Full Year 2026 Gale Pacific Ltd Earnings Call

August 26, 2026

Speaker #1: Pacific CEO, Troy Mortleman, and CFO, Dexter Clarke. There will be a Q&A session at the conclusion of this presentation, with Troy and Dexter. If you would like to submit a question, please use the Q&A function within Teams; questions may be submitted at any time throughout the briefing, and we'll be addressed during the Q&A session.

Speaker #1: It's my pleasure to hand over to Gale Pacific's Chief Executive Officer, Troy Mortleman.

Speaker #2: Well, good morning, and thank you for joining us today at our 4-year results briefing for FY26. My name's Troy Mortleman, CEO of Gale Pacific, and joining me today is our Chief Financial Officer, Dexter Clarke.

Speaker #2: This morning I'll take you through our FY26 result, discuss the performance of the group and our operating regions, outline the actions we've taken during the year to strengthen the business, and explain how those actions are supporting our priorities as we move into FY27.

Speaker #2: I'll also share our outlook and the areas where we remain focused on improving performance with a view toward restoring sustainable profitability. Following the presentation, Dexter and I will be happy to take your questions.

Speaker #2: So let's now begin with a quick overview of who we are at Gale Pacific. This year marks 75 years since Gale Pacific was founded in Melbourne.

Speaker #2: Today we're a global manufacturer and marketer of technical fabrics and shade solutions serving consumer, commercial, industrial, and agricultural markets. What differentiates us is the combination of strong brands, technical expertise, vertically integrated manufacturing, and long-standing customer relationships.

Speaker #2: Our products are sold through leading retailers globally, while our commercial fabrics are specified across critical applications, including architectural shade, horticulture, and water containment. Supporting these market positions is a global operating footprint spanning Australia, Asia, North America, Europe, and the Middle East.

Speaker #2: We employ more than 400 people, serve customers in over 40 countries, and operate manufacturing, distribution, and commercial facilities across key markets. This footprint provides close control over quality, inventory, and customer service, while giving us the flexibility to respond to changing market conditions.

Speaker #2: As the pioneer of high-density polyethylene shade fabric and global market leader in that category, we have established positions across many of the world's largest shade markets.

Speaker #2: During FY26, we refined and embedded a clearer strategic direction across the organization. Our purpose is to enrich lives through shade, while our vision is to make shade as fundamental to outdoor life as sunlight.

Speaker #2: Our strategy is built around three pillars: culture, innovation, and growth. Together, these pillars guide how we allocate resources, innovate, and pursue growth opportunities. We measure success in three ways: margin expansion, EBITDA growth, and cash generation.

Speaker #2: The execution of this strategy is well underway, and it guides our actions across the business. So moving now on to our results from FY26.

Speaker #2: FY26 was a year of meaningful change. While profitability remained below our expectations, we materially strengthened the business through improved margins, stronger cash generation, lower inventory, a leaner operating model, and a return to positive net cash position.

Speaker #2: Revenue for the year was $155.5 million, down 9.6% on FY25, and I'll discuss the factors influencing this decline as I step through each of those regions.

Speaker #2: What I would highlight at a group level, though, is the improvement in earnings quality, despite lower revenue, EBITDA increased 2.5% to 12.3 million. And EBITDA margin expanded to 7.9%.

Speaker #2: This reflects a more favorable product and customer mix, improved cost discipline, and the benefits of actions taken throughout the year to simplify and strengthen the business.

Speaker #2: Net loss after tax improved by 2.3 million, to 2.9 million. Despite absorbing costs associated with the operating model reset, and a $3 million foreign exchange expense that was largely non-cash in nature.

Speaker #2: Cash generation, though, was the standout feature of the year. Operating cash flow increased from $0.1 million to $21.4 million, driven by disciplined working capital management and a material reduction in inventory.

Speaker #2: As a result, the group finished FY26 with net cash of $4.9 million, compared with net debt of $8.9 million a year earlier. This 13.8 million improvement in our balance sheet provides a much stronger financial position from which to execute our strategy and pursue both current and future growth opportunities.

Speaker #2: This result demonstrates that while there is still work to do ahead to restore profitability, the business exited FY26 in a materially better financial position than it entered.

Speaker #2: Now, what sits behind the FY26 result are a series of deliberate actions taken throughout the year to improve operating performance and cash generation. The first was the simplification of our Americas operating model.

Speaker #2: During the year we reduced organizational complexity, streamlined management and administrative layers, and refocused the business on its core sales, marketing, and distribution activities. These changes delivered $3.1 million in cash savings during FY26 and established a leaner operating structure moving forward.

Speaker #2: Across the broader group, we maintained a disciplined approach to cost management. Overall group operating expenses reduced by $7.2 million, as we removed duplication, improved efficiency, and aligned our cost base more closely with current market conditions.

Speaker #2: Importantly, this reduction was achieved without materially impacting our core customer-facing or revenue-generating capabilities. The third initiative was our focus on working capital. Throughout the year, we placed a strong emphasis on converting earnings into cash through tighter inventory management and improved working capital efficiency.

Speaker #2: This reduced inventory by 8.6 million. And was a key factor in strengthening the balance sheet and improving cash conversion. These actions were undertaken against a challenging operating backdrop.

Speaker #2: Consumer demand in the United States remains subdued, the conflict in the Middle East disrupted trading conditions, and grain storage fabric volumes moderated from the exceptional levels achieved in FY25.

Speaker #2: Despite these conditions, we remained focused on the factors within our control, and acted decisively on cost, organizational complexity, and working capital. So let's now look at our results by region, and firstly to the Americas.

Speaker #2: Revenue for the year was $64.3 million, down 15%, while EBITDA declined 11% to $13.1 million. Despite the lower revenue outcome, EBITDA margin improved to 20.4%, reflecting the benefits of the actions taken throughout the year to simplify the operating model.

