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Please note that while you can submit questions from now on, I will not address these until the relevant time in the meeting. I'll focus on the overview of the results and discuss the key elements of the progress of the company during the year.

This will be followed by our strategy for the upcoming period. Pete will follow with the financial performance for the half.

After Pete, I'll make some closing remarks with time for Q&A at the end. Today, we'll share with some clear, consistent messages.

Our strategy is clear. We are focused on consistent execution of our strategy, and our execution is reflected in our results.

I'm proud of the progress we are making as we execute our plans, but there is more to do. Strategy turns to growth.

Strong EBITDA growth as well as investing for the future. The plant-based milks segments, led by Milklab, delivered another record sales result, reflecting the success of our key initiatives and the strength of the diversified channel mix.

At the same time, our dairy and nutritional segment has continued to consolidate its 4-year turnaround and is now delivering more consistent operating results. Plant-based milks delivered record sales growth in all strategic channels, including Milklab in retail, Horeca, and export.

Our flagship Milklab brand grew both in plant-based milks and dairy milks. Our Milklab almond is clear number one in the grocery barista channel.

Dairy nutritional improvement continues, more consistent performance, and we are investing for our future. Extensive strategic investments in sales and marketing, including brand, activation, global playbook, and new product development.

As you'll see in the results, the first half of FY26 represented another period of solid progress against our strategy. Our business portfolio has a nice balance.

Dairy and plant-based milks lead the way, with sports nutrition on trend. Nutritional ingredients with bulk cream and lactoferrin remain critical products in our portfolio.

Nutritional ingredients showcases our specialty dairy products and maximizes the value of all milk components. Our contract manufacturing, especially in dairy and nutritionals, allows us to rebuild our dairy portfolio.

We are the largest long-life milk processor in Australia, currently supplying the major retailers in Australia across dairy and plant-based milks. Our contract manufacturing, especially in dairy nutrition, gives us scale and connects us with key retailers and means we offer products across the value chain.

We are pleased with the balance in our portfolio. Today, 80% of our contribution margin comes from our brands.

Milklab remains our number one brand with growth continuing. We are positioned at the intersection of consumer megatrends, with health and wellness focus, plant-based adoption, and a coffee culture premiumization.

We have high-growth branded plant-based milk export business in the Asia-Pacific region. Opportunities exist in branded specialty dairy.

We have great assets in sports nutrition, which are poised to grow with some investment to represent a great opportunity in the fast-growing segment. There are clear value creation opportunities close to the core to drive the next phase of growth, and an exciting pipeline of adjacent opportunities.

The improved revenue and earnings are underpinned by our strategy. The delivery of another period of improved adjusted operating EBITDA performance provides the foundation for Noumi to pursue the significant opportunities before us to drive growth.

It is with great pleasure to announce an EBITDA of $33.9 million, up 23% from the first half of FY25. Revenue in our plant-based milk segment is up 1.1% with $94.3 million.

The plant-based EBITDA of $22.9 million reflects the previously foreshadowed investments we are making in marketing, sales, and new product initiatives to capture growth opportunities in Australia and overseas. We are confident in these initiatives will be rewarded in future periods.

This result was driven with Milklab sales up 11.1% across both plant-based and dairy milks. Horeca sales returned to growth, up 2.5%.

For the fourth period in a row, dairy nutritionals has shown improvement with EBITDA up of $12.4 million, up over 167%. Planning is underway for solutions for the maturity of the convertible notes in May 2027, and we are working with our financial advisors with the intent of maximizing value for all stakeholders.

Slide 8 has the financial highlights that further call out the financial operational metrics. The statutory net loss after tax of $24.2 million includes $42.2 million for the convertible note fair value adjustment.

We have seen revenue growth across the business, with brands, channels, and geographies showing growth, consistently executing in the key initiatives that support our strategy. Milklab has grown over 51% in retail, with 2.5% growth in our largest channel, Horeca.

