Full Year 2026 Lark Distilling Co Ltd Earnings Call

August 18, 2026

Speaker #1: You have joined the meeting as an attendee and will be muted throughout the meeting.

David Allen: Release of the FY26 financial statements and annual report to the ASX earlier today. My name's David Allen from Hawkesbury Partners. I am going to be your host for today's call, and joining us is Stu Gregor, CEO and Managing Director, and with him is Paul Bowker, the CFO of Lark. I would 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 would 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. Note that the raise hand function is not enabled. We will also have a recording of today's call on the Lark website shortly for future viewing. I now look forward to handing over to Stu Gregor, CEO of Lark, to start today's call.

David Allen: Release of the FY 2026 financial statements and annual report to the ASX earlier today. My name's David Allen from Hawkesbury Partners. I am going to be your host for today's call, and joining us is Stu Gregor, CEO and Managing Director, and with him is Paul Bowker, the CFO of Lark. I would 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.

Speaker #3: We released the FY26 financial statements and annual report to the ASX earlier today. My name’s David Allen from Hawkesbury Partners. I’m going to be your host for today’s call, and joining us is Stu Grigals, CEO and Managing Director, and with him is Paul Barker, the CFO of Lark.

Speaker #3: I'd also like to note that today's call is being recorded. All participants are in listen-only mode, and we will have a question-and-answer session following the presentation.

Speaker #3: If you'd like to ask a question at that time, 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.

David Allen: If you would 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. Note that the raise hand function is not enabled. We will also have a recording of today's call on the Lark website shortly for future viewing. I now look forward to handing over to Stu Gregor, CEO of Lark, to start today's call.

Speaker #3: We'll also have a recording of today's call on the Lark website shortly, for future viewing. I now look forward to handing over to Stu Grigals, CEO of Lark, to start today's call.

Speaker #4: Thanks, David. Good day, everyone. Welcome to my first results. It's been an incredible journey here over the last 6 months at Lark. I've thoroughly enjoyed myself since starting on January 5.

Stu Gregor: Thanks, David. Good day, everyone. Welcome to my first results. It has been an incredible journey here the last 6 months at Lark. I have thoroughly enjoyed myself since starting on 5 January. For those of you who do not know me, I came out of the Four Pillars Gin business, where we sold that business to Kirin in 2023. I then joined the Lark board at the back end of 2024 and have been the CEO and Managing Director, still remaining on the board since 5 January this year. We have been very lucky to get Paul Bowker on board. He is our new CFO. He has been with us just over 3 months now, out of the Brick Lane Brewing business. A very talented lawyer, finance CFO for listed businesses, and we are greatly lucky to have him on board. Welcome, Paul. It has been a pretty good year.

Stu Gregor: Thanks, David. Good day, everyone. Welcome to my first results. It has been an incredible journey here the last six months at Lark. I have thoroughly enjoyed myself since starting on 5 January. For those of you who do not know me, I came out of the Four Pillars Gin business, where we sold that business to Kirin in 2023. I then joined the Lark board at the back end of 2024 and have been the CEO and Managing Director, still remaining on the board since 5 January this year. We have been very lucky to get Paul Bowker on board. He is our new CFO. He has been with us just over three months now, out of the Brick Lane Brewing business.

Speaker #4: For those of you who don't know me, I came out of the Four Pillars gin business, where we sold that business to Kirin in 2023.

Speaker #4: I then joined the Lark board at the back end of 2024 and have been the CEO and Managing Director, still remaining on the board since January 5 of this year.

Speaker #4: We've been very lucky to get Paul Barker 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 and finance CFO for listed businesses, and we're great.

Stu Gregor: A very talented lawyer, finance CFO for listed businesses, and we are greatly lucky to have him on board. Welcome, Paul. It has been a pretty good year. In fact, it has been a very good year. Lark is uniquely positioned amongst Australian spirit sector, and most particularly amongst Australia's whisky sector, I think, to show even improved growth over the next couple of years. We are going to focus on FY 2026. Our net sales are up by 15% in what is a challenging market, both domestically and internationally.

Speaker #4: We're greatly lucky to have him on board, so welcome, Paul. It's been a pretty good year. In fact, it's been a very good year.

Stu Gregor: In fact, it has been a very good year. Lark is uniquely positioned amongst Australian spirit sector, and most particularly amongst Australia's whisky sector, I think, to show even improved growth over the next couple of years. We are going to focus on FY26. Our net sales are up by 15% in what is a challenging market, both domestically and internationally. AUD 18 million of net sales is a really impressive result for this business. Most happily, across every channel that we sell across, both domestically and internationally. We have a AUD 4.5 million operating EBITDA loss, which just basically reflects the fact that we are continuing to invest ahead of the curve.

Speaker #4: Lark is uniquely positioned amongst the Australian spirits sector, and most particularly amongst Australia's whisky sector, I think, to show even improved growth over the next couple of years.

Speaker #4: But we're going to focus on FY26, and ours 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.

Stu Gregor: AUD 18 million of net sales is a really impressive result for this business. Most happily, across every channel that we sell across, both domestically and internationally. We have a AUD 4.5 million operating EBITDA loss, which just basically reflects 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. We know that we have to invest in marketing and commercial roles, and we are doing that now ahead of what we consider to be really great potential future revenue growth.

Speaker #4: The 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 the fact that we are continuing to invest ahead of the curve.

Stu Gregor: We know that we can build this into one of the world's great drinks businesses. We know that we have to invest in marketing and commercial roles, and we are 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 whisky inventories that you will see there at point 4. Paul Bowker 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 FY27 and beyond. Speaking about balance sheet, we have got a really great balance sheet. We have plenty of cash in the bank, AUD 14.3 million in cash and cash equivalents. We have got no debt.

Speaker #4: 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. We're doing that now ahead of what we consider to be really great potential future revenue growth.

Speaker #4: We have made some adjustments—some non-cash adjustments—to goodwill and whisky inventories that you will see there at $0.4 million. Paul will talk to you a bit more about them in a couple of slides' time.

Stu Gregor: We have made some adjustments, some non-cash adjustments to goodwill and whisky inventories that you will see there at point four. Paul Bowker 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 FY 2027 and beyond. Speaking about balance sheet, we have got a really great balance sheet. We have plenty of cash in the bank, AUD 14.3 million in cash and cash equivalents. We have got no debt.

Speaker #4: I think both were timely and necessary adjustments. Though, I think we'll keep up with a clean balance sheet moving ahead for FY27 and beyond. Speaking of our balance sheet, we've got a really great balance sheet.

Speaker #4: 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 growth in the future.

Stu Gregor: This allows us, I think, to have a really incredibly great base to fund growth in the future. Importantly, we have 2.4 million liters of some of the world's greatest whiskies maturing at 43% ABV at our single-site distillery now at Pontville. We have one of the greatest resources in the world. It is a magical place, Pontville, just on the outskirts of Hobart. We have a really great scalable production asset. We are making the best whisky that we have made in the history of Lark, and Bill Lark told me that as recently as last week. 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. I just thought I would give you a little overview of what the spirit of Lark is on the next slide.

Speaker #4: And, importantly, we have 2.4 million liters of some of the world's greatest whiskies maturing at 43% ABV at our single-site distillery now at Pontville.

Speaker #4: We have one of the greatest resources in the world. It is a magical place — Pontville — just on the outskirts of Hobart. We have a really great, scalable production asset.

Speaker #4: 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.

Speaker #4: So, it is a year of foundational growth, and it really has been an excellent year for the business—for us to build a foundation moving ahead.

Speaker #4: 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, since 1992.

Stu Gregor: 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 Lyn 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 will show you on the next slide, continue to win more global awards than almost any Australian whisky distillery. In fact, I am 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. Not just for the whisky inside, but also the packaging outside.

Speaker #4: Bill and Lynn Lark founded this business, and that gives us a unique position among any Australian whisky distilleries. We have won, and continue to win.

Speaker #4: 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, 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 global recognition.

Speaker #4: 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 it a little bit later in the presentation.

Stu Gregor: We actually won the world's best design and best range design at the 2026 World Whiskies Awards for our new packaging, which you will hopefully have seen, and if not, you will see it a little bit later in the presentation. Chris Thomson, 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 have got the 2.4 million liters 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, that is the duty-free channel, and our international channels, which are growing at a great rate. International channels grew 69%, global travel retail, 43%.

Speaker #4: 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 liters 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, the duty-free channel; and our international channels, which are growing at a great rate.

Speaker #4: International channels grew 69%, and global travel retail grew 43%. As I've said before, we have reinvented, repackaged, and relaunched the Lark business in the last six months.

Stu Gregor: As I've said before, we have reinvented, repackaged, and relaunched the Lark 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. 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. I think that positions us really, really well to grow. If you just have a look at the next slide, these are the awards that we have won just in the last four months.

Speaker #4: In the last—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. 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—a significant growth in 2027.

Speaker #4: 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 to grow.

Speaker #4: 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.

Speaker #4: The World Whisky Masters is where the trophies are essentially given, and they're called Masters medals and gold medals, which are the better established gold medals.

Stu Gregor: The World Whiskies Masters is where trophies essentially are given. They are called masters medals and gold medals, which are more the better-established gold medals. We have won seven between masters and gold medals. We won three gold medals at the Australian International Spirits Awards, which were just recently held in Melbourne. We also won the design award for best whisky design. At the San Francisco World Spirits Competition, we won another hat full of awards, five, in fact, all for the new range of whiskies. What we are seeing here is that the new whiskies that are being released today, but also the new whiskies that are being made at Pontville are the very best whiskies I think that Lark have ever made. I think that the future for the business is astonishingly positive.

Speaker #4: 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.

Speaker #4: We also won the Design Award for Best Whisky Design. And at the World Spirits Competition in San Francisco, we won another hatful of awards—five, in fact—all for the new range of whiskies.

Speaker #4: What we're seeing here is that the new whiskies that are being made, that are being released today, but also the new whiskies that are being made at Pontville, are the very best whiskies I think that Lark have ever made. I think that the future for the business is astonishingly positive.

Speaker #4: It's also worth noting that Bill Lark, our founder and still our global ambassador—still very active in the trade—was doing dinners as recently as last week in Sydney and also in Canberra.

Stu Gregor: It is also worth noting that Bill Lark, our founder and still our global ambassador, and 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 Thomson was awarded Master Distiller, 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 has been quite a time for the Lark business. If we just have a look at the growing market opportunity, it is 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 is really important to have a look at the bigger picture.

Speaker #4: He was awarded an AM in January, in the exact same week that Chris Thompson was awarded Master Distiller, Master Blender of the Year for the rest of the world in the World Whiskies Awards.