Speaker #2: Trading conditions remained challenging throughout the year, as softer consumer demand impacted the broader outdoor living category. During the year, we deliberately adopted a more disciplined approach to retailer inventory fulfillment than in the prior year.

Speaker #2: And as a result, many customers worked through excess inventory carried into the season, reducing replenishment orders throughout the peak trading period. Now, while this impacted revenue, it did improve cash generation and supported customer positioning.

Speaker #2: Encouragingly, though, our commercial business remained resilient despite the softer market backdrop. As we exited the year, we added business development capability in key US markets to help accelerate growth in our existing architectural shade business, while also supporting expansion into commercial segments where we have already established strong positions in Australia.

Speaker #2: We also continued executing against our growth priorities, securing new supplier agreements with Minards, Do It Best, and Orgle. Together, these partnerships significantly expand our market reach.

Speaker #2: Providing access to thousands of additional retail locations across North America. Our own e-commerce platform also gained momentum during the year, with sales nearly doubling from a developing base, while providing an additional channel to engage directly with consumers.

Speaker #2: Now, while consumer demand remains challenging, we've used this period to materially improve the Americas business. With a leaner cost base, healthier customer inventory positions, expanded sales capability, and new customer partnerships now in place, the region is better positioned to deliver improved performance through the continued execution of our growth strategy.

Speaker #2: Turning now to Australia and New Zealand, our home market and the region where many of the capabilities and category positions were now leveraging internationally were first established.

Speaker #2: Revenue for the year was $76.4 million, down 4%, while EBITDA increased to $22% to $11.5 million. EBITDA margin expanded from $11.8 to $15.1%, delivering one of the strongest earnings performances across the group.

Speaker #2: This outcome reflects improved margin management, disciplined cost control, and the strength of our positions across both retail and commercial channels. And while revenue was modestly lower than the prior year, it is important to note that FY25 benefited from exceptionally strong grain storage fabric volumes.

Speaker #2: However, demand remained well above long-term averages during FY26, supported by our long-standing relationship with Graincore and the leading position we've established in that category.

Speaker #2: Our retail business also continued to perform well. Core shade categories delivered growth, and we completed a successful trial of new Gazebo products with bunnings late in the summer season, creating the opportunity for further category expansion during FY27.

Speaker #2: Encouragingly, our commercial business continued to build momentum. Architectural shade and water containment segments delivered growth during the year, supporting our decision to invest in additional business development capability as we look to expand customer acquisition.

Speaker #2: We also progressed several growth initiatives during the year. This included renewing our long-term paper coating agreement with Vizzy, and progressing the rollout of our SolarWeave horticulture hothouse fabric, which is designed to support entry into the large-scale commercial grower market.

Speaker #2: Overall, the ANZ region delivered a strong earnings outcome despite lower revenue. While it is our most mature market, further growth remains through category expansion, commercial segment development, and deeper customer penetration.

Speaker #2: And this region also provides us with a proven model for scaling capabilities, categories, and customer partnerships in much larger markets. So looking now to our developing markets region.

Speaker #2: Revenue for the year was $14.8 million, down 12%, while EBITDA declined 41% to $4.1 million. While the financial outcome was below the prior year, it is important to recognize the significant disruption experienced across the Middle East during the second half of FY26.

Speaker #2: Prior to the escalation of the conflict, the Middle East business was performing strongly. Delivering revenue growth of 7% during the first half. However, customer activity was materially impacted as conditions deteriorated throughout February and March.

Speaker #2: Pleasingly, demand progressively recovered from April onwards, with revenue returning to prior year levels during the fourth quarter. Throughout this period, our first priority was the safety of our employees and their families.

Speaker #2: Importantly, our established presence in Dubai, including local inventory and experienced commercial teams on the ground, provided a significant competitive advantage. While many competitors were impacted by imported supply disruptions, we remained well positioned to continue servicing customers, responding quickly as conditions improved and capturing new opportunities as demand returned.

Speaker #2: Disciplined credit and collections management was also maintained throughout the disruption. Helping preserve cash, manage receivables, and minimize the financial risk across the region. Outside the Middle East, Europe delivered growth through a really strong seasonal demand.

Speaker #2: While momentum continued to build across Asia. During the year, we also strengthened our business development capability in India, which has helped drive the rollout of SolarWeave horticulture fabric trials with local customers.

Speaker #2: These trials leverage capabilities developed in Australia and support expansion into new commercial market segments. So while the Middle East conflict weighed on the FY26 result, we remain encouraged by the opportunities right across our developing markets.

Speaker #2: Customer relationships remain strong, activity improved as conditions stabilized, and our investments in local capability and market development continue to create new avenues for growth across both existing and emerging markets.

Speaker #2: Across our operations, the focus during FY26 was improving efficiency, increasing flexibility, and reducing supply chain risk. In China, we've progressed a number of initiatives aimed at improving productivity and reducing complexity, including warehouse consolidation and manufacturing optimization projects.

[Company Representative] (Gale Pacific): The horticulture fabric trials with local customers. These trials leverage capabilities developed in Australia and support expansion into new commercial market segments. While the Middle East conflict weighed on the FY26 result, we remain encouraged by the opportunities right across our developing markets. Customer relationships remain strong. Activity improved as conditions stabilized. Our investments in local capability and market development continue to create new avenues for growth across both existing and emerging markets. Across our operations, the focus during FY26 was improving efficiency, increasing flexibility, and reducing supply chain risk. In China, we progressed a number of initiatives aimed at improving productivity and reducing complexity, including warehouse consolidation and manufacturing optimization projects. We also continued our work to standardize warehousing and logistics processes right across the group. This is an important step to both strengthening inventory management and creating greater consistency right across our global operations.

