M.P. Evans Group (LSE:MPE) — Interim Results for the six months ended 30 June 2025

0:01 Good afternoon, ladies and gentlemen, and welcome to the MPEvans Group PLC Interim Results Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged. They can be submitted at any time via the q and a tab that's just situated on the right hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and we'll publish our responses where it's appropriate to do so on the investor meet company platform. Before we begin, we would just like to submit the following poll. And if you could give that your kind attention, I'm sure the company would be most grateful. And I would now like to hand you over to the team from MPEvans Group PLC. Peter, good afternoon, sir. Thank you very much, Jake. Good afternoon to everybody. Thank you so much for joining us today.

0:49 Today's presentation relates specifically to the, interim results announced yesterday, which, have been well received by the market, and we will take you through a number of slides. Myself, Peter Hadsley Chaplin, I'm the nonexecutive chairman, joined by my colleagues, Matthew Matthew Coulson, who sat sadly, slightly ailing, but nonetheless, nobody joining us from his home, and our CFO, Luke Shaw. So what we would envisage is that the presentation will take, including questions will take no longer than, one hour maximum. Sure. It's quite quite enough time, for you to hear us, talking.

1:36 So I will kick off with a little overview of, the results and then hand over to my two colleagues. So pleasingly, the group harvest for the group managed areas was up by 9% to just some under 620,000 tons, compared with, 566,000 or so last year, with the purchases of independent crop from the outside suppliers reduced quite significantly by 39% to a 118,000 tons, but nonetheless, resulting in a similar level of total as crude palm oil production. And as I'm sure Luke will, Matthew will go on to explain, the of the significantly high enough amount of, group crop has very favorably impacted on the so called crop mix.

2:35 The crude palm oil mill gate prices, I e, the the price that we get in our pockets as it were, was up very pleasingly by almost $100 a ton, up by 13% to $868 per ton. And staggeringly, palm kernel prices were up by 71%. And, again, that will be spoken about a little more, later on. This all fed into the gross profit, up by 50% to 63,400,000 compared with 42,100,000 last year due to the CPO, and PK pricing levels, the crop mix I've just referred to, cost phasing, which will be described in more detail later, and indeed a slightly favorable foreign exchange movement.

3:25 Earnings per share were up by 60% to 71.7p, and we have, as last year, in fact, increased the interim dividend by 20% from last year's 15p per share to 18p per share for the interim period. So at this point, I will hand over to Matthew. That's great. Thank you, Peter, and good afternoon, everybody. Before we get into a little bit more detail on our own operations, it's always very important just to look in a little bit more detail at the palm oil market and indeed the pricing environment we've seen in the first half of this year. And that's what this slide does. So looking at the chart, first of all, at the top right hand side of this slide, you get a sense of the pricing environment looking back over the last five or so years.

4:21 And the dark green shaded part represents the first half of this year. And what you can see is that, the price increase in CPO in crude palm oil that we saw coming through in the second half of last year has really persisted through the first half of this year, which has been fantastic for the results during that six month period. So the average price in SIFT Rotterdam terms, the average price is up noticeably, and it's it's on average $1,179 per ton, up from just under $1,000 per ton in the first half of last year. And we've seen if you then project forward, if you look in the in the months of July and August, we've also seen that strong pricing environment persist as well, which is very encouraging as we look forward into the second half, and we'll talk some more about that later on.

5:23 Of course, as I'm sure everybody knows, we don't achieve that full SIF Rotterdam price when we're selling our oil, we achieve a lower mill gate price, and that's really what the second half of the slide is all about. And then looking at that that not exactly a reconciliation, but more of an illustration of how the one becomes the other in in in the bottom chart there. The dark green element shows us the Millgate price, and then the other colors represent where the rest of it goes, if you like. And effectively, the main things to think about are things like export taxes and levies, which the Indonesian government charges, and then, of course, things like transport costs, insurance costs, other costs of that nature.

6:15 And that's why as you can see, that 1,179 is an average in the first half of of the year. So if Rotterdam became 868, as Peter has already mentioned, as a mill gate price to us, which, as we say, is is is a big increase, almost a $100 increase on the first half of twenty twenty four. If we then turn on and and now think a little bit more about our own operations and think about crop pricing and indeed sustainable output during the first half of of twenty twenty four, if we can move to the next slide. This chart these two charts here illustrate the picture in the first half of twenty four compared to the first half of twenty twenty five, looking at the proportions, both crop and indeed of production.