Speaker #4: So, we started the calendar year pretty well—the second half of the financial year. It's been quite a time for the Lark business.

Speaker #4: If we just have a look at the growing market opportunity, it's fair to say that there are some challenges in the liquor industry at the moment.

Speaker #4: 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 in a world whisky market that is valued at over US$100 billion, with the Australian whisky market at about 2 or 3% of that, and still growing.

Stu Gregor: We are still playing in a world whisky market that is valued at over US$100 billion, with the Australian whisky market at about 2% or 3% of that and still growing. Whisky is still a growing category. We understand there are headwinds, we understand there are challenges for Australian drinks manufacturers, and there are for global spirits giants as well. We are still playing in a very big pond, if you like. What we are going to be doing over the next couple of years is trying to do, well, to continue the fishing metaphor, we are going to try to fish where the fish are. 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 are looking for in occasion-based drinking.

Speaker #4: Whisky is still a growing category. We understand there are headwinds. We understand there are challenges for Australian drinks manufacturers, and there are for global spirits giants as well.

Speaker #4: But we are still playing in a very big pond, 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.

Stu Gregor: We know that they are 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. 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. Now, one thing that we really have to do is we have to look at innovation and flavor and say, "Well, what are the new generation of whisky drinkers looking for in terms of flavor, innovation, pack size?" There are many things that we have in the pipeline for the future of Lark. We cannot just be a whisky business selling extremely expensive Australian whiskies. We have to be able to be more diverse.

Speaker #4: Now, one thing that we really have to do is look at innovation and flavor, and say, well, what are the new generation of whisky drinkers looking for in terms of flavor, innovation, and pack size?

Speaker #4: There are many things in the pipeline for the future of Lark. We can't just be a whisky business selling extremely expensive Australian whiskies.

Speaker #4: 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.

Stu Gregor: We have to be able to be more innovative, and that is where we are going to be looking at putting quite a significant amount of our focus over the next 12 to 24 months. What are we looking at? If we have a look at the key focus areas to expand our future growth, we have got a 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 Hobart. We have 2.5 million liters 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.

Speaker #4: So, where are we looking at? If we have a look at the key focus areas to expand our future growth, 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—it's just on the outskirts of Hobart.

Speaker #4: We have 2.5 million liters of the most incredible whisky, and we have a really strong balance sheet and net cash position to support our growth.

Speaker #4: That is unique, I think, in Australian whisky distillers today. What do we have to do? We have to make great consumer connections. The key to us being a success—and this has sort of been my mantra for 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.

Stu Gregor: The key to us being a success, and this has sort of been my mantra for 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 Lark. That is across all our distribution channels, both in the on- and the off-trade, both in domestic and in international. It is really important for Lark 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 the category leader. What that means is that we are just going to build better partner relationships.

Speaker #4: Not just a generic whisky brand, but people must ask for Lark—and that is across all our distribution channels, both in the on- and the off-trade, both in domestic and in international.

Speaker #4: It's really important for Lark 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 the category leader.

Speaker #4: And what that means is that we're just going to build better partner relationships. Those partner relationships are with everyone from the larger on-premise groups across Australia, obviously the large retailers across Australia, and the global travel retail partners—whether that be for in Australia, Heinemann in Sydney Airport, and Lotte, who are in Melbourne and Brisbane airports. They have very, very significant aspirational plans to partner with Lark over the next few years to build our global travel retail presence in really important airports, particularly Melbourne and Brisbane as they grow. In particular, Brisbane is having a massive redevelopment, and Melbourne is very ambitious to become as important a gateway as Sydney.

Stu Gregor: 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 in Sydney Airport, and Lotte, who are in Melbourne and Brisbane Airport, who have very significant aspirational plans to partner with Lark over the next few years to build our global travel retail presence 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. For those who were at our presentation in June, it is worth noting that at Sydney Airport, over the June-July period, we were actually the number 1 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.

Speaker #4: 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.

Stu Gregor: For those who were at our presentation in June, it is worth noting that at Sydney Airport, over the June-July period, we were actually the number 1 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. We've got some big opportunities, I think, across the global travel retail network. To dive into the numbers, I'd want to invite Paul Bowker across now to have a look at a couple of the FY 2026 highlights. Over to you, Mr. CFO.

Speaker #4: 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.

Stu Gregor: We've just gone into Changi Airport as well in all four terminals. We've got some big opportunities, I think, across the global travel retail network. To dive into the numbers, I'd want to invite Paul Bowker across now to have a look at a couple of the FY26 highlights. Over to you, Mr. CFO.

Speaker #4: So, to dive into the numbers, I'd like to invite Paul to join us now to look at a couple of the FY26 highlights. Over to you, Mr. CFO.

Speaker #2: Thanks, Joe, and thank you for the introduction and the overview. Like Stuart mentioned, I'm a relatively recent convert to Lark as well, having started this year. And like Stuart, I'm incredibly honoured to be part of Lark at what is a pivotal moment in its history.

Paul Bowker: Thanks, Stu. Thank you for the introduction and the overview. As Stu mentioned, I'm a relatively recent convert into Lark as well, having started this year. Like Stu, I'm incredibly honored to be part of Lark at what is a pivotal moment in its history. One thing when you start at Lark, you pretty quickly realize the love for Lark, not just across customers and consumers, but the team internally. It's a magical place, to use your word back at you, Stu. It's an excellent description, actually, of what it's like at Team Lark. The financial highlights. Stu's obviously touched on these. The key thing for us really as we look at FY26, but also into FY27, is the sales number. Lark is entering the growth phase of its journey, and over the course of FY26, we grew sales by 15% to AUD 18 million.

Paul Bowker: Thanks, Stu. Thank you for the introduction and the overview. As Stu mentioned, I'm a relatively recent convert into Lark as well, having started this year. Like Stu, I'm incredibly honored to be part of Lark at what is a pivotal moment in its history. One thing when you start at Lark, you pretty quickly realize the love for Lark, not just across customers and consumers, but the team internally. It's a magical place, to use your word back at you, Stu. It's an excellent description, actually, of what it's like at Team Lark. The financial highlights. Stu's obviously touched on these. The key thing for us really as we look at FY 2026, but also into FY 2027, is the sales number. Lark is entering the growth phase of its journey, and over the course of FY 2026, we grew sales by 15% to AUD 18 million.

Speaker #2: One thing, when you start at Lark, you pretty quickly realise the love for Lark—not just across customers and consumers, but within the team internally.

Speaker #2: It's a magical place, to use your word back at you, Stuart. It's an excellent description, actually, of what it's like at Team Lark. The financial highlights.

Speaker #2: So, Stuart's obviously touched on these. The key thing for us, really, as we look at FY26, but also into FY27, is the sales number.

Speaker #2: Lark is entering the growth phase of its journey, and over the course of FY26, we grew sales by 15%, to $18 million. We'll break that down in a bit more detail when we look at the split between domestic and international and the different channels, but at a high level, the really impressive part of that sales growth is it comes from a couple of components.

Paul Bowker: We'll break that down in a bit more detail when we look at the split between domestic and international and the different channels. At a high level, the really impressive part of that sales growth is it comes from a couple of components. One is effectively the baseload, predictable, organic growth domestic business that we sit on. The other is the outside growth path, which is through international and GTR. We'll touch on that in a bit more detail. It's a very solid number and very pleasing for the team. The operating EBITDA for the year was -AUD 4.5 million, broadly in line with FY25. The key factors that sit behind the negative EBITDA, as we'll get into in a bit more detail, is really around the investment for growth.

Speaker #2: One is effectively the base-load, predictable, organic-growth domestic business that we sit on. And the other is the outsized growth path, which is through international and GTR. We'll touch on that in a bit more detail, but it's a very solid number and very pleasing for the team.

Speaker #2: The operating EBITDA for the year was negative $4.5 million, broadly in line with FY25. The key factors that sit behind the negative EBITDA, as we'll get into in a bit more detail, are really around the investment for growth.

Speaker #2: As Stuart has touched on, over the last couple of years, the business has invested very heavily in its portfolio, in its brand, and in its infrastructure, and that's all been done with a view to long-term growth.

Paul Bowker: As Stu touched on, the last couple of years, the business has invested very heavily in its portfolio, in its brand, in its infrastructure, and that's all been done with a view to long-term growth. We intend to continue to do that in FY27, and we'll touch on the balance sheet in a bit more detail, but we have the firepower to continue that growth model. Cash position. The business is in a very strong cash position. We have no debt. We have AUD 14.3 million in cash. We also have significant assets backing the business, including our home of Lark, the magical place at Pontville, and also our whiskey bank, which approximately AUD 50 million worth of whiskey that we're sitting on. The other key factor in the FY26 accounts that we need to bring forward is the impairment to goodwill, and the write-down of the whiskey inventories.

Paul Bowker: As Stu touched on, the last couple of years, the business has invested very heavily in its portfolio, in its brand, in its infrastructure, and that's all been done with a view to long-term growth. We intend to continue to do that in FY 2027, and we'll touch on the balance sheet in a bit more detail, but we have the firepower to continue that growth model. Cash position. The business is in a very strong cash position. We have no debt. We have AUD 14.3 million in cash. We also have significant assets backing the business, including our home of Lark, the magical place at Pontville, and also our whiskey bank, which approximately AUD 50 million worth of whiskey that we're sitting on. The other key factor in the FY 2026 accounts that we need to bring forward is the impairment to goodwill, and the write-down of the whiskey inventories.

Speaker #2: And we intend to continue to do that in FY27. We'll touch on the balance sheet in a bit more detail, but we have the firepower to continue that growth model.

Speaker #2: Cash position: the business is in a very strong cash position. We have no debt. We have $14.3 million in cash. We also have significant assets backing the business, including our home of Lark, the magical place at Pontville, and also our whisky bank, which is approximately $50 million worth of whisky that we're sitting on.

Speaker #2: The other key factor in the FY26 accounts that we need to bring forward is the impairment to goodwill and the write-down of the whisky inventories.

Speaker #2: We took the decision this year to impair goodwill—the majority of our goodwill—by just over $20 million. Much of that goodwill arose from previous acquisitions within Lark. No need to go back through the deep history, but Lark is effectively a roll-up of a number of different distilleries over time to get where it is today.

Paul Bowker: We took the decision this year to impair goodwill, the majority of our goodwill, by just over AUD 20 million. Much of that goodwill arose from previous acquisitions within Lark, and no need to go back through the deep history that Lark is effectively a roll-up of a number of different distilleries over time to get where it is today. The decision was made to write down the goodwill and some of those historic acquisitions, many of which are five years or more ago. The other key factor was an assessment of our whisky bank, and we took the decision to reduce the net asset value in the whisky bank from AUD 64 million down to AUD 49 million.

