapore Parra, Padang Sanang, Bharatan, Bertam, Rowe Evans and Lendu. That was the big six. I just like to this isn't a question, it's more of a comment. I just like to say the progress of the companies coming together, the weather across holdings, the coming together, the movement from Malaysia to Indonesia and the foresight in acquiring the palm oil estates in Indonesia has been quite remarkable.

29:07 And thanks to you, and I would also mention the name of Philip Fletcher. I think a round of applause for what has been done by yourself and Philip in particular. That's not to exclude current directors, new directors, but thank you very much. Thank you. Perhaps, Philip, you should stand up for a moment. But no, and I think my father my late father will be very proud of what's been achieved as well, thanks to our amazing team.

29:53 And of course, Chandra helped us to develop what to see through our vision. And we now have a wonderful Board and a fantastic team in Indonesia. They really are the best. And I couldn't be prouder of them all. But thank you very much for your kind words, Derek. Well, perhaps we might oh, sorry, there is one more. Yes, yes. Andrew Gervin, Shareholder. I was just reading this thing in the Investors Chronicle the other day. You talk about this change likely to start in 2027. But AgriNAS, which is a government company within Indonesia, they currently have 1,700,000 hectares.

30:49 I don't quite could you help us a little bit explain what their intention is? Are they a grower? Are they a refiner? I mean how does it mix in with your business, please? Do you want to have a crack at that? So Peter mentioned the fact that certain companies have had land taken from them where they may not have appropriate title, they may have developed in areas they shouldn't have developed in because of concerns regarding deforestation or whatever it may be. Those parts those areas of land have now been handed over to a relatively new company called P. Agrinas, which is a government owned company.

31:42 And that company P. T. Agrinas, because of all of those areas that have been identified, now as you say has a very large hectareage and that company is now running that hectareage as a grower, as a public company to manage that hectareage that has been transferred across to it. It's as simple as that. Okay. Well, thank you very much. By all means, do continue to ask questions of any of us more informally a short while in the courtyard afterwards. But we might now continue with the formal part of the meeting. So as the notice of meeting has been in the hands of members statutory period, may I please take it as read?

32:34 Thank you. The independent orders of report to the members of MPM's Group PLC is set out on Pages 64 to 70 in the annual report and accounts. The report is on the group financial statements, including the parent company financial statements. May I take it as read? Thank you. Voting today will be conducted on a show of hands. May I remind you that shareholders who are present here in person or by corporate representative are entitled to one vote on a show of hands. A proxy who is present and has been duly appointed by a shareholder entitled vote also has one vote on a show of hands. Please do not raise your hand if you're not a shareholder or a formally appointed representative or proxy.

33:23 Resolutions one to 11 are proposed as ordinary resolutions and require a simple majority to be passed. Resolution 12 is proposed as a special resolution, which requires a majority of 75% to pass. We have received proxies in respect of 26,902,990 shares, copies of a scheduled detailing proxy voting instructions for, against or withheld received in relation to each resolution have been distributed in the room. A vote withheld is not a vote in law and is not counted in the calculation of the proportion of the votes for and against.

34:09 With that in mind, I'm pleased to confirm that of the votes cast, not fewer than 93% are in favor of all resolutions. The reports and financial statements have been sent or made available by digital means to all members, and I hope they provide shareholders with a clear explanation of the group's strategy, its activities and its profit and financial position as at the 12/31/2025. I now propose as Resolution one that the report of the directors and the audited financial statements for the year ended 12/31/2025 now laid before the meeting be received. I put the resolution to the meeting. Those in favor?

34:58 Those against? I declare the resolution carried. I now propose as Resolution two that the Director's Remuneration Report has set out in the Annual Report in order to financial statements for the year ended 12/31/2025, now late before the meeting be received. I put the resolution to the meeting. Those in favor? Those against? I declare the resolution carried. I have pleasure in proposing as Resolution two that Kate Koppinger be elected Director of the company. Kate, who joined the Board one minute after the conclusion of last year's AGM, so is now being elected for the first time, has proved already an extremely valuable member of the Board and also very effective Chair of the Remuneration Committee, and we're very grateful to have your contribution.