7:13 So you can see particularly how we've been changing the mix of the crop that's been processed in our mills. Particularly, look at the orange part, the left left half of of each of those analyses. And you can see in '24, we had basically a quarter of our input came from buying crop from outside suppliers. What we've been doing is actively changing that mix of inputs to our mills, And what was a quarter is now only 16% of the input to our mills. And that's very important for us, and that's very deliberate. We've been very keen to make that change for lots of reasons. But if you think about the the nature of the crop that we process, the crop comes from from the green elements, the dark and light green elements. That's crop that we harvest in areas that we manage.

8:11 And there are two key characteristics of that crop that is important to highlight to you. One is it's it's cheaper for us, and we can actually deliver that crop to our mill for a lower cost. And and secondly, because we are controlling the area, because we are harvesting the crop, we know that it is of a much higher quality, so it makes a huge difference to us when it comes to our ability to turn crop into production, into margin. So we're very excited about making that change, and we want to do more of it. The other thing that it does, which is really represented by the proportions shown in the production elements of these bars, is the ability to produce more certified sustainable output.

9:07 Because as we are harvesting from areas that we know and love, so we are able to increase the proportion of our certified sustainable output. And you can see the difference that we've made just from one year to the next. What was 68% certified sustainable output in 2024 in the first half has now become over three quarters, and so we've made a big change there as well. And we want again, we want to do more of the same. As you know, we achieve an additional piece of income for every extra ton that we produce as certified sustainable output. But fundamentally, we we acknowledge that it's it's something that we're extraordinarily keen to do because it signifies very clearly in a quantifiable way our commitment to being a responsible producer of certified sustainable palm oil.

10:08 At this stage, I think we should get into the numbers in a bit more detail. And at this point, I'll pass over to Luke. Matthew. Mhmm. I'll just skip to the next slide. Thank you. So looking at the first half results and starting with the left hand side of the screen here, I'm looking at revenue. You see the ink the revenue increased by 10%, and and primarily that was due to the higher price environment from both a CPO and PK perspective. And you'll see the little table there underneath the pie charts, is showing the split of our revenues by CPO and PK. And you can see a significant step up in that PK revenue over 10,000,000 really driven by that much higher price environment of 71%.

11:00 Our CPO number is up. We did have a working capital benefit in the first half last year, which is making that increase look a little bit lower, but that working capital benefit didn't reoccur in 2025. But nonetheless, that pricing environment for CPO also did increase our CPO revenues as well. And then Matthew's just touched on sustainability premium. We saw the overall amount we received of sustainability premium fall ever so slightly from 3,000,000 to 2,800,000 in the first half. That was despite an increase in the amount of output of certifiable production. And what we saw was a reduction in the amount of premium that we received for, in particular, PK. So there was a step down in the PK premiums, which offset more than offset that increased volume as a result of that higher production that Matthew already touched on.

11:59 If I move over to the right hand side of the slide and we look at costs, you can see this cost metric that we highlight here is the cost to produce our own palm product. So that's the cost to produce CPO and PK, and that fell to $446 per ton in the first half. We always have a slightly higher cost per ton in the first half due to some of our cost phasings. And and you'll see that, in particular, this year, one of the reasons for that reduction was the fertilizer application that we would normally put down in the first half has been slightly delayed. We had an a number of or number of days of wet weather in the first half, which stopped our operations teams from putting that fertilizer on the ground. Clearly, we don't want to do that. It's a and let watch it wash away. So we've effectively deferred some of the fertilizer application from h one into h two.

12:55 We also benefited from a weaker Indonesian rupiah. So our biggest element of cost is the labor. We pay our labor in rupiah. And as the dollar strengthened or as rupiah weakened against the dollar, that means that we see a benefit when it comes to that labor cost. The second cost metric we focus on is the total cost per ton by how much it costs to produce our own fruit, but also then adding in the amount it costs to buy the fruit from our scheme smallholders and the independent crop. And you can see that that was a total of $553 per ton, up 5% compared to 2024. And I'll touch on that again in my next slide, but part of the reason for that and the main reason for that going up was because the commodity price environment had gone up as well.

13:49 And the amount of the, that we have to pay for the supply moves in line with that commodity price. If it was going up, so too does that cost the supply. But, also, if the commodity price was going down, that cost of supply so too would fall. But when you factor in on average that our costs were $446 per ton, the cost of buying fruit, across the other two sources was north of $700 per ton. So that gives you a little bit of an insight in terms of the margin benefit that we can achieve, if we are processing more of our own frog own crop rather than that that we buy in. So a little bit more on that now. We just go to the next slide.

