Argosy Property Limited (ARG) Earnings Call Transcript & Summary

Good afternoon, everyone. My name is Jeff Morrison. I'm the Chairman of Argosy. On behalf of my fellow directors and members of the management team, it's my pleasure to welcome you all to the 2024 Annual Meeting of shareholders. As usual before we get things underway, there are housekeeping matters. Firstly, I'd ask you put your phones on silent. In the unlikely event of an emergency, please evacuate the building using the blue doors -- yes, blue doors at the eastern end behind you and assemble in the carpark. The bathrooms are located behind me next to the main reception area. In previous -- as in previous years, today's annual meeting is a hybrid annual meeting. Shareholders who are not attending in person can attend virtually and still ask questions and vote through the Computershare online meeting platform. Shareholders can also follow proceedings via the live webcast. Today's meeting, we'll focus on our recent results to 31 March 2024, our long-term strategy for growth and progress around our sustainability goals. Before we get into that, however, there are a few procedural differences we need to run through for our hybrid meeting to run smoothly. For shareholders participating through the live webcast, polling on the 3 resolutions has now opened. Votes can be cast by selecting the polling icon on the instruction screen and following the prompts. Votes can be amended up until the time the poll closes, which is at the conclusion of the meeting. Questions can also be submitted through the webcast portal. We've allocated time to address these at the relevant time of the meeting, and they can be submitted at any stage. If you experience any technical issues casting your vote or submitting questions, please refer to the instructions provided in the virtual annual meeting guide that accompanied the Notice of Meeting or type your query into "Q&A" on your tab or you can call Computershare on 0-800-650-034. Now let's get things underway. I'd like to record the Notice of Meeting was duly given on the 20th of May 2024, and as there are at least 5 shareholders here today, there is a quorum present. Accordingly, I declare the 2024 Annual Meeting of Argosy Property Limited open. Now your Board of Directors. There is detailed information about the Board in the 2024 annual report. However, I will briefly introduce most of them to you. To my right, is Stuart McLauchlan. Stuart was appointed to the Board in August 2018 and is a prominent businessman and company director. He is Chairman of the NZ Sports Hall of Fame, Scott Technology, Sky (sic) [ Skyline ] Aviation. He is a Director of EBOS and Dunedin Casinos and several other companies. Stuart's position as director is up for reelection, and we'll hear from him a little later in the meeting. Next to Stuart, we have Chris Gudgeon, who joined the Board in November 2018. Chris has been involved in property investment, development and construction. And for more than 25 years, and he is currently a Director of Crown Infrastructure Partners, and Ngati Whatua Orakei Whai Rawa Limited, amongst other appointments. He is -- previously -- was previously Chief Executive of Kiwi Property Group and Capital Properties NZ Limited. Next to Chris, we actually have Rachel, but in the order of things we would have had Mike Pohio, Mike. Unfortunately, he's not able to join us today. He's overseas and he did send through by e-mail and text his apologies to everyone here for not being present. Mike was appointed in February 2019 and has over 25 years of corporate experience across a range of industries, including property investment, ports, logistics and dairy. Now to Rachel. Rachel was first appointed to the Board in August 2019. She's been involved in the property sector for over 20 years across a variety of senior roles, including strategy, portfolio management, financial management, development and leadership and has recently taken on some other directorships. Next to Rachel, we have Martin Stearne. Martin has over 20 years of commercial and capital markets experience and currently holds appointments to the NZX's NZRegCo advisory panel, the Takeovers Panel and the Investment Committee of the Impact Enterprise Fund. He is a member of INFINZ and IceAngels. Finally, on top left, I hate the photograph, talk to management about changing it, but they seem to like winding me up by keeping it there. I've been a director since 2013 and have over 45 years of experience as a property lawyer. As well as my role as Chairman of Argosy, I also chair the Remuneration and Nominations Committee and sit on the Audit and Risk Committee. My position as a director is also up for reelection today. And again, you'll hear from me on that topic a little later. Seated next to the Board, our Chief Executive, Peter Mence, and Chief Financial Officer, Dave Fraser. We also have several other members of the management team here today. I would also like to welcome our auditors, Deloitte; our solicitors Harmos Horton Lusk, our registrar, Computershare; and our tax advisers, KPMG, to the meeting. The agenda. The agenda for this afternoon's meeting will be as follows: as Chairman, I will deliver a brief review of Argosy 2024 results and strategy. This will be followed by a more detailed review of Argosy's performance by our Chief Executive, Peter Mence. Following Peter's review, we will take questions from shareholders. We will then move to the formal resolutions of the meeting. And finally, we will then attend to any general business. After the meeting has been formally closed, please stay for refreshments where the directors and executives of Argosy will be available to discuss any queries you may have. Proxies. Proxies have been received in respect of 30 -- sorry, 377,085,300 shares, out of the 847,168,744 shares on issue. I'm now pleased to present you with a summary of the company's performance for the year ended 31 