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Annual Report to 31 Dec 2013
27 February 2014
Annual Report to 31 Dec 2013

The directors and management are pleased to present Seeka's financial results for the year ended 31 December 2013.

The results are better than NZX guidance given to shareholders at their 22 October 2013 meeting, specifically: 
- Profit before tax, impairments and revaluations totalled $3.33m (guidance range $1.7m to $2.2m); 
- Earnings before interest, tax, depreciation and amortisation totalled $9.94m (guidance range $8.2m to $8.7m).

Seeka achieved earnings of $0.19 per share for the year, and at the year’s end each share had a net tangible asset backing of $4.05 and on 31 December a market price of $2.10.

Seeka’s after-tax profit of $2.67m is down from $5.88m in the previous corresponding period (pcp). This is significantly better than anticipated; the company has successfully absorbed the downturn in fruit volumes and margins caused by Psa-V.

Overall revenue of $97.37m is 10% down from $108.29m in the pcp, and 30% down from $138.8m two years ago. The lower revenue reflects the drop in volume of Zespri Hort16A gold fruit (less is being grown and processed). Volumes are expected to recover from 2015 when the new, disease tolerant Zespri G3 variety comes on-stream.

Seeka’s strategy to weather the Psa-V outbreak in recent years included selling surplus non-core assets, reducing debt, restructuring operations to reduce costs, and limiting capital expenditure. Seeka pursued new business areas to improve earnings. The company withheld dividends while it focused on lowering debt. Dividend payments have been reinstated now that net debt levels are well within the Board’s target range. Net bank debt (term loans less cash deposits) at 31 December totalled $14.67m, compared to $17.78m pcp. At 31 December 2013, Seeka had invested $9.24m in next year’s crop; removing this short-term investment reduces core debt to $5.43m. This is low relative to the context of the company’s long-term assets of $67.87m.

Seeka reviewed and revamped its strategy in 2013. In October, the company outlined to shareholders a bold vision to be “New Zealand’s Premier Produce Business”. Kiwifruit remains the foundation and heart of the business, but there is a realisation that Seeka must diversify to provide additional earnings, growth and capital appreciation to shareholders. While the recovery in kiwifruit provides exciting growth prospects, developing complementary business in the produce sector adds to the company’s prospects for future growth.

The past two years have been a difficult time for Seeka and parties associated with it. It remains a difficult time for some, as the industry rebuilds and growers re-graft their orchards with fruit varieties understood to be more tolerant to the Psa disease. However, the steps taken by Seeka have strengthened the company and will position it to re-emerge from difficult times on an exciting growth path.

Directors and management thank staff, contractors and suppliers for their service, and we thank growers in particular for their loyal support during the past year.

The directors have declared a fully-imputed dividend of $0.07 per share, to be paid on 28 March 2014. 
This is a $0.01 increase on the 27 September 2013 dividend distribution. 
The dividend will be paid to those shareholders on the register at 5pm, 21 March 2014. 
The dividend reinvestment plan will apply.

Reporting period for year ended 31 December 2013. 
The previous reporting period is year ended 31 December 2012.

Revenue from ordinary activities ($000) $ 97,371 down ( 10.1)%

Profit from ordinary activities before tax attributable to security holders ($000) $ 3,514 down ( 52.3)%

Profit from ordinary activities after tax attributable to security holders ($000) $ 2,664 down ( 54.7)%

Net profit attributable to security holders ($000) $ 2,664 down ( 54.7)%

EBITDA before revaluations and impairments ($000) $ 9,935 down ( 35.8)%

Year ended 31-Dec-2013

Basic earnings per share $ 0.19 ( $ 0.41 for prior year) 
Diluted earnings per share $ 0.19 ($ 0.41 for prior year) 
Asset backing per share $ 4.05 ($ 3.89 for prior year)

1. This announcement should be read in conjunction with the attached annual report. A copy of the full annual report can be found on Seeka's website 
2. EBITDA before revaluations and impairments is considered by the board to be a key measure of performance and a reflection of cash flow generation. 
3. Profit before tax, impairments and revaluations is a measure used when providing guidance to the market and is reported against in the commentary.

EBITDA Reconciliation $000s 2013 
Net profit before tax $ 3,514 
Adjustment for impairment charges 
* Short-term lease (gain) $( 22) 
* Investments in associates $615 
* Revaluation land and buildings (gain) $( 776) 
Profit before tax, impairments and revaluations $ 3,331 
Adjustment for 
* Depreciation and amortisation expense $5,392 
* Amortisation of intangibles $73 
* Interest $1,139 
EBITDA before impairments and revaluations $ 9,935

Michael Franks 
Chief Executive 
021 356 516

Stuart McKinstry 
Chief Financial Officer 
021 221 5583

Seeka Key