Speaker #2: And the decision was made to write down the goodwill in some of those historic acquisitions, many of which are five years or more ago.

Speaker #2: The other key factor was an assessment of our whisky bank, and we took the decision to reduce the net asset value in the whisky bank from $64 million down to $49 million.

Speaker #2: Then, as we touch on the balance sheet, and this is really one of the strengths of Lark, and we're in this incredible position that we're in to enable a future growth mindset, because of the hard work that's gone on in the business over the last few years, and we've had a very strong focus on ensuring we've got a strong balance sheet to enable growth without straining the business.

Paul Bowker: As we touch on the balance sheet, this is really one of the strengths of Lark, and we are in this incredible position that we are in to enable a future growth mindset because of the hard work that has gone on in the business over the last few years. We have had a very strong focus on ensuring we have got a strong balance sheet to enable growth without straining the business. Michael Andrews and his team, who look after the finance within the business, have done a tremendous job of ensuring that we have got a very solid cash position, we run no debt, and also that we have been investing even ahead of the growth curve in continuing to build both the quality and the flexibility of our whisky bank.

Speaker #2: And Michael, Andrew, and his team, who look after the finance within the business, have done a tremendous job of ensuring that we've got a very solid cash position.

Speaker #2: We run no debt, and we've also been investing even ahead of the growth curve, continuing to build both the quality and flexibility of our whisky bank.

Speaker #2: All these items mean that from this position, we're able to continue to invest in the operating side of the business, predominantly sales and marketing, knowing that we've got all these assets within the business that are there to be commercialised and properly deployed.

Paul Bowker: All these items mean that from this position, we are able to continue to invest in the operating side of the business, predominantly sales and marketing, knowing that we have got all these assets within the business that are there to be commercialized and properly deployed. This is a bit of an overview, just to touch on the momentum in sales. As you can see, the business historically has had a good track record, particularly over the last few years, of steady growth of its underlying core business, I would call it. That business predominantly has been around the domestic market, driven through our sales within the national retailers, a little bit of on-prem, and also through our own channels. It has been very good to see that organically, this business can continue to grow, even in what is, in some parts, a challenged market.

Speaker #2: So this is a bit of an overview, just to touch on the momentum in sales. As you can see, the business historically has had a good track record, particularly over the last few years, of steady growth in its underlying core business, I'd call it.

Speaker #2: Now, that business, predominantly, has been around the domestic market, driven through our sales within the national retailers, a little bit of on-prem, and also through our own channels.

Speaker #2: And it's been very good to see that, organically, this business can continue to grow even in what is, in some parts, a challenged market.

Speaker #2: The key thing to note with this graph, which we'll get into in a bit more detail, is that this is really based off organic growth of our pre-existing portfolio.

Paul Bowker: The key thing to note with this graph, which we will get into in a bit more detail, is that this is really based off organic growth of our preexisting portfolio. In FY26, towards the back end of FY26, we relaunched our range, including a signature range, and those sales trickled through in the end of FY26 as we just released them. But will form a very core part of FY27, as will a focus on global travel retail and internationals. In our view, we will continue to see growth in sales of the business through the core business, if you will. But also there is this opportunity for outsized growth, outsized performance, across those key areas of GTR and international. If we touch on a bit more detail now, we will just split these two slides, our channels into domestic and international. Within those, there are different paths to market.

Speaker #2: In FY26, towards the back end of FY26, we relaunched our range, including a signature range, and those sales trickled through at the end of FY26 as we just released them, but will form a very core part of FY27, as will a focus on global travel retail and internationals.

Speaker #2: So, in our view, we'll continue to see growth in sales of the business through the core business, if you will, but also there's this opportunity for outsized growth, outsized performance across those key areas of GTR and international.

Paul Bowker: But also there is this opportunity for outsized growth, outsized performance, across those key areas of GTR and international. If we touch on a bit more detail now, we will just split these two slides, our channels into domestic and international. Within those, there are different paths to market. As I said, historically, domestic has been the core focus of our business. It is a very strong position that we have got in the market, and there is a lot of love for Lark within Australia. We have a good position in it.

Speaker #2: So, if we touch on a bit more detail now, we'll just split these two slides—our channels—into domestic and international, and within those, there's different paths to market.

Speaker #2: As I said, historically, domestic has been the core focus of our business. It's a very, very strong position that we've got in the market, and there is a lot of love for Lark within Australia.

Paul Bowker: As I said, historically, domestic has been the core focus of our business. It is a very strong position that we have got in the market, and there is a lot of love for Lark within Australia. We have a good position in it. Within the domestic channels, we have a direct-to-consumer business, which goes from strength to strength. Cam Blight, who runs that business for us, has done an incredible job of capturing a leading position in the Australian D2C market, for whisky, spirits, and in fact, drinks. It is a sophisticated operation. We have a database of around 80,000 people who regularly read our communications and buy our whiskies. The other key thing, and just to lead into a little bit of international off this slide, is that Cam has spent the last year focusing very heavily on how we expand that D2C business.

Speaker #2: We have a good position in it. Within the domestic channels, we have a direct-to-consumer business, which goes from strength to strength. So, Cam Blight, who runs that business for us, has done an incredible job of capturing the leading position in the Australian DTC market for whisky, spirits, and, in fact, drinks.

Paul Bowker: Within the domestic channels, we have a direct-to-consumer business, which goes from strength to strength. Cam Blight, who runs that business for us, has done an incredible job of capturing a leading position in the Australian D2C market, for whisky, spirits, and in fact, drinks. It is a sophisticated operation. We have a database of around 80,000 people who regularly read our communications and buy our whiskies. The other key thing, and just to lead into a little bit of international off this slide, is that Cam has spent the last year focusing very heavily on how we expand that D2C business.

Speaker #2: It's a sophisticated operation. We have a database of around 80,000 people who regularly read our communications and buy our whiskies. The other key thing, and just to bleed into a little bit of international off this slide, is that Cam has spent the last year focusing very heavily on how we expand that DTC business. Over the last week, it's very pleasing to see that we are now available in China and also in Europe.

Paul Bowker: Over the last week, it is very pleasing to see that we are now available in China and also in Europe through our own D2C channel, which has required an incredible amount of work on Cam's part. It also means that dominant position we have in D2C in the domestic market, we can now leverage that and expand that out into much bigger markets internationally. The B2B component, a very important part of our business and a touch point to, I guess, the mass consumer, and being available in national retail, which for us is Endeavour Group and Coles, is incredibly important to give people ready access to our whiskies. We do that through one of our very good partner, exclusive partner in the distribution space, which is Spirits Platform.

Speaker #2: Through our own DTC channel—which has required an incredible amount of work on Cam's part—but it also means that, with the dominant position we have in DTC in the domestic market, we can now leverage that and expand out into much bigger markets internationally.

Speaker #2: The B2B component is a very important part of our business and a touchpoint for, I guess, the mass consumer. Being available in national retail, which for us is Endeavor Group and Coles, is incredibly important to give people ready access to our whiskies.

Speaker #2: We do that through one of our very good partners, an exclusive partner in the distribution space, which is Spirits Platform. The team there, through Ian Neil, Ryan, and others, have done an incredible job of really expanding our presence both in the off-premise—so, in retail outlets—but increasingly we're starting to trickle into on-premise, which will provide us excellent trial to a broader base of consumers.

Paul Bowker: The team there through Ian, Neil, Ryan, and others, have done an incredible job of really expanding our presence, both in the off-premise, so in retail outlets, but increasingly we are starting to trickle into on-premise, which will provide us excellent trial to a broader base of consumer. Stu Graham continues to impress everyone within the business and outside the business on his dedication to growing that channel. The other part that we do not need to touch on in too much detail, but Stu mentioned this. Lark has been around for a long time. It started small, and the way it really started was a hand sell one-on-one with the consumer, and we have continued to carry that ethos through the business.

Speaker #2: And Stu Graham continues to impress everyone within the business and outside the business with his dedication to growing that channel. The other part that we don't need to touch on in too much detail, but Stu mentioned this: Lark's been around for a long time.

Speaker #2: It started small, and the way it really started was a hand-sell, one-on-one, with the consumer. We've continued to carry that ethos through the business, and we now have a venue and hospitality business that covers four venues within Hobart and surrounds. That continues to provide an incredibly important channel for trial of our product, for hosting people, for bringing people into the magic world of Lark.

Paul Bowker: We now have a venue and hospitality business that covers four venues within, in Hobart and surrounds, and that continues to provide an incredibly important channel for trial of our products, for hosting people, for bringing people into the magical world of Lark. I will keep using that word of yours, Stu, that I have now adopted. It also provides an excellent channel for new product development and one-off releases and really getting immediate market feedback. The key message out of domestic is really that this is a core part of our business. It is in steady growth. It is very reliable cash flow. A business that we understand well and a great touch point for the consumer. If we move across into the international channel, if domestic is our core business, international is where we are aiming for outsized performance. International for us covers two elements.

Speaker #2: I'll keep using that word of yours, Stu, that I've now adopted. It also provides an excellent channel for new product development and one-off releases, really allowing us to get immediate market feedback.

Speaker #2: So the key message out of domestic is really that this is a core part of our business. It's in steady growth. It's very reliable cash flow.

Speaker #2: This is a business that we understand well and provides a great touchpoint for the consumer. If we move across into the international channel—if domestic is our core business—international is where we are aiming for outsized performance.

Speaker #2: International, for us, covers two elements. One is international into countries globally, and the other one is a specific subset of that, which is global travel retail.

Paul Bowker: One is international into countries globally, and the other one is a specific subset of that, which is global travel retail. If we look at in-country export distribution, we have made inroads into China. China is our focus. We are unashamed about that. In FY26, we did just under AUD 2 million in China off a low base. We have four people, four full-time staff based in Southeast Asia. We have a very strong program over the next 12 months to continue to make inroads into China. We also touch on other South Asian markets, but again, our focus of our marketing sales dollar spend is in that China market, and we have very good hopes for that. We have also got our new signature range arriving on the shores of Shenzhen in about 10 days, so that new range will also be going hard into China too.

Paul Bowker: One is international into countries globally, and the other one is a specific subset of that, which is global travel retail. If we look at in-country export distribution, we have made inroads into China. China is our focus. We are unashamed about that. In FY 2026, we did just under AUD 2 million in China off a low base. We have four people, four full-time staff based in Southeast Asia. We have a very strong program over the next 12 months to continue to make inroads into China. We also touch on other South Asian markets, but again, our focus of our marketing sales dollar spend is in that China market, and we have very good hopes for that. We have also got our new signature range arriving on the shores of Shenzhen in about 10 days, so that new range will also be going hard into China too.

