Foley Wines Limited, Annual Meeting 2025

November 8^th 2025

Foley Wines Limited (FWL)

The company will hold its Annual Shareholders Meeting at 10.30am Tuesday 18 November 2025.

The location is The Runholder, Te Kairanga, 89 Martins Road, Martinborough.

Company Overview

Established in 1988 as Grove Mill Wine Co Ltd, the company merged with Foley Family Wines in 2012 and changed its name to Foley Wines in 2018. It owns Martinborough Vineyard, Te Kairanga, the Lighthouse Gin brand in Martinborough, Grove Mill and Vavasour in Marlborough, and Mt Difficulty in Otago.

Total case sales were up 9% at 610,000 across a diversified range of geographies: 28% New Zealand, 17% Australia, 18% US and Canada, 24% UK and Europe, 12% Asia and Pacific and 1% rest of the world.

The Foley family hold 65.46% of the shares.

In January 2025, Robert Foley resigned from the Board and was replaced by William Foley. In February 2025, Mark Turnbull, the CEO and Managing Director, resigned and was replaced by Mike Higgins as interim CEO, formalised as a permanent appointment in October 2025.

Current Strategy

The company states its ambition is to be New Zealand’s most revered wine group through the ownership of iconic wineries in the country’s most acclaimed regions, inspiring the most discerning retailers and restaurants around the world.

Previous Year Shareholder Meeting

NZSA recorded the following key items at last year’s annual shareholder meeting:

1. The year was very challenging as it became very evident that there was a significant over supply of Marlborough Sauvignon Blanc resulting in deep discounting.
2. The Company invested heavily in the USA with various initiatives which lead to a 60% increase in shipments to the USA.
3. Changes to tax legislation which has removed the ability to claim tax depreciation on commercial buildings has resulted in a one-off deferred tax expense of $4,548,000.

The meeting report is available at this link.

Disclaimer

To the maximum extent permitted by law, New Zealand Shareholders Association Inc. (NZSA) will not be liable, whether in tort (including negligence) or otherwise, to you or any other person in relation to this document, including any error in it.

Forward looking statements are inherently fallible.

Information on www.nzshareholders.co.nz and in this document may contain forward-looking statements and projections. For any number of reasons, the future could be different – potentially materially different. For example, assumptions may be wrong, risks may crystallise, unexpected things may happen. We give no warranty or representation as to any future financial performance or any other future matter. We may not update our website and related materials for changes.

There is no offer or financial advice in our documents/website.

Information included on www.nzshareholders.co.nz and in this document is for information purposes only. It is not an offer of financial products, or a proposal or invitation to make any such offer. It is not financial advice and does not take into account any person’s individual circumstances or objectives. Prior to making any investment decision, NZSA recommends that you seek professional advice from a licensed financial advice provider.

There are no representations as to accuracy or completeness.

The information, calculations and any opinions on www.nzshareholders.co.nz and in this document are based upon sources believed reliable. The NZSA, its officers and directors make no representations as to their accuracy or completeness. All opinions reflect our judgement on the date of communication and are subject to change without notice.

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Key

The following sections calculate an objective rating against criteria contained within NZSA policies.

Governance

NZSA assessment against its key policy criteria are summarised below.

Directors Fees:  While disclosure is generally good, there is no disclosure as to whether special exertion payments are made or retirement benefits (a position not favoured by NZSA) are offered.

Director Share Ownership:  There is no disclosure as to whether Directors are required to own shares. NZSA policy is whilst this should be encouraged it should be up to each Director to decide depending on their personal circumstances. We note not all Directors hold shares however we prefer an explicit statement around this matter.

CEO Remuneration:  The company discloses its remuneration policy on its website, which includes an overview of the remuneration philosophy applicable to the company. There is no separate Remuneration Committee, with remuneration governance falling within the remit of the whole Board.

Incentives: The former CEO was paid a short-term incentive (STI) in cash. No long-term incentive (LTI) was awarded.

NZSA encourages fulsome disclosure in relation to any incentive payments made to the CEO, including disclosure of measures (or measure ‘groups’), weightings, targets, and the level of achievement versus target for each component associated with any awards. This methodology is supported by the new NZX Remuneration Reporting Template.

The STI was awarded at a target of 50% of base salary with a maximum of 75% of base salary. The measures but not the weightings and level of achievement against each component were disclosed. No award was made.

