Articore Group Limited (WAB0.F) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Articore Group Limited Extraordinary General Meeting. I would now like to hand the conference over to Robin Mendelson. Please go ahead.

Good morning, everyone. My name is Robin Mendelson. I am the Chair of the Articore Group Board of Directors. The Company Secretary has informed me that we have quorum present. I, therefore, declare this extraordinary general meeting of Articore Group Limited open. The company was required under the Corporations Act to call this meeting following the receipt of a notice from shareholders who together hold at least 5% of the issued capital of the company. These shareholders seek to replace Articore's 4 nonexecutive directors with their own 4 candidates. Today's meeting is being held as a virtual meeting. Shareholders and their proxies and their representatives will be able to ask questions through the online platform and on the phone in relation to the business of today's meeting and to vote electronically when prompted. If we experience any technical issues that impact the meeting, it is possible that I may need to pause proceedings or adjourn the meeting. I will assess the circumstances and communicate further with you. If this is not possible, you will be e-mailed instructions on how and when to rejoin the meeting. I would now like to introduce my fellow nonexecutive directors, all of whom are present virtually today: nonexecutive directors Robin Low, John Lewis and Bob Sherwin; and Group CEO and Managing Director, Vivek Kumar. Representatives from our share registry, MUFG, are also present and will be acting as returning officer and scrutineer for today's meeting. Before moving to the formal part of the meeting, I will begin with a few remarks. Since its renewal in June, your new Board, with deep Australian and North American corporate and e-commerce expertise, has acted with urgency and a clear focus to stabilize the business and accelerate our turnaround strategy in lockstep with the group's new CEO and Managing Director, Vivek Kumar. We are seeing the benefit of our disciplined approach. The group has just delivered its best fourth quarter in 5 years. Underlying cash flow for the quarter was $2.5 million, a significant improvement of $6 million on the prior corresponding period. The strong result for the last quarter was due to a 430 basis point improvement in the group's gross profit margin and a 16% reduction in operating expenses versus the prior corresponding period. We are confident that we can build on this momentum going forward. In fiscal year 2026, the group is guiding to an EBIT range between $2 million and $8 million alongside underlying cash flow between $5 million and $12 million. This is significant as the group has not achieved positive EBIT in 5 years. I have had the opportunity to meet with a number of shareholders in the past 2 months. Thank you for your frank feedback and candor. We agree that the group has not realized its full potential. Your Board is laser-focused on unlocking shareholder value by accelerating revenue growth and further expanding profit margins. You can expect the following from your Board: a clear strategy focused on value creation and cash flow; a strategic review to assess capital structure, portfolio fit and value creation pathways; the recruitment of an additional director to strengthen Australian governance and complement existing skills; strong alignment with shareholders through performance-based executive incentives and Board ownership of equity; and increased shareholder visibility and accountability, including communication on performance against milestones. We are just getting started. And with your support, we will continue to execute Articore's transformation. This now brings us to the formal part of the meeting. There are 8 resolutions to be considered today, which have been listed in the notice of meeting. The notice of meeting was sent to shareholders in July 2025, and I will take it as read. Before moving to the items of business, there are a number of procedural matters, which I wish to draw to your attention. All items of business will be voted on by way of a poll. Voting will take place via the online meeting platform. Only shareholders, their attorneys, proxies and authorized company representatives are entitled to ask questions and vote at this meeting. To cast your vote, select get a voting card, which appears on your screen. You will need to enter your SRN or HIN or proxy number and postcode and click submit details and vote. Please complete the online voting card for each item of business and click submit vote. [Operator Instructions] Participants can submit questions at any time from now. However, questions will not be addressed until later in the meeting. Questions may be moderated or, if we receive similar questions on one topic, they may be combined. Given all items of business relate to the composition of the Board, we will take questions on all resolutions together after they have been formally presented to the meeting, which I will do now. For further information, the virtual meeting online guide is available for download. The poll will be conducted at the end of the meeting after each resolution has been put to the meeting. In order to provide you with enough time to vote, I now declare that voting is open for all resolutions. I will give you a warning before voting closes at the end of the meeting. Where undirected proxies have been given to me as Chair, I intend to vote all such proxies in accordance with the recommendations set out in the notice of meeting, being against all resolutions. Any directed proxies that are not voted at the meeting will automatically default to me as Chair of the meeting, and I am required to vote those proxies as directed. We will shortly display the number of direct and proxy votes that the company received on each resolution prior to this meeting. The final voting results will be released to the market on the company's ASX platform shortly after the meeting. Resolution 1. As the first resolution relates to my removal, I will hand over responsibility to Robin Low to Chair this item and present this resolution to shareholders.