March 2024. You will have received the annual report and financial statements either by post or electronically, depending on your preference. The Board is very pleased with the way the business and the management team and staff have performed during what has been a difficult year with continued weak operating conditions. Inflation remains sticky. And consequently, interest rates have stayed high and clearly had a negative influence on property values at year-end. We're all experiencing the cure to the sugar rush after COVID. And there have been some recent -- somewhat depressing news in the form of Jarden reported this morning, the services sector has dropped to its lowest level in a non-COVID lockdown month since 2007 and earlier at our Board meeting, Stuart reported that the PMI index is also at an all-time low. Despite these cyclical factors as a Board, we are pleased with the progress we've made towards our sustainability goals as evidenced by the green buildings completed during the year and certifications achieved. During the year, we obtained 6 Green Star built certificate for 8-14 Willis Street, which was Wellington's first 5-star office development in Argosy's first 2. This building was awarded the Property Council Supreme Building Award on last Friday evening at the Property Council Awards evening, and I'm sure Peter will speak to that achievement in more detail during his presentation. The Board congratulates management and staff on a great achievement. For the year to 31 March 2024, we again achieved Toitu net carbon zero certification, maintained or improved our NABERS rating, which is a measure of energy efficiency in our buildings, and we maintained it across various properties and retained our MSCI ESG green rating at AA, which is a great result. The office portfolio has weighted 34% to the government sector, which provides a measure of earnings defensiveness. Whilst portfolio metrics remain sound, we expect the coming year will continue to produce challenges. The Board is comfortable with the company's capital position and balance sheet strength and are pleased management achieved several strategic asset divestments through the year. Balance sheet gearing is sitting in the middle of our target range of 30% to 40%. As part of its strategic asset allocation strategy, review during the year, the Board chose to adjust policy targets with an increased weighting to Auckland Industrial and a reduced weighting to Wellington Office. Whilst Peter will talk more to the exact weightings, the decision was made with a view to where we see the best long-term returns being to support earnings and a return to dividend growth for the company. We trust that shareholders are pleased. We have delivered a dividend in line with guidance at $0.0665 per share for 2024, and we will maintain that guidance at $0.0665 per share for the '25 financial year. Looking ahead, I do believe the company's sound financial and portfolio position sees the business well placed to manage any near-term economic weakness. Building a better future. Many of you here will be quite familiar with this slide. Our vision of building a better future continues to be underpinned by our 3 core pillars of being a green resilient business, owning a quality portfolio diversified by sector, tenant and location. Our focus on greening the portfolio is unchanged as we target 50% of our portfolio being green assets by 2031. Our current development green asset weighting of 35% sees us well placed to deliver on this target. Peter will touch on this in his review, but there is growing evidence around rental premiums being achieved between green and nongreen buildings. Furthermore, with increasing climate change reporting and the analysis companies are being required to disclose, we expect to see growing valuation differentials between green assets, which are built with more climate resilient and -- resilience than those which are not. This all underpins the sustainability and stability of earnings and dividends over the long term. Argosy's portfolio remains diversified by sector, tenant and location. We believe this approach will continue to reduce volatility in returns and widen growth opportunities over the longer term. In summary, the future of our business is still green and will continue to support our tenants who are on this journey as well. We remain focused on being the market leader in retrofitting existing buildings to create modern, attractive working environments for our tenants and their people. We will continue to target strategic growth opportunities with green potential with Auckland Industrial being the focus. Our strategy of creating a green resilient and diversified business continues to be all about delivering measurable and sustainable earnings and a return to dividend growth for shareholders in the medium term. On the subject of strategy, the Board is very focused on the current and future success of the business. A key part of this is ensuring that there is appropriate succession planning in place at both the Board and management levels. The Board is developing a longer-term succession plan for directors and senior management that will position the business well to continue to deliver solid and reliable results for shareholders. Some full year dividend in first quarter announcement. The Board was pleased to -- as I've said previously, the Board is pleased to announce an F '24 full year dividend of $0.0665 per share in line with prior years. Looking ahead, as it is clear that the New Zealand economy will continue to face challenges during the remainder of F '25 as inflation and interest rates remain high. Now the Board believes it is appropriate to look through short-term cyclical headwinds to provide certainly foreign investors and to maintain guidance -- or dividend guidance at $0.0665 per share for this year. I'll now hand over to Peter, who will take you through a brief review of the business.