Speaker #2: So, if we look at in-country export distribution, we've made inroads into China. China's our focus—we're unashamed about that. FY26, we did just under $2 million in China, off a low base.

Speaker #2: We have four people—four full-time staff—based in Southeast Asia, and we've got a very strong program over the next 12 months to continue to make inroads into China.

Speaker #2: We also touch on other South Asian markets, but again, our focus of our marketing, sales, and dollar spend is in that China market, and we've got very good hopes for that.

Speaker #2: We've also got our new Signature range arriving on the shores of Shenzhen in about 10 days, so that new range will also be going hard into China too.

Speaker #2: The other key, and so that's Alfred Go—who I think is on this call as well—so congratulations, Alfred, on a tremendous year in getting China up and running.

Paul Bowker: That is Alfred Do, who I think is on this call as well. Congratulations, Alfred, on a tremendous year in getting China up and running. Global travel retail is an absolute powerhouse of international retail, not just in alcohol spirits, but in categories globally. It is growing, it is growing heavily. Passenger numbers are increasing. There is premiumization. This is an incredibly important channel for us. It is one that we have only recently entered at scale. We have been in it with our historic portfolio, but the new signature range has really now just started to flow through, and we are seeing some absolutely incredible numbers, particularly out of the Sydney Airport, where we have large activations. Off the back of the results for that and proof in market, we have now rolled into Changi. We are in four venues in Changi, in Singapore as well.

Speaker #2: Global travel retail is an absolute powerhouse of international retail, and not just in alcohol and spirits, but in categories globally. It is growing. It's growing heavily.

Speaker #2: Passenger numbers are increasing. There's premiumization. This is an incredibly important channel for us. It's one that we've only recently entered at scale. We've been in it with our historic portfolio, but the new Signature Range has really now just started to flow through, and we are seeing some absolutely incredible numbers—particularly out of the Sydney Airport, where we have large activations.

Speaker #2: And back off the back of the results for that, and proof in market, we've now rolled into Changi. We're in four venues in Changi, in Singapore as well.

Speaker #2: And through the efforts of Stu Graham, we're going to continue to roll that channel out in the future. So there are some exciting opportunities there, both in terms of baseload, but also in terms of outsized growth, and it's a really promising year ahead that we have.

Paul Bowker: Through the efforts of Stu Graham, we are going to continue to roll that channel out in the future. There are some exciting opportunities there, both in terms of base load, but also in terms of outsized growth. It is a really promising year ahead that we have. Thank you.

Speaker #2: Thank you.

Speaker #1: Thanks, Paul. So, what's next? I mean, it's not a complicated business. We need to increase distribution points, and then we need to increase depletions at those distribution points.

Stu Gregor: Thanks, Paul. What is next? It is not a complicated business. We need to increase distribution points, and then we need to increase depletions at those distribution points. One of the things that we really need to do is we need, as Paul said, we need to increase our availability across the Australian domestic retail channel and also across Australia's domestic on-premise channel, which is bars and restaurants. We have often been seen as being an exclusive and expensive whisky that is a little bit too expensive to have a nip of if you are in a whisky bar in Sydney or Brisbane or Melbourne.

Speaker #1: One of the things that we really need to do is, as Paul said, we need to increase our availability across the Australian domestic retail channel, and also across Australia's domestic on-premise channel, which is bars and restaurants.

Speaker #1: We've often been seen as being an exclusive and expensive whisky that's a little bit too costly to have a nip of if you're in a whisky bar in Sydney, Brisbane, or Melbourne.

Speaker #1: We need to readjust our thinking, and we need to readjust some pricing, which we have done with a new product called Dark Lark that was only released just in June, where we have brought some pricing down in order to significantly increase the volume and the ability for people to enter the Lark world.

Stu Gregor: We need to readjust our thinking, and we need to readjust some pricing, which we have done with a new product called DARK LARK that was only released in June, where we have brought some pricing down in order to significantly increase the volume and the ability for people to enter the Lark world. We are going to be doing a lot more with the on-premise market right across the country, and we are also going to be doing a lot more with the on-premise market across Southeast Asia and into China. What we just simply have to do is increase sales into the distribution points. We have to make sure that we are depleting that by making sure that consumers are asking for our products.

Speaker #1: So we are going to be doing a lot more with the on-premise market right across the country, and we're also going to be doing a lot more with the on-premise market across Southeast Asia and into China.

Speaker #1: And what we just simply have to do is increase sales into the distribution points. We have to make sure that we are depleting that by making sure that consumers are asking for our products.

Speaker #1: We think that Spirits Platform are the absolute correct partner, and I thank them for the efforts that they've put in this year. Global travel retail will be a huge focus for us.

Stu Gregor: We think that Spirits Platform are the absolute correct partner, and I thank them for the efforts that they have put in this year. Global travel retail will be a huge focus for us. As recently as yesterday, we were talking to the Lotte business, who do run the Melbourne and Brisbane concessions, as we have said, about some of the developments that we can engage in at both of those airports. They also run the concession at Changi. There is four terminals at Changi and 30 stores at Changi, just to give you a sense of the scale there. Obviously, Lotte is one of the biggest Korean businesses, and we are already talking to them hopefully about whether or not we can get into some of the other markets where Lotte exists. It is a big opportunity for us.

Speaker #1: I mean, as recently as yesterday, we were talking to the latte business, who do run the Melbourne and Brisbane concessions, as we've said, about some of the developments that we can engage in at both of those airports.

Speaker #1: They also run the concession at Changi. They have four terminals at Changi and 30 stores at Changi, just to give you a sense of the scale there.

Speaker #1: And obviously, Lotte is one of the biggest Korean businesses, and we're already talking to them, hopefully, about whether or not we can get into some of the other markets where Lotte exists.

Speaker #1: It is a big opportunity for us. We'll be talking to New Zealand, all of the Southeast Asian regions, and, of course, we'll probably be going into the Middle East in the FY27, FY28 period.

Stu Gregor: We will be talking to New Zealand, all of the Southeast Asian regions, and of course, we will probably be going into the Middle East in the F27, F28 period. Our focus, however, will remain on the Asia Pacific region. It will remain on China. It will remain in Australia, New Zealand and Southeast Asia. If there are sort of opportunities that present themselves in other regions, we will obviously be talking to them. One of the things that is happening to this business now, I think, as we are getting better known, better recognized, and more successful. We are finding that a few more importers and distributors around the world are more interested in our business, and that is something that I have learnt from the Four Pillars Gin days.

Speaker #1: Our focus, however, will remain on the Asia-Pacific region. It will remain on China; it will remain in Australia, New Zealand, and Southeast Asia. If there are opportunistic—if there are sort of opportunities that present themselves in other regions, we will obviously be talking to them.

Speaker #1: One of the things that is happening to this business now, I think, as we're getting better known, better recognized, and more successful, is that we are finding a few more importers and distributors around the world who are more interested in our business. That's something I learned from the Four Pillars days.

Speaker #1: Once you begin to get some traction, once you begin to gain some attention both domestically and internationally, you really do have a greater opportunity to get the right sorts of partners in the right markets.

Stu Gregor: Once you begin to get some traction, once you begin to gain some attention, both domestically and internationally, you really do have a greater opportunity to get the right sorts of partners in the right markets. Be strategic, but build those relationships. Luckily, we have a few of those great relationships around the world from my time running the Four Pillars Gin business. It is a great opportunity for us. So FY27, if we built the foundations in FY26, what we now have to do is build the first several levels of the Lark castle, if you like now. I think it is going to be a very exciting year. I do not think that we are going to be anything less than incredibly ambitious. We are going to be a much more aggressive business. We have some genuine targets to become Australia's preeminent whisky business, both in terms of value and volume.

Speaker #1: Be strategic, but build those relationships. And luckily, we have a few of those great relationships around the world from my time sort of running the Four Pillars business.

Speaker #1: So it is a great opportunity for us. So, FY27—if we build the foundations in FY26—what we now have to do is build the first several levels of the Lark Castle, if you like, now.

Speaker #1: I think it's going to be a very exciting year. I don't think that we're going to be anything less than incredibly ambitious. We're going to be a much more aggressive business.

Stu Gregor: I think it is going to be a very exciting year. I do not think that we are going to be anything less than incredibly ambitious. We are going to be a much more aggressive business. We have some genuine targets to become Australia's preeminent whisky business, both in terms of value and volume. It is a big year for us, FY 2027. I just want to thank you all for listening. Thank you, Paul, for participating. Thank you, David, for pulling it all together. Thank you for Kate in my office here for sorting out my inevitable tech issues. We are more than happy to open up for questions.

Speaker #1: We have some genuine targets to become Australia's preeminent whisky business, both in terms of value and volume. It's a big year for us—FY27.

Stu Gregor: It is a big year for us, FY27. I just want to thank you all for listening. Thank you, Paul, for participating. Thank you, David, for pulling it all together. Thank you for Kate in my office here for sorting out my inevitable tech issues. We are more than happy to open up for questions.

Speaker #1: So I just want to thank you all for listening. Thank you, Paul, for participating. Thank you, David, for pulling it all together. Thank you to Kate in my office here for sorting out my inevitable tech issues.

Speaker #1: And we're more than happy to open it up for questions.

Speaker #2: Thank you, Stu. Now, we've got a few questions already, but just a reminder for listeners: if you do want to ask a question, please type it in the Q&A window at the bottom of your screen.

David Allen: Thank you, Stu. We have got a few questions already, but just a reminder for listeners, if you do want to ask a question, just please type it in the Q&A window at the bottom of your screen, when you are ready. The first question. I would add that raising the hand has been disabled, so if you want to ask a question, please just use that Q&A function and we will get to you. If we get multiple questions on the same topic, we may combine them as well. Our first question comes from Lachlan Scott of Moelis. The question is: Given Lark's now entered 10 export markets and a recent first shipment to China, what feedback are you hearing from the distributors and consumers in those markets, especially relating to your new signature range?

Speaker #2: When you're ready—okay, the first question. I would add that raising the hand has been disabled, so if you want to ask a question, please just use the Q&A function and we'll get to you.

Speaker #2: If we get multiple questions on the same topic, we may sort of combine them as well. So our first question comes from Larkman Scott of Mollus.

Speaker #2: And the question is, given Lark's now entered 10 export markets, and a recent first shipment to China, what feedback are you hearing from the distributors and consumers in those markets?

Lachlan Scott: Given Lark's now entered 10 export markets and a recent first shipment to China, what feedback are you hearing from the distributors and consumers in those markets, especially relating to your new signature range?

Speaker #2: Especially relating to your new Signature Range.