14:37 So if we look at the gross margin, we can see that that's gone up 50% over the last, over the period. So from 2024, we had a gross margin of 42,100,000. And and in 2025, we had a gross margin of or gross profit of $663,400,000. Now a big proportion of that increase has come from sale the selling price. And, again, here, we show a net benefit of 18,800,000. And, again, that's because we have to give some of that commodity price increase back to those suppliers because those two are effectively formulaically linked. So the big proportion of the increase on price takes us up to 60,900,000. We then saw a reduction in volume, and, again, most of that is a result of that working capital benefit last year that didn't repeat.

15:28 Approximately, 3,000,000 of that 4,000,000 is that working capital benefit. But, of course, we did process slightly less crop than we did in the prior period, and that had little impact on the volume and of dispatches. But then when you offset the mix benefit, which I just touched on that margin differential, we did over 3 and a half million of mix benefit in the first half, and that really is that mix of crop coming through into the profitability. The next labs we will work across is 1,700,000. That predominantly is the first lives of that application that was delayed in h one, and, really, that's gonna come and hit the p and l in h two instead. That gets you to 62,000,000 in gross profit.

16:14 And then finally, we had some FX benefit, as I touched on earlier, of 1,400,000, taking us all the way to that 63,400,000 and the 50% increase. We do a pretty good job of keeping costs below the line as tight as we can, but we also offset those costs with some other income through electricity sales or shell sales as as sort of waste products that we're able to to sell onwards. And then as a result, that 50% drops down to the operating profit as well. So that's also up 50%. And then our profit for the period is up a little bit more than that 50%, and that's really due to the fact that we've seen a shift from a sort of net finance cost to a net finance income.

16:59 And that's because we've been able to clear, the US dollar debt that was on our balance sheet that was fully repaid during the first half. And and with the cash position, which I'll come on to, that's now generating some returns. So we flipped from a sort of net finance cost to a net finance income, and that's one of the reasons why the profit for the period is up more in percentage terms than the gross profit and and the OP. So if we look next at cash, the group continues to be a significantly cash generative, operation. So we came into the year it looks starting at that top bar. We came into the year with just under $80,000,000 of gross cash. And then in the first half, we generated just under 73,000,000 from operations.

17:50 And one of the reasons why we can generate that much cash is it actually on our cost base, always worth calling out that about 20 to 25% of that is noncash. So that's really where we get that cash conversion percentage north of a 100%. And in this period, it was a 117. So if you take the 79 plus the 72 or 73,000,000 that we generated, and and then look on the next bar, what did we do with that cash? So we paid our taxes, and we continue to do that. We also repaid that debt as I was talking about. Then in the two red parts of that second bar, you'll see that we spent just over $10,000,000 on capital expenditure and then also 26,000,000 on dividends. And that's the final dividend for 2024 being paid in June 2025.

18:41 And we continue to balance that capital allocation, between a number of different areas. And in this period, the real focus was on that dividend payment and the CapEx. And that CapEx number is coming down from some of the historical levels, particularly now that we're not in a mill building phase. But what we are still seeing, and and I think it's always worth calling out, is we see opportunities at some of our estates to continue planting, and that is a CapEx requirement. So we're continuing to put new palms in the ground at our existing estates, and that absolutely represents a fantastic return for us if we can do that. So if you take those cash outflows, we're still left with just over $91,000,000 of gross cash at the end of June twenty five, and that is a net fund position of just over $70,000,000.

19:35 But in July, we did a job of spending some of that. We bought an additional 3,000 hectares, which Matthew will touch on in a little bit more detail shortly, and and that took 35,000,000 of that 91 away in July. But nonetheless, even after that acquisition, we still have a fantastic balance sheet with, real firepower to look at the pipeline for further acquisitions and other areas of capital allocation. So with that, I'll just move on to dividends. And I talked on the cash outflow about the $20.24 dividend that was paid, and Peter's already touched on. We're delighted to announce for the interim dividend this year that we've increased it by 20% again up to eighteen p from fifteen p.

20:26 And, again, one of the reasons why we can do that is I've touched on the EPS enhancement as a result of those finance costs now switching to more finance income. But also last half year, we were able to acquire some of the, hectareage from one of our minority partners, and that absolutely has helped, improve our EPS position too. And we're very proud at MPEvans of our dividend track record. We now have a thirty five year history of either maintaining or increasing our dividend, and that's something that the board take very seriously, and we're very proud of. And I think it's an incredible achievement for any business, But, certainly, when you consider a commodity business as well that goes through the cycles, it's even more impressive.

21:17 If I just go to the next slide, and I'll hand back to Matthew to talk you through a little bit about our strategy. Great stuff. Thank you very much, Luke. So this slide, as Luke says, covers some thoughts on on our strategy, and I'm sure many of the people on the call today will already be friends with Reggie and will be familiar with the strategy as as sort of articulated in this way. We are a responsible producer of sustainable Indonesian palm oil striving for excellence in all of our operations with a focus on continuing growth and offering an increasing yield. And and that is RGGI in a nutshell.