Milklab lactose free has grown 16.9%. We've also seen growth in exports in both plant-based and dairy.

Milklab has also grown 22.5%. We are investing into the future, spending over $19 million in sales and marketing activities, the majority of which is spent in plant, with more to come in the second half.

We've established our global brand guidelines, supporting our ambition to become a true international brand with consistent execution across markets. New product innovation is key with investments in team and capability.

This will be part of our future pipeline. We're investing in our sales team with additional resources and tools to make our geographic performance more consistent.

We've seen a number of marketing activities during the first half of FY26, and activities are ongoing. Our increased investment in marketing has been both strategic and targeted.

They're in-market and support our products and our teams domestically and internationally. They include a mix of brand and activation initiatives.

We are leveraging Milklab's premium position to drive sales, portfolio expansion, and distribution. The activities have ranged from video on demand, billboards, to events at our premium outlets to showcase our products, both in hot and iced beverages.

The team at Noumi are critical to our success. We're investing in additional Horeca team members to support the marketing activities we are launching.

In recent years, the share of performance has been inconsistent between states. The key is to visit cafes more often.

We've now launched a new safety program called Safe Together, and I'm proud to say that with a focus on keeping everyone safe, we have seen our safety metrics improve. We continued to embed safety across all aspects of the business.

Frontline leadership development programs are underway. We are focused on driving reliability, efficiency, and innovation, all aligning to our strategy.

As we mentioned in our 4-year announcement, a new CRM was in the pipeline. I'm pleased to say that this was launched in January, enabling productivity to support our initiatives.

Our growth is supported with modern, well-invested sites: our dairy nutritional site in Shepparton, Victoria, with our plant-based site in Ingleburn, southwest Sydney, which incorporates our consumer nutritionals operation. We have our group services and our support team collocated in our operating sites, a decision we took 3 years ago.

We think this has contributed to our improved execution with greater collaboration across all disciplines and are well positioned for our product innovation pipeline. Our ESG strategy is integrated across our value chain, from delivering with our supply partners, to manufacturing, to delivery of our products to our customers.

We are continuously improving processes to meet or exceed our ESG targets. Our team is committed to working together to build the health, wellness, happiness of our communities.

We will continue to look for opportunities. We refined our strategy last year, and it remains focused on growth.

As already mentioned, the consistent execution of our strategy is delivering in our improved results. We want to be the barista's choice and own the Horeca channel.

We want to increase our penetration in retail and drive Milklab and Australia's Own further into the segments where we compete. Grow Milklab internationally, led by our strategic markets and our consistent approach.

Develop our specialty dairy portfolio and be a world-class contract manufacturer. Pre-position around future growth opportunities, innovation, and trends.

With each pillar, we have a clear set of priorities to drive growth. As I delve into the plant-based milk segment, we are investing with confidence post legacy issues.

With the successful launch of Milklab in retail, we are investing in other initiatives such as new formats, flavors, and cold applications to leverage the strength of Milklab. We are launching an improved soy formulation, which will enable us to provide the complete range to our customers and consumers.

We are investing in a better and more consistent execution in Horeca. As we build our opportunities, we'll accelerate Milklab internationally in our strategic markets, supported by our global brand guidelines.

Our strategy for dairy nutritionals has been refined, but fundamentally remains the same. The continued evolution of our operational excellence program is ensuring that we maximize the components of milk we buy on farm.

As we continue to look for opportunities, innovation is key to our future growth, and this includes products such as lactose free. Small format opportunities exist with ready to drink flavors and specialty milk, an important focus to deliver higher margins.

Bulk cream has been a great turnaround for the period. Pricing pressure on farmgate milk pricing, global commodity markets may impact the ongoing benefit, more so in FY27.

Building off the market tailwinds for protein, consumer nutritionals is well positioned in the health and wellness space, although competition for space puts margins under pressure. Pete will now take you through this year's financial performance.