Speaker #1: Yeah. The answer is, it's almost too early to tell. As Paul said, I think that the first serious order of Signature Range to China is actually still 10 days away from landing.

Stu Gregor: Yeah. The answer is, it is almost too early to tell. As Paul said, I think that the first serious order of signature range to China is actually still 10 days away from landing. We had some good early success with a product called Kurio, as well as the classic releases. But certainly in Singapore and Malaysia, where we have been with our signature range now for the best part of four or five months, the response has been fantastic. They love the 700ml format. They love the bright colors. They love the packaging, and both for consumption and for gifting. I think measurable feedback has been nothing short of extremely positive, and I think we will go very well in each of those markets. Paul was in China only two or three weeks ago with Alfred. I will be back in Hong Kong, Shenzhen, Singapore, in October, November.

Speaker #1: We had some good early success with a product called Curio, as well as the Classic releases. But certainly in Singapore and Malaysia, where we have been with our Singapore range and our Signature range now for the best part of four or five months, the response has been fantastic.

Speaker #1: They love the 700ml format. They love the bright colors. They love the packaging. And both for consumption and for gifting, I think measurable feedback has been nothing short of extremely positive.

Stu Gregor: They love the 700ml format. They love the bright colors. They love the packaging, and both for consumption and for gifting. I think measurable feedback has been nothing short of extremely positive, and I think we will go very well in each of those markets. Paul was in China only two or three weeks ago with Alfred. I will be back in Hong Kong, Shenzhen, Singapore, in October, November. We are putting a considerable effort there, and the feedback so far has been terrific.

Speaker #1: And I think we will do very well in each of those markets. Paul was in China only two or three weeks ago with Alfred.

Speaker #1: I will be back in Hong Kong, Shenzhen, and Singapore in October and November. We're putting a considerable effort there, and the feedback so far has been terrific.

Stu Gregor: We are putting a considerable effort there, and the feedback so far has been terrific.

Speaker #2: We've got a follow-on question in relation to that, and that is: export sales grew 69% this year, mainly in China. Can you just unpack a little bit about what's driving that momentum and how repeatable you think that might be?

David Allen: We've got a follow-on question in relation to that, and that is: Export sales grew 69% this year, mainly in China. Can you just unpack a little bit about what's driving that momentum and how repeatable you think that might be?

David Allen: We've got a follow-on question in relation to that, and that is:

Lachlan Scott: Export sales grew 69% this year, mainly in China. Can you just unpack a little bit about what's driving that momentum and how repeatable you think that might be?

Speaker #1: I think it's utterly repeatable. In fact, I think it's just very—it's come off a very low base. I think we've actually—we are endeavoring to establish a reasonably unique route to market based primarily in the southern states of China.

Stu Gregor: I think it's utterly repeatable. In fact, I think it's come off a very low base. I think we are endeavoring to establish a reasonably unique route to market, based primarily in the southern states of China. I think we have put an enormous amount of research and effort into doing it because we do understand that if we were just to try to do what everyone else might try to do into China, then we would, in some ways, moderate our potential for great success. We've been doing some great work with a partner with whom we're going to have a distribution agreement very soon. I think we've got a great opportunity because there is an innate love of, and maybe not a full understanding of, but certainly a love of Tasmania and Australia, and there is an amazing consumption and love for whisky.

Speaker #1: I think we have put an enormous amount of research and effort into doing it, because we do understand that if we were just to try to do what everyone else might try to do in China, then we would, in some ways, moderate our potential for great success.

Speaker #1: We've been doing some great work with a partner with whom we're going to have a distribution agreement very soon. I think we've got a great opportunity because there is an innate love of—and maybe not a full understanding of, but certainly a love of—Tasmania and Australia. There is an amazing consumption and love for whisky.

Speaker #1: And there's a burgeoning part of the Chinese community, and you can see it with the Chinese, for instance—the first time ever in Asia's 50 Best Bars, the first time in history, a Chinese bar actually won Asia's 50 Best Bars.

Stu Gregor: There's a burgeoning part of the Chinese community, and you can see it with the Chinese. For instance, the first time ever in Asia's 50 Best Bars, first time in history, a Chinese bar actually won Asia's 50 Best Bars. There's more of a cocktail culture coming, and we know that when there's a cocktail culture coming into a country, they start looking for brands other than just the big hitters. They're looking for this originality and authenticity, and they're looking for something that will differentiate themselves. That's both from a consumer point of view as well as an on-and-off trade point of view. So we think we've got terrific opportunities in the southern parts of China, and we're going to be really investing. We're employing now for commercial and marketing roles to be based in China in preparation for us to have these first significant shipments going.

Speaker #1: There's more of a cocktail culture coming, and we know that when there's a cocktail culture coming into a country, they start looking for brands other than just the big hitters.

Speaker #1: They're looking for this originality and authenticity, and they're looking for something that will differentiate themselves. And that's why, from a consumer point of view, as well as an on- and off-trade point of view...

Stu Gregor: That's both from a consumer point of view as well as an on-and-off trade point of view. So we think we've got terrific opportunities in the southern parts of China, and we're going to be really investing. We're employing now for commercial and marketing roles to be based in China in preparation for us to have these first significant shipments going. A bit too early to tell, but we should know on this call next year, we should have a really good read on it.

Speaker #1: So, we think we've got a terrific opportunity in the southern parts of China, and we're going to be really investing. We're employing now for commercial and marketing roles to be based in China.

Speaker #1: In preparation for us to have these first significant shipments going. So, it's a bit too early to tell, but by this call next year, we should have a really good read on it.

Stu Gregor: A bit too early to tell, but we should know on this call next year, we should have a really good read on it.

Speaker #2: Great, thank you. Next question from Alan Franklin at Canacor. There are a couple of questions; I might just do them one at a time. Could you talk to the process undertaken with the non-cash write-down of your inventory?

David Allen: Great, thank you. The next question from Alan Franklin at Canaccord. There is a couple of questions. I might just do them one at a time. Could you talk to the process undertaken with the non-cash write-down of your inventory? What literage was written down, and what does this suggest for the value or the quality of the whisky bank that you have got left or stands today? That might be for you, Paul.

David Allen: Great, thank you. The next question from Alan Franklin at Canaccord.

Allan Franklin: There is a couple of questions. I might just do them one at a time. Could you talk to the process undertaken with the non-cash write-down of your inventory? What literage was written down, and what does this suggest for the value or the quality of the whisky bank that you have got left or stands today?

Speaker #2: What leverage was written down, and what does this suggest for the value or the quality of the whisky bank that you've got left or stands today?

David Allen: That might be for you, Paul.

Speaker #2: Might be for you, Paul.

Speaker #3: Yeah, thanks, David, and thanks for the question, Alan. So, when we look at the inventory—and we're predominantly talking here about our whisky bank, which is whisky effectively under bond and in barrel, awaiting a home on the consumer's lips.

Paul Bowker: Yeah. Thanks, David, and thanks for the question, Alan. When we look at the inventory, and we are predominantly talking here about our whisky bank, which is whisky effectively under bond and in barrel, awaiting a home on the consumer's lips. Within that whisky bank, we look at it at different tranches. So there is whisky there that we have distilled ourself at our Pontville distillery. There is whisky that we have distilled at former distilleries, and there is whisky that we have bought into the business through prior acquisitions. Now, within those different tranches, we have on the balance sheet that whisky at different prices. As part of, obviously, our audit review, we go through that, we test it, we test the values of the balance sheet, and we see what is appropriate.

Speaker #3: Within that whisky bank, we've got—we look at it in different tranches. So, there's whisky there that we've distilled ourselves at our Pontville distillery.

Speaker #3: There's whisky that we've distilled at former distilleries, and there's whisky that we've bought into the business through prior acquisitions. Now, within that—within those different tranches—we have, on the balance sheet, that whisky at different prices.

Paul Bowker: Now, within those different tranches, we have on the balance sheet that whisky at different prices. As part of, obviously, our audit review, we go through that, we test it, we test the values of the balance sheet, and we see what is appropriate. When we went through it this year, we had a look very closely at what we can actually now produce whisky for and how that compares to other whisky on the balance sheet. Importantly, we also had a look at what our path to market for the whisky is and in a real positive.

Speaker #3: So, as part of our audit review, we go through that. We test it; we test the values of the balance sheet, and we see what's appropriate.

Speaker #3: So, when we went through it this year, we had a look very closely at what we can actually now produce whisky for, and how that compares to other whisky on the balance sheet.

Paul Bowker: When we went through it this year, we had a look very closely at what we can actually now produce whisky for and how that compares to other whisky on the balance sheet. Importantly, we also had a look at what our path to market for the whisky is and in a real positive. Previously, we were focused on the super-premium and luxury, which remains an incredibly important part of the business. But we have now opened up new channels into higher volume whiskies, including the release of DARK LARK at AUD 150 a bottle. What that means is when we draw down from the whisky bank, we are putting it into a slightly lower margin product, but obviously higher volume product. When we pulled all those things together, we did a calculation around the whisky bank and made the decision to adjust the value from AUD 64 million to AUD 49 million.

Speaker #3: Importantly, we also had a look at what our path to market for the whisky is. And, in a real positive, previously, we were focused on the super premium and luxury, which remains an incredibly important part of the business.

Paul Bowker: Previously, we were focused on the super-premium and luxury, which remains an incredibly important part of the business. But we have now opened up new channels into higher volume whiskies, including the release of DARK LARK at AUD 150 a bottle. What that means is when we draw down from the whisky bank, we are putting it into a slightly lower margin product, but obviously higher volume product.

Speaker #3: But we've now opened up new channels into higher volume whiskies, including the release of Dark Lark at $150 a bottle. What that means is when we draw down from the whisky bank, we're putting it into a slightly lower margin product, but obviously a higher volume product.

Speaker #3: And when we've pulled all those things together, we get a calculation around the whisky bank and made the decision to adjust the value from $64 million to $49 million.

Paul Bowker: When we pulled all those things together, we did a calculation around the whisky bank and made the decision to adjust the value from AUD 64 million to AUD 49 million. Now, that does not mean that it changes the amount of literage that we have in our bank or under bond. It is no change to the quality. It just means that we are now able to produce that whisky very efficiently through our own production facility. We also have paths to market that move outside of the super-premium and luxury categories into categories where we hope to drive more volume.

Speaker #3: Now, that doesn't mean that it changes the amount of litreage that we have in our bank or under bond. It's no change to the quality.

Paul Bowker: Now, that does not mean that it changes the amount of literage that we have in our bank or under bond. It is no change to the quality. It just means that we are now able to produce that whisky very efficiently through our own production facility. We also have paths to market that move outside of the super-premium and luxury categories into categories where we hope to drive more volume.

