Austal Limited (ASB) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen, on behalf of the Board, I would like to welcome you to the 2020 Annual Meeting of Austal Limited, the General Meeting of Austal Limited. My name is John Rothwell, and I am the Executive Chairman and the principal Founder of Austal. Notice of this meeting was given on the 1st of October 2020 in accordance with the provisions of the company's constitution and the Corporations Act. The notice, including an agenda, specifying the resolutions to be proposed at this meeting and an explanatory memorandum providing further details on these resolutions. We are obviously doing things little differently this year in holding this meeting on a virtual basis. While the circumstances that led to this environment are obviously not ideal, it's great to be able to reach out to so many more of our shareholders outside Western Australia through this online platform. Instructions on how to register, attend and vote at this virtual meeting were issued at the same time as the notice of the meeting. Obviously, you are seeing and hearing me now. You must have managed to register as advised. If you haven't already voted, you can also vote through the online facility. This is a shareholders meeting, and only shareholders, their proxies, attorneys and authorized representatives are entitled to speak at this meeting. Operator Instructions]. Before we begin, I would like to introduce my fellow directors, some of whom are here in Perth, and some who have dialed in from interstate. Starting on my left, David Singleton. David is the Executive Director and CEO. David was a nonexecutive Director of the company from December 2011 and until his appointment as Austal's CEO in April 2016. David has been a CEO of ASX-listed companies for 15 years and has worked in the defense industry internationally for over 20 years. David is also a Director of Austin Engineering Limited. You will all be familiar with David by now. And as you're aware, this will be David's final AGM before he steps down as CEO on the 31st of December this year. Next to David, we have Giles Everest. Giles is based here in Perth and, hence, was able to join us in person. He has a breadth of experience for project and service-based businesses. Giles is a qualified Chartered Accountant, is currently CFO at MacMahon Holdings and was formerly CFO and Company Secretary at Monadelphous Limited. He has held senior financial roles at Rio Tinto and Fluor Corporation. Giles is also the Chairman of the Board's Audit and Risk Committee. Next to Giles, we have Paddy Gregg, our Chief Operating Officer and CEO designate. As was announced some time ago, Paddy will take over the reins from David from the 1st of January 2021, and we're excited about what he'll bring to the role. We also have 3 other nonexecutive independent directors, who have dialed in, and they are Sarah, Adam-Gedge. Sarah has dialed in from Melbourne. Sarah was appointed as a nonexecutive director of the company in August 2017. And in August 2019, the Board also appointed her as deputy Chair. She brings a strong enterprise technology management background to Austal, having significant experience in executive roles in the information technology and consulting sectors, including serving as Managing Director of Avanade Australia. She's currently Managing Director of Publicis Sapient, which is a business transformation hub of the Publicis Group. Sarah is also Chair of our Nomination and Remuneration Committee. We also have Chris Indermaur. Chris has dialed in from Queensland. Chris was appointed as a nonexecutive Director of the company in 2018. Chris has over 30 years of experience in large Australian companies in engineering or commercial roles. Amongst these roles, he was the Engineering and Contract Manager for QNI Nickel Refinery at Yabulu, company Secretary for QAL and General Manager for Strategy and Development at Alinta Ltd. Chris is also a Director of Austin Engineering Limited. Mick McCormack. Mick is new to the Board of Austal, having joined us in September this year. He has also dialed in from Queensland. Mick has over 36 years experience in the energy infrastructure sector in Australia, and his career has encompassed all aspects of this sector, including commercial development, design, construction, operation and management of Australia's -- most of Australia's gas pipelines and distribution systems. Mick was Managing Director and CEO of APA Group from 2005 to 2019. He's also a Director of Central Petroleum Limited, the Australian Brandenburg Orchestra Foundation and the Clontarf Foundation. Mick has prepared a short introduction video, which I will show now.

Good afternoon, folks. I'm Mick McCormack, and I joined your Board on the 14th of September this year to fill a casual vacancy. As is usual practice, I am now standing for reelection at this AGM. And before you cast your vote on the matter, I'll give you a thumbnail sketch of my background and the skills and experience, I believe, I will bring to the Austal Board. I had an executive career of 36 years, culminating in my retirement from APA Group in July 2019, being in my 15th year as CEO. My entire career has been spent in the energy infrastructure industry and which I can lay claim that during my time with APA, I have owned, operated or managed most of Australia's gas transmission and distribution system. In addition, my experience includes developing gas side power stations, gas processing facilities, LNG processing facilities, electricity transmission and large-scale renewables, that is wind and solar, across the country. In respect of growing a business, when I was appointed CEO of APA, it had 30 employees at an enterprise value of $1 billion. When I retired in 2019, APA had an enterprise value of $24 billion and over 3,000 employees. In respect to returns to shareholders, APA delivered total shareholder returns of over 17% each year, making it one of Australia's most successful companies during my tenure as CEO. The success of APA was built largely on the execution over the long-term of prudent M&A and organic growth opportunities, whilst always maintaining an unyielding focus on cost control and operating efficiencies. My career has always been about growing a business that builds long-lasting assets, and that is where my entry in Austal was peaked when I was first contacted some months ago. In addition, I've always had an interest in boats. To me, Austal is a real Australian manufacturing success story, that now has a global reach in the niche of defense and commercial shipbuilding markets it competes in. And what really excited me about Austal is to hear of its future growth plans, which is where I believe my skills and experience will benefit the company. In summary, I'm delighted to be offering myself up for reelection to your Board. And I believe my skills and experience gained in leading a large ASX-listed company will benefit Austal and help making prudent investment decisions, continuing a safe and efficient operations, managing the interest of stakeholders and, importantly, for you, our owners, our continued focus on profitability. Thank you, and I look forward to your support.

Thank you, Mick. And we're certainly very pleased to have Mick on our Board. I would ordinarily introduce you the members of Austal's Executive Team at this point. However, given the virtual nature of this meeting, most of them are not in the room today. However, we do have Greg Jason, our CFO; and we have Adrian Strang, our General Counsel and Company Secretary, here with us. We also have Tim Richards from Deloitte, who are the auditors responsible for the audit of Austal. Also in attendance is Paul Branston representing our legal advisers, Herbert Smith Freehills. Each of our directors and team present is able to assist in answering your questions, and a period for discussion will occur later in the meeting. Given that we are doing things differently this year, I've taken the opportunity to prerecord my Chairman's address, and I'll play that video for you now. Prior to David's detailed operational presentation, I will take a moment to provide my overview of Austal's performance in the year and where to next for Austal. The 2020 financial year was one of strong financial performance for Austal. The company exceeded $2 billion in revenue for the first time in its 30-plus year history and reported a record EBITDA of $176.1 million and a record net profit after tax of $89 million. These results enabled the Board to increase the dividend payment from $0.06 per share unfranked in the financial year 2019 to $0.08 per share unfranked in 2020. And throughout the COVID-19 pandemic, all our shipyards remain fully operational. Appropriate health and well-being measures put in place to protect our almost 7,000 strong workforce. We are, however, cognizant that the COVID-19 situation remains dynamic and has the potential to have an impact on our operations. We will continue to monitor the situation closely. And at that, we're required to mitigate the potential impacts from the virus. U.S. operations celebrated 20 years of shipbuilding in December 2019. In just 2 decades, Austal USA has grown to become a world-leading defense ship buildout. In that time, we have been the only foreign-owned prime contractor to design, construct and sustain ships for the United States Navy. Austal USA has been the core driver of our financial performance for a number of years in this financial year. It constituted around 3/4 of our revenue through the ongoing efficient delivery of high-quality aluminium vessels to the United States Navy. 3 ships were delivered to U.S. Navy during 2020, with a further 7 in various stages of construction. At last year's AGM, I talked about our expansion in Australasia with new shipbuilding facilities at our Cebu shipyard in the Philippines, new operations established in Vietnam and through our joint venture in China. In 2020, it was a 3-year expansion, and reorganization of Austral Australasia was evident with stronger earnings and improved margins. Led by a high-caliber team, the reinvigorated Australasian business is in a robust position to adapt and navigate through future obstacles in Australasia. We remain aware that COVID-19 presents the statistical challenges for our integrated network of shipyards and the impact of global travel may cause a softening in demand for large vehicle ferries. Our support business, which operates at our major shipyards as well as other strategic locations around the globe, went from strength-to-strength. Revenue was up 28.4% compared to 2019. Our strategy has been to grow our global support business as an increasing number of Austal-designed and built vessels are being commissioned and deployed by the U.S. Navy. Providing support services will deliver a long-term, stable income stream that will underpin sustained shareholder returns. Austal entered the 2021 financial year at a $4.2 billion order book, including contracted orders for U.S. Navy that extends through to 2024. And with the delivery of our work in hand and the award of no additional vessels in the U.S.A., the order book is now lower than 12 months ago. While the award of the U.S. Navy frigate program to an alternate bidder in May 2020 was clearly disappointing, we are now in the midst of expanding our mobile Alabama shipyard to participate in future U.S. Navy programs for steel ships. These facility upgrades are jointly funded. The U.S. government offered us to a substantial brand to expand and upgrade our facilities. Upside of the U.S.A., in 2020, we secured a $324 million contract to design and construct 6 evolved Cape Class Patrol Boats for the Australian Navy. This is the largest contract for an Australian vessel construction program ever awarded to Austal and will assist in providing stability for our Australian shipyard and workforce in the years ahead as we look to navigate the economic challenges presented by COVID-19. Before closing, I would like to recognize some personnel changes that have taken place in the year. Firstly, today will be David Singleton's last AGM as Austal's Chief Executive Officer, handing over to Chief Operating Officer, Patrick Gregg on January 1, 2021, following a planned 6 months transition period. I would like to take this opportunity to thank David for his contribution of what will be almost 5 years as CEO at Austal, and I wish him all the best for the future. I also welcome Paddy as CEO designate. Paddy's deep experience, drive and commitment meant he was a natural successor to the CEO role when he joined Austal in February 2017. We recently announced Ian McMillan will commence as Chief Operating Officer from the first of January 2021, joining Austal from BAE Systems Australia. Secondly, I'd also like to welcome Michael McCormack, who joined the Board as a Nonexecutive Director just last month. Mixed track record in delivering growth as CEO at the APA Group for over 15 years and his considerable experience in the infrastructure sector meant it was a clear standout from the diverse list of high-caliber candidates presented to the Board by an external recruitment firm. We are confident Mick will add significant value to Austal as we undertake the next phase of our growth strategy. So in closing, I would like to thank my fellow Board of Directors for their ongoing guidance and counsel and express my sincere thanks to all Austal staff, whose hard work and adaptability and resilience enabled Austal to deliver record financial results in an unprecedented year. I'd also like to specifically note the contributions of the executive leadership team supporting David and Paddy, Including Greg Jason, our CFO and Ben Marland, Vice President, Sales and Marketing; Adrian Strang, General Counsel; Andrew Malcolm, Vice President of Strategy and Commercial Development; David Thomas, VP of Defense; Craig Perciavalle, the President of our USA operation; Wayne Murray, President of Philippines Operations; Mark Dummett, President of our Vietnam operations; and Lisa Breen, our Head of HR. Finally, to our loyal shareholders, our focus is on delivering on our existing pipeline and making the right strategic decisions today that will enable the business to grow into the future and deliver long-term value. I thank you for your ongoing support. I now invite David Singleton to provide a more detailed overview of our performance in the financial year and the company's outlook. David?

Thank you, John, and welcome to everybody who's attending this virtual AGM this year, particularly those over on the East Coast of Australia, who have not had the ability to involve themselves in the AGM in this way in the past. As John said, this is my ninth attendance at an AGM for Austal, the last 5 of those as CEO, and will be my last as I hand over to Patrick Gregg at the beginning of next year. I would reiterate what John said that Paddy is absolutely the right person for this role at this time. We've titled -- or I've titled this presentation celebrating success. And it's not only a picture about the financial success of this business over the last 12 months, but it's also about the success of Austal as a business that has been developing over many years. Austal still remains the largest aluminium shipbuilder in the world. It's the largest Australian-owned defense company, and it's 1 of the 4 biggest shipyards in the United States. And this picture here is an image of a traditional celebration as we've completed the first of 2 trimaran vessels for Fred Olsen in the Canary Islands, a very sophisticated vessel that was completed under really difficult conditions as COVID started to close down supply chains. I'm going to -- in my presentation, I'm going to go through a bit of a year-end review that we will do through a video. We'll do some overviews of 2020 more detailed reviews from the individual shipyards, and then I'll give a strategic and business overview at the end of that. Just before I start the year end review, I'll say that this has been a year of both the expected and the wholly unexpected, and what I mean by that is that what we expected in 2020 was the continued development in the United States of the really good quality shipbuilding activity that we have been seeing developing over some period of time. We expected the EPF program to continue to perform, and we expected to see the improvements in the LCS program that have been planned over some years. And that was brilliantly led and brilliantly implemented. We also expected to see the Australian strategy really playing out and coming to a conclusion at this phase, where the investments we've made in Vietnam and the Philippines and the transfer for competitiveness reasons of our commercial shipbuilding activity to those sites to come to fruition. And that's indeed what happened with the delivery of important ships from both of those sites. What we didn't, of course, know was going to happen was the wholly unexpected, and that was the impact of COVID-19 on our business. I can say that we went into COVID with 2 very clear objectives. One of those was to keep our people safe from the virus itself, and the other thing was to keep our people in employment and continuous employment and, therefore, to keep them personally and their families safe. And I'm enormously proud of the work that went in on all the locations around the world to achieve exactly that. All of our operations stayed open and functioning throughout that period. And although took a great deal of effort and organization and change throughout the business in order to make that happen, nonetheless happen it did, and we met the objectives that we set ourselves at the beginning of the pandemic. I'm going now to play you a video of the year in review for the business to give you an overview of all the things that have happened. [presentation] Really is exciting when you see a video like that and how much has gone on through the year. It's quite steering. I'll turn now to some just key facts around Austal from this infomatic. We have 7 operating shipyards in Austal during last year in 5 different countries, employing 6,800 people, a little bit over half of those in the United States. And what's really interesting, though, if you look in the -- sorry, and 45 ships across all of that organization, 45 ships under construction or scheduled for construction with 10 new ships, including 6 Cape Class Patrol Boats ordered and a very large -- in fact, the largest ferry that we have ever designed and built that was ordered during the year as well and will be built in the Philippines. I think what's really interesting about the business today, though, is caught in those -- in the bottom right-hand area of that graphic, and that is that last year, over 85% of the total revenue of the business was defense-related in 3 of the most important defense regions in the world, the United States, Australia and Asia. And indeed, following our determined push at growing our support revenue, we now have 17% of the total revenue of the business from that support activity, both in the United States and Australia. And you can see very much in those figures how this business has matured very much into a defense business over the last few years. So I'll just talk very quickly about financial headlines for last year. As has already been said, it was a record profits last year, $130.4 million of EBIT, translating into $89 million worth of net profit after tax, both of which were up over 40% on previous years. And the previous financial year 2019 was in itself a record year. What's really good to see, however, is that turn into cash. So we've had another very strong period in operating cash flow, $164 million, left us in a strong cash position of $231 million and allowed us to pay a dividend for the year that was up 33% on the previous year. Underlying all of that is a continued and a notable increase in the shipbuilding margin in the United States that has risen from 7.9% to 8.1%, but a solid doubling of the profitability of the Australasian business up to 6%, on its way to meeting a target that we set ourselves 2 or 3 years ago to match the profitability percentage of the United States and Australasia. Cash position, as I said, has been very strong. And you can see from this graphic how that profitability rise we've seen in the business over the last few years has really turned into cash and has provided significant amount of capability for the business going forward. It's this strong cash position which has allowed us to make the investments that you've seen recently. And John referred to $100 million investment that Austal's making in the U.S.A., 50% funded and by the company itself. I'll turn now to a review of the shipyards and the style of this sort of presentation, of course, lends itself very well for us to be able to use videos to give you perhaps a better insight than I can do simply from a PowerPoint presentation. So the first one of these is Patrick Gregg talking from our Henderson shipyard. Patrick has been instrumental in implementing the plan of how we reshaped our business in Australia and in Asia in order to make it much more competitive for our commercial business, but also to focus on the defense business here in Australia. And that's a transformation that is now largely complete. I'll allow Patrick to talk about some of that.

Here in Henderson, Austal Australia has continued to develop our naval shipbuilding capability through the delivery of 21 Guardian Class Patrol Boats for the Commonwealth of Australia and construction of our benchmark Cape Class Patrol Boats for both Trinidad and Tobago Coast Guard and the Royal Australian Navy. The ones behind me are Hulls 398 and 399 for the Trinidad and Tobago Coast Guard, 258-meter Cape Class Patrol Boats that will be launched soon and delivered in the first half of 2021. It's been a fantastic export contract for Australia that has engaged hundreds of businesses across Australia and employed thousands of people, both here in the shipyard and throughout the defense industry. In May this year, we were awarded a $324 million contract to construct 6 more Cape Class Patrol Boats for the Royal Australian Navy, adding to the 2 already in service with Navy, and 8 operated by Australian Border Force. These new capes will support the Royal Australian Navy's growing patrol boat fleet and presents further opportunities for Austal to expand our in-service support and sustainment services throughout Northern Australia. We're particularly proud that despite the significant challenges of COVID-19, we've been able to maintain construction progress and productivity on not only these vessels, but 2 large trimarans for customers in Spain and Japan and deliver Guardian Class Patrol Boats every 3 months. In fact, we're delivering another 1 here in Henderson today, the 8 Guardian Class Patrol Boat for Commonwealth of Australia and second vessel to be gifted to the Kingdom of Tonga. Going forward, Austal is really well placed to build upon a strong track record in naval shipbuilding, and we're particularly excited about the 4 structure plan that I announced some $75 billion worth of naval shipbuilding going forward over the next 15 years. This should present tremendous opportunities, both in the new build shipbuilding areas and the sustainment areas. I'd like to finish by saying well done, and thank you to the team for what has been an exceptional year in so many ways under exceptionally difficult circumstances. Thank you for your support.

I'll move on now to the United States and Craig Perciavalle, who is the President of that business. Craig has overseen an absolute renaissance in the Alabama shipyard in recent years. EPF has continued to be an exemplary program, and LCS has improved so much that it's now making the difference and driving up our margins. But also he's overseen a move in the United States back into a significant support position and has built that sustainment business starting in Alabama, moving on to San Diego, and more recently setting up a support business in Singapore to support the fleet as it moves into the Asian theater. And that's been a really important part of the development of the U.S. in the last few years. So I'll hand you over to Craig now.

Greetings from Austal USA. FY '20 was another very good year for us here in Mobile, Alabama. First and foremost, we continued our track record of being one of the safest, large shipyards in the United States. Our new construction programs continue to perform very well as we delivered 3 vessels to the U.S. Navy last year, EPF 11, the USNS Puerto Rico, LCS 22, the USS Kansas City, and LCS 24, the USS Oakland. We started the construction of 3 more ships and finished the year with 7 ships under various stages of construction, including 2 that are very near and dear to our hearts, the future USS Mobile, LCS 26 and LCS 30, the future USS Canberra. The service business continued to grow as we provided service and support to many vessels around the globe. We continue to mature our efforts in Singapore as we successfully supported the deployments of LCS 8 and the USS Montgomery and LCS 10 for USS Gabrielle Giffords. We also supported multiple EPS operating around the globe and are very proud of what our ships do to support our nation's defense. We ended the year with exciting news about our plan to add steel shipbuilding capability to our operations here in Mobile with support from the U.S. government as we adjust to the evolving needs of our customers and increase the new construction markets that we serve. These efforts are well underway and will be completed within the next 24 months. With a strong FY '20 behind us, we're laser-focused on FY '21 and beyond. The Navy has remained committed to grow to 355 ships or more, both manned and unmanned, and we remain well positioned to help them get there. Our excellent performance, facility investments and continued focus on advancing the design of both unmanned and manned vessels sets us up well for continued long-term success going forward. I want to thank the incredible employees here at Austal USA for their hard work and dedication, which has resulted in another great year for our business. I also want to thank our shareholders for your continued support and faith in us. Thank you all from us here at Austal USA.

And what you can't see and wouldn't know is that as Craig was recording that clip, there was a hurricane running through the state of Alabama and was turning the lights off in the facility at the time. So it's a pretty courageous thing we aim to do. I'll move on now to the Philippines. And this has been a key part of our strategy going forward. The big white facility that you can see in the background, some other facilities, that you can't see have been the product of our investment in that facility. This is now the most modern and capable individual facility that we have anywhere outside of the United States. And as you can see from this picture, it's just completed its first major vessel for Europe, the largest vessel by volume that we have ever built. Our winds have been really up against it this year with the impact of COVID, have been locked down in the country essentially for 9 months now. And several of those months, Wayne and his management team have lived only on the shipyard itself. So great performance from him and his team through what has been extraordinarily difficult time for them.

[Foreign Language] from Austal Philippines. This has certainly been a big year for us in so many different ways. We started with the opening of the very impressive John Rothwell assembly hall that you can see directly behind me. This, together with the peter base has effectively tripled our build capacity, and we can now build the largest of our vessels completely indoors, free of influence from the ever-changing tropical weather. At around the same time, we also successfully delivered a 49-meter, high-speed vessel to Aremiti of French Polynesia, and that was just the beginning of our year. Later in the year, we successfully launched the largest bulk volume aluminium, high-speed catamaran ferry, the FSTR fueled line for Norway. This impressive vessel with its offbeat bowl, optimized hull design, catching color scheme and striking delivery is now ready for the final commissioning, having navigated the challenges of COVID that we are all affected by. Inside the shed, we are currently in the final stages of assembling the largest trimaran ever built in the Philippines, a 115-meter trimaran for Fred Olsen of the Canary Islands. This is the second of 2 vessels that were ordered by Fred Olsen from Austal in 2018, the first of which was delivered from Austal itself in Australia. Last, but by no means least, we are now working on what will be the largest vessel by volume ever built by hospital anywhere. We are pleased to be working on the 115-meter Express 5 for Molslinjen of Norway. 2020 will certainly go down in the Austal Philippines' history books as an extraordinary and exciting year. At this time, when we are limited with face-to-face contact, I would like to take this opportunity to thank the entire team involved for the very big effort that they have put in over this entire year to continue building these exciting vessels and achieve such great outcomes. Thank you to all involved.

It looks pretty good for a man who spent several months living 7 days a week in a shipyard. Lastly, the last review we're going to do is from Mark Dummett, who's President of our newest facility in Vietnam. This business emanates from a decision we made a few years ago to extend our capacity in Asia, and we looked around the best place to do that and focused on Vietnam for 2 reasons. One is that Vietnam itself is a good center for this kind of activity with really good quality labor and good access to infrastructure, but also perhaps much more importantly than all of that was that there was a good quality management team in Vietnam, many of whom who previously trained and come out of Austal, who were building aluminium ships for a company that was going into administration. We attempted to buy the business itself. We were unable to do that, so we ended up employing the entire management team building a new shipyard, and they moved straight into building a shipyard in under 4 months and getting into production of this vessel, a large, 94-meter vessel for Trinidad and Tobago, and I'll let Mark talk his story.

I'm standing in front of the newly commissioned APT James, a 94-meter, high-speed ROPAX catamaran, that is soon to be handed over and bound for the port of Spain in Trinidad and Tobago. A lot has happened since we broke ground in Vung Tau port in late 2018. And despite COVID-19, we have manufactured and launched this vessel in a little under 20 months. During that time, we've also built a fully functioning shipyard with a skilled workforce peaking at 440 in March of this year. A little under 40 of these employees are still naval architects and mechanical engineers. We're working under the guidance of our Australian design team, have largely been responsible for the design of our second vessel, a 41-meter passenger-only catamaran for the Comoros archipelago. This vessel is now in front of schedule and well placed to launch in March 2020. Without doubt, we are truly open for business in Vietnam and are looking forward to completing many more impressive ships in this growing shipyard.

I will now turn my mind to the strategic position that we find ourselves in and the impact that it will have on Austal, whilst much of the world has been focused on COVID-19, whereas the defense business are focused very much on the rapidly changing defense environment around the world. Post the second world war, we had 30 years of the cold war, really focused on Northern Europe. And then post that, as the cold war came to an end the actual conflicts that we saw in the Middle East. But it was the President Obama in the United States, which made the initial moves that we are seeing now, which they tend, at the time, the pivot to Asia. And this was a movement of capability and troops out of Europe and, to some extent, the Middle East into the Asian region, as it was seen as the next area for potential nation-state competition. That has also accelerated the fence expenditure in major areas around the world. The United States, a couple of years ago, passed a resolution to increase the size of the United States Navy by 20% to 355 ships. And more recently, Mark Esper, the Defense Secretary PAUSE has held at a new dawn of increasing that target from 355 ships to closer to 500 ships for the United States Navy. Great opportunity for a company like Austal embedded in the U.S. system. Equally, what we've seen here in Australia is a very long-planned expenditure increase in armed forces in this country, in particular, in the Navy as well, with a $95 billion expenditure program on new ships over the next few years. We will see defense expenditure in this country go from less than 2% of GDP to substantially more than 2% of GDP over the next decade. And we're seeing exactly that kind of approach in Asia as well. Whether it's the Philippines or Vietnam or Indonesia, we're seeing increased expenditure demands as a result of the strategic conditions in those countries. We're also, of course, developing our business to suit, and Asia will be an important center for our support business into the future. We recently, at the beginning of this year, got accreditation from the U.S. Navy to use our Australian sites to carry out work on behalf of the United States Navy. And we established a support center in Singapore and are currently working on an additional support, large support center in further up in Asia. It also demands, of course, that our business moves with where the customer is going, and we're seeing the customer -- a lot of the customers' demands in the future being for steel ships. And that has been the thing that's driven our investment here in Australia a few years ago into steel ships into the U.S.A. and into Asia. As we've already mentioned, we made a decision 2 or 3 months ago to invest USD 100 million into an expansion of our current facilities in Mobile, Alabama. Perhaps most pleasingly about that expansion, however, is that 50% of that expenditure is driven by the United States government, who set themselves who will fund half of that integration. The new facilities are due to be ready by the middle of 2022, and I applaud the decision of the U.S. business and its ability to get the support that it has from the U.S. government for doing exactly what they're doing. The reason why is quite clear on this graphic. If we think about the vessel types and sizes that we see coming through in the future, and we think about the vessels that we will be able to build in Austal, the steel shipbuilding facility really grows the target for us by about 3x as we see these new steel ship programs come through. That's a large target by our own assessment looking at the programs that we see across the United States is something like $2 billion worth a year of new start programs, of ships about the size that Austal can produce in the U.S., for which there are no current incumbents. And those programs are largely starting at the roundabout the time that our new facilities will be up and operational. I'll move on now to defense support, which we've talked about many times before. This has really been a very successful growth for aster, but I want to emphasize why this is so important. And that is that carrying out the French support is an extremely complex and sophisticated activity. But the fence department demands high reliability and availability of its systems in this particular case, across ships. Indeed here, in Australia, we contract on the base of -- on the basis that we make ships available for a certain period of time of the year, and that they remain reliable. That's a complex process to do, requires a lot of planning, a lot of full thought and a lot of analysis of the way that the vessels perform in order to keep that availability high. That has required an investment which has gone on for many years now in the basic underlying skills in our people and the technologies and the processes necessary to do that. And the result of that has been successful, and we've seen double-digit growth in that support business in the future. Why is that important to investors? Well, because that sophisticated position has led into good, strong margins in this business. And it's of interest, isn't it, that our support business today is achieving EBIT margins similar to our new shipbuilding business, but has decades of opportunity ahead of it. As we build and deliver new ships in our 45-ship order book, that will, of course, relate to more sustainment activity. As those ships are deployed more often, that will relate to more support activity. As those ships need to be upgraded, as they get older in service, that will create more support activity. And as we've indicated, we confidently expect that over the next few years, our support revenue base will increase to over $500 million a year with inorganic-type opportunities available as well to continue to grow that business. It's not only been exciting in the United States, though it's also been exciting here in Australia. And things have changed dramatically in Australia. Very recently, I think if I go back a couple of years ago, we had some concerns about the Australian business and how it would carry on in the defense market. Boy, we've seen a change in that over the last couple of years. Very recently, we've seen the culmination of what I think is about 3 years of development in the Royal Australian Navy that has led to them publishing a 4-structure plan, which is a very detailed plan of pretty well all of the ships the Navy expects to buy in the future. And whilst that includes a lot of ships, of course, that have already been ordered and well understood, it includes a lot of ships that we did not have sight of only a year or 2 ago, and creates a really interesting pipeline of ships going forward in the future. Many of those are still ships that supports the pivot that we've been doing to steel in this country. I think this is a really good outcome from the governance emphasis that is going to support defense, defense exports and the fence technology. Because one of the things that we have seen from the Navy, which we have not seen before, is not only a clear shipbuilding plan, but a clear and written determination that pretty well all of those ships are going to be built in Australia. And most of those ships will be built in Western Australia. I'll just touch on the commercial ferry market. And as the chairman said previously, this is probably an area of our business that will be affected by COVID-19. And it is a smaller part of our business these days. We think it will be less than 10% of revenue in this financial year, but it is a market where we have an extremely strong brand. And if a customer is looking for a high-speed aluminum vessel anywhere in the world, very unlikely that Austal will not be on his list of companies that he would go to seek. Our repositioning of our manufacturing business in Asia has also fundamentally changed our competitiveness in the market, and I'm really pleased that we took the decision when we did because it's put us in that position at a time when margins are likely to be tighter, I think, in this business over the next few years. We do have a solid pipeline of new PAUSE programs that we're seeing, and we'll look forward to seeing some of those transfer into programs over the next year or two. Lastly, I want to talk about research and development. I said about 3 years ago that we intended to triple the investment we were making in technology across the business, and we have done that with some very notable successes. And you can see here some graphics on electric ships on the use of artificial intelligence of -- on the bottom right-hand corner there of autonomous and unmanned ships as well. And these are programs that we're working on both in the United States and here. I'm going to play you a short video in a second by Andrew Malcolm, who is our first Chief Digital Officer. I have to say that when we first thought about digital in a shipyard 4 or 5 years ago, we were really unsure about the role that it could play in developing our business and creating new opportunities for us, but we decided that it was something that we would push for anyway. And it had a really significant impact. The first product we looked at was this MARINELINK Smart, which is an artificial intelligence, big data system brain that goes on to the ships that we started developing a few years ago and has now been sold to a number of customers. We moved on to a sophisticated maintenance management system, fleet-wide maintenance management system for onboard, off-board cyber-protected, maintenance-type management, which has now been sold to the Royal Australian Navy, and I think has a really strong future in that environment in the future. Quite interesting activities around automation. So for instance, our control systems, which used to be built from the bottom-up by engineers are now built automatically, allowing software engineers to spend their time on improving the products rather than building the base products themselves. And we are now experimenting more and more on automating the basic design process of the company as well with some really significant successes so far. And we've just started the process of using digital systems for optimizing our design. We have always used a finite element analysis and computational flow dynamics-type computer systems for our design, but we're now using neural networks in order to fully optimize the use of those tools. That allows us to do much more optimization of a vessel much more quickly than we were ever able to do before. That really is transforming the way that many parts of our business work, and I feel as if we're at right at the beginning of the opportunities that, that will deliver. So I'll let Andrew Malcolm now talk about some of that work.

I'm here onboard the Queen Beetle. She's the latest demonstration of Austal's world-leading trimaran technology, but, underneath the hood, she's also carrying the latest in our digital technologies. For example, the MARINELINK Smart system on board is streaming real-time operational data from the vessel into the cloud. There, we've got machine learning algorithms that we've trained specifically for this hull, making recommendations back to the crew about how to optimize the vessel operation, as well as optimize the comfort and performance for the passengers on board. This is one example of the new digital products that we're developing here at Austal. We've also got a system under development in partnership with the Australian Navy onboard our patrol vessels. This takes not only operational data, but also maintenance information and reliability information, allowing them to plan the availability and forecast the performance of the vessels hard into time. They can do this at a fleet level, all the way through to individual bits of equipment on individual vessels. We're applying digital technologies, not just on the vessels that we build, but across our entire design build and sustainment activities here at Austal. We've got a number of new technologies in the works, including metal 3D printing as well as use of neural networks and artificial intelligence to accelerate the rate that we can optimize new designs and new hell forms. I'm excited about the range of opportunities we've got to apply these digital technologies across the business. And in the coming year, you'll see these roll out, not just on the products we deliver, but in the way we work inside the business as well, helping us to coordinate operations across an expanding number of facilities and sites in the region and in a world where travel is increasingly challenged due to COVID, keeping us connected across the business and making us work as one Austral team.

Exciting stuff. I'll finish now by giving a short-term and maybe slightly longer-term outlook on the business itself. We started this year indicating that we did not wish to provide guidance because of the uncertainties around COVID-19 and the impacts that travel was having and how it was affecting our business, particularly in the ability -- the inability for us to move commissioning engineers out of Europe and other places in order to get vessels finished. I'm pleased to say that whilst these matters are still confronting and of a daily action for us, we are managing these things well. And whilst we're not clear of risk, matters are definitely improving. Last year, as I said, was an exceptional year with EBITDA with -- sorry, with revenue up 13% and EBITDA up 41%. But revenue was, in part, lifted by exceptionally strong levels of shipbuilding here in Australia and the United States due to a large number of order wins in previous years, but also to a very positive foreign exchange position that we found ourselves in through the year. As a result of that position and the reversal of the foreign exchange impact, we expect to see revenue this year of approximately $1.8 billion. However, the story on improving margins, both in the United States and particularly in Australia, has meant that we expect a -- currently expecting an EBIT margin for this year of around about $125 million, a very positive story that we will update, I'm sure, at the end of the interims and the full year later in the year. As you can see, the business has -- continues to travel very well and has a level of profitability and consistency that I think the capability and the technology leadership that this business has deserves. We are, however, highly conscious of the need to grow and develop the business and to win new programs. We know that we have to work vigorously in that area, and we need to continue to grow the strategic position of the business. And I think the fact that the balance sheet is so strong now gives us the ability to do all of those things, not only as we have done it in the past, but in new and interesting ways. Most importantly, though, I think we are in a very strong and positive market in the defense market in the navel arena. And I think being involved in the United States, here in Australia and in Asia is uniquely supportive of the business going forward into the future. And as my very last comment at my last AGM, I'd like to say what an absolute privilege has been working with the management team in this company. I can say that over the 40 years that I've been involved in business, many of those leading businesses, I have never worked with such a fine management team, dedicated, intelligent, capable, determined people. And the good news is that pretty well all of them, much younger than me, so many more years to go and able to support the Austal business. And if I'm sad about anything, I'm sad about the fact that I won't to get to work with such a high-quality management team ever again. Thank you.

Thank you, David. That was a great presentation. And it's wonderful that we can take our shareholders around the world and that you hear firsthand from our team, the managers in their respective businesses. If I think back, starting with the last video or the second last video from Vietnam, Mark Dummett that runs that joined me at Austal very early on in the piece, and that's more than 30 years ago. We go to Wayne Murray in Cebu. He was a naval architect here. I haven't counted a number of years, but he was -- a very long-serving and very capable naval architect. Craig Perciavalle in the U.S. joined Austal almost at the start, so which was probably we started in 2000. So let's say, 1 or 2 that Craig's been there and graduated to be the president of the company. Business is about people so often, and these guys are the very best that we have out there. And it was just wonderful to be able to show you what they're doing.

It is now time for questions. And so, Adrian, in relation to the presentation or, in fact, any other general matters, are there any questions?

So the first question comes from [Paul O'Reilly]. The question is, what has caused the share price to drop so much just recently? And do you see this downward trend continuing?

Thank you for that question. I'll attempt to answer that myself because, frankly, I don't know, and I don't think anyone else does here. There is nothing on our radar that we're aware of that would cause this drop. So there's some mood out there in the market that's caused that change. You've heard our presentation. There is no serious news on the horizon. I've just got to assume that it's just a market mood at the moment.

Thank you. The next question is from [Bob Hu]. And the question is, what further measures are being taken by Austal to restore confidence after the news article about the corruption investigation into the success payment from the Australian border forced to Austal in 2015 and '16? Will Austal be taking further action to protect its reputation?

So as everyone's aware, the Border Force issue allegations of corruption are quite new. We go back some years when Border Force itself is in a confused state that some of you will remember and, somehow, these allegations come out of that period. What I can say is that we built a group, of course, a number of these patrol boats for Border Force. They were great boats, but, as happens, there were some issues that we don't think are major issues. But nevertheless, it caused Border Force to withhold a serious amount of what should have been progress payments, if you like, this equal to an overdue account of circa $40 million. We then -- our previous CEO communicated or, if you like, discussed that, negotiated that with the then head of Border Force and said, "This is unreasonable. Whatever correction are required to the boats, that don't substitute anything like what you're withholding." That particular manager saw that the -- saw that was correct and paid us a big chunk of that money, retaining some until we've corrected the issues. We're not aware of any form of corruption through that whole process and where that's come from. We believe it's probably targeted at throwing rocks within Border Force, but we have no knowledge of anything that we've done that we should not have done.

The next question is from [Patrick Moore]. And the question is, over the next 2 or 3 years, do you see Austal growing mainly through acquisitions as opposed to generic growth?

Okay. So again, I'll have a go at that one myself, and it's an impossible one to answer definitively. So both is the answer, both generic -- sorry, inorganic. As we've announced in the past week, we've just recently purchased the business in Cairns. That will help grow our sustainment ability or potential earnings. We constantly work on organic growth in many ways, but there will be a blend of both. We're looking at an opportunity in the Philippines at the moment. We're going to continue to grow our sustainment capability in the United States, which would also include some inorganic moves. So the answer is both.

The next question is again from Patrick Moore. How long might it be before you launch your first deal ship out of Alabama?

So the transformation -- not the transformation, the addition of steel building capability in the United States has commenced. So we've recently made an acquisition of some land on the other side of the Mobile River, which has a dry dock on it, and will give us a floating dry dock. And it will give us some ability to move some of our expansion into steel into that yard. So the work is underway now. The grant has -- is unconditional from the U.S. government in so much as we have it. And we have the resources of our own to match that as we're required to do. All of that is ahead of us winning any steel defense orders in the United States. So I think we can take comfort out of the fact that the U.S. Navy -- or government, rather, has tipped in USD 50 million to give still that capability. And you can have reasonable confidence that orders will flow from that. As to when exactly, I don't know the answer to that, but the programs in the U.S. are substantial. So we're confident we'll win some work in the near future, certainly on completion of the steel capability.

Another question from Paul O'Reilly. With the development of offshore shipbuilding in the Philippines, Vietnam and China, will the shipbuilding program in Australia be wound back? I think it's important that Austal remains in Australia as an active manufacturing operation.

So there is no intent -- and thank you for that question. There is no intent to close the shipyard here in Australia. So the reason why we moved abroad was primarily for the labor costs and, of course, to make sure that we could continue to compete with our commercial ferries. In Australia, we see, and there's been change of that for some time, that we're moving more and more into the defense space. So no -- the short answer is no intent to close operations in Australia, but a definite intent to have a greater focus on defense shipbuilding in Australia.

Another question from Patrick Moore. Why is operating cash flow about double NPAT?

Right here. So I think this is one for the CEO. So, David, could you just join and answer that one?

Well, first of all, I think for operating cash flow, which is pretax, the best comparison is EBITDA, and the comparison is a much better one with EBITDA or, if you like, more clearer the connection. The reality of the business, though, is that as profitability has improved over the last few years, and cash flow from that profitability has come through as well. So it's been a very strong period of cash flow, as you point out.

The next question is also from Patrick Moore. About what percent of sales do you spend on research every year?

Again, I'll have to flick that one to Craig by the sound of it. Craig, if you could do that.

Sure. Good afternoon. So there's really 3 ways in which R&D can come through the accounts. One is a really pure way where Austal is taking its own funds and investing and developing new technologies. The second is where we might get funded explicitly by the customer. So we have received funding previously for the frigate program in the United States as well as more recently on an autonomous vessel in U.S.A. Those combined will somewhat sit between 0.25% and 1% of revenue, but then, of course, there's also the R&D investment we make just through regular shipbuilding contracts, where we might be integrating new pieces of equipment, new technologies. And that's embedded in the programs that we're building day-by-day.

Thanks, Craig, and thank you for the question.

Another one from Patrick Moore. What criteria do you use to allocate capital to activities in different countries?

So David, is it one that you'd like to tackle? Or..

Yes. I mean, it's a really good question. And I think what you're alluding to is the fact that in some jurisdictions, of course, we expect to get higher returns on the capital that we employ because of the risk we take on board than in other jurisdictions, and also because of the size of the opportunity that exists in those areas. What is true, of course, is that priority areas for us are the United States, where we have such a great relationship with the U.S. Navy. and are here in Australia, where, of course, we're very present, and we know the market extremely well. So they tend to be our priorities. The other priority is, has been, for some time, not an absolute priority, but a priority around investing in growing our support business because we see that as a great sort of risk counterweight to the new shipbuilding activities. So that's really how we think about capital allocation. And in other countries around the world, we're much more cautious than there.

One more question from Patrick Moore. Why was it so long after the Falklands war before the U.S. Navy realized that aluminium can catch fire? And has that hurt Austal?

Well, I don't think aluminum catches fire. It has a lower melting resistance than what steel does. But I don't think that's, to Navy, all that relevant at the time of the U.S. changing to aluminium ships. It was far more focused on high speed and agility of those ships to be able to avoid catching fire, if you like, or being shut down or shot at. So, no, it's -- the story I've been hearing for years and years and goes back to the Falklands War, where exited missile hit a steel ship with an aluminium superstructure, and it's burn around over since. Of course, an ex-cat missile will destroy it, as it would a steel ship, but aluminium is advantaged in its speed and agility.

One more question from [Jody Klaus]. Will the U.S. election or politics in the Philippines significantly affect Austal.

So the U.S. election -- sorry. Just one more time, please, Adrian.

Will the U.S. election or politics in the Philippines significantly affect Austal?

So if we go to the U.S. elections traditionally, there has been very little change to programs, defense programs in the U.S. with a change of administration. So we've probably seen that a few times in my life, and it hasn't really made a lot of difference. So at this time, pre election -- and it is only just pre-election in the United States. There's always a lot of to-ing and fro-ing. Not much has been talked about in relation to defense expenditure, I might add, so we really don't expect whatever programs are current will be seen by both sides of politics to be a necessity for U.S. defense. In the Philippines, I think it would be a similar story. I'm not up to date when the next elections are due in the Philippines, but it is, again, the defense people that -- our people have spoken to and have a lot of interaction with are very consistent about what the Philippine Navy needs. And we have confidence that, that would continue if there was to be an administration change.

Okay. One final comment from Patrick Moore. David, many thanks for your terrific contribution.

I don't think I need to answer that.

That's all the questions on that item, John.

All right. But I'm sure everyone in the room will -- in this room and in the audience will support the thank you to David. That's about -- he's had 9 years out of his life spent here, and thank you. So now I move to the fun part of the meeting. The next agenda item, which is the directors' report and the financial statements of the company, the annual financial statements of the company for the year ended June 30, 2020, and, together with the directors' report and auditors' report in respect of those statements or at least on ASX on 30 August 2020, and were sent to the shareholders who so requested. We also have copies of these on our Austal website should any shareholder wish to review them there. There is no voting on this item of business. Instead, shareholders have the opportunity to ask questions about those reports. We have the auditors and directors in attendance, and I would welcome questions from shareholders present relating to the company's financial statements, including any questions of the auditors relating to the company's financial statements. Adrian, are there any questions on the financial statements set out in the company's annual report or for the auditors generally?

John, I have some questions from [Jeff Reed], a proxy holder on behalf of the Australian Shareholders Association. The first question is rather a comment. To the Board and the executive and everyone at Austal, congratulations on your success in 2020. The record profit and EBITDA is to be applauded, and the increased dividend is welcome. Farewell to David Singleton. Thank you for all you've achieved. Very best wishes for whatever comes next in your life. There's a question here as well. In September 2020, you announced that Austal had purchased a floating dry dock and associated land and buildings in Mobile, Alabama. Please can you describe the reasoning behind this purchase and the relationship