Thank you, Michael, and good morning. Like Michael, I am delighted we're able to report more significant progress as we execute on our strategy.

Our messages are similar to recent announcements. Our strategy is clear, and we're looking to grow and invest in our business after a period where, for a range of reasons, we needed to be more cautious.

As a result, we've been able to grow our earnings and make significant investments in our future at the same time. Record revenues in plant, and another strong improvement in dairy, more than double the first half of last year.

Our strategy remains focused on growth, but we are accelerating. Our initiatives that support the execution of the strategy have not changed, but we are investing harder behind them.

These initiatives are clear: grow Milklab in retail following the successful launch late in FY24, make Milklab a true international brand, adding to our flagship Milklab almond offering, rounding out the portfolio in Horeca with oat and a new soy formulation, expanding our portfolio of specialty dairy products and more consistent operations for both our own portfolio and for our contract manufacturing partners. Michael has called out key actions and investments we're making to support our ambition and accelerate progress.

We're investing in our brands, our people, and our tools in revenue-generating areas, and we are investing in product and our NPD team and capability. The benefits of these investments are yet to contribute to our financial results, but we are confident that in future reports, they will contribute to the achievement of our strategy.

There has been a clear pathway to this point. We've been able to grow our earnings, we've been able to make dairy more consistent, and we've closed out the legacy legal matters.

Because of this progress, we're now in a position to accelerate our investments and drive our strategy. The progress that we've made also means that we're in a stronger position to plan for the maturity of the convertible notes in May of 2027, which I'll talk to a little later.

There's a lot to talk about, but to reflect for a moment on our achievements in the last 6 months, our results continue to improve, we have a clear strategy, we're implementing exciting initiatives to support it, and we're encouraged by our progress. Now, as I turn to some of the specifics of the result, just a word on terminology, which we've consistently adopted in the last few years.

We consider adjusted operating EBITDA numbers as being our most important measure of operating performance. It excludes all one-off restructuring, and things like legacy litigation expenses and recapitalization costs.

It excludes fair value accounting adjustment on the convertible notes. Adjusted operating EBITDA is the measure we use, and we consider it the most useful for investors.

If Michael or I just say EBITDA this morning, that's what we mean. Moving to slide 20, I'm pleased to report record group revenue, up $33 million, or 11.2%, compared to the prior period.

Milklab sales, up 11.1% across plant and dairy. Key plant-based milks channels all growing revenues.

Increased revenues in dairy and nutritionals, including an improved contribution from bulk commodities, and a strong 6 months for export dairy revenues, with some specific factors contributing to a turnaround of more recent trends. Adjusted operating EBITDA for the group, $33.9 million, up 23% on the same period last year, and this comes on top of the 13% increase we announced for the full FY25 year.

Before I take you the highlights of the operating performance, there are a couple of callouts in relation to non-operating matters. First, the statutory loss of $24.2 million includes a fair value adjustment on the convertible notes of $42.2 million.

The earnings table on this slide 20 highlights the fact that before we count the fair value adjustment for the convertible notes, we made money, $18.1 million. All of the components are moving in the right direction: EBITDA is up, non-operating costs are down, depreciation is down, net finance costs are down.

The second callout would be to say that as far as the fair value charges on the convertible notes is concerned, these are higher than last year since we are getting closer to maturity, but as we've previously advised, these adjustments will continue until the notes mature in 2027. More about the notes in a moment.

Now let's move to the detail of the segment earnings. We're pleased with the plant-based milks result, with record revenue, up 1.1%, and EBITDA of $22.9 million.

The reduction in EBITDA of $2.4 million is entirely attributable to our decision to increase our sales and marketing investment by $4.3 million compared to the same period last year. There are many highlights: total revenue up 1.1%, growth in our key brands, Milklab plant sales up 8%, growth in our range, Milklab oat formulation launched a couple of years ago up 22.5%, overall growth in plant revenues in the Horeca channel up 2.5%, and sales up 18.4% in export markets from the targeted initiatives underway to extend Milklab's geographic reach.