22:05 And we've indicated on this slide here some examples of how under each each of these strategic pillars we've been pushing forward over the course of this interim period. And you've heard about some of them already as we've been discussing what's been going on on with you. So I I won't sort of, if you like, labor the point in sort of item by item across this slide. But I I hope it's extremely clear to you how this really does govern everything that we think about and how we make sure that all that we're doing is is really with with at least one, if not several, of these strategic pillars in in in mind. And perhaps what what's best to do is then provide some further illustration of exactly what Reggie means to us in practice by by looking at the next couple of slides where where we talk about about a couple of them in in a bit more detail.

22:59 Firstly, starting actually with growth and going back to exactly what Luke was just describing, which is that whilst you may say we're slightly cheating because it's not not exactly within within the period in question, but nonetheless very important to us and covered within the reporting that that we are we are disclosing with you and talking to you about just now, fact that we have just completed the acquisition of some further planted hectares, which is fantastic. So perhaps if we do just turn to the next slide, we can look in a bit more detail at the acquisition we've just completed, which is further 3,000 planted hectares close to our Bumimas estate in in East Kalimantan, which is something we're very pleased to confirm to you.

23:51 As I say, it doesn't make a a difference to the to the six month period we are reporting just now, but we'll we'll make a difference to the the second six months that we will look forward to reporting to you in in due course. We we acquired essentially two two blocks of 1,500 hectares, which which comprise the the 3,000 hectares that we we acquired. One one on either side of of our Bemimas project in in East Kalimantan, effectively turning what is a a 9,000 hectare estate into a 12,000 hectare estate, which is superb when it comes to our ability to then provide crop to the 60 ton per hour mill that we that we have in Boominas in in East Kalamantan.

24:46 What we're doing is then once again thinking about how we're changing that mix of crop supply to to our our our mills that we've already invested in. And so we will over time there continue to increase the proportion of our own crop that we we we mill in East Kalimantan at Boomingmass and become less and less reliant on third party crop to fill up the milling capacity there in East Kalimantan. It's relatively young hectare we've acquired, which again is absolutely in line with our strategic objectives to make sure we continue to renew our portfolio, maintain overall a relatively young average age, and we expect our acquisition to be immediately earnings enhancing.

25:40 It's entirely funded out out of our our our internal resources. You've just seen from Luke the fact that we we are in a very healthy and very strong financial position, so we're able to fund it entirely out of existing resources. And it gets us to an exciting new milestone. We're able now to talk about the fact that we are a 70,000 hectare company when we look across all of our projects now. We we've achieved that new milestone. So when you think about the the amount of growth that we've been able to deliver over the course of of of recent years, in terms of planted hectare, we're up by the thick end of 30% in terms of planted hectare over the last three years, very much delivering on the g of Reggie over recent years.

26:34 So that's one example, which we're very pleased to be able to share. Then coming back to the beginning of Reggie, coming back to to the hour of Reggie, thinking about our commitment to being a responsible operator, and we continue to focus on on our our estate communities and making sure that our estates are very, very well maintained and supported in terms of community life on our estates. And we just give you an example here of what that means for us in practice When we think about all of the facilities that are provided across all of our estates, whether it's high quality housing, whether it's medical facilities, whether it's recreational facilities, estate shops, you know, etcetera, etcetera. I could go on. We could provide you a whole a whole range of further examples just to demonstrate what that what that looks and feels like for the many thousands of people who who make make their homes on on our Royal Palm Estates.

27:42 So moving on now and actually thinking a little bit about the second half of this year and beyond and thinking about outlook, we've published alongside our first half results an indication of what the next couple of months look like. And the answer to what the next couple of months look like is more of the same, basically. So we're very pleased to be able to share that crops continue to do well, and you've had a sense there. The crops are still very much around, you know, percent up to 8% up on our own crop, 11% up on the crop harvested from the scheme smallholder areas. We continue with our strategy of restricting the crop being bought in from outside suppliers.

28:28 We think absolutely that's the right thing to continue doing. And then from a price perspective, as you already saw from the chart I was showing you earlier on, our pricing remains extremely robust. And so the averages, the year to date averages for the eight month period there look very, very similar to the six month averages that we've disclosed for our for our interim results. So the eight month averages are now eight six five and seven three seven, very, very similar to the six month averages. So we think with those two thirds of the year analysis, that puts us in a very strong position to see robust averages for for the year as a whole. So that just just knocks us on a couple of more months and and looks very encouraging.