Thanks, Jeff, and thanks to you for coming to the Annual Meeting. I appreciate that. As detailed earlier by Jeff, I'll be taking you through the F year -- financial year 2024, the F '24 results in a little bit more detail, hopefully, not covering too much of the ground that Jeff already has before rounding out with a bit of an outlook on what we're seeing for the year ahead. And you will be, you'll note on the way through this, that valuations has been a -- or devaluations as it's been this year has been a driving factor in these results, and I'll talk a little bit about what we expect to see for the future. One of the key results, metrics that we're sitting -- looking at today's net property income, and that was up around 3.3%. The NTA or the tangible asset backing per share was down due to the unrealized devaluations. So property assets declined in value during that time. And you might have noticed in the press, this is often referred to as cap rate expansion, which means that the property is worth less, albeit that it's providing the same level of income. We've held the dividend flat. And obviously, we recognize that the economy will continue to face challenges over the year ahead. I'll talk about valuations in a minute because I don't expect to see the same level of change that we've seen there, but we do expect that income levels will be challenged. The gearing for the portfolio -- for the business remains comfortably around the middle of the 30% to 40% band and well below our 50% covenant. And Jeff mentioned that we've completed strategic asset sales during the year. It's worth noting that none of those were completed -- none of those asset sales were completed at numbers that were below the tangible asset backing per share. So that gives us a level of confidence in our valuations. Occupancy is obviously somewhat less than we'd like and has been negatively affected by some recent expiries. We do continue to see some fairly good leasing inquiry, and we do get transactions running through, but the period of time taken to complete a conversion from that inquiry is noticeably longer than it has been in prior years. The portfolio metrics, however, remain solid, and we continue to have high tenant retention rates. That's pretty important because we always lose money when we lose a tenant. With sustainability initiatives have obviously been a key plank of the Argosy strategy for well over a decade now, we've continued -- we will continue to target 50% of our portfolio into that green space by 2031, and we're well on our way to achieving that with 35% weighting currently. Climate disclosures are a very important part of what we're disclosing over the current year. They will be an iterative process as we move further into meeting the full compliance of that system. The portfolio at a glance shows that we're just over 50% weighted into the industrial sector and around 40% into office. The majority of the exposure is into Auckland with 70% weighting, and we note that where we've got those value-add properties, they are all actually providing an income to us. We call it a holding income. So they're not costing us money sitting there empty. Looking at revaluations. Devaluations this year, and that clearly affected the overall result. But looking ahead, our analysis and the most recent data suggests that, that cap rate expansion has stopped. The valuers and their assessments of current transactions are valuing the risk of shorter lease terms. So we think that the focus from a valuation perspective has moved from capitalization rates to rental income rates. On that basis, we would expect a flatter profile come the interim valuations on 30 September. Construction costs are also reducing. You might have noticed in the press, construction cost index coming down, a number of contractors looking for work. So construction costs are reducing. We expect that with the softer investment environment that we've seen that there could be some negative pressure on land rates. But overall, the assessment for our portfolio looks a lot flatter for the next 12 months than it has done. Overall, green assets performed better in the revaluations and in the leasing transactions. In fact, the vast majority of the leasing inquiry we're getting is specifically for green space. Net property income was up 3.3% or $3.7 million, almost the same amount of money that the changes in taxation cost us on the prior period and driven by rental reviews, completed developments over the years, such as 8-14 Willis Street and 105 Carlton Gore Road. Administration expenses were negatively affected. So they were up by the cost of the interim revaluation costs about $180,000 to complete an interim revaluation if we need to do that. And health and safety audit, we don't do every year, ESG costs and the setup costs related to our insurance captive that will save us a lot of money in the future. The management expense ratio for the year is 54 basis points, so relatively modest across the sector, and corporate expenses to net property income is 9.9%, which is relatively stable. With the higher official cash rate, the OCR, the interest expense was up by $7.5 million, the rate variance of that was $4.7 million, and the volume variance was $1.3. We had lower capitalized interest of $1.5 million during the year. And the revaluation loss we've covered earlier contributes to the -- or drives -- reported bottom line loss of $55.3 million for the year. Turning to distributable income. The usual fair value -- after the usual fair value adjustments, the net distributable income was $55.8 million versus $64.2 million last year. The prior year, of course -- if you've listened to us last year, the prior year benefited from the receipt of $3 million from a property transaction that failed to settle from which we managed to extract a $3 million penalty. Higher interest and tax costs also weighed on the result. On a per share basis, NDI was -- net distributable income was 6.58% versus $0.0758 per share last year. Turning to the lease expiry. The lease expiry profile is pretty modest for the next 2 years. That's a good thing in our current environment. And 2027 and 2028, we have expiries, which we're already working on, as you would expect, and we expect to manage to convert the larger ones of those. Our portfolio review indicates a pretty good tenant retention rate going forward. We tend to be sitting around that 85% tenant retention during a given year across the next 12 to 24 months, so we don't expect to see many surprises. It is a bit of a balance in a quiet market, where tenants still want to have the opportunity to grow their business and to position themselves for the future, but they're pretty reluctant to commit the costs of relocation. Turning to the market and to what we're seeing. Obviously, there's a relatively low supply of new product coming to the market specifically in the industrial space and much of the growth prior to the economic slowdown was in the industrial space. So we expect to see a continuation of that low growth up until the Christmas period at least. So low supply and low demand, but we do expect 2025 to be a lot more positive. We expect to see more activity in that industrial part, particularly, and an ever-increasing focus on green or sustainable developments. So that suggests that our timing for our current construction at 224 Nielsen Street looks pretty good better [indiscernible]. And office, look, you might have seen quite a bit of press about redundancies in Wellington and employment rates going up. The Reserve Bank, of course, has been looking to see unemployment going up. So we need to just keep that a little bit in perspective. Wellington is not quite as bad as you might have picked up from the media alone because the high degree of growth in government employees in the Wellington market prior to the current downturn was really fueling the market. And what we've really seen is a reversal of only about 6 or 7 months of the growth in the prior year. So a lot of redundancies, yes, but there have been a lot of growth in the prior period, and that's really only offsetting some of the growth that we've seen. One of the changes we are noting, particularly in Wellington is a return to the office. Fewer people working from home, working remotely. You could be cynical and suggest that, that's related to the increase in the redundancy rate in the city. But working from home is diminishing, particularly in Wellington. And in fact, one of the tenant inquiries we're working on at the moment is from a tenant who had released some of the space that they were leasing to an alternative occupier only to find that they needed some space back because their own staff were coming back into the office. In Auckland, we have established the footprint co-working space. I'm pretty proud of that. It provides a lot of flexibility for the building and for tenants within the portfolio. This is an expertise that strategically we had wanted to develop in-house rather than subcontract to an outside party. One of the big benefits we're noting already is tenants to the building and indeed to the portfolio are finding a great deal more flexibility with our space because they're able to take their overflow and meeting room space from the co-working floor within the building. It is very much providing flexibility for tenants going forward and something we see as the -- as important for the market in general. Finally, as we look at the year ahead, there's a number of focus areas, and we'll need to keep working on them quite hard in order to achieve results. We're not rushing over the fact that we expect the coming year to continue to be somewhat difficult. We will need to work very carefully with our tenants, our clients to try and offset increased taxation relating to building depreciation no matter what we think the advisability of that change might be. From a capital perspective, we will remain well placed and our early move into the green space is certainly paying dividends to tenants. We are getting inquiry from tenants who are coming to Argosy simply because we're regarded as being green in that space. The experience and the intellectual property we've managed to develop in that space, particularly in the reuse of existing spaces, is becoming more and more valuable over time. We will continue to focus on delivering strong operational performance, good outcomes around expiries, leasing and pushing rental growth. We will deliver on our strategic objectives, including greening our developments, our existing portfolio and our own company internal focus. We will continue to move on divesting low-growth assets or assets that are going to give us less, a higher risk in the future and to recycle that capital into green resilient business to deliver sustainable dividends to shareholders. Over the last decade, we've been fortunate to receive some 35 awards from -- predominantly from the Property Council but others as well for the quality of the developments and the activity that we've done within the portfolio. But on Friday, last week, as Jeff mentioned, we did secure the Supreme Award from the Property Council in New Zealand National Awards. That was out of 141 entrants, new property during the year. And the Supreme Award is something that I've personally always wanted to see Argosy achieve, and I'm incredibly proud of the team that delivered that. It's a great team. It was a great delivery and they're building a great portfolio for all of us. I'd specifically like to thank the Argosy team for their delivery and support over the last 12 months and for their commitment to support us or as shareholders and as managers through the F '25 year. We're not brushing over the fact that 2025 will be challenging. But if you were -- if you needed a team to deliver, I've got the greatest confidence that I've got the best team to help us through that. I'd like to hand back to the Chairman. Thank you very much.

