LARK Distilling Co. Ltd.

Recording in progress.

Hello and welcome everyone to the last Distilling Investor Call for the 2026 Annual Results and Business Outlook. Following the release of the FY26 Financial Statements and Annual Report to the AFX earlier today. My name is David Allen from Horseshoe Partners. I'm going to be your host for today's call. And joining us is Stu Greggles, CEO and Managing Director. And with him is Paul Barker, the CFO of Lark. I'd add that today's call is being recorded. All participants are in a listen-only mode, and we will be having a question and answer session following the presentation. If you'd like to ask a question at that time, then please type it into the Zoom Q&A section, which is at the bottom of your screen, and note that the raise hand function is not enabled. We'll also have a recording of today's call on the LARC website shortly for future viewing. I now look forward to handing over to Stu Gregold, CEO of LARC, to start today's call.

Thanks David. G'day everyone. Welcome to my first result. It's been an incredible journey here the last six months of LARC. I've thoroughly enjoyed myself since starting on January the 5th. For those of you who don't know me, I came out of the Four Pillars Gin business where we sold that business to Kieran in 2023. I then joined the LARC board. at the back end of 2024 and has been the CEO and Managing Director, still remaining on the board since January the 5th this year. We've been very lucky to get Paul Bowker on board. He's our new CFO. He's been with us just over three months now out of the Brick Lane Brewing business, a very talented lawyer, finance CFO for Distilled Businesses and we're greatly lucky to have him on board. So welcome, Paul. And it's been a pretty good year. In fact, it's been a very good year. LARC is uniquely positioned amongst the Australian spirit sector and most particularly amongst Australia's whisky sector, I think, to show even improved growth over the next couple of years. But we're going to focus on FY26. Our net sales are up by 15% in what is a challenging market, both domestically and internationally. $18 million of net sales is a really impressive result for this business. and most happily across every channel that we sell across both domestically and internationally. We've got a $4.5 million operating EBITDA loss which just basically reflects just the fact that we are continuing to invest ahead of the curve. We know that we can build this into one of the world's great drinks businesses and we know that we have to invest in marketing and commercial roles and we're doing that now ahead of what we consider to be really great potential future revenue growth. We have made some adjustments, some non-cash adjustments to Goodwill and Whiskey Inventories that you will see there at point four. Paul will talk to you a bit more about them in a couple of slides' time. I think both timely and necessary adjustments that I think will keep us with a clean balance sheet moving ahead for F27 and beyond. Speaking of our balance sheet, we've got a really great balance sheet. We have plenty of cash in the bank, $14.25, $14.3 million in cash and cash equivalents. We've got no debt. And this allows us, I think, to have a really incredibly great base to fund the growth in the future. And importantly, we have 2.4 million litres of some of the world's greatest whiskies maturing at 43% ABV at our single site distillery now at Pontville. have one of the greatest resources in the world. It is a magical place, Ponsville, just on the outskirts of Hobart. We have a really great scale of a production asset. We're making the best whisky that we have made in the history of Lark and Bill Lark told me that as recently as last week. So it is a year of foundational growth and it really has been a really excellent year for the business for us to build a foundation moving ahead. So I just thought I'd give you a little overview of what the spirit of Lark is on the next slide. For those of you who might be a little bit newer to our shareholder base than others, we are the original single malt whisky of Tasmania and of Australia. In 1992, Bill and Lynn Lark founded this business, and that gives us a unique position amongst any Australian whisky distilleries. We have won and continue to win, and most importantly, I'll show you on the next slide, continue to win more global awards than almost any Australian whisky distillery. And in fact, I'm almost aligned to thinking that we might be one of the most successful this calendar year, one of the most successful whisky businesses in the world in terms of international and global recognition. And not just for the whisky inside, but also the packaging outside. We actually won the world's best design and best range design at the 26th World Whiskies Awards. for our new packaging, which you will hopefully have seen, and if not, you will see a little bit later in the presentation. And Chris Thompson, who has been with us 19 years, is actually the Master Distiller of the Year at the Same World Whiskies Awards. As I said, we've got the 2.4 million litres of whisky bank, great production assets, feeding our four channels, which we call Direct-to-Consumer, Business-to-Business, which is selling to bars and restaurants in Australia, Global Travel Retail, which is the duty-free channel, and our international channels, As I've said before, we have reinvented, repackaged and relaunched the LARC business in the last six months, essentially in the last quarter of the previous financial year. The recognition for the new portfolio, the new format and the new identity has been quite astonishingly positive and we think that this is going to build our momentum in the