Thank you, Robin. The first resolution is the removal of Robin Mendelson as a director. Details of the resolution and direct and proxy votes received prior to this meeting are shown on the screen. The Board, with Robin Mendelson abstaining, recommends that shareholders vote against this resolution. I will now hand back to Robin Mendelson.

Thank you, Robin. Resolution 2. Resolution 2 is the removal of Robin Low as a director. Details of the resolution and direct and proxy votes received prior to this meeting are shown on the screen. The Board, with Robin Low abstaining, recommends that shareholders vote against this resolution. Resolution 3. Resolution 3 is the removal of Robert Sherwin as a Director. Details of the resolution and direct and proxy votes received prior to this meeting are shown on the screen. The Board, with Robert Sherwin abstaining, recommends that shareholders vote against this resolution. Resolution 4. Resolution 4 is the removal of John Lewis as a Director. Details of the resolution and direct and proxy votes received prior to this meeting are shown on the screen. The Board, with John Lewis abstaining, recommends that shareholders vote against this resolution. Resolution 5. Resolution 5 is the election of Richard Cawsey as a nonexecutive director. Details of the resolution and direct and proxy votes received prior to this meeting are shown on the screen. The Board recommends that shareholders vote against this resolution. Resolution 6. Resolution 6 is the election of Andrew Nash as a nonexecutive director. Details of the resolution and direct and proxy votes received prior to this meeting are shown on the screen. The Board recommends that shareholders vote against this resolution. Resolution 7. Resolution 7 is the election of Carole Campbell as a nonexecutive director. Details of the resolution and direct and proxy votes received prior to this meeting are shown on the screen. The Board recommends that shareholders vote against this resolution. Resolution 8. Resolution 8 is the election of Christine Christian as a nonexecutive director. Details of the resolution and direct and proxy votes received prior to this meeting are shown on the screen. The Board recommends that shareholders vote against this resolution. We will now move to questions where I will address questions submitted virtually then questions submitted on the phone line.

Moderators, have we received any written questions online?

Chair, we've received one written question from shareholder Richard Cawsey, "Will I be allowed to speak on behalf of the motions?"

So Richard, thank you for your message -- or thank you for your question. As Chair -- can you hear me, by the way?

Yes, we can hear you, Chair.

Thank you. Okay. Great. Thank you. As Chair, we have determined that neither the directors or the nominated directors will be speaking. All shareholders have received information in the notice of meeting about bios of both the sitting directors and the nominated directors. And in an effort to facilitate this efficient meeting, we've determined that we would be fair and only I would address the meeting. Thank you for your question. Do we have other questions?

Another question, Chair, from [ Stephen Mayne ]. Is Christine disappointed with the proxy results?

Thank you for your question. I do not have a response to that. Next question, please?

Thanks, Chair. The next question is asked by [ James Middleweek ]. James asks, when do you expect the strategic review to conclude?

Thank you very much for your question. We have partnered with Citizens to begin our strategic review. We are taking this process very seriously, and it isn't one that we are intending to move hastily on. However, this Board commits to all shareholders that we will communicate the results of the strategic review as soon as we have confirmed a path forward. But we are just in the beginning of the process. Next question, please?