Mark Nicholls: The horticulture fabric trials with local customers. These trials leverage capabilities developed in Australia and support expansion into new commercial market segments. While the Middle East conflict weighed on the FY2026 result, we remain encouraged by the opportunities right across our developing markets. Customer relationships remain strong. Activity improved as conditions stabilized. Our investments in local capability and market development continue to create new avenues for growth across both existing and emerging markets. Across our operations, the focus during FY2026 was improving efficiency, increasing flexibility, and reducing supply chain risk. In China, we progressed a number of initiatives aimed at improving productivity and reducing complexity, including warehouse consolidation and manufacturing optimization projects. We also continued our work to standardize warehousing and logistics processes right across the group. This is an important step to both strengthening inventory management and creating greater consistency right across our global operations.

Speaker #1: Horticulture fabric trials with local customers—these trials leverage capabilities developed in Australia and support expansion into new commercial market segments. So, while the Middle East conflict weighed on the FY26 result, we remain encouraged by the opportunities right across our developing markets.

Speaker #2: We also continued our work to standardize warehousing and logistics processes right across the group. This is an important step to both strengthening inventory management and creating greater consistency right across our global operations.

Speaker #1: Customer relationships remain strong, activity improved as conditions stabilized, and our investments in local capability and market development continue to create new avenues for growth across both existing and emerging markets.

Speaker #2: A key strategic priority during the year was manufacturing diversification. We successfully completed fabric trials in Thailand for roller shade products, which represent our largest export category into the United States.

Speaker #1: Across our operations, the focus during FY26 was improving efficiency, increasing flexibility, and reducing supply chain risk. In China, we've progressed a number of initiatives aimed at improving productivity and reducing complexity, including warehouse consolidation and manufacturing optimization projects.

Speaker #2: And progressed planning for low-volume commercial production during FY27. This is also an important milestone as we continue building additional manufacturing flexibility, strengthening supply chain resilience, and reducing concentration risk within our production footprint.

Speaker #1: We also continue our work to standardize warehousing and logistics processes right across the Group. This is an important step toward both strengthening inventory management and creating greater consistency across our global operations.

Speaker #2: So as we move through FY27, our priorities are well defined. During FY26, we materially improved cash generation, strengthened the balance sheet, and established a leaner operating model.

Speaker #2: With these foundations now in place, our focus in FY27 shifts firmly to executing the market expansion, customer acquisition, and demand generation priorities embedded within our strategy.

Speaker #1: A key strategic priority during the year was manufacturing diversification. We successfully completed fabric trials in Thailand for roller-shaped products, which represent our largest export category into the United States, and progressed planning for low-volume commercial production during FY27.

[Company Representative] (Gale Pacific): A key strategic priority during the year was manufacturing diversification. We successfully completed fabric trials in Thailand for roller shade products, which represent our largest export category into the United States, and progressed planning for low-volume commercial production during FY27. This is also an important milestone as we continue building additional manufacturing flexibility, strengthening supply chain resilience, and reducing concentration risk within our production footprint. As we move through FY27, our priorities are well-defined. During FY26, we materially improved cash generation, strengthened the balance sheet, and established a leaner operating model. With these foundations now in place, our focus in FY27 shifts firmly to executing the market expansion, customer acquisition, and demand generation priorities embedded within our strategy. Our first priority is to accelerate commercial segment growth.

Mark Nicholls: A key strategic priority during the year was manufacturing diversification. We successfully completed fabric trials in Thailand for roller shade products, which represent our largest export category into the United States, and progressed planning for low-volume commercial production during FY2027. This is also an important milestone as we continue building additional manufacturing flexibility, strengthening supply chain resilience, and reducing concentration risk within our production footprint. As we move through FY2027, our priorities are well-defined. During FY2026, we materially improved cash generation, strengthened the balance sheet, and established a leaner operating model. With these foundations now in place, our focus in FY2027 shifts firmly to executing the market expansion, customer acquisition, and demand generation priorities embedded within our strategy. Our first priority is to accelerate commercial segment growth.

Speaker #2: Our first priority is to accelerate commercial segment growth. We've expanded business development capability across all regions and are increasing customer acquisition activity across priority segments where our technical expertise, product performance, and established market positions provide a clear advantage.

Speaker #1: This is also an important milestone as we continue building additional manufacturing flexibility, strengthening supply chain resilience, and reducing concentration risk within our production footprint.

Speaker #1: So as we move through FY27, our priorities are well-defined. During FY26, we materially improved cash generation, strengthened the balance sheet, and established a leaner operating model.

Speaker #2: Second, we're focused on scaling our US consumer business by replicating the category breadth and depth we've successfully developed with Bunnings. We already have established retail partnerships across the footprint approximately 10 times larger than Australia.

Speaker #1: With these foundations now in place, our focus in FY27 shifts firmly to executing the market expansion, customer acquisition, and demand generation priorities embedded within our strategy.

Speaker #2: Providing a significant opportunity to expand category participation and increase customer value over time. Third, we're scaling demand generation across every region and across both our consumer and commercial channels.

Speaker #1: Our first priority is to accelerate commercial segment growth. We've expanded business development capability across all regions and are increasing customer acquisition activity across priority segments, where our technical expertise, product performance, and established market positions provide a clear advantage.

[Company Representative] (Gale Pacific): We have expanded business development capability across all regions and are increasing customer acquisition activity across priority segments where our technical expertise, product performance, and established market positions provide a clear advantage. Second, we are focused on scaling our US consumer business by replicating the category breadth and depth we have successfully developed with Bunnings. We already have established retail partnerships across a footprint approximately 10 times larger than Australia, providing a significant opportunity to expand category participation and increase customer value over time. Third, we are scaling demand generation across every region and across both our consumer and commercial channels. Through deeper end-user insight, stronger digital capability, and targeted market activation, we will increase brand and solution preference, accelerate sell-through and specification, and bring new end users into our category. Our fourth priority is continued operational optimization.