The company does not disclose the gender pay gap and CEO/employee remuneration ratio.

Golden Parachutes: In the interests of transparency, NZSA believes there should be explicit disclosure around the severance terms and notice periods associated with the CEO, including whether specific termination payments are offered.

The former CEO was paid $1,800,000 on his resignation. No other details are disclosed.

Director Independence:  Three of the four Directors are independent.

Board Composition:  The Annual Report does not include a skills matrix that attributes skill sets to individual Directors to demonstrate how they contribute to the governance of the company.

The Annual Report does not include the profiles of the Directors or a table of the Directors’ other governance roles. We note Directors profiles are included on the company’s website. It would appear none of the Directors have an operational background in the wine industry.

While it is difficult to assess the relevant skills of Directors for FWL, in the absence of any meaningful disclosure as to the skills required to govern the company, Directors appear to have appropriate functional experience and diversity of thought and opinion for FWL.

Director Tenure:  NZSA looks for evidence of ongoing succession or ‘staggered’ appointment dates that reduce the risks associated with effective knowledge transfer in the event of succession. We also prefer a term maximum of 9-12 years, unless there are exceptional circumstances that may apply.

Anthony Anselmi was appointed to the Board in September 2012 and is standing for re-election at the ASM. The other Directors appointment dates range from 2018 to 2025.

ASM Format: Foley Wines Limited is holding a physical meeting. NZSA prefers a hybrid meeting (i.e., physical, and virtual) as a way of promoting shareholder engagement while maximising participation.

We note almost 70% of NZX companies now hold hybrid meetings and this is expectation of shareholders. There are several low-cost platforms to allow for virtual meetings so cost should not be a barrier.

Independent Advice for the Board & Risk Management: NZSA looks for evidence, through disclosures, that a Board has access to appropriate internal and external expertise to support board assurance activities. 

The Board Charter allows Board members to seek external advice (with the approval of the Chair) to support decision-making. There is no disclosure as to the extent to which internal assurance staff have unfettered access to the Board.

We also look for evidence that Boards are across their risk management responsibilities. 

We note the disclosures in the Annual Report cover financial risks together with risks impacting the wine industry and how the company mitigates these risks. 

Audit

NZSA assessment against its key policy criteria are summarised below.

Audit Independence:  Good disclosure.

Audit Rotation:  The company ensures the Lead Audit Partner is rotated at 5 years as required by the NZX Listing Rules and notes the current Lead Audit Partner was appointed for the FY25 audit. There is no disclosure as to the tenure of the current audit firm Deloitte.

Environmental Sustainability

Foley Wines is not a climate reporting entity (CRE), because it falls under the financial threshold required to be a CRE. Despite this, the company has provided a high-level overview of its scope 1 and 2 emissions, indicating that they have offset this through an external programme.

NZSA policies encourage issuers to take a “broad approach” to environmental risks; this may result in disclosures that offer more insight into relevant environmental risks for the business beyond climate change. We consider this relevant for Foley Wines given the nature of the industry, with water use and soil conditions forming key building blocks for their business.

NZSA does not complete RAG assessments on non-Climate Reporting Entities.

Ethical and Social

NZSA assessment against its key policy criteria are summarised below.

Whistleblowing: Good disclosure.

Political Donations:  We note the Annual Report “Foley Wines Limited made no cash donations during the year.”  We take it as read that no political donations were made, but we still expect an explicit statement ruling out political donations.

Financial & Performance

Foley Wines’ share price fell from $0.81 to $0.615 (as of 22^nd October 2025) over the last 12 months – a 24% decline. This compares unfavourably with the NZX 50 which rose 4% in the same period. The capitalisation of FWL is $40m placing it 90^th out of 115 companies on the NZX by size and makes it a mid-sized company.

¹ per share figures based off actual shares at balance date (not weighted average)

FY25 was a year of recovery and contrast; a loss was reported, yet a final dividend of 2 cents was paid, based on a strong improvement in operating cashflows.

Revenues were up 6% to $70.6m, and continues an impressive consistent increase over the years. The gross profit margin, however, decreased to 31% as margins in the viniculture sector were squeezed. This led to a fall of 7% in gross profit of $21.8m.

Expenses were contained somewhat, yet NPAT for the year was still negative coming in at -$1.9m, although we acknowledge this was impacted negatively to the tune of $3.7m by non-cash revaluations. This year’s loss is an improvement on FY2024’s loss of -$4.1m.