In terms of market conditions, plant-based milks in the grocery channel are growing, with the most recent data suggesting mid-single digits for the last 12 months, with branded revenues performing strongly, which has in turn meant some contraction in our contract manufacturing volumes. Data is not as readily available for the Horeca channel, which is more likely to be impacted by macroeconomic factors and cost-of-living pressures.

Whilst we can't speak for the Horeca market performance, we are pleased that our revenues have returned to growth in this highly competitive channel for the most recent period. Michael has outlined the nature of the targeted investments we're making, and in particular, the opportunity that is unique to Noumi, namely that with a strong Milklab portfolio of almond, oat, soy, and lactose free, we have a real point of difference to offer our customers.

We are confident that a combination of these investments, our brand strength, and Australians' love affair with coffee is a very strong recipe for the future of our business. In short, another good result, a clear strategy, and a great future.

Slide 22 outlines the progress we've made in dairy nutritionals: positive EBITDA of $12.4 million, more than double last year's $4.6 million, and continuing the turnaround in earnings that began in FY23. The result reflects a careful return to increased long-life milk export volumes, a very strong performance in Milklab lactose free, solid lactoferrin production, and some improvement in contribution from commodities, most notably bulk cream.

More specifically, Milklab lactose free grew 16.9%, Australia's Own lower cholesterol grew 28.7%. In long-life domestic milk, contract manufacturing sales were down slightly, with margins very competitive after a number of tenders during the last 12 to 18 months.

In export long-life milk, sales returned to growth after many periods of contraction. Two factors were at play here, including an increasing trend to small formats in our export markets, and some volumes which were the result of assisting Southeast Asian customers who face supply chain disruptions in their own markets due to border conflicts.

Lactoferrin volumes were up 6.9%, but prices were down, as we've previously advised, following the expiry of a multiyear premium price contract. Commodity prices for products such as bulk cream generally weakened in the second half, but we have been more active and targeted in our selling approach this year, and have enjoyed higher realized prices and volumes.

Overall, bulk cream revenue is up $8.3 million through a combination of price and volume, and this has contributed to the improved dairy result. As Michael said, whilst it's likely that the relationship between farmgate milk prices and bulk commodity pricing will put some pressure on this element of our result in FY27, for the rest of FY26, it should remain favorable.

Consumer nutritionals revenue is up 2% for the period, Vital Strength up almost 8%, and UProtein up 11%. Overall, the dairy nutritionals result demonstrates the reward for years of hard work in the transformation phase of the previous strategy and is now becoming a meaningful contributor to earnings.

Moving to slide 23, in terms of cash and capital, net senior debt hasn't changed much since June 25. The convertible notes are now carried at $475 million, and as with other years, is an independent fair value of the notes.

It is different to the redemption amount. In terms of the convertible notes, I want to pause on two important callouts.

First, fair value adjustment on the convertible notes have been included in all of our results since the notes were issued in 2021, although the adjustments get bigger as we approach maturity. These adjustments are scheduled to continue until the value of the notes on the balance sheet, currently $475 million, reaches the redemption value of a minimum of $610 million in May of 27.

In short, the fair value on the balance sheet is a proxy for the net present value of the redemption amount. Second callout is to point out the classification of the notes as a current liability in the balance sheet.

This is consistent with the treatment back in June and has nothing to do with the planning for the May 27 maturity date. Last year, the accounting rules changed regarding circumstances where liabilities, in our case the notes, can be converted into shares at any time.

The likelihood of that conversion on its existing terms does not matter. The mere fact that they can means we have to show them as a current liability, but that classification has no impact on our liquidity position.

Then finally, in terms of our balance sheet, as we have said before, we don't carry any value in our books for our flagship asset, the Milklab brand. Milklab has been built from scratch, and it's now just over 10 years old, and we consider it to be worth hundreds of millions of dollars, and that value continues to grow.