Speaker #3: It just means that we're now able to produce that whisky very efficiently through our owned production facility. We also have paths to market that move outside of the super premium and luxury categories.

Speaker #3: into categories where we hope to drive more volume.

Speaker #2: Great, thank you. Just changing gears a little bit—another one from Alan. With GTR, it's great to see the Changi range. There looks to be four doors.

David Allen: Great. Thank you. Just changing gears a little bit. Another one from Alan. With GTR, it is great to see the Changi range. There looks to be four doors. What prospects for rate of sale does an airport like this hold? How should we think about the margins here versus, say, the rest of the portfolio?

David Allen: Great. Thank you. Just changing gears a little bit. Another one from Alan.

Allan Franklin: With GTR, it is great to see the Changi range. There looks to be four doors. What prospects for rate of sale does an airport like this hold? How should we think about the margins here versus, say, the rest of the portfolio?

Speaker #2: What prospects for rate of sale does an airport like this hold, and how should we think about the margins here versus, say, the rest of the portfolio?

Speaker #3: Yeah, so in GTR—and Changi is incredibly exciting. To launch there in four channels, off the bat, is an amazing outcome. GTR is a high-growth part of the market.

Paul Bowker: Yes. In GTR, Changi is incredibly exciting to launch there in four channels off the bat is an amazing outcome. GTR is a high-growth part of the market. Last year, we grew 43% in GTR. We did AUD 2.2 million in revenue, and that was off a fairly small start, small base, standing start almost. GTR is a lower margin channel. There is margin for the airport, there is margin for the retailer. What it does allow us to do is to move good volume, but also enter new markets with a really low setup cost. For us, GTR is run by one person, Stu Gregor, who seems to be getting a few shout-outs today. He is able to run that GTR operation effectively by himself with the support of on-the-ground activations. It allows us to enter four markets off the bat without an increase in resource.

Speaker #3: Last year, we grew 43% in GTR. We did $2.2 million in revenue, and that was off a fairly small start—a small base. Almost a standing start.

Speaker #3: GTR is a low-margin channel. There's margin for the airport, there's margin for the retailer, but what it does allow us to do is move good volume, and also enter new markets with a really low setup cost.

Speaker #3: For us, GTR is run by one person, Stu Graham, who seems to be getting a few shout-outs today. But he's able to run that GTR operation effectively by himself with the support of on-the-ground activations.

Speaker #3: It allows us to enter four markets off the bat without an increase in resources. It allows us to go into new countries internationally and really form a base for further international distribution.

Paul Bowker: It allows us to enter four markets off the bat without an increase in resource. It allows us to go into new countries internationally and really form a base that further international distributions. Compressed margins, but higher volume, and we have an excellent portfolio of products that are volume and super high margin. Once we blend the volume products in with the higher margin retail exclusive products, we end up having a very sustainable margin.

Paul Bowker: It allows us to go into new countries internationally and really form a base that further international distributions. Compressed margins, but higher volume, and we have an excellent portfolio of products that are volume and super high margin. Once we blend the volume products in with the higher margin retail exclusive products, we end up having a very sustainable margin.

Speaker #3: Compressed margins, but higher volume. We have an excellent portfolio of products that are both volume and super high margin, and once we blend the volume products in with the higher margin, retail-exclusive products, we end up having a very sustainable margin.

Speaker #1: Yeah, and it's important to note that one thing in that GTR channel, and even as recently as this week, we've been having these conversations, is that whilst the margin for the mainstream whiskies that we're making will be low, there's an increasing demand, particularly ex-Australia and in Asia, for what I'm going to call mega-premium products.

Stu Gregor: Yes. It is important to note that one thing in that GTR channel, and even as recently as this week we have been having these conversations, is that whilst the margin for the mainstream whiskies that we are making will be low, there is an increasing demand, particularly ex-Australia and in Asia, for what I am going to call mega premium products. These are whiskies at AUD 5,000 and above. One of the things I think that is most special about Lark is our ability to make volume. We noted that we made a The Whisky Club whisky this year of well over 20,000 bottles that is winning gold medals and Masters awards. We are also making mizunara cask whiskies that are AUD 1,000 a bottle that sell almost exclusively in GTR as well as our direct channels.

Speaker #1: And these are whiskies at $5,000 and above. And one of the things I think that is most special about Lark is our ability to make volume. We noted that we made a whisky club whisky this year of well over 20,000 bottles.

Stu Gregor: We noted that we made a The Whisky Club whisky this year of well over 20,000 bottles that is winning gold medals and Masters awards. We are also making mizunara cask whiskies that are AUD 1,000 a bottle that sell almost exclusively in GTR as well as our direct channels. But we will be making some products for the travel retail channels that will be in the AUD 4,000 to AUD 6,000 a bottle, and there are good margins there for everyone.

Speaker #1: It was a brand that's winning gold medals and Masters Awards. But we were also making Mizunara cask whiskies that are $1,000 a bottle, that fell almost exclusively in GTR, as well as our direct channels.

Speaker #1: But we will be making some products for the travel retail channels that will be in the $4,000 to $6,000 a bottle range. And there are good margins there for everyone.

Stu Gregor: But we will be making some products for the travel retail channels that will be in the AUD 4,000 to AUD 6,000 a bottle, and there are good margins there for everyone.

Speaker #2: Great. Just one final one from Alan Franklin, moving forward. Could you give a little bit more color on FY27 execution and specifically what success would for Dark Lark look like? What would success for Dark Lark look like?

David Allen: Great. Just one final one from Alan Franklin. Moving forward, could you give a little bit more color on FY27 execution? Specifically, what would success for DARK LARK look like? What would success look like for international as well?

David Allen: Great. Just one final one from Alan Franklin.

Allan Franklin: Moving forward, could you give a little bit more color on FY 2027 execution? Specifically, what would success for DARK LARK look like? What would success look like for international as well?

Speaker #2: And what would success look like for international as well?

Speaker #3: Oh, look, I think if we start with Dark Lark, we are—we're having a decent-sized bet on that. And it's requiring the business to—we have to make sure that we can meet our level at the executive and board level of expectation for the product.

Stu Gregor: Oh, look, I think if we start with DARK LARK, we are having a decent-sized bet on that, and it is requiring the business to. We have to make sure that we can meet our level at the executive and board level of expectation for the product. We want to turn that product without giving away too much. I would expect in two or three years that we will be selling somewhere in the vicinity of 15 to 20x of the current volumes of DARK LARK. We have a very aggressive plan for that whisky to become Australia's number one value whisky. So DARK LARK will also be a door opener for us both in travel retail as well as on-premise in Australia. I want everyone in this country and in the region and potentially across the world to realize that DARK LARK is the entry point for them to Australian whisky.

Speaker #3: We want to turn that product around, without giving away too much. I mean, I would expect in two or three years that we will be selling somewhere in the vicinity of 15 to 20 times the current volumes of Dark Lark.

Speaker #3: We have a very, very aggressive plan for that whisky to become Australia’s number one value whisky. And the other—So Dark Lark—will also be a door opener for us both in travel retail as well as on-premise in Australia.

Stu Gregor: We have a very aggressive plan for that whisky to become Australia's number one value whisky. So DARK LARK will also be a door opener for us both in travel retail as well as on-premise in Australia. I want everyone in this country and in the region and potentially across the world to realize that DARK LARK is the entry point for them to Australian whisky. So our ambition for DARK LARK should not be understated. The other question was about our. What was the other question, David?

Speaker #3: I want everyone in this country, and in the region—and potentially across the world—to realize that Dark Lark is the entry point for them to Australian whisky.

Speaker #3: So our ambition for Dark Lark should not be understated. And the other question was about our—what was the other question, Dave?

Stu Gregor: So our ambition for DARK LARK should not be understated. The other question was about our. What was the other question, David?

Speaker #2: It was about, what does your international—what will success look like for international?

David Allen: It was about what does your international. What will be success look like for international.

Speaker #3: Oh, continued significant growth both in the—what we need to do is we need to firm up our foundation in Southeast Asian markets, first of all, before we go exploring into Europe, the Middle East, and the United States.

Stu Gregor: Continued significant growth. What we need to do is we need to firm up our foundation Southeast Asian markets, first of all, before we go exploring into Europe, the Middle East, and the United States. What I want to see is good growth across all of our established 10 markets. I want to see us expanding into some other markets within our region. There are a couple of obvious ones. I want to see us having a presence in airports, in regions where we are selling. Because what one does is, if we're available at the airport, even if we don't get the sale, then people have had enough opportunity for brand recognition that they might buy it if they go into retail within their market. That would be Kuala Lumpur as a good start.

Speaker #3: So what I want to see is good growth across all of our established ten markets. I want to see us expanding into some other markets within our region.

Speaker #3: There are a couple of obvious ones, and I want to see us having a presence in airports in regions where we are selling. Because if we're available at the airport, even if we don't get the sale, then people have had enough opportunity for brand recognition that they might buy it if they go into a retail store within their market.

Stu Gregor: Because what one does is, if we're available at the airport, even if we don't get the sale, then people have had enough opportunity for brand recognition that they might buy it if they go into retail within their market. That would be Kuala Lumpur as a good start. That would certainly be Hong Kong, that would certainly be Shenzhen Airport, that would certainly be Singapore.

Speaker #3: So that would be Kuala Lumpur, for example. That would certainly be Hong Kong. That would certainly be Shenzhen Airport. That would certainly be Singapore.

Stu Gregor: That would certainly be Hong Kong, that would certainly be Shenzhen Airport, that would certainly be Singapore.

Speaker #2: I'm just following on from that. There's another question: apart from Asia, what other international markets are you targeting? And what sort of time frame and likely costs are you looking at to get into those?

David Allen: Just following on from that, there's another question. Apart from Asia, what other international markets are you targeting, and what sort of timeframe and likely costs are you looking at to get into those?

David Allen: Just following on from that, there's another question.

Allan Franklin: Apart from Asia, what other international markets are you targeting, and what sort of timeframe and likely costs are you looking at to get into those?

Speaker #3: I'd say that our focus remains, I mean, hopefully I sort of gave that a good crack a minute ago. But I mean, the focus has to be in this Asia market.

Stu Gregor: I'd say that our focus remains. Hopefully I sort of gave that a good crack a minute ago. The focus has to be in these Asia markets. What we have to do is solidify the markets that we are already in, that we have already opened in. Because remembering that some of these markets we launched into, let's call it Japan, Korea, Thailand, Vietnam, with what we are going to call old classic product rather than the signature product, and only now are they getting the new product. I think we have got to make sure that we emphasize getting a solid foundation in these markets first before we go and look elsewhere. As Paul said, we do have availability in the European markets direct to consumer. We are now getting inbound inquiries from distributors, for instance, in the United Kingdom.