35:59 So if I may put to the meeting those in favor, those against, I declare the resolution carried. I'm pleased to propose as Resolution four that Mr. Michael Sherwin, who is also, as you all know, Chair of our Audit Committee and our Senior Independent Director, be reelected as director of the company. I put the resolution to the meeting. Those in favor, those against, I declare the resolution carried. I'm pleased to propose as Resolution five that Ms. Tanya Ashton be reelected as Director of the company. Tanya, who brings a lot of experience in terms of sustainability and many other valuable skills to the Board. So I have a pleasure in putting the resolution to the meeting. Those in favor, those against, I declare the resolution carried.

37:20 I'm pleased to propose as Resolution six that Mr. Lee Yuan Zhang be reelected as Director of the company. Yuan, who brings with us, he's a member of KLK, our biggest shareholder, but brings huge knowledge and experience in terms of plantation matters, in terms of the Southeast Asian general cultural economic background and we're extremely grateful for your contribution to the Board. I put the resolution to the meeting. Those in favor, those against, I declare that resolution carried. Now I nominate Michael to put Resolution seven to the vote.

38:10 Thank you, Peter. I have pleasure in proposing as Resolution seven that Mr. Peter Hadsley Chaplin be reelected as a Director of the company. So I put the resolution to the meeting. Those in favor? That was a big shout. Those against? And those abstaining? I declare that resolution carried, and I hand the chair back to Peter. Thank you very much, and thank you very much, Michael. I now propose as Resolution eight that a final dividend of 42p per share be declared payable on or after the 06/18/2026 in respect to the year ended 12/31/2025 to all holders of shares on the register of members of the company at the close of business on 04/24/2026.

39:09 I put the resolution to the meeting. Those in favor? Those against? I declare that resolution carried. I now propose as Resolution nine that the total amount of fees payable to all of the non executive directors excluding any remuneration for special or additional services paid pursuant to the company's Arcels 102 will increase from £250,000 to 500,000 Just lest there be any misunderstanding on that, this is the maximum amount that is payable given that we would shortly go through the threshold which has been in place for some time of 250,000 So by going to the new level of 500,000, it's anticipated that, that we won't be seeking permission for that to be reviewed for quite some years yet, just in case there was any misunderstanding on that. I put the resolution to the meeting.

40:08 Those in favor, those against, I declare the resolution carried. I now propose as Resolution 10 that BDO LLP, Chartered Accountants and Registered Auditors, be appointed auditors of the company to hold office from the conclusion of the meeting until the conclusion of the next general meeting at which financial statements are laid before the company in accordance with Section 4,371, Companies Act 2,006, at a fee to be determined by the directors. I put the resolution to the meeting. Those in favor? Those against? I declare that resolution carried. Now propose Resolution 11 that the directors of the company be authorized to determine the remuneration of the auditors. I put the resolution to the meeting. Those in favor, those against, I declare that resolution carried.

41:15 And I now move on to the special business of the meeting and propose as a special resolution, the resolution as set out in the notice of meeting number 12. This resolution gives authority for the company to purchase up 10% of its own shares during the coming year, a maximum of 5,225,629 shares as and when the directors consider it appropriate. I put the resolution to the meeting. Those in favor, those against, I declare that resolution carried. And now before concluding the formal business of the meeting, it's always been customary for a vote of thanks to be proposed by a shareholder to our fantastic staff and workforces throughout the world who continue to play such a vital role in the activities of our group and in the furtherance of our strategy.

42:18 Chris, thank you very much. So thank you. I have pleasure inviting all of you to join us for some light refreshments. I gather it's believed it's going to be sunny and dry enough to venture into the Courtyard. And my colleagues and I, as well as our advisers, will be very happy to answer any further questions that you may have on a more informal basis. Thank you very much.