Sanford Limited, Annual Meeting 2025

5 December 2025

Sanford Limited (SAN)

The company will hold its Annual Shareholders Meeting at 2.00pm Wednesday 17 December 2025.

The location is Eden Park, Reimers Avenue, Mt Eden, Auckland in the World Cup Lounge West, South Stand.

You can also join the meeting online at this link.

Company Overview

The company was founded by Albert Sanford in 1864. In 1894, the company established a fish market on the corner of Albert St and Customs St in Auckland. The company was listed on the New Zealand Stock Exchange in 1924.

The company holds 19.8% of the country’s total fishing quota. The company harvested 105,687 tonnes of seafood down from 108,700 tonnes in FY24. Its main markets are New Zealand 18%, Australia 7%, North America 27%, China 15%, and Europe 21%.

Current Strategy

The Chair states in the Annual Report “The Board remains focused on the primary objective of maximising total shareholder return via Sanford’s share price and dividend performance over time.”

Previous Year Shareholder Meeting

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

1. The current focus on cashflow, capital structure and reducing spending on IT helped to increase the earnings per share by 21%.
2. In the future the company would fund strategies and not projects per se, using a zero-based allocation method, to bring more discipline into the company.
3.  Sanford is an export-led company, with most of its revenue generated offshore.

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.

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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: Excellent disclosure.

Director Share Ownership:  The Constitution requires Directors to own a minimum of 500 shares. NZSA policy is that share ownership should be left to individual Directors according to their personal circumstances, however in mitigation, we note the relatively small commitment.

CEO Remuneration:  The company discloses its remuneration policy on its website, which includes an overview of the remuneration philosophy applicable to the company. The People Health and Safety Committee are responsible for implementing the policy.

Incentives: The CEO is paid a short-term incentive (STI) and a long-term incentive (LTI).

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 NZX Remuneration Reporting Template.

We note the significant improvements in remuneration disclosure versus FY24.

The methodology used to award STI is set out in the Annual Report. We are pleased to note that following our comments last year, there is now a cap of 30% of the cash salary as regards the STI.

“The Managing Director is eligible for an STI award in relation to the year ended 30 September 2025 which is determined by comparing the lesser of (i) 5% of full-year normalised earnings before interest and taxation (NEBIT) improvement over the FY24 NEBIT and (ii) 30% of cash salary paid in respect of the financial year to which the STI calculation is applied. An amount of $270,000 is payable in respect of the plan for FY25, which is accrued in the FY25 financial statements (FY24: $154,807 was paid on 15 December 2024).”

The LTI is an Options Plan. At the 2024 ASM, shareholders approved the issue of 1,800,000 Options to the CEO as a single grant.

• The Options have an exercise price per Option of $4.0063 multiplied by 1.259, less the cumulative amount of cash dividends per share paid by the company during this vesting period.
• $4.0063 was the weighted average share price on the 20-day trading period prior to 01 May 2024 (being the commencement date of the employment  of the CEO).
• 1.259 represents a cost of capital charge of 8% per annum compounding annually from the date the Options are issued to the vesting date.

The Options are exercisable at the end of a three-year vesting period being 15 November 2027.

NZSA notes the that the vesting date of the options is able to be brought forward in the event of a takeover, forming a degree of takeover incentive for the CEO. We also note the relatively narrow ‘exercise window’ of only 20 days following the release of FY27 results. NZSA also notes that an effective performance condition is built into the options by way of the exercise price calculation.

The company discloses the CEO/employee remuneration ratio, but not the gender pay gap.

Golden Parachutes: There is no disclosure around this or similar payments. In the interests of transparency, NZSA believes there should also be explicit disclosure around the severance terms and notice periods associated with the CEO, including whether specific termination payments are offered.

We noted in our FY23 Report the previous CEO received a golden handshake but only had a short tenure; at the time, NZSA questioned the ‘value for money’ of this payment for shareholders.

Director Independence:  The Board comprises an independent Chair, two independent Directors, the Managing Director / CEO and two non-independent Director. The NZX Code of Corporate Governance and NZSA policy is that companies should have a majority of independent Directors to protect the interests of minority shareholders. In our 2024 Report, we noted the inter-related nature of business and personal relationships of Directors, although we observe that there is no evidence that this has hampered Board quality and/or performance.

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

The company does not participate in the IoD’s Future Director programme designed to develop and mentor the next generation of Directors. NZSA expect NZX50 companies to participate as part of a responsibility to develop and mentor the next generation of Directors.

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.

Director appointment dates range from 2016 to 2024. We note the Annual Report states the Chair, Sir Rob Macleod, will retire from Board sometime in calendar 2026 (having served since 2016). We appreciate the transparency as regards succession.