29:19 And and that really leads us on mindful of of the time and the fact that it's half past, and we said we'd devote some time for questions to just very quickly summarizing what what you've heard, which is that it's been a fantastic first half. We're very pleased to be able to share that with you today. So, you know, crop and and production doing very well. Pricing, terrific. We come out of the first half with a with a with a very, very strong balance sheet, which enables us to do the kind of investment you've just seen me talking about. And and we look forward into the second half with and and beyond, indeed, with with with much positivity. We continue to look at the opportunity to add more hectare into the group, and and we continue to be highly cash generative, enabling us to deliver more and more in terms of returns for shareholders and more and more in terms of ongoing growth.

30:15 So that's our story, and I'm I'm sure there are I can see there are some questions coming in, but I will just, for a moment, hand back to Jake from from my MC before we move on to questions. But thank you, everybody. Perfect, guys. That's great. Thank you very much indeed for your presentation this afternoon. Ladies and gentlemen, please do continue to submit your questions just by using the Q and A tab that's situated on the right hand corner of your screen. But just while the team take a few moments to review those questions that have been submitted already, I'd just like to remind you that a recording of this presentation, along with a copy of the slides and the published Q and A, can all be accessed via your investor dashboards. Guys, you can see there, we have received a number of questions throughout your presentation this afternoon. And thank you to all of those on the call for taking the time to submit their questions.

31:02 But Peter, at this point, sir, if I may hand over to you to chair the Q and A with the team. And if I pick up from you at the end, that would be great. Thank you. Thank you very much, Jake. Well, thank you for the questions that a number of you have submitted. And I will try to take these, relatively in chronological order, which will make it simpler for me, but there are one or two which are similar, which I'll try to group together. The first question perhaps I might put to Matthew, this is a subject particularly close to Matthew's heart, to all our hearts, is regarding sustainability and how will you be improving, I'd say improve even further the sustainability of your operations.

31:48 Matthew, would you like to comment on that? Yes, absolutely. I mean, I think you get a sense from everything we're saying so far that we're working very hard on that. One of the things that we're very keen on is continuing to improve the certified sustainability, the proportion of the certified sustainability of our our output. And that's why being able to deliver more and more of our own high quality and certified sustainable input to our mills, and we've made a step change on that already this year. So we're very pleased on pleased what we've done on that, and we think absolutely there's the opportunity to continue to deliver more. I haven't touched on, I'm sure in some senses from a keeping to time perspective, people will be glad that I haven't touched on some of the other things that are included in our separate stand alone sustainability publications, like our recently published TCFD report, although, as always, I commend it to everybody here.

32:51 Please do, take the opportunity to review that, and you'll see a lot more about, our journey there, what we're doing to continue to work on reducing our carbon balance sheet and some of the targets we're setting ourself to ourselves to continue to work very, very hard on that. Thanks, Matthew. Thank you for the congratulations on our results. What has caused a substantial increase in the Kernel price, this was touched on in the presentation, but essentially Kernel competes directly with the coconut oil of which has been heightened demand as a result of the shortage in The Philippines.

33:42 If there's anything else you want to add to that, Matthew? No. You're exactly right. I mean, there was a shortage in the early part of the year in coconut supply, and that really kicked off the price increase. I mean, it's been sustained for some time, which is superb. You know, selfishly from an MPE perspective, long way that will continue. Yeah. Well, yes. There are a couple of questions about share buybacks. On the June 18, we announced a share buyback program with up to £2,000,000 to be used by September 17. Could you please advise why this has not yet been initiated? And naturally, we're not quite at the seventeenth, so if not utilized, will it be carried forward? I'm conscious of quite a lot of questions for Matthew. I I might just make a a couple of broad quest comments on this, and maybe Luke can comment further.

34:32 But it it's really a question of capital allocation. And I would also say that, certainly, going back over many years in terms of share buybacks, there have been times when we've paused, when we kept the price at a certain level. We believe strongly that we still represent good value, but it's a question of priority over capital allocation. You've heard that we've recently invested in a further 3,000 hectares at a cost of some $35,000,000. Given that we still have significant surplus capacity from our existing mills, there could be the potential without building a single further mill to add some ten, twelve, possibly 15,000 hectares on top of what we've got, where one could be talking, you know, 80, a 100, a 120,000,000.

35:30 It's unlikely that will happen at once, but we look at various possibilities, projects which are put to us. So a little bit keeping our powder dry, but share buybacks in the longer term will continue to be a a priority along with the priority of dividends and indeed continuing to invest in new land. So it's a matter of juggling those three. Do you have anything further to add? No. I I think you're right, Peter. I think we've always taken a a balanced approach to capital allocation, and I think Peter's just sort of explained that and sort of spot on going there. There's some questions on sort of customers.