Mark Nicholls: We have expanded business development capability across all regions and are increasing customer acquisition activity across priority segments where our technical expertise, product performance, and established market positions provide a clear advantage. Second, we are focused on scaling our US consumer business by replicating the category breadth and depth we have successfully developed with Bunnings. We already have established retail partnerships across a footprint approximately 10 times larger than Australia, providing a significant opportunity to expand category participation and increase customer value over time. Third, we are scaling demand generation across every region and across both our consumer and commercial channels. Through deeper end-user insight, stronger digital capability, and targeted market activation, we will increase brand and solution preference, accelerate sell-through and specification, and bring new end users into our category. Our fourth priority is continued operational optimization.

Speaker #2: Through deeper end-user insight, stronger digital capability, and targeted market activation, we'll increase brand and solution preference, accelerate sell-through and specification, and bring new end-users into our category.

Speaker #1: Second, we're focused on scaling our U.S. consumer business by replicating the category breadth and depth we've successfully developed with Bunnings. We already have established retail partnerships across a footprint approximately ten times larger than Australia, providing a significant opportunity to expand category participation and increase customer value over time.

Speaker #2: Our fourth priority is continued operational optimization. We'll progress manufacturing diversification, improve productivity, and standardize supply chain and distribution processes to support margin improvement, working capital efficiency, and strong cash generation, all while increasing the scalability of the business.

Speaker #2: Turning to the outlook, we remain realistic about the external environment. Consumer confidence in the United States remains subdued, and is expected to continue weighing on discretionary spending.

Speaker #1: Third, we're scaling demand generation across every region and across both our consumer and commercial channels. Through deeper end-user insight, stronger digital capability, and targeted market activation, we'll increase brand and solution preference, accelerate sell-through and specification, and bring new end-users into our category.

Speaker #2: Demand across the Middle East is likely to remain sensitive to geopolitical developments. While Australian summer trading may actually benefit from the hotter and drier conditions associated with the forecast El Niño weather pattern.

Speaker #1: Our fourth priority is continued operational optimization. We'll progress manufacturing diversification, improve productivity, and standardize supply chain and distribution processes to support margin improvement, working capital efficiency, and strong cash generation—all while increasing the scalability of the business.

Speaker #2: Now, these factors create both risks and opportunities. But our approach will remain disciplined. We'll continue prioritizing profitable cash-generative growth while maintaining the operational and financial discipline established during FY26.

[Company Representative] (Gale Pacific): We will progress manufacturing diversification, improve productivity, and standardize supply chain and distribution processes to support margin improvement, working capital efficiency, and strong cash generation, all while increasing the scalability of the business. Turning to the outlook, we remain realistic about the external environment. Consumer confidence in the United States remains subdued and is expected to continue weighing on discretionary spending. Demand across the Middle East is likely to remain sensitive to geopolitical developments, while Australia's summer trading may actually benefit from the hotter and drier conditions associated with the forecast El Niño weather pattern. Now, these factors create both risks and opportunities, but our approach will remain disciplined. We will continue prioritizing profitable, cash generative growth while maintaining the operational and financial discipline established during FY26. We will provide a further performance update at our annual general meeting in November. In closing, I want to reinforce five key messages.

Mark Nicholls: We will progress manufacturing diversification, improve productivity, and standardize supply chain and distribution processes to support margin improvement, working capital efficiency, and strong cash generation, all while increasing the scalability of the business. Turning to the outlook, we remain realistic about the external environment. Consumer confidence in the United States remains subdued and is expected to continue weighing on discretionary spending. Demand across the Middle East is likely to remain sensitive to geopolitical developments, while Australia's summer trading may actually benefit from the hotter and drier conditions associated with the forecast El Niño weather pattern. Now, these factors create both risks and opportunities, but our approach will remain disciplined. We will continue prioritizing profitable, cash generative growth while maintaining the operational and financial discipline established during FY26. We will provide a further performance update at our annual general meeting in November. In closing, I want to reinforce five key messages.

Speaker #2: And we'll provide a further performance update at our annual general meeting in November. So in closing, I want to reinforce five key messages. The first is that while the work undertaken during the year has materially strengthened the business, profitability remains below where we expect it to be.

Speaker #1: Turning to the outlook, we remain realistic about the external environment. Consumer confidence in the United States remains subdued and is expected to continue weighing on discretionary spending.

Speaker #1: Demand across the Middle East is likely to remain sensitive to geopolitical developments, while Australian summer trading may actually benefit from the hotter and drier conditions associated with the forecast El Niño weather pattern.

Speaker #2: There is more work to do, but restoring sustainable profitability remains our primary objective. FY26 was a year of meaningful change. Delivering materially improvement in cash generation, operating efficiency, and balance sheet strength.

Speaker #1: Now, these factors create both risks and opportunities. But our approach will remain disciplined. We'll continue prioritizing profitable, cash-generative growth, while maintaining the operational and financial discipline established during FY26.

Speaker #2: The actions taken during the year were deliberate and focused on the factors within our control. Those actions improved the quality of the business despite challenging market conditions across our regions.

Speaker #1: And we'll provide a further performance update at our Annual General Meeting in November. So in closing, I want to reinforce five key messages. The first is that while the work undertaken during the year has materially strengthened the business, profitability remains below where we expect it to be.

Speaker #2: The growth elements of our strategy are now being actively executed. Commercial expansion, US consumer category development, demand generation, and operational optimization now define our execution priorities.