ASM Format: Sanford Limited is holding a ‘hybrid’ meeting, (i.e., physical, and virtual), a format preferred by NZSA as a way of promoting shareholder engagement while maximising participation.

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.

There is clear disclosure in the Board Charter that Directors have access to internal staff and external independent advice, although it is less clear as to the extent to which internal assurance staff have unfettered access to the Board. We note that the Audit, Finance and Risk Committee approved the internal audit plan undertaken by Ernst and Young.

The Annual Report includes comprehensive disclosure around financial, strategic, and business risks and mitigation, and how these are governed and managed.

Audit

NZSA assessment against its key policy criteria are summarised below.

Audit Independence: NZSA notes the significant increase in fees paid to the auditor, from $447k to $710k, including $281k (40%) of ‘Other spend’. Depending on the nature of spend, NZSA prefers that total other spend with the auditor is kept to a low level, to ensure no conflict of interest.

Audit Rotation:  The company ensures the Lead Audit Partner is rotated at 5 years as required by the NZX Listing Rules. There is no disclosure as to the date of appointment of the current audit firm. NZSA expects disclosure of appointment dates of the Lead Audit Partner and Audit Firm in the Annual Report to improve transparency for investors.

Environmental Sustainability

Sanford have not yet released their FY25 sustainability reporting. The company offers a strong track record, however, and voluntarily publishes a broad range of environmental disclosures with ESG World, in addition to its FY24 Climate-related disclosures report.

Shareholders are able to view this information at this link.

Despite NZSA’s favourable view, we encourage the company to consider publishing its formal Sustainability Report at the same time as the release of its Annual Report, so investors are able to be fully aware of all relevant information.

Ethical and Social

NZSA assessment against its key policy criteria are summarised below.

Whistleblowing:  Good disclosure.

Political Donations:  Whilst donations are disclosed in the Annual Report there is no disclosure as to whether political donations are made. NZSA expects explicit disclosure around this matter.

Financial & Performance

Sanford’s share price rose from $3.80 to $5.60 (as of 22^nd October 2025) over the last 12 months – a 47% increase. This compares favourably with the NZX 50 which rose 4% in the same period. The capitalisation of SAN is $524m placing it 47^th out of 115 companies on the NZX by size and makes it a large company.

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

2025 was a great year for Sanford and the company’s new Managing Director, David Mair, was featured in an NBR article (subscription only).

Revenues were static at $584m, but most substantially, cost of sales were down meaningfully with the Gross Margin improving by 22% to 26%. This led to a substantial increase of 23% in Gross Profit to $154.8m. This is the 6^th consecutive annual increase in revenue and gross profit.

Operating costs continued to decline dramatically, down by 24% to $60.0m, giving rise to a large 88% increase in operating profit of $102.0m.

NPAT was up 224% to $63.7m, the highest we have seen. EPS were $0.68, placing SAN on a very low PE of 8.

The company is in very sound financial position with ample liquidity illustrated by a current ratio that sits at 1.88. They have relatively little debt ($105m), after retiring some debt during the year, and a debt equity ratio of 0.36. Operating cashflows are also impressive coming in at $135.3m or $1.45 when measured in cents per share. Sanford likely qualifies as a “cash cow”.

SAN trades at a hefty 106% premium to its NTA of $2.72 but at a notable discount to their total Equity per share of $7.91, indicating that the market may not predict future cashflows matching the intangible assets on the balance sheet.

Sanford continued the payment of dividends with a stable dividend of $0.10 declared. Dividends are fully imputed. The company is aware of the cost of debt funding, and prefers to retire debt over the payment of dividends.

On page 17 of an investor presentation released to market, the company provide some highlights for 2025 but did not make any forward looking statements although they did state that “It should not be assumed that this year’s financial result will be repeated”.

Ngai Tahu Investments Limited is the largest shareholder with a cornerstone 19.87% holding.

Resolutions

David Mair was appointed to the Board 7 November 2022.He has been a Director of Skellerup Holdings Limited since 2006 and was Managing Director between 2011 and 2024. David was also involved in a2 Milk from 2008 until the company listed on the ASX in 2015. He was recently judged Deloitte Top 200 CEO of the Year for 2021 and given the prestigious Johnson Partners Leadership Award from the Institute of Finance Professionals (INFINZ). He is also currently a Director of Forté Funds Management Limited. David holds a degree in civil engineering and an MBA from Canterbury University.

We will vote undirected proxies IN FAVOUR of this resolution.

This is an administrative resolution.

We will vote undirected proxies IN FAVOUR of this resolution.

Proxies

You can vote online or appoint a proxy at https://www.investorvote.com.au/

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

Voting and proxy appointments close 2.00pm Monday 15 December 2025.

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

The Team at NZSA