36:16 It was how much production is used locally in Indonesia and how much is exported and where exported, who the customer is, who's buying the CPO. We want to take that, Matthew, and then a couple of follow-up questions. Yes. Absolutely. So when it comes to CPO production and usage, Indonesia itself is the largest consumer of palm. You know, it's the largest producer and consumer of palm globally. So from a consumption perspective, it uses around a quarter of of the world's palm, and obviously, the remainder is is then sent for export.

37:04 In terms of our our own production, you know, we can't say for certain how much of our own is consumed locally and how much exported. And the reason for that is slightly connected to the next question about our customers. Because our customers are all Indonesian because, obviously, being at the very beginning of the supply chain, all of our customers are local refiners in Indonesia who will take our our crude palm oil on and then take it to the next stage of refining. But that all happens within Indonesia. As I say, we then lose sight. It's likely that, you know, a significant part of that is then retained for the local market, but also a significant part will be exported.

37:55 Fine. Thank you, Matthew. Did you want to comment on the on the kernels versus the CPO? Sorry, I was is that are there different customers for the kernels versus the CPO? Not particularly, no. Yep, okay. What is your target percentage for certified CPO in future years? Do you see this continuing to climb? I mean, you have already touched on this, but perhaps you might want to elaborate again, Matthew. Of course. And and so and hopefully, it's clear with everything we've been discussing that our ambition is absolutely that we expect this to continue to climb.

38:44 We haven't set a specific target. To some degree, this is somewhat of a of a location by location question, and it goes back to what Peter was just saying about our opportunity to acquire further hectares. And as we go through that process and subject to our ability to acquire those additional hectares, so we will be able to continue specifically, as I was just saying, Boombats, that was a very good example where we just bought 3,000 hectares that enables us and accelerates our ability to cut back on independent crop and yet maintain a level of capacity utilization within our mills and enables us to continue making the step changes to our crop mix and increase our sustainable output.

39:38 Thank you. And now could you please give some color on long term industry supply and demand outlook? And I I perhaps just to complicate things, of course, in terms of the industry, palm oil competes with other vegetable oils. So there was the wider industry of vegetable oils, and then there was the industry specifically of palm oil. Again, Matthew, do you want to comment on that? You're right, it's always very hard to talk about palm in isolation without getting interested in lots of other vegetable oils, but without sort of taking too long over it, just looking at palm for a moment. Well, I suppose on the demand side, there is no question that there has there has been for a very long time a steady tick up in demand for vegetable oil, inclusive of of palm around the world, and there's no reason to think that's stopping anytime soon.

40:36 On on the supply side for palm, there is a a lot of evidence that points to the fact that there is some restriction in the level of supply coming through because of a lack of long term investment in the key producing countries, both in Malaysia and to a degree in Indonesia in terms of an investment in replanting. And so a lot of areas have an aging stock of farms, which is something which, you know, which we obviously are very keen to to work hard to to maintain a very healthy and good age and invest in replanting stock across our portfolio.

41:26 So so we we fight very hard against that despite the fact that the industry isn't doing quite so well. Thank you. MPE still has a minority stake in PT Kurasan, Indonesia. The questioner asks that he thinks that we have the intention to hold onto majority stakes of the negotiation to CPEF to sell a 38% stake. And just to give a ban a little bit of background, we still have two minority shareholdings. One is our share of Bertrand Properties, which is the remnants of what we used to own in Malaysia, which is now a very long term town development project on what used to be a rubber and oil palm estate, and the other is our our 38% share in a a relatively small estate in in Indonesia.

42:28 And, yes, you're right that we we would like, in the longer term, to to have only majority stakes, and I'm sure that will eventually be the conclusion. But, these things have to be agreed, negotiated. There have been discussions with CPEF, and no doubt there will be further discussions. But, as yet, it is, well managed by CPEF and a profitable investment. So no doubt it will be revisited in the future. Another question is, any thoughts on the AIM status of the company going forward? I don't know. Matthew, do you want to comment on that versus versus main board, I suppose? Is that I guess that's the I I I presume that's behind the question. Yes.

43:26 We are and have been an AIM company for a very long time. I I think, you know, we we've enjoyed and benefited greatly from from being a member of of that index. Of course, we keep that under review, and it's something that we discuss as as a board. And, you know, we recognize the fact that we are now, you know, within within our chosen index, one of the one of the very largest companies. You know, we I think we're one of the by by market cap, I think we're one of the 10 largest companies on on AIM as we sit here today. So it would it would be wrong of us not to at least think about that and and keep it on under review as we as we but but right now, this minute, we have no immediate plans to dash off anywhere else.