[Company Representative] (Gale Pacific): The first is that while the work undertaken during the year has materially strengthened the business, profitability remains below where we expect it to be. There is more work to do, but restoring sustainable profitability remains our primary objective. FY26 was a year of meaningful change, delivering material improvement in cash generation, operating efficiency, and balance sheet strength. The actions taken during the year were deliberate and focused on the factors within our control. Those actions improved the quality of the business despite challenging market conditions across our regions. The growth elements of our strategy are now being actively executed. Commercial expansion, US consumer category development, demand generation, and operational optimization now define our execution priorities. Finally, we enter FY27 with greater financial flexibility, a clearer strategic focus, and a business that is better positioned than it was 12 months ago.

Mark Nicholls: The first is that while the work undertaken during the year has materially strengthened the business, profitability remains below where we expect it to be. There is more work to do, but restoring sustainable profitability remains our primary objective. FY26 was a year of meaningful change, delivering material improvement in cash generation, operating efficiency, and balance sheet strength. The actions taken during the year were deliberate and focused on the factors within our control. Those actions improved the quality of the business despite challenging market conditions across our regions. The growth elements of our strategy are now being actively executed. Commercial expansion, US consumer category development, demand generation, and operational optimization now define our execution priorities. Finally, we enter FY27 with greater financial flexibility, a clearer strategic focus, and a business that is better positioned than it was 12 months ago.

Speaker #2: And finally, we enter FY27 with greater financial flexibility, clearer strategic focus, and a business that is better positioned than it was 12 months ago.

Speaker #1: There is more work to do, but restoring sustainable profitability remains our primary objective. FY26 was a year of meaningful change, delivering material improvement in cash generation, operating efficiency, and balance sheet strength.

Speaker #2: Our task now is clear. To build on the progress delivered during FY26, translate our strategic priorities into improved performance, and deliver sustainable profitability and improved returns for shareholders.

Speaker #1: The actions taken during the year were deliberate and focused on the factors within our control. Those actions improved the quality of the business, despite challenging market conditions across our regions.

Speaker #2: We're confident in the direction we've set, we're disciplined in our approach, and we're focused on execution. So thank you for joining us for today's briefing and for your continued support of Gale Pacific.

Speaker #1: The growth elements of our strategy are now being actively executed. Commercial expansion, U.S. consumer category development, demand generation, and operational optimization now define our execution priorities.

Speaker #2: Dexter and I would now be pleased to answer any questions that you may have. Have we got any questions?

Speaker #1: And finally, we enter FY27 with greater financial flexibility, a clearer strategic focus, and a business that is better positioned than it was 12 months ago.

Speaker #1: Just one. So the question is, how and where will revenue growth be delivered? And what is a reasonable rate of growth to aim for in FY27 and beyond?

Speaker #1: Our task now is clear: to build on the progress delivered during FY26, translate our strategic priorities into improved performance, and deliver sustainable profitability and improved returns for shareholders.

[Company Representative] (Gale Pacific): Our task now is clear: to build on the progress delivered during FY26, translate our strategic priorities into improved performance, and deliver sustainable profitability and improved returns for shareholders. We are confident in the direction we have set. We are disciplined in our approach, and we are focused on execution. Thank you for joining us for today's briefing and for your continued support of Gale Pacific. Dexter and I would now be pleased to answer any questions that you may have. Have we got any questions?

Mark Nicholls: Our task now is clear: to build on the progress delivered during FY26, translate our strategic priorities into improved performance, and deliver sustainable profitability and improved returns for shareholders. We are confident in the direction we have set. We are disciplined in our approach, and we are focused on execution. Thank you for joining us for today's briefing and for your continued support of Gale Pacific. Dexter and I would now be pleased to answer any questions that you may have. Have we got any questions?

Speaker #1: We're confident in the direction we've set, we're disciplined in our approach, and we're focused on execution. So, thank you for joining us for today's briefing and for your continued support of Gale Pacific.

Speaker #2: So really, it's across all of those strategic growth priorities, really. But I mean, it's across those four things. I mean, we're really focused on demand generation and scaling what we're doing in the United States.

Speaker #2: And that works already underway. Our commercial part of our business provides the clearest near-term opportunity for growth. We know we operate in longer buying cycles, particularly in our retail environment in the United States.

Speaker #1: Dextra, now I would now be pleased to answer any questions that you may have. Have we got any questions?

Speaker #2: This one. So, the question is: how and where will revenue growth be delivered? And what is a reasonable rate of growth to aim for in FY27 and beyond?

Operator: Yes, Mark.

Speaker #2: And we're working on actively growing that. So that's really where we're focusing on that. And from a rate of growth, again, we're realistic about what those things might look like.

Dexter Clarke: The question is: how and where will revenue growth be delivered, and what is a reasonable rate of growth to aim for in FY27 and beyond?

Speaker #2: And so we'll have more to say on that from a progress point of view, I think, when we get to the AGM.

Speaker #1: So really, it's across all of those strategic growth priorities, really. But I mean, it's across those four things. I mean, we're really focused on demand generation and scaling what we're doing in the United States.

Speaker #1: Okay. There's one more question here at the moment. Which is, has the change of approach to inventory stopping in the US fully washed through the revenue numbers?

[Company Representative] (Gale Pacific): So really, it is across all of those strategic growth priorities, but it is across those four things. We are really focused on demand generation and scaling what we are doing in the United States, and that work is already underway. Our commercial part of our business provides the clearest near-term opportunity for growth. We know we operate in longer buying cycles, particularly in our retail environment in the United States, and we are working on actively growing that. So that is really where we are focusing on that. From a rate of growth, again, we are realistic about what those things might look like, and so we will have more to say on that from a progress point of view, I think, when we get to the AGM.