With the approaching maturity of the convertible notes in May 27, we thought it'd be helpful to summarize the capital structure. Importantly, there have been no changes to the notes since they were issued in two tranches in FY21 and FY22.

There's been no change to the terms, and there's been no change to the makeup of the investor group. The notes have been instrumental in supporting the company through its former reset, transform, and grow phase.

Whilst we've made significant improvements to our earnings and our financial position since issuance, the company remains highly geared. Total debt based on the December 31, 2025 redemption value of the convertible note, and when you include $68 million of net senior debt, the total debt is $662 million, and this represents approximately 10.5 times last 12 months EBITDA on the post-AASB 16 basis.

The maturity of the notes represents an important opportunity to establish the right capital structure to support the company through its next phase, and at the same time, create liquidity for the noteholders that provided critical capital to the rebuilding of our earnings base. Given the scale of the refinancing, the company and its advisors are looking at all options, but it is too soon to be certain as to which of the options available to the company will deliver the best outcome for the various stakeholders or how equity values might be impacted.

What we can say is that we are confident that remaining focused on continuing to execute on our plans and driving operating and financial performance will contribute to a successful outcome, and we'll keep shareholders informed as appropriate. Turning to slide 25, our cash flow performance was not as strong as last year, but all of the underlying disciplines regarding working capital management remain in place.

Net cash from trading was $23 million, down $17 million compared to H1 last year. In the first half of last year, we generated more cash from trading than we reported in EBITDA, by $13 million, and as we called out at the time, that rather extraordinary result included some timing differences.

In the current period, we have done two things, as noted in our recently released Appendix 4C for the December 25 quarter. First, we've increased our inventory approximately $6 million, and are now more in line with target levels that will ensure we service our growth and our customers.

Second, we've seen an increase in receivables, which reflects the strong export sales that we enjoyed in the second quarter of the year, which will be reflected in collections in Q3. We are pleased with our working capital management across the board, and apart from working capital, our approach to capital expenditure remains disciplined, with $2.5 million spent during the period.

Finance costs, mostly interest, were down a million, not including the cash payments on the convertible notes. To recap the financials: group EBITDA up 23.3% to $33.9 million, a sizable investment in sales and marketing to support key initiatives, dairy and nutritionals doubling its earnings from last year, commodity prices and a strong focus on value-added opportunities making a difference, and another record sales result for a plant-based milk segment highlighted by effective execution of recent initiatives.

As we look forward, the focus on getting returns on the targeted investments we have made, which we believe will make our company even stronger, and our planning for the 2027 maturity of the convertible notes is well underway. All in all, another period of progress executing against the strategy, and with that, I'll hand back to Michael for some closing remarks.

Thanks, Pete, for the summary of the financial results for the half. It's pleasing to see the continued performance of the business.

The board has agreed to the position and outlook and will continue to pursue our growth agenda. We expect that our investment in sales and marketing initiatives will be rewarded, particularly for the Milklab brand.

While we have delivered significant and sustainable improvements in dairy and nutritionals segment, we operate in a highly competitive domestic market, and it is exposed to global impacts on export markets and commodity prices. We are positive about the progress, and we remain confident about the investments we are making.

That concludes the formal part of our presentation. We're now available for any questions from shareholders.

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Michael, you have some questions from Garth Francis.

Good morning, Michael and Peter. Thank you very much for taking my questions, and congratulations on the results.

Could you just chat through some of those export channels, just a bit more clarity? They were up significantly in both, and just the opportunity for international, if you see new markets, if you could just elaborate on those, that'd be great.

Thank you.

Thanks, Garth. There's a few key markets that we're focused on.

We've got the strategic markets that we called out earlier, which is focused around South Korea, Indonesia, and Thailand are our key markets. We do currently export to approximately 24 different countries.

There's a range of investments that we're doing with key distributors in each of those markets there for growth, especially around Milklab. We are also seeing growth in some of our dairy channels, especially as Pete called out some of the border conflict that is happening between certain markets.