Thank you, Peter. I will now open the meeting for questions specifically about the company's performance. Other issues can be addressed as general business later in the meeting, where you will have the chance to ask further questions. I would like to remind you that only shareholders, proxy holders or shareholder company representatives have a right to speak. In addressing the Chair with questions, would you please clearly state your name and advise whether you are a shareholder, a proxy holder or a shareholder company representative. If you have a question, there are people here with microphones in the aisles. Please use these so we can hear your question. Do you have any questions?

Thompson, representing the Shareholders' Association and myself as a shareholder. There's quite a lot of green building development. And I was wondering if you could give us some ballpark figure of the premium you get over and above non-green Star as to justify the extra costs? I know it's nice to be environmentally with it and all that sort of thing. But from a shareholder point of view, could you outline the real benefits that a shareholder would have obtained from such?

I'll pass that to Peter for a more specific answer, but there's -- I guess, the evidence is in the early stages of emerging and a lot of the benefits are sort of more intangible and environmental. But Peter, you'll be able to answer that much better than I can.

Yes. Thank you, Noel. I appreciate the question. It's one of my favorites. Look, I think we should be looking at green buildings and sustainability, not as what you're going to make by doing it, but what you're going to lose if you don't. In short, though, trying to be more specific now. When you look at creating a green building from an existing asset or if you look at creating one from scratch, the vast majority of your excess cost is in planning and time beforehand. So it's about what you know. It's about how you put it together. So individual properties will have a different answer as to how much the premium will be for that particular asset, but the opportunity cost is always significant if you don't do that. So when I say the vast majority, over 80% of our lease inquiry is specifically for green buildings. So you might be sitting for a long time trying to lease something that isn't. It's the first point. But once the tenant in there, what they've found is that you get higher tenant loyalty, higher staff attendance on-site and lower energy costs. Overall, it stacks up extremely well, but the individual costs will vary greatly from one building to another. We've developed quite a bit of time and effort -- quite a bit of learnings from our time and effort that we've put into particularly converting existing buildings. And if you start early enough and plan properly, the excess cost is not huge.