Mark Nicholls: So really, it is across all of those strategic growth priorities, but it is across those four things. We are really focused on demand generation and scaling what we are doing in the United States, and that work is already underway. Our commercial part of our business provides the clearest near-term opportunity for growth. We know we operate in longer buying cycles, particularly in our retail environment in the United States, and we are working on actively growing that. So that is really where we are focusing on that. From a rate of growth, again, we are realistic about what those things might look like, and so we will have more to say on that from a progress point of view, I think, when we get to the AGM.

Speaker #1: And that work is already underway. Our commercial part of the business provides the clearest near-term opportunity for growth. We know we're operating with longer buying cycles, particularly in our retail environment in the United States.

Speaker #2: Yeah. It's a good question. Because that's certainly the impact some of the revenue numbers in the United States as they went through their peak season, which they're now on the way out of that.

Speaker #2: So the demand profile naturally in the US was a little bit softer, but they did successfully these retailers at least start to sell through some of that inventory over this summer.

Speaker #1: And we're working on actively growing that, so that's really where we're focusing. And from a rate of growth, again, we're realistic about what those things might look like.

Speaker #2: So by the time we get into a build for next year, we expect that that impact will be lessened. Certainly. But what we're really focusing on is adding to that and increasing our scale and increasing that category depth and breadth that I spoke about to try and grow on that.

Speaker #1: And so we'll have more to say on that from a progress point of view, I think, when we get to the AGM.

Speaker #2: Okay, there's one more question here at the moment, which is: Has the change of approach to inventory stocking in the U.S. fully washed through the revenue numbers?

Dexter Clarke: Okay, there is one more question here at the moment, which is: Has the change of approach to inventory stocking in the US fully washed through the revenue numbers?

Speaker #2: And grow our presence there in the United States. New retailers will be able to help us be able to do that and to be able to soften some of the impacts of any residual imagery that might be left over in some of these retailers.

Speaker #1: Yeah, it's a good question because that's certainly impacted some of the revenue numbers in the United States as they went through their peak season, which they're now on the way out of.

[Company Representative] (Gale Pacific): Yeah. It is a good question because that is certainly going to impact some of the revenue numbers in the United States as they went through their peak season, which they are now on the way out of that. So the demand profile naturally in the US was a little bit softer, but these retailers at least, did successfully start to sell through some of that inventory over this summer. So by the time we get into a build for next year, we expect that impact will be lessened, certainly. But what we are really focusing on is adding to that and increasing our scale and increasing that category depth and breadth that I spoke about to try and grow on that and grow our presence there in the United States.

Mark Nicholls: Yeah. It is a good question because that is certainly going to impact some of the revenue numbers in the United States as they went through their peak season, which they are now on the way out of that. So the demand profile naturally in the US was a little bit softer, but these retailers at least, did successfully start to sell through some of that inventory over this summer. So by the time we get into a build for next year, we expect that impact will be lessened, certainly. But what we are really focusing on is adding to that and increasing our scale and increasing that category depth and breadth that I spoke about to try and grow on that and grow our presence there in the United States.

Speaker #1: Yeah. So the next question is, will we speak to the most recent demand characteristics?

Speaker #1: So the demand profile naturally in the U.S. was a little bit softer, but they did successfully, these retailers at least, start to sell through some of that inventory over this summer.

Speaker #1: So, by the time we get into a build for next year, we expect that impact will be lessened—certainly. But what we're really focusing on is adding to that, increasing our scale, and increasing the category depth and breadth that I spoke about, to try and grow on that and grow our presence there in the United States.

Speaker #2: So yeah. So we'll talk to that, I think, in more detail when we get to the AGM in November. We'll certainly talk about how the early part of this year has gone.

Speaker #2: Actually, it's we're only sort of six or seven weeks in. So I think we'll have more to say on that in November.

Speaker #1: New retailers will be able to help us do that and be able to soften some of the impacts of any residual inventory that might be left over in some of these retailers.

[Company Representative] (Gale Pacific): New retailers will be able to help us be able to do that and to be able to soften some of the impacts of any residual inventory that might be left over in some of these retailers.

Mark Nicholls: New retailers will be able to help us be able to do that and to be able to soften some of the impacts of any residual inventory that might be left over in some of these retailers.

Speaker #1: And at the moment, the final question is, have the input costs stabilized?

Speaker #2: So certainly, as a result of the Middle East conflict, we did see input costs starting to increase. We did have inventory in place particularly in the Middle East and particularly in other parts of our business as well that helped us to mitigate that into 26.

Speaker #2: Yeah. So the next question is, will we speak to the most recent demand characteristics?

Dexter Clarke: Yep. The next question is: Will we speak to the most recent demand characteristics?

Speaker #2: And then we've been able to sort of recover some of those input cost increases through price in some of our key markets as well.

Speaker #1: So, yeah, we'll talk about that, I think, in more detail when we get to the AGM in November. We'll certainly talk about how the early part of this year has gone.

[Company Representative] (Gale Pacific): Yes. We will talk to that, I think, in more detail when we get to the AGM in November. We will certainly talk about how the early part of this year has gone. Naturally, we are only six or seven weeks in, so I think we will have more to say on that in November.

Mark Nicholls: Yes. We will talk to that, I think, in more detail when we get to the AGM in November. We will certainly talk about how the early part of this year has gone. Naturally, we are only six or seven weeks in, so I think we will have more to say on that in November.

Speaker #2: We are seeing that starting to stabilize a little bit. Now coming off as all prices have started to ease, particularly on our resin price, which is our most our highest cost raw material.

Speaker #1: Actually, we're only sort of six or seven weeks in, so I think we'll have more to say on that in November.

Speaker #2: And at the moment, the final question is: Have the input costs stabilized?

Dexter Clarke: At the moment, the final question is: Have input costs stabilized?

