M.P. Evans Group PLC (MPE.L) Earnings Call Transcript & Summary

Hello, you're watching Proactive London. I'm joined by Matthew Coulson. He's the CEO of M.P. Evans. Matthew, very good to speak with you again.

Good morning.

So Matthew, you've released your 2023 results today. Take us through some of the highlights of the year.

Yes, absolutely. Well, we're very pleased to be releasing our results today, and it's been a very busy year here at M.P. Evans. We have increased our planted hectarage really quite significantly during the course of 2023, up by more than 10,000 hectares. But alongside that, we've opened a new mill and production and crop are up once again.

Yes. So you now have all 6 mills producing certified ARPU by the end of 2023. In fact, most of your production went through your own mills. So another milestone for the company.

Yes, that's exactly right. So opening mill #6 at our Musi Rawas plantation early in 2023 has really made a big difference for us. And it means that 95% of the crop that we harvest is now processed in one of our own group mills, and that means that we can increase our production really quite significantly. And now there was a 20% plus increase in production coming out of our own group facilities over the course of this year, a big difference for the group.

In fact, planting at Musi Rawas, passed 10,000 hectares over the period. So would you be looking to build on that this year?

Yes, very much so. So we set an initial target of getting to 10,000 hectares planted at Musi Rawas, and we then passed that halfway through the year. By the end of the year, we were at 10,300. And we're [ carrying own ] planting in 2024. We think there's a very good chance that by the end of this year we could get to as much as 11,000 planted hectares there. And that's all great news as we have more and more crop going into the new mill.

So despite the higher production, Matthew, there was a bit of pressure on crude oil and crude palm oil prices. So that affected your revenue for the period, but still strong cash generation. You've increased your dividend, and you've also decided to extend your share buyback program.

Yes, that's exactly right. So I mean, as you say, slightly lower prices this year, but that was to be expected given the very high price environment in 2022. But you're right to point out, we continue to be extremely cash generative. So we generated over $100 million of operating cash over the course of 2023. And that really enabled us to focus on our strategic priorities. Obviously, we spent a significant amount of cash on purchasing new hectares, but we still had ample cash to be able to increase our dividend for shareholders and continue our share buyback program.

Take us through those strategic priorities, Matthew.