Speaker #3: What we have to do is solidify the markets that we're already in, that we've already opened in. Because, remembering that some of these markets we launched into—let's call it Japan and Korea, Thailand, Vietnam—with what we're going to call old classic product, rather than the signature product, and only now are they getting the new product.

Speaker #3: And I think we've got to make sure that we emphasize getting a solid foundation in these markets first, before we go and look elsewhere.

Speaker #3: As Paul said, we do have availability in the European markets, direct to consumer. We are now getting inbound inquiries from distributors, for instance, in the United Kingdom.

Speaker #3: We are definitely getting inbound inquiries from distributors in the United States. But for those who know how the United States' liquid distribution world is going at the moment, it's complicated.

Stu Gregor: We are definitely getting inbound inquiries from distributors in the United States. But for those who know how the United States liquor distribution world is going at the moment, it is complicated and there is all manner of challenges in the US liquor distribution market at the moment. So that is probably not a priority. Would we like to have a presence in some of the Middle Eastern airports when they get back to full capacity? Absolutely, we would. But we need to be a bit strategic. Some people often ask me, what are the good things and the bad things that I learned around Four Pillars? One of them is you cannot just take a scattergun approach to export markets. I think one of the questions was what is it going to cost? They are expensive markets to manage.

Speaker #3: And there are all manner of challenges in the U.S. liquid distribution market at the moment, so that's probably not a priority. Would we like to have a presence in some of the Middle Eastern airports when they get back to full capacity?

Speaker #3: Absolutely, we would. So but we need to be a bit strategic. If I did some people often ask me, did I learn what are the good things and the bad things that I learned around four pillars?

Speaker #3: One of them is that you can't just take a scattergun approach to export markets. I mean, I think one of the questions was, what's it going to cost?

Speaker #3: They're expensive markets to manage. And as Paul said, one of the reasons we like the GTR is that we can run the GTR business with one or two people almost globally, working out of Sydney.

Stu Gregor: As Paul said, one of the reasons we like the GTR is that we can run the GTR business with one or 2 people almost globally working out of Sydney. Whereas if we are going to appoint distributors in far-flung nations, that is an expensive market to service. So we have to be strategic, whilst keeping an open mind for opportunities. For instance, Canada fell in our lap recently because they no longer like drinking American whiskey. So there is a small opportunity there. It might be a one-off, but it is definitely worth us exploring.

Speaker #3: Whereas, if we're going to appoint distributors in far-flung nations, that is an expensive market to service. So we have to be strategic, whilst keeping an open mind for opportunistic opportunities. For instance, Canada fell in our lap recently because they no longer like drinking American whisky.

Speaker #3: So, there is a small opportunity there. It might be a one-off, but it's definitely worth us exploring.

Speaker #2: I've got another financial question here from Mick McGargle at Barrenjoey. Can you talk—and this is probably for you, Paul—can you talk about your gross margins and the dip in FY26?

David Allen: Got another financial question here from Nick McGarrigle at Barrenjoey. This is probably for you, Paul. Can you talk about your gross margins and the dip in FY26? How should that track over time, and did this get impacted by the inventory write-down?

David Allen: Got another financial question here from Nick McGarrigle at Barrenjoey. This is probably for you, Paul.

Nick McGarrigle: Can you talk about your gross margins and the dip in FY 2026? How should that track over time, and did this get impacted by the inventory write-down?

Speaker #2: How should that track over time? And did this get impacted by the inventory write-down?

Speaker #3: Yeah, thanks, Mick. So I guess, to look at a comparison around gross margin, we probably need to look at where the business came from.

Paul Bowker: Yeah. Thanks, Nick. To look at a comparison around gross margin, we probably need to look at where the business came from. As we have touched on historically, it had a fairly narrow path to market and very high-priced product. So we naturally have run high gross margins because we capture this very small top of the mountain-type portion of the market. As we have now moved into the growth phase of the business, we have expanded our channels and also our product mix. If we take both of those in turn, our channel mix is now, rather than skewing very heavily to our own high-margin channels, we are now pushing particularly into other channels like GTR. Those are going to deliver us a big increase in volume, but also at a lower gross margin.

Speaker #3: And as we've touched on, historically it had a fairly narrow path to market and was a very high-priced product. So we have naturally run high gross margins because we capture this very small, top-of-the-mountain-type portion of the market.

Speaker #3: As we've now moved into the growth phase of the business, we've expanded our channels and also our product mix. So, if we take both of those in turn, our channel mix is now—rather than skewing very, very heavily to our own high-margin channels—we're now pushing particularly into other channels like GTR. Those are going to deliver us a big increase in volume, but also at a lower gross margin.

Speaker #3: If we then also look at our product mix, again, we're now entering new markets where we're required to, or where the biggest opportunities are, ensuring that we've got more accessible products. And if we look at a product like Dark Lark, we expect that to deliver significant incremental dollar margin.

Paul Bowker: If we then also look at our product mix, again, we are now entering new markets where we are required to, or where the biggest opportunities are ensuring that we have got more accessible products. If we look at a product like DARK LARK, we expect that to deliver significant incremental dollar margin, but the percentage margin will be lower. So those historic margins of mid-60s, even 70%, that the business has experienced in the past, came down to 60% in FY26. We would expect to tickle lower as we continue to expand our channel mix and also our product mix.

Paul Bowker: If we then also look at our product mix, again, we are now entering new markets where we are required to, or where the biggest opportunities are ensuring that we have got more accessible products. If we look at a product like DARK LARK, we expect that to deliver significant incremental dollar margin, but the percentage margin will be lower. So those historic margins of mid-60s, even 70%, that the business has experienced in the past, came down to 60% in FY 2026. We would expect to tickle lower as we continue to expand our channel mix and also our product mix.

Speaker #3: But the percentage margin will be lower, so those historic margins of mid-60s, even 70%, that the business has experienced in the past, came down to 60% in FY26.

Speaker #3: And we’d expect it to tick lower as we continue to expand our channel mix and also our product mix.

Speaker #2: Thank you. We have another question here, and it says, there's a long-term shareholder and a loyal customer who has visited your Tasmanian sites. I'd like to hope that we could be rewarded with a 15% to 20% retail discount with online purchase.

David Allen: Thank you. We have another question here, and it says, "As a long-term shareholder and a loyal customer, having visited your Tasmanian site, I would like to hope that we could be rewarded with a 15% to 20% retail discount with online purchase." Is that something that you would consider?

David Allen: Thank you. We have another question here, and it says,

Nick McGarrigle: "As a long-term shareholder and a loyal customer, having visited your Tasmanian site, I would like to hope that we could be rewarded with a 15% to 20% retail discount with online purchase." Is that something that you would consider?

Speaker #2: Is that something that you would consider?

Speaker #3: Well, it sounds like a Dorothy Dixer to me. I'm not sure if it's 15% or 20%, but we are letting shareholders know today that we have just created a loyalty club, the Lark Club.

Stu Gregor: Well. Sounds like a Dorothy Dixter for me. I am not sure it is 15% or 20%, but we are letting shareholders know today that we have just created a loyalty club called The LARK Club. It is a fantastic initiative. We are looking at more like a 10%, so apologies, 10% discount for shareholders across some of our limited release and signature ranges. Every shareholder today will get some communication, I believe, around the tier of membership that they are going to get. So each Lark shareholder will become a member of our loyalty club, and they will get benefits of VIP visits, private tastings, special discounts if they come to our homes, and an online discount of around 10%. So apologies, I did not quite hit your 15% to 20%, but as the previous question said, we need to retain our margins, right? We need to maintain some margin.

Speaker #3: It is a fantastic initiative. We're looking at more like a 10%, so apologies—10% discount for shareholders across some of our limited release and signature ranges.

Speaker #3: And every shareholder today will get some communication, I believe, around the tier of membership that they're going to get. So each Lark shareholder will become a member of our loyalty club.

Stu Gregor: So each Lark shareholder will become a member of our loyalty club, and they will get benefits of VIP visits, private tastings, special discounts if they come to our homes, and an online discount of around 10%. So apologies, I did not quite hit your 15% to 20%, but as the previous question said, we need to retain our margins, right? We need to maintain some margin.

Speaker #3: And they will get the benefits of VIP visits, private tastings, special discounts if they come to our homes, and an online discount of around 10%.

Speaker #3: So, apologies—I didn't quite hit your 15% to 20%. But as the previous question stated, we need to retain our margins, right? We need to maintain some margin.

Speaker #2: Thank you.

David Allen: Thank you.

Speaker #3: And as a shareholder, I know you understand that.

Stu Gregor: As a shareholder, I know you understand that.

Speaker #2: Thank you. This is a forward-looking question. All the projections appear to indicate that Lark could be profitable at the bottom line in a couple of years.

David Allen: Thank you. This is a future-looking question. All the projections look to be saying that Lark could be profitable in a couple of years at the bottom line. Is it intended to issue dividends when that is possible? What proportion of profit might you be allocating to dividends at that time?

David Allen: Thank you. This is a future-looking question.

Nick McGarrigle: All the projections look to be saying that Lark could be profitable in a couple of years at the bottom line. Is it intended to issue dividends when that is possible? What proportion of profit might you be allocating to dividends at that time?

Speaker #2: So, is it intended to issue dividends when that's possible? And what proportion of profit might you be allocating to dividends at that time?

Speaker #3: Yes, I'll answer that question in two parts. I guess, as we touched on from a capital perspective, the business has a very, very strong balance sheet.

Paul Bowker: Yes, I will answer that question in two parts. I guess, as we touched on from a capital perspective, the business has a very strong balance sheet. We have already pre-invested in our Pontville distillery, which you can see behind me. We have AUD 50 million worth of whisky. We do not have any significant need for any funds to be deployed into capital projects. That has effectively been pre-solved. The other side is our operating expenditure, and obviously, we run that harder than our income at the moment, which is why we have negative EBITDA. Our plan and our forecasts are certainly for FY27 and beyond to continue to run sales and marketing hard. We are seeing good growth already from that investment. The signature range has only just been relaunched, and we are not taking the foot off the pedal at the moment. We would expect to continue to invest in that.

Speaker #3: We've already pre-invested in our Pompville brewery, which you can see behind me. We've got $50 million worth of whisky. We don't have any significant need for any funds to be deployed into capital projects.

Speaker #3: That's effectively been pre-solved. The other side is our operating expenditure. And obviously, we run that harder than our income at the moment, which is why we've got negative EBITDA.