Speaker #2: We're starting to see that starting to come off. And we expect that as long as everything stays somewhat stable, which you can never predict, but we've got a number of mitigation opportunities and activities in play on how we have multiple sourcing options for raw materials right around the globe that can help to mitigate some of those input costs.

Speaker #1: So certainly, as a result of the Middle East conflict, we did see input costs starting to increase. We did have inventory in place, particularly in the Middle East and in other parts of our business as well, that helped us to mitigate that into '26.

[Company Representative] (Gale Pacific): Certainly, as a result of the Middle East conflict, we did see input costs starting to increase. We did have inventory in place, particularly in the Middle East and particularly in other parts of our business as well, that helped us to mitigate that into FY26. Then we have been able to recover some of those input cost increases through price in some of our key markets as well. We are seeing that starting to stabilize a little bit now coming off as oil prices have started to ease, particularly on our resin price, which is our highest cost for material. We are starting to see that starting to come off, and we expect that as long as everything stays somewhat stable, which you can never predict.

Mark Nicholls: Certainly, as a result of the Middle East conflict, we did see input costs starting to increase. We did have inventory in place, particularly in the Middle East and particularly in other parts of our business as well, that helped us to mitigate that into FY26. Then we have been able to recover some of those input cost increases through price in some of our key markets as well. We are seeing that starting to stabilize a little bit now coming off as oil prices have started to ease, particularly on our resin price, which is our highest cost for material. We are starting to see that starting to come off, and we expect that as long as everything stays somewhat stable, which you can never predict.

Speaker #2: But we are starting to see them ease.

Speaker #1: And then we've been able to sort of recover some of those input cost increases through price in some of our key markets as well.

Speaker #1: Yeah. So the next question is around margin expansion. So margin expansion has grown. Is there opportunity to continue to grow margins?

Speaker #1: We are seeing that start to stabilize a little bit now, coming off as oil prices have started to ease—particularly on our resin price, which is our highest cost raw material.

Speaker #2: Yeah, definitely. I think the opportunity really is to grow our commercial business. Our commercial business, we do enjoy good margins in our commercial business.

Speaker #1: We're starting to see that starting to come off, and we expect that as long as everything stays somewhat stable—which you can never predict—but we've got a number of mitigation opportunities and activities in play on how we have multiple sourcing options for raw materials right around the globe that can help to mitigate some of those input costs.

Speaker #2: And so as we continue to change that customer mix and that product mix throughout our business, that's where we see those opportunities to expand margin.

[Company Representative] (Gale Pacific): We have a number of mitigation opportunities and activities in play on how we have multiple sourcing options for raw materials right around the globe that can help to mitigate some of those input costs. We are starting to see them ease.

Mark Nicholls: We have a number of mitigation opportunities and activities in play on how we have multiple sourcing options for raw materials right around the globe that can help to mitigate some of those input costs. We are starting to see them ease.

Speaker #2: But also, in some of those operational efficiency measures that we're continuing to put into place, particularly with what we're doing up in China, that work is ongoing.

Speaker #1: But we are starting to see them ease.

Speaker #2: Yeah, so the next question is around margin expansion. So, margin expansion has grown— is there opportunity to continue to grow margins?

Dexter Clarke: Yep. The next question is around margin expansion. Margin expansion has grown. Is there opportunity to continue to grow margins?

Speaker #2: So we expect to see both things that active things that we're doing, but then also customer mix changes as we continue to be able to grow.

Speaker #2: And then that will help us naturally with a cost base that's much leaner. As we start to grow, then that margin flows straight through into the bottom line, which will help us to improve overall margin.

Speaker #1: Yeah, definitely. I think the opportunity really is to grow our commercial business. We do enjoy good margins in our commercial business.

[Company Representative] (Gale Pacific): Yeah, definitely. I think the opportunity really is to grow our commercial business. Our commercial business, we do enjoy good margins in our commercial business, and as we continue to change that customer mix and that product mix throughout our business, that is where we see those opportunities to expand margin. Also in some of those operational efficiency measures that we are continuing to put into place, particularly with what we are doing up in China. That work is ongoing, so we expect to see both active things that we are doing, but then also customer mix changes as we continue to be able to grow. That will help us naturally with a cost base that is much leaner. As we start to grow, then that margin falls straight through into the bottom line, which will help us to improve overall margin health.

Mark Nicholls: Yeah, definitely. I think the opportunity really is to grow our commercial business. Our commercial business, we do enjoy good margins in our commercial business, and as we continue to change that customer mix and that product mix throughout our business, that is where we see those opportunities to expand margin. Also in some of those operational efficiency measures that we are continuing to put into place, particularly with what we are doing up in China. That work is ongoing, so we expect to see both active things that we are doing, but then also customer mix changes as we continue to be able to grow. That will help us naturally with a cost base that is much leaner. As we start to grow, then that margin falls straight through into the bottom line, which will help us to improve overall margin health.

Speaker #2: Health.

Speaker #1: Yeah. Okay. So how has the recoup of tariffs gone? And are there more to recoup? What is the expected impact of US tariffs going forward?

Speaker #1: And so, as we continue to change that customer mix and that product mix throughout our business, that's where we see those opportunities to expand margin.

Speaker #1: But also, in some of those operational efficiency measures that we're continuing to put into place, particularly with what we're doing up in China, that work is ongoing.

Speaker #2: So yeah. So we have been able to recoup some of those tariffs. Which has been helpful. I mean, the ongoing impact of tariffs is always going to be there.

Speaker #1: So, we expect to see both things: the active things that we're doing, but then also customer mix changes as we continue to be able to grow.

Speaker #2: We've been dealing with tariffs since 2017, particularly. Naturally, that's volatile. And we're seeing what's happened as it relates to Canada and the like as well.