So what you're basically indicating is that there's a longer-term benefit to shareholders rather than an immediate return.

Yes. No, there is a longer term benefit, but there is also an immediate benefit. So we're getting rental rates that are higher, and we're getting leases done more quickly, and time is money. So it stacks up as a green investment but it also gives you better long term.

Would anyone else would like to ask a question at this stage? As I said, there will be a chance to ask questions again at the end. Okay. We'll now consider the formal resolutions to the meeting. The resolutions for consideration today may only be voted on by shareholders, either in person or virtually or by proxy -- and proxy holders and shareholder company representatives present. As noted earlier, I've been provided with a record of the valid proxies received. Proxies received are approximately 377,085,300, and these are being delighted -- sorry, have been audited by Deloitte. There are 847,168,744 shares on issue. I will now hand over to Martin Stearne to chair us through the next part of the meeting. Thank you, Martin.

Thanks, Jeff. Just appropriate as Resolution 1 concerns Jeff, that as a matter of process, another director puts the resolution to the meeting. So Resolution 1 proposes that Jeff Morrison be elected as a director pursuant to Clause 24.6 of the company's constitution and NZX Main Board Listing Rule 3.3.11, Jeff retires by rotation. The Board confirms that Jeff is an independent director, and Jeff has confirmed that he is available for election. The Board supports Jeff's election and believes Argosy benefits from his extensive property market and governance expertise and experience that he brings to the company. I'll now ask Jeff to say a few words.

Thank you, Martin. As I mentioned earlier, I'm a practicing solicitor for -- with some 45 years' experience. I was first appointed to the Board in 2013, and I've had the honor to be the Chair for the last 4 years following Mike Smith's retirement. As I also said earlier, the last couple of years have been challenging, and we have wrestled with the impact of higher interest rates and tax changes. And we still have a way to go before lower interest rates and rental growth lead to improved earnings and the potential for that own growth, pursuing our sustainability strategy, good management and good governance are going to be key to that improvement. I mentioned that the Board is presently undertaking a review to make sure we will continue to have the necessary capability to deliver on our strategy and being able to work on your behalf over the next period to help to facilitate a successful outcome of that review. Thank you. Pass back to Martin.

Thanks, Jeff. Are there any questions on this resolution? No? I'll now put to the vote the resolution that Jeff Morrison is elected as a Director of the company. Voting on this resolution will be by poll. For those shareholders and proxy holders physically in attendance, please tick the relevant box on your voting form. For those shareholders and proxy holders attending virtually, please simply select your voting choice by the options shown on your screen. You can now vote. [Voting]

Thank you. We can now move to the next resolution.

Thank you, Martin. Resolution 2 proposes that Stuart McLauchlan be elected as a director, pursuant to Clause 24.6 of the company's constitution and the NZX Main Board Listing Rule 3.3.11, Stuart retires by rotation, the Board confirms that Stuart is an Independent Director, and Stuart has confirmed that he is available for election. The Board supports Stuart's election and believes Argosy benefits from his extensive financial expertise and experience. Are there any questions on this resolution? There should be a little placeholder here, Stuart, which enables me to ask you to say a few words, which either are read over or it doesn't only exist, but please welcome you on the stage.

Good afternoon. I've had the privilege of serving as a Director of Argosy since August 2018. My background is a chartered accountant. I have and currently hold leaderships in a wide range of segments of the New Zealand economy. This experience, I'm able to share with my fellow directors at Board level. I'm currently the Chairman of the Audit and Risk Committee and a member of the Remuneration and Nominations Committee. If reelected today, I look forward to be part of the delivery of the next phase of Argosy strategy, including delivering favorable returns to our loyal and support of shareholders. Thank you.

Thank you, Stuart. So are there any questions on this resolution? I now put to the vote the resolution that Stuart McLauchlan is elected a Director of the company. Voting on this resolution will be by poll. For those shareholders and proxy holders physically in attendance here, please take the relevant box on your voting form. For those shareholders and proxy holders attending virtually, please simply select your voting choice from the options shown on your screen. [Voting]

Does anybody need time to complete or all good? Okay. Resolution 3 seeks to increase the directors' remuneration pool by $25,000 to $853,000 per annum. Is there any discussion on this resolution?