international markets and in the domestic markets to see a really great year of significant growth in 2027. Importantly, we are different. We are differentiated from the broader Australian whisky market, if you like. Lark is different. Lark is better. We have a more authentic, original story and I think that positions us really, really well. And if you just have a look at the next slide, these are the awards that we have won just in the last four months. The World Whiskey Masters is where they, trophies essentially, are given and they're called Masters Medals and Gold Medals, which are the better established gold medals. And we have won seven between Masters and Gold Medals. We won three gold medals at the Australian International Spirits Awards, which was just recently held in Melbourne. We also won the Design Award for Best Whiskey Design. And at the World Spirits Competition in San Francisco, we won another hat full of awards, five in fact, all for the new range of whiskies. What we're seeing here is that the new whiskies that are being made It's also worth noting that Bill Lark, our founder and still our global ambassador, is still very active in the trade. He was doing dinners as recently as last week in Sydney and also in Canberra. He was awarded an AM in January on the exact same week that Chris Thompson, was awarded Master of the Spill and Master Blender of the Year for the rest of the world in the World Whiskies Awards. So we started the year, the calendar year, pretty well, the second half of the financial year. It's been quite a time for the lark business. If we just have a look at the growing market opportunity, there are, you know, it's fair to say that there are some challenges in the liquor industry at the moment. There are some challenges in whisky, but I think it's really important to have a look at the bigger picture. We are still playing the world... Distilling Co. Ltd. If you like. And what we're going to be doing over the next couple of years is trying to do... Well, to continue the fishing metaphor, we're going to try to fish where the fish are. And we have to make some big decisions about making our whiskies more accessible. We have to continue to sell the authenticity and the originality stories. We have to understand where consumers are going to meet us, what they're looking for in occasion-based drinking. We know that they're shopping on e-commerce, not to the levels they were, obviously... in the pandemic, but there is still significant growth in e-commerce, both in Asia-Pacific and domestically, and we are focused there, both in the Australian market as well as the Chinese market, on making sure that we are well-positioned in e-commerce. And one thing that we really have to do is we have to look at innovation and flavour and say, well, what are the new generation of whisky drinkers looking for in terms of flavour, innovation, pack size? So there are many things that we have in the pipeline for the future of last, We can't just be a whisky business selling extremely expensive Australian whiskies. We have to be able to be more diverse. We have to be able to be more innovative and that's where we're going to be looking at putting quite a significant amount of our focus over the next 12 to 24 months. So where are we looking at? If we have a look at the key focus areas to expand our future growth, we've got We've got a very, very magical distillery that I would encourage anyone who has any interest in the lark business to get down to just on the outskirts of Tobart. We have two and a half million litres of the most incredible whisky and we have a really strong balance sheet and net cash position to support our growth. That is unique, I think, in Australian whisky distillers today. What do we have to do? We have to make great consumer connection. The key to us being a success, and this has sort of been my mantra My entire career in this industry is that we have to become a brand that people love, a brand that people want to call out, a brand that people will seek. Not just a generic whisky brand, but people must ask for lard, and that is across all our distribution channels, both in the on and the off trade, both in domestic and in international. It's really important for lard that we stand head and shoulders above the category. We have the right to be the category leader, and now we have to begin to behave. as a category leader. And what that means is that we're just going to build better partner relationships. And those partner relationships are with everyone from the larger on-premise groups across Australia, obviously the large retailers across Australia, the global travel retail partners, whether that be in Australia, Heinemann and Sydney Airport and Lotte, who are in Melbourne and Brisbane Airport, who have very, very significant aspirational plans to partner with LARC over the next few years to build our global travel retail preferences In really important airports, particularly Melbourne and Brisbane as they grow, Brisbane is having a massive redevelopment and Melbourne is very ambitious to become as important a gateway as Sydney. And for those who were at our presentation in June, it's worth noting that at Sydney Airport over the June-July period, we were actually the number one selling single malt whisky at Sydney Airport, ahead of any of our Scottish competitors. Pretty remarkable for a little Tasmanian brand. We have some real opportunities. We've just gone into Changi Airport as well in all four terminals, so we've got some big opportunities, I think, across the global travel retail network. But to dive into the numbers, I'd want to invite Paul across now to have a look at a couple of the FY26 highlights. Over to you, Mr CFO.