Speaker #1: And then that will help us, naturally, with a cost base that’s much leaner. As we start to grow, that margin then flows straight through into the bottom line, which will help us to improve overall margin.

Speaker #2: So we think that that's we'll manage that. We've been able to manage that over the last sort of two years, really. Where we see probably the biggest impact of tariffs is probably more on the consumer side of spending amongst everything else, particularly in the United States, where we have seen that to start to soften as lots of things have become more expensive.

Speaker #1: Health.

Speaker #2: Yeah. Okay. So, how has the recoup of tariffs gone? And are there more to recoup? What is the expected impact of U.S. tariffs going forward?

Dexter Clarke: Yep. Okay. How has the recoup of tariffs gone, and are there more to recoup? What is the expected impact of US tariffs going forward?

Speaker #2: We haven't really seen a reduction of shelf price in a lot of the US retailers as the tariff refunds are being getting washed through.

Speaker #1: So, yeah, we have been able to recoup some of those tariffs, which has been helpful. I mean, the ongoing impact of tariffs is always going to be there.

[Company Representative] (Gale Pacific): So we have been able to recoup some of those tariffs, which has been helpful. I mean, the ongoing impact of tariffs is always going to be there. We have been dealing with tariffs since 2017, particularly. Naturally, that is volatile, and we have seen what has happened as it relates to Canada and the like as well. So, we think that we will manage that, and we have been able to manage that over the last two years, really. Where we see probably the biggest impact of tariffs is probably more on the consumer that starts spending in amongst everything else, particularly in the United States, where we have seen that just start to soften as lots of things have become more expensive. We have not really seen a reduction of shelf price in a lot of the US retailers as the tariff refunds have been getting washed through.

Mark Nicholls: So we have been able to recoup some of those tariffs, which has been helpful. I mean, the ongoing impact of tariffs is always going to be there. We have been dealing with tariffs since 2017, particularly. Naturally, that is volatile, and we have seen what has happened as it relates to Canada and the like as well. So, we think that we will manage that, and we have been able to manage that over the last two years, really. Where we see probably the biggest impact of tariffs is probably more on the consumer that starts spending in amongst everything else, particularly in the United States, where we have seen that just start to soften as lots of things have become more expensive. We have not really seen a reduction of shelf price in a lot of the US retailers as the tariff refunds have been getting washed through.

Speaker #2: Naturally, that might come through as we get closer to Christmas. I think that'll be a really interesting indicator for us. But we'll continue to doing what we're doing, focusing on growth, focusing on what we can control.

Speaker #1: We've been dealing with tariffs since 2017. Naturally, that's volatile, and we've seen what's happened as it relates to Canada and the like as well.

Speaker #2: And the tariffs will manage the tariffs as they come up. And whatever happens.

Speaker #1: So, we think that we'll manage that. We've been able to manage that over the last sort of two years, really. Where we see probably the biggest impact of tariffs is probably more on the consumer side of spending, amongst everything else—particularly in the United States, where we have seen that start to soften as lots of things have become more expensive.

Speaker #1: It's probably fair to say as well, they're fully factored into our plans for by 27. So as much as they have been more stable over the last six months, we've got that factored into our operating model changes.

Speaker #2: Yeah, exactly right.

Speaker #1: We haven't really seen a reduction of shelf price in a lot of the U.S. retailers as the tariff refunds are being washed through.

Speaker #1: All right. That's it. Questions at the moment?

Speaker #2: Great. Excellent. Well, thank you again for your questions. Thank you for your attendance at the briefing. And we'll look forward to speaking to you all again at the annual general meeting in November.

Speaker #1: Naturally, that might come through as we get closer to Christmas. I think that'll be a really interesting indicator for us. But we'll continue doing what we're doing, focusing on growth, focusing on what we can control, and we'll manage the tariffs as they come up.

[Company Representative] (Gale Pacific): Naturally, that might come through as we get closer to Christmas. I think that will be a really interesting indicator for us. But we will continue doing what we are doing, focusing on growth, focusing on what we can control, and the tariffs will. Or management terraces that come up and whatever happens.

Mark Nicholls: Naturally, that might come through as we get closer to Christmas. I think that will be a really interesting indicator for us. But we will continue doing what we are doing, focusing on growth, focusing on what we can control, and the tariffs will. Or management terraces that come up and whatever happens.

Speaker #1: And whatever happens.

Speaker #2: It's probably fair to say as well they're fully factored into our plans for '27. So, as much as they have been more stable over the last six months, we've got that factored into our operating model changes.

Dexter Clarke: It is probably fair to say as well, they are fully factored into our plans for FY27.

[Company Representative] (Gale Pacific): Yep.

Mark Nicholls: Yep.

Dexter Clarke: As much as they have been more stable.

Dexter Clarke: over the last six months, we have got that factored into

[Company Representative] (Gale Pacific): Yeah

Mark Nicholls: Yeah

Dexter Clarke: our operating model changes.

Speaker #1: Yeah, exactly right.

[Company Representative] (Gale Pacific): Yeah, exactly right.

Mark Nicholls: Yeah, exactly right.

Speaker #2: All right, that's it. Any questions at the moment?

Dexter Clarke: That is it for questions at the moment.

Speaker #1: Great. Excellent. Well, thank you again for your questions. Thank you for your attendance at the briefing, and we'll look forward to speaking to you all again at the Annual General Meeting in November.

[Company Representative] (Gale Pacific): Great. Excellent. Well, thank you again for your questions. Thank you for your attendance at the briefing, and we will look forward to speaking to you all again at the annual general meeting in November. Thank you.

Mark Nicholls: Great. Excellent. Well, thank you again for your questions. Thank you for your attendance at the briefing, and we will look forward to speaking to you all again at the annual general meeting in November. Thank you.