EPS of -$0.028 were delivered, and the company resumed the payment of dividends with a fully imputed dividend of $0.02 paid for the full year

The company is in a sound financial position with the current ratio at 2.89 and debt equity at 0.63. Long-term interest-bearing debt was reduced from $52m to $40m, and subsequently finance costs also decreased from $4.6m to $3.6m – a saving of $1m per annum.

Operating Cashflows were up substantially to $16.1m and the inventory levels were steady at $49m whilst Inventory turnover increased 0.94.

NTA per share fell to $1.63. Foley trades at a huge 62% discount to its NTA, indicating the market expects operational headwinds in the sector or possibly further revaluation of underlying assets. The main assets are property plant and equipment, being $123m of $142m. See note 19 in the Annual Report for more information on these assets.

The Company issued an unquantified forward looking statement on page 21 of the annual report where they state:

The Directors believe that the Company has made considerable progress during a period of great uncertainty within the economic environment. Our premiumisation strategy continues to deliver strong sales results and we are well poised for growth as the market improves. Trading conditions both domestically and internationally remain challenging. It is very apparent that there is still a global oversupply of wine, coupled with a higher cost of goods and high interest rates which compound the situation.

Foley Holdings NZ Limited is the largest holding with a controlling 52.8% stake in the company.

Resolutions

This is an administrative resolution.

We will vote undirected proxies IN FAVOUR of this resolution.

Bill Foley was appointed to the Board in September 2012 and served as Chair of the Company until he resigned on 31 March 2023. Bill was re-appointed to the Board on 24 January 2025 following the resignation from the Board of his son Robert P Foley II and is therefore required to offer himself for election. A comprehensive biography is included in the Notice of Meeting.

We will vote undirected proxies IN FAVOUR of this resolution.

Grant Graham was appointed to the Board 1 February 2019. He is Chair of advisory and investment firm Calibre Partners with a background in corporate finance and advisory in valuation and restructuring. Grant has a Bachelor of Commerce and is a Chartered Accountant with Chartered Accountants Australia New Zealand (CAANZ) holding a Certificate of Public Practice and CAANZ Licensed Insolvency Practitioner status. He is a member of the Institute of Directors in New Zealand.

His other current roles include Sleepyhead Group (Director), Phoenix Metal Recyclers (Chair), Phoenix Metal Recyclers Holdco Limited (Director), Blues Limited Partnership (Director), Blues Management Limited (Director), Better Blues Company Limited (Director), Old Pueblo Limited (Director), Old Buena Limited (Director), Halberg Trust Foundation (Trustee) and Anglican Trust Board (Chair).

We will vote undirected proxies IN FAVOUR of this resolution.

Tony Anselmi was appointed to the Board in September 2012. He has invested with Bill Foley in Foley Holdings New Zealand since 2009. A comprehensive biography is included in the Notice of Meeting.

We note and appreciate the following in the Notice of Meeting “The Board have determined that Tony Anselmi is an Independent Director in accordance with the NZX Listing Rules. The Board carefully considered the effect of Tony having served on the Board for 12 years and determined that he is sufficiently independent from management particularly considering the recent change in CEO.”

At his last re-elect in 2023 we said “If he is re-elected, he will have served 14 years at the end of that term. As we commented above, we would expect see some indication of his future tenure and while we will support his re-election, we would need to see compelling evidence to support a further term.”

We note this is a small Board with only four members therefore it is important that there is regular renewal and refreshment. We also acknowledge the statement made by the Board in relation to Anselmi’s tenure and independence: “The Board carefully considered the effect of Tony having served on the Board for 12 years and determined that he is sufficiently independent from management particularly considering the recent change in CEO.”

While we consider the change in CEO a relevant factor in minimising transition risk, we also note that other Board members have served for some time also, and therefore also retain a strong degree of institutional knowledge.

On balance, we will vote undirected proxies AGAINST this resolution.

Proxies

Note. There is no online voting or Proxy appointment process. NZSA’s Standing Proxies will be communicated to the company on your behalf. Alternatively, you will need to complete the Proxy/Voting Form and return this to the Company at admin@foleywines.co.nz

Instructions are on the Proxy/voting paper sent to you.

Voting and proxy appointments close 10.30am Sunday 16 November 2025.

Please note you can appoint the Association as your proxy. We will have a representative attending the meeting.

The Team at NZSA