The only thing I'd add, Michael, is the dairy volume, I think you'd sort of roughly split half-half between some of those supply chain issues with the border conflicts that you were just describing and the trend in favor of small format, which does feel like it's a trend that we're going to see more of.

Right, the border conflict is more of a one-off uptick?

I think that's right to think of it that way, Garth.

Terrific. Cool.

Then just in terms of the marketing spend uplift, you called out sort of $3 to $4 million for plant-based division. Was some of that cost also the CRM, and is that non-repeating?

Then also should we expect the second half to see a similar uplift in absolute terms?

The CRM cost will fall more in the second half, Garth, and we'll continue to see an elevated level, but it won't kind of continue to lap at kind of 50% increases. It will start to moderate a little bit after that.

I think as I said in my remarks, this is kind of relatively part of an orderly process where we had to get the dairy earnings to a situation where they were not being supported by the plant business. We've achieved that.

We had to get rid of the legacy issues. We've achieved that.

Then we have the opportunity now to invest, in particular whilst the bulk commodity conditions are good, and then we'll start to moderate and mature that level of investment.

I think on top of that, Garth, with some of the new product innovation as well, that's supporting some of that opportunity around that market growth and being able to provide the suite of products there around, especially under Milklab, which covers almond, oat, soy, coconut, and also extends into lactose free, especially into the domestic Horeca market.

Could you just maybe then elaborate on those reformulation of soy and the additional product launches? Do you think that that will give you a better penetration in the Horeca channel as you're able to offer another soy product from a bundling perspective?

There're different markets within the Horeca channel, and it's more the larger, we call multi-store outlets that would predominantly want to range a single product format. That's where being able to bring the market a product that we believe is market leading in terms of its taste and performance means that we can turn up with Australia's number one Milklab almond partnered with our oat and soy, and also bringing the lactose free.

Gives that opportunity to grow into more of those multi-store outlets.

Right. If I could squeeze in one more before rejoining the queue, just in terms of farmgate milk pricing, one of your peers had highlighted that the farmgate milk pricing had fallen somewhat, but you're calling out some headwinds for FY27.

Could you maybe just elaborate on that outcome?

We've seen some global demands coming off regarding the global dairy trade. It has bounced back a little bit in the early part of this year, but there is still a slight discrepancy that you have seen across in New Zealand.

Some of their milk prices have come off their earlier indication. When we see demand shifting around and what's happening with supply, especially out of Europe and the US, their production is increasing, which means especially around fat, there is a surplus of fat.

There is a shortage of protein, but overall, we've got a surplus milk. Because we are really playing in the global market overall, irrespective if where Australia is predominantly focused on domestic for fresh milk, there is a lot of impact around butter, whole milk powder, and even long-life milk being exported into the other regions.

It's be a little bit early around what we see around what's going to happen with milk price. As we called out around the cream price, the benefit we saw this year, we expect to see a bit of a moderation in FY27 there where milk price potentially comes down, but so will some of those other bulk commodities.

Thanks for that clarity. I'll rejoin the queue.

There are no other questions at the time, Michael.

We'll just give it another 30 seconds there to see if there's any other questions.

Jonathan Snape would like to ask some questions, Michael, and then Garth will ask some after that.

Hey, guys, can you hear me okay?

Yep, thanks, Jonathan.

Great, thanks. Look, can I ask two questions, and maybe this one continues on from the marketing?

A question first. If I looked at last year, in the second half, there was an uplift in the marketing spend of a little over $3 million.

There's kind of a similar kind of step up, I guess, second half to first half this year. Is it reasonable to kind of assume that that step up is now kind of done, i.e., this $19-$20 million type level is the right number going forward, or is there a moderate continuance in that movement?

I think I wouldn't consider it done, but I think your instincts are 100% right, Jonathan, that it will moderate. The level of growth will moderate, depending to some extent on the kind of activity levels that we've got around it, new product development and channel opportunities and so forth, but perhaps be a little bit more specific.