I -- The Shareholders' Association holds approximately to 39.4 million shares, representing 429 shareholders. I think we're the fifth largest shareholder group. Many of our shareholders that are discretionary shareholders had voted by about 3:1 against the increase in directors' fees. It's quite a substantial number. Although it is -- although the actual increase of 25,000 is not a huge amount, but on these recessionary times, and there's no been -- and there has been no major increase in returns to shareholders in the way of dividends for about 4 years, I feel or they feel it's not appropriate for the increase to be done at this time. I'd like you to comment on that.

Thank you I appreciate the sentiment. There are 2 drivers really. The observation is obviously that in relative terms increases more. The reason is to reflect an increased workload. You've heard a lot about increased reporting on climate change and the responsibilities that flow to directors from that. So there's an increased workload. Secondly, the company strives to keep the directors' remuneration current so that we don't fall into a position where we're seeking to catch up by a significant amount at a regular interval. So we had PwC survey the market and provide us a recommendation as to whether we should seek the increase or not, and we're following that recommendation. What is the -- any of the Board or management team like to add anything to that?

Jeff, just to point out, that it is 3 years since the last review. Last year, the Board elected not to pursue it because there was insufficient evidence of substantive change. But over a 3-year period, $25,000 is not an awful lot over a 3-year period, is pretty small.

Thank you, Peter. So thank you for that comment. So people will have had the opportunity to vote and presumably proceeded or changed their view depending on that discussion. I think we now move to the fourth and final resolution, which authorizes the Board to fix the auditor's fees and expenses. Is there any discussion on this resolution? Voting on this resolution will be by poll. For those shareholders and proxy holders physically in attendance here, please tick the relevant box on your voting form. For those shareholders and proxy holders attending virtually, please simply select your voting choice from the options shown on your screen. As this is the final resolution, the online voting system will close in approximately 30 seconds. Please ensure that you've cast the vote on all resolutions. [Voting]

Does anybody need more time or you're all good? Okay. That completes voting on all resolutions online voting will close at the end of the 30-second period, which I imagine I'm slightly ahead of, and I will now ask for the voting papers to be collected and the box is being circulated. While that's happening, I'll continue to the number of votes to be counted, the votes collected at this meeting and online will be added to the proxies already received and the results will be soon compiled by the registrar and scrutinized by the auditor. The results once available, will be published on the Argosy website and provide it to the NZX. General business. I move now on to the general business of the meeting and open the floor for questions or comments. Again, I ask that when addressing the Chair with questions that you please clearly state your name and advise whether you are a shareholder, a proxy holder or a shareholder company representative. [Operator Instructions] As I noted at the beginning of this meeting, we will try to get as many of the questions as possible, but not all questions may be able to be answered during the meeting. In this case, questions will be followed up by e-mail after the meeting. I'd to remind you that only shareholders, proxy holders or shareholder company representatives have the right to speak or ask questions. The floor is open for any general business or questions. [ Two. ]

[ Neil ], I'm a shareholder. How many people have you got watching online?

I can't answer it. Steve, how many.

Sorry. 39.

Steve, if you got any questions, no. Any other questions?

[ Keith McCracken ] shareholder. I just wonder at what level the Board happy with the share price. It seems to fluctuate from $1 to $1.20. I know you probably all like it much higher, but I just wonder at what level are you guys comfortable?

We're very comfortable when it exceeds the NTA which is currently $1.45. So we appreciate that we're all out of the money at the moment. And we're doing our absolute best to recover or make sure that, that position is managed as well as it can be at an operational level. Obviously, interest rates and tax changes and everything else and perhaps the share price that are things that are out outside our control, but believe me, everything that we can focus on internally and operationally, we are focused on. Any other questions? Okay. That completes the formal business of this meeting. Thank you, everyone, for your attendance, and I'll remind you of our invitation for you to join us on refreshments and to chat with the Board and management. Thank you very much for your attendance.