Speaker #3: Our plan and our forecast are certainly for FY27 and beyond to continue to run sales and marketing hard. We're already seeing good growth from that investment.

Paul Bowker: Our plan and our forecasts are certainly for FY 2027 and beyond to continue to run sales and marketing hard. We are seeing good growth already from that investment. The signature range has only just been relaunched, and we are not taking the foot off the pedal at the moment. We would expect to continue to invest in that. In terms of dividends, that is something we assess on a regular basis through the board. At some point, when we believe we have hit the optimum in pre-investment or ahead-of-the-curve investment into our sales results, then we will consider whether or not the earnings of the business justify handing or declaring a dividend.

Speaker #3: The Signature range has only just been relaunched, and we're not taking our foot off the pedal at the moment. So we would expect to continue to invest in that.

Speaker #3: In terms of dividends, that's something we assess on a regular basis through the Board. At some point, when we believe we've hit the optimum pre-investment, or ahead-of-the-curve investment into our sales results, then we'll consider whether or not the earnings of the business justify handing out or declaring a dividend.

Paul Bowker: In terms of dividends, that is something we assess on a regular basis through the board. At some point, when we believe we have hit the optimum in pre-investment or ahead-of-the-curve investment into our sales results, then we will consider whether or not the earnings of the business justify handing or declaring a dividend.

Speaker #2: Yeah, another forward-looking question here. Is Lark receptive or interested in potentially being acquired by a bigger player in the industry if the right deal were to be presented to you?

David Allen: Yeah. Another forward-looking question here. Is Lark receptive or interested in potentially being acquired by a bigger player in the industry if the right deal was to be presented to you?

David Allen: Yeah. Another forward-looking question here.

Nick McGarrigle: Is Lark receptive or interested in potentially being acquired by a bigger player in the industry if the right deal was to be presented to you?

Speaker #3: We would say, in all honesty, that the appetite for the larger players globally to invest in businesses like ours might be somewhat limited at the moment, given the macro situation of some of our larger competitors.

Stu Gregor: We would say, in all honesty, that the appetite for the larger players globally for investing in businesses like ours might be limited somewhat at the moment, given the macro situation of some of our larger competitors. That said, there is some activity going on in Europe at the moment where we think one of the big companies is going to acquire a mid-tier white spirit distillery. Look, it is not something that we can afford to focus on for the time being, right? To Paul Bowker's point before, we need to work this business on a pathway to profitability. We need to work our assets hard. We need to create much greater consumer demand. And sure, if there is a knock on the door somewhere down the track, then we will obviously have a conversation.

Speaker #3: That said, there is some activity going on in Europe at the moment where we think one of the big companies is going to acquire a mid-tier white spirit distillery.

Speaker #3: Look, it's not something that we need to—or that we can afford to—focus on for the time being, right? We need to pause. Point before.

Speaker #3: We need to get this business on a pathway to profitability. We need to work our assets hard. We need to create much greater consumer demand.

Speaker #3: And sure, if there's a knock on the door somewhere down the track, then we will obviously have a conversation. But we need to look after our own affairs.

Paul Bowker: We need to look after our own affairs, and we need to make ourselves the most attractive potential proposition as we can. Then, those of us who have been in the industry long enough understand that we are in a particular part of the cycle at the moment, where acquisitions are probably not front of mind for most of the international players. But they will come back, and Australia will become of interest to the international players. We need to make sure that if Australia is of interest to international players, that Lark is the forefront of that interest.

Stu Gregor: We need to look after our own affairs, and we need to make ourselves the most attractive potential proposition as we can. Then, those of us who have been in the industry long enough understand that we are in a particular part of the cycle at the moment, where acquisitions are probably not front of mind for most of the international players. But they will come back, and Australia will become of interest to the international players. We need to make sure that if Australia is of interest to international players, that Lark is the forefront of that interest.

Speaker #3: And we need to make ourselves the most attractive potential proposition as we can. And then if the the cycles we all know those of us who've been in the industry long enough understand that the cycles are we're in a particular part of the cycle at the moment where acquisitions are probably the international players.

Speaker #3: But they will come back. And Australia will become of interest to the international players, and we need to make sure that if Australia is of interest to international players, then Lark is at the forefront of that interest.

Speaker #2: Great. Just to follow up here from Nick McGregor at Baron Joey. With the recent whisky club release sales, can you just comment on that and how you see that as being repeatable in FY27?

David Allen: Great. Just a follow-up here from Nick McGarrigle at Barrenjoey. With the recent The Whisky Club release sales, can you just comment on that and how you see that as being repeatable in FY27?

David Allen: Great. Just a follow-up here from Nick McGarrigle at Barrenjoey.

Nick McGarrigle: With the recent The Whisky Club release sales, can you just comment on that and how you see that as being repeatable in FY 2027?

Speaker #3: Well, unfortunately, Nick, it's not repeatable in FY27 because they have a very strict cycle of how often they will partner with a particular distillery.

Stu Gregor: Well, unfortunately, Nick, it is not repeatable in FY27 because they have a very strict cycle of how often they will partner with a particular distillery. Our next The Whisky Club is April 2028, I think is our next one. So it is not repeatable next year. The Whisky Club, which is based in Tasmania, is a phenomenal business, and we love partnering with them. The fact of the matter is that the LARK Club edition, which was the July Whisky of the Month, is in the three most successful whiskies that The Whisky Club has ever produced and sold. In fact, there were 2,500 people who missed out on getting their allocated bottle. So we love partnering with The Whisky Club, but there will not be a The Whisky Club order in the next financial year, but there will be one in the subsequent financial year.

Stu Gregor: Well, unfortunately, Nick, it is not repeatable in FY 2027 because they have a very strict cycle of how often they will partner with a particular distillery. Our next The Whisky Club is April 2028, I think is our next one. So it is not repeatable next year. The Whisky Club, which is based in Tasmania, is a phenomenal business, and we love partnering with them. The fact of the matter is that the LARK Club edition, which was the July Whisky of the Month, is in the three most successful whiskies that The Whisky Club has ever produced and sold.

Speaker #3: And our next whisky club is April 2028, I think, is our next one. So it's not repeatable next year. I mean, the Whisky Club, which is based in Tasmania, is a phenomenal business.

Speaker #3: And we love partnering with them. And the fact of the matter is that the Lark Whisky Club edition, which was the July Whisky of the Month, is in the three most successful whiskies that the Whisky Club has ever produced and sold.

Speaker #3: And in fact, there were two and a half thousand people who missed out on getting their allocated bottles. So we love partnering with The Whisky Club.

Stu Gregor: In fact, there were 2,500 people who missed out on getting their allocated bottle. So we love partnering with The Whisky Club, but there will not be a The Whisky Club order in the next financial year, but there will be one in the subsequent financial year. Hopefully by that time, it might even be a big uplift on the one we did this July.

Speaker #3: But there will not be a Whisky Club order in the next financial year, but there will be one in the subsequent financial year. And hopefully, by that time, it might even be a — it might even be a big uplift on the one we did this July.

Stu Gregor: Hopefully by that time, it might even be a big uplift on the one we did this July.

Speaker #2: Okay. Steve, no further questions, so I'll hand you back for any final closing remarks.

David Allen: Okay. Stu, there are no further questions, so hand you back for any final closing remarks.

Speaker #3: I just want to thank the shareholders. I want to thank everyone. I want to thank the shareholders, the analysts, and anyone who's paying attention to this webinar.

Stu Gregor: I just want to thank the shareholders, the analysts, anyone who is paying attention to this webinar. I want to thank the internal team at Lark. They have done a really terrific job. It has been a year of transition, right? We talk about foundational growth, but it has been a year of transition. I want to thank Sash and Iain, our former CEO and CFO, for the commitment and hard work they did. Both of them finished up in the financial year of FY26, and both of them did a phenomenal job on building the foundations that we are now growing upon at Lark. So thank you to Iain and thank you to Sash. Thank you to Paul and our executive team. I think there is great opportunity for Lark.

Stu Gregor: I just want to thank the shareholders, the analysts, anyone who is paying attention to this webinar. I want to thank the internal team at Lark. They have done a really terrific job. It has been a year of transition, right? We talk about foundational growth, but it has been a year of transition. I want to thank Sash and Iain, our former CEO and CFO, for the commitment and hard work they did. Both of them finished up in the financial year of FY 2026, and both of them did a phenomenal job on building the foundations that we are now growing upon at Lark. So thank you to Iain and thank you to Sash. Thank you to Paul and our executive team. I think there is great opportunity for Lark.

Speaker #3: I want to thank the internal team at Lark. They've done a really terrific job. It has been a year of transition, right? We talk about foundational growth, but it has been a year of transition.

Speaker #3: We had—I want to thank Sash and Ian, our former CEO and CFO, for the commitment and hard work they did. Both of them finished up in the financial year of FY26.

Speaker #3: And both of them did a phenomenal job on building the foundations that we're now growing upon at Lark. So thank you to Ian, and thank you to Sash.

Speaker #3: Thank you to Paul and to our executive team. I think there's great opportunity for Lark. I think the key for us is that the market, the industry more broadly, and consumers understand that Lark is uniquely positioned.

Stu Gregor: I think the key for us is that the market and the industry more broadly and the consumers understand that Lark is uniquely positioned. We are Australia's original single malt whisky distillery. We are Australia's great single malt whisky distillery. I think if we can continue to delight our customers, delight anyone who visits Tasmania, and make the best whiskies in the world, we will be very well-positioned at this time next year and the subsequent years to be known as one of the world's great drinks businesses. That is the only aspiration we can really live for. So thank you for everyone for their ongoing support, and I hope we have a terrific FY27.

Speaker #3: We are Australia's original single malt whisky distillery. We are Australia's great single malt whisky distillery. I think if we can continue to delight our customers, delight anyone who visits Tasmania, and make the best whiskies in the world, we'll be very, very well positioned at this time next year.

Speaker #3: And the subsequent years to be known as one of the world's great drinks businesses, because that's the only— that's the only aspiration we can really, really live for.

Speaker #3: So, thank you to everyone for their ongoing support. And I hope we have a terrific FY27.

Speaker #2: Thank you, everybody. That does conclude the call today. We will be putting this up on the website. We appreciate your participation, and you can now disconnect.

David Allen: Thank you, everybody. That does conclude the call today. We will be putting this up onto the website. We appreciate your participation, and you can now disconnect. Thanks very much.

Speaker #2: Thanks very much.

Speaker #3: Thank you all.

Stu Gregor: Thank you all.

Speaker #1: The recording has stopped.

Operator: The recording has stopped.

Speaker #5: Good job.

David Allen: Good job.

Operator: Goodbye

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Full Year 2026 Lark Distilling Co Ltd Earnings Call

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