We're a little low in FY25 for a range of reasons. We did do a bit more, I think, as you call out, in the second half of last year.

A little bit more growth, but not at the same rate and starting to moderate.

In terms of how you reckon that flows through to the top line, obviously, you ramped up the spending in the second half last year, and it looks like you've got a benefit in the first half this year in terms of the uplift relative to the second half run rate anyway. Do you expect that that should start to transition going forward at a similar kind of pace, or how do you think about the benefit of that $4 million investment flowing through to the top line in the next, I don't know, 18 months or something like that?

I think as we called out there, we do see those investments in sales and marketing being rewarded in future, especially around the Milklab brand. When we look across at our investment that we're doing domestically and driving that brand awareness to the opportunity to grow here and also in the international market.

Marketing is about creating that awareness and continuing to drive sales there. The increase in team members around our Horeca channel as well to get more cafes visited more regularly is also important to drive our branded portfolio.

I think, Jonathan, I guess my add to that would be you've got a mix of investments. Michael has been clear that they're strategic.

We got some brand investments, that's going to take a bit longer. You've got activation investments that you would expect to be rewarded more quickly.

You've got the sales team investments that Michael was just describing there that kind of probably somewhere in between. Then you've got the international global brand playbook that we're building that is really supporting the growth authority coming through.

I think it's a bit of a mixed bag from that perspective.

Okay. Look, can I ask to go into the dairy business?

Because that's a really strong result. I think we saw Bega had a pretty strong result themselves just recently, although they flagged they can be really first half centric in terms of their earnings.

I realize you're kind of different businesses. You have far bigger, I guess, branded portfolio exposure than maybe they do.

How would you think around the first half, second half phasing in dairy? Because that was a really strong step up, and I'm guessing a fair chunk of it looks like is this bulk cream, where, obviously, lagging the indicators by about 6 months on pricing, but another part of it was the big step up in UHT as well, which it sounds like maybe $10 million of that in terms of sales is probably not going to repeat.

How would you think around the phasing in that dairy nutritionals business? I know you don't give guidance, but

I think you're right to call it out. I think the message we're trying to give around bulk commodities is that the way in which we have activated our sales and locking in some arrangements looking for more specialty customers rather than just kind of clearing it on a bulk basis has been successful for us, and that will see reasonable outcomes in the second half of this year, but they will be lapping comps that were stronger in the second half of last year.

We expect good performance, but won't I don't think on that score represent as strong a growth. I think you're right to be cautious around the UHT, the long-life milk, in terms of those sort of one-off factors in the first half.

I do think, at the same time, I think we celebrate the fact that we are becoming more consistent with our performance in dairy nutritionals. You do have a wee bit of seasonality with things like Chinese New Year as well that do impact that export market.

You're right, we don't give guidance, but I think I've tried to give you a few clues there as to what you might expect in the second half.

I think, Jonathan, to lay on top of that, some of the production work that we've been doing around our operational excellence program means that we're managing the yield at Shepparton more consistently, which ensures that we've got the ability to sell more of that bulk cream commodity from the milk that we bring in. It sort of becomes in two parts, but definitely the locking in of some of those offtake agreements have been beneficial for this first half and will flow into second half.

Great. Thanks.

I was more looking at the gross margins. A big jump year on year.

There's a big mix shift towards dairy and nutritionals, which you would expect to be a lower GM kind of business, especially when the farmgate was stepping up. Just how we think about banking those gains, because it's been a couple of years now pretty pretty impressive GM expansion.

That's all. Thank you.

Michael, we have a written question from David Zammit: "With media reports of a free trade agreement between Australia and Europe being imminent, which is expected to assist Australian farmers and agricultural businesses specifically, has there been any early planning and preparing Noumi to commence exporting into European markets?"

Thanks, David, for that question. Quite an interesting discussion has been going on.