44:18 Indeed. Now the next one, what are the five main reasons why all entities and palm oil plantations have an incredible return this year? Well, I I can start off with the first reason, which is the the the the very robust palm oil price. I don't know whether Sheila, you'd like to add any further reasons. I mean, those reasons, basically, we've already given in in terms of the the better result this year compared to last. Do you want to comment? Yeah. I mean, I just just figured it out. I mean, I can't really sort of go into sort of returns for other For others. No. Companies at all. But in terms of our own return, I think it's a combination of the price environment being, you know, robust for a longer period, which is fantastic when it comes to the cash that can be generated.

45:10 And, also, I think it's just, you know, the three of us and and others have have been trying to, you know, explain the story about MPEvans and make sure that people are aware of what the business can do and and the future of the investment case. I'd like to think that some of that has played a part in some of that return as well. Thank you, Luke. Think this has been covered fundamentals driving palm oil price and where do you see it in the coming years. I think that's largely been covered, isn't it? So I think we might move on from that. But thank you for that question nonetheless. As a reference to the recent social unrest in Indonesia and whether this poses a financial risk to the company, all I'd say initially from a broader perspective, having been with the company for some thirty seven years, There have been some periods of social unrest in the past, but broadly speaking, Indonesia remains a very friendly and benign environment for the foreign investment investors such as ourselves, not least because of the significant amount of investment we we have made and continue to make into their economy.

46:30 Do do you want either of you, Matthew, Luke, to make any specific comments about what's been happening in recent week or last week or two? I think I need to say that it's obviously something that we've been listening to the guidance from our colleagues in Jakarta on very carefully. And based on what they've been sharing with us, firstly, as you say, I mean, there's been no impact whatsoever on our on our operations. And the guidance we've been receiving is that whilst as has been reported, there has been some unrest and some demonstrations in in Jakarta. Things seem to have settled down fairly quickly after that, and things seem to be getting back to normal.

47:23 Thank you. As cash is coming in at a very fast pace, are you considering other countries to invest in? Do you want to answer that one, Luke? Yeah. Not not right now. I think we have very much benefited from sort of one country approach with Indonesia. And we and I think as we've touched on throughout this presentation that we see a lots of opportunity to continue growing within Indonesia and within the regions that we are in in Indonesia. And I think we're absolutely focused on those opportunities first before we were to look further afield. Absolutely. A specific question about palm oil seeds and which ones we use and what superior yield do these deliver.

48:13 Maybe without being too specific, do do you want to comment about the the speeds, what what we use, the mix, that sort thing, Matthew? Yeah. Of course. We I mean, as you say, we don't we don't go into detail of seeds type and and what what we use where and so on and so forth. But, fundamentally, what we do do is we don't place over reliance on a single seeds type or a single seed supplier. We listen very carefully to our agronomic team and our agronomic advisers who understand this stuff in in a huge amount of detail to ensure that we get the right material in the right places when we're doing either new planting or or indeed replanting in order to be able to to, one, maximize yield, and two, minimize any planting risks associated with what we plant and where where we plant it. And so, you know, we have some fantastic teams internally who who look at this stuff, and we also rely on advice as well.

49:25 Thank you. I think one for you, Matthew. As the company aims to be nature friendly, I. E. Sustainability, can you talk about studies of wildlife flora, fauna in in your non farmed cropped areas? Yes. I can. We've we've got some information on this. I think we've put a little bit of information on this in our last annual report, but certainly there's information on this in our sustainability reporting. Our sustainability and biodiversity teams are very much on top of exactly this, and and we support and encourage increasing biodiversity across our estates, both in planted and non planted areas, in fact.

50:12 And it's something that's extremely important for us. The next question, would you ever sorry. No. Does the rise in the commodity price impact on the value of the estate? I mean, there tends to be if there is an effect, tends to be a lag effect. And funny enough, the value of plantations doesn't, fluctuate to anything like the extent that the commodity price does. It seems to move very slowly. So I don't think there's been a a significant change to the underlying value of the plantations or the projects that we've been looking at to invest in. Any would you agree? No. I I mean, I I think, certainly, you know, when when we're looking at values of the states, we're we're not sort of reactive to the sort of current levels of the commodity price environment. We very much take a longer term view when it comes to that. And I think most valuers would also take a similar approach Yep.

51:18 To that evaluation methodology for estates. Would you ever consider investing in refining your own project produce? I mean, for for for now, no, because we're simply not big enough. I mean, if we had all our 70,000 hectares in one block, then maybe yes, but we don't. And actually, as Matthew has touched on earlier, it's good to have that geographical diversity, we feel, and we do what we feel we do best, which is to grow the crops, to process the crop through our crude palm oil mills and then sell it on at the best price, the best premium to the refiners.

52:05 So we wouldn't be looking to do that with our current hectare as it stands. What percentage of the planted hectares will require replanting during the next five years? Do you want to take that Luke? Yeah, sure. Not a significant proportion of of our planted hectares within the next five years. We always do a little bit of replanting and and also part of skill the and the strategy is also to manage those replanting phases for the group. But we're actually quite fortunate in the time frame specified in the question that over the next five years, not a lot of replanting necessarily required. And we also hope there'll be lots of opportunity for new planting.

52:55 As I said earlier, we're continuing in through our CapEx expenditure to put new plants in the ground, our existing estates, and also where there's opportunities to do so on some of the newly acquired states that we have as well. Thank you very much. Now this question is, what is the current implied enterprise value per planted hectare of MPE. Mean, first of all, we need to define enterprise value and there is a certain amount arguably of subjectivity about this, but I don't know whether you'd like to comment, Matthew, in terms of that question. Yes. Absolutely. It it is I mean, it clearly has been increasing as we've been enjoying the an increase in in overall market value over the last twelve months.

53:47 But Do you want to just explain what enterprise value means? Yes. By all means. So, I mean, as we as we take it, when we look at the market value and we adjust for for for non planting assets, so adjust for the cash and any other assets on the balance sheet to to to leave what's left for the planting and estate assets and then divide by the hectorage to give an enterprise value per planted hectare. We would say we're we're we're still looking at no more than $10,000 per planted hectare, I would say, which given the the extremely high quality and productive and cash generative nature of of the planting portfolio, we would say, is actually still a very low valuation per planted hectare when you think about the MPE of this portfolio.

54:45 Thank you. The next question is really up there, because although, do the current demonstration of the change of government finance minister worry us? Think Matthew has answered that in terms of the question about sort of social unrest. So I think we can move on from that. I haven't had a chance to review this. It's quite a long question, but historically, the palm oil price has been very cyclical, which several episodes more than 15% drops in price given that most of the demand is essentially noncyclical food consumption, plant growth takes years. Why would be why would this be the case? And will the cyclicality persist in the future?

55:31 Look into your crystal ball, Matthew. Well, yes, indeed. I I mean, I I think the last time we saw a particularly sharp increase, first of all, followed by something of a reset in the palm oil price was to do with concern associated with with other oils, and that goes back to 2022 where we saw the outbreak of war between Russia and Ukraine, and that caused something of a spike followed by a reset in CPO pricing. So that was very much external events causing things to to to change more sharply. And I think that that that historic example may give some clues to the future where as as as the questioner rightly says, fundamentally, we're dealing with something which is an essential.

56:24 And then so you wouldn't expect those sorts of sharp changes, but then life sometimes comes along and surprises you because there are external events that you can't necessarily legislate for. But what we would say is that our experience shows that whilst you may have those those short term peaks and troughs, we are in a position where we continue to to sort of, if you like, you know, sail serenely through them and and continue to enjoy the ability to generate returns, generate cash, generate the ability to persist with our progressive dividend policy over over the long term for our for our investors.

57:11 And so, you know, I I think it's a point well made by the questioner, but but nonetheless, you know, we we make sure that we have a very robust balance sheet behind us, and and we're thinking very much sort of a a long term view of life, notwithstanding the occasional peak and trough in commodity price. Well, thank you, Matthew. And that rather neatly takes us to just two minutes before the hour that we spoke about. So thank you so much for your questions. Some very interesting questions there. I'll just hand back to Jake for a moment, if that's okay. Absolutely, guys. Thank you very much indeed for being so generous of your time then addressing all of those questions that came in from investors this afternoon. And of course, if there are any further questions that do come through, we'll make these available to you afterwards just for you to review. But, Peter, perhaps before really now just looking to redirect those on the call to provide you with their feedback, which I know is particularly important to yourself and the company.

58:14 If I could please just ask you for a few closing comments just to wrap up with, that would be great. Thank you, Jake. Well, I hope that's been helpful. And thank you again for the various questions submitted. And thank you to Jake and IMC for hosting this. I think this is an excellent forum, I have to say. And those familiar with us, including shareholders, would be shareholders, people who follow us, will know we'd be likely to present you again normally in March following the annual results. So we look forward to seeing many of you then, we hope. But thank you again for your time today. Perfect, Peter. That's great. And thank you once again for updating investors this afternoon.

59:03 Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order the management team can really better understand your views and expectations. This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of MPEvans Group PLC, we would like to thank you for attending today's presentation. That now concludes today's session. So good afternoon to you all.