Unfortunately, it does seem like agriculture and especially dairy, there's been a lot of lobbying from the likes of Australian Dairy Products Federation and Australian Dairy Farmers to get dairy on the table. It has generally not been part of the discussion around getting extra support, and at this stage, there is been a lot of work going on to try to get more impact around how do we get dairy to be part of that or ensure that managing the import of products such as cheeses and other powders from Europe.

Our focus is still very much into the Southeast Asian market. There's a shortage of dairy and a shortage of dairy protein up through that market.

When we're seeing a European general commodity increase of production, what we want to make sure we maintain focus around the markets that we're in, that we do compete with some of that European product that's coming across. For us, really maintaining focus around our Australian market, really ensuring that we are a good co-manufacturer of our dairy long-life products and supporting the customers and the consumers that we face into that Southeast Asian market.

Garth Francis would like to ask some more questions.

Hi, gents. Thanks for taking the follow-ups.

Just following on from the focus on dairy and nutritionals, obviously, a step up in margins is a result of some of those items highlighted. Just thinking about the business longer term, is a margin closer to FY25 more sustainable on a forward basis, or do you believe that there are still some yield benefits to be had in this business?

I think there's a cocktail of factors at play. You do get volatility in your margins out of those bulk commodity outcomes, for sure.

We've tried to kind of give you a bit of a steer as to what we see the future looking like there. We also have been very clear that our unit pricing around lactoferrin has retreated a little bit in the current period because we came to the end of a premium price contract that we enjoyed for a number of years.

Production is good, volumes are good, demand is good, pricing off a little bit there. That feels like it's relatively indicative going forward.

Think to some extent, it depends on the assumptions that you want to make around the role of UHT and export in particular, because that is a relatively low-margin part of our business, although it does give us scale and provide us some scale economics benefits. I think we've shown over the last 3 years that we have been relatively careful and cautious and in the way in which we've paired back that business when the margins weren't there, and we've re-entered that business for specific reasons in this more recent period.

Pretty hard, Garth, to kind of generalize about the dairy margins. I think you've got to pick it apart into its components.

Great. Thanks.

Then just for the CapEx, you'd mentioned the run rates for the half. Is it fair to annualize this, and what do you suspect is your CapEx spend on a look-forward basis is $5 to $6 million where you'd like to be, or do you foresee that ticking up over time?

I think it depends on what opportunities we see. I think in terms of maintenance level of CapEx, that would be about the zip code that we have worked on now for a few years.

Obviously, if there are opportunities, we don't see any kind of giant refurb cost in our future. We are happy with the state of our plants and the maintenance and so forth of the plants.

I think that maintenance level of CapEx is around the number that you're talking about, and I think opportunities might take it above that if they pay off in a business case sense.

Yep. Then just one more on lease liabilities.

Those stepped up. Was there a renewal of leases or something that caused that, or was that an option that was included in the lease?

No, I think it was just some improvements that were financed by the landlord, and that caused the remeasurement of the lease as those improvements get recognized in the balance of the lease.

Terrific. Thank you.

There are no more questions at this time.

All right. I'd just like to reiterate a few points to summarize, and we are focused on the delivery of service, quality, and innovation.

The execution of our strategy is delivering, and we're proud to provide a strong set of results. I'd like to thank everyone for listening today and reiterate that the execution of the strategy of your company.

The results we're delivering today is a testament to that. Right across the business, including the board, we remain committed to the pathway forward.

I want to thank all of our stakeholders within the business. Our team is instrumental in our success.

We would not be here today without them. I want to thank everyone for their effort.

On a final note, as announced on January 13, Pete is retiring as CFO of Noumi, with Ian Short commencing on the 1st of April. It has been a pleasure to have Pete next to me to rebuild Noumi to the business that it is today.

I'd like to personally thank Pete for his mentorship and leadership and wish him all the best for the future. Thank you all again for your time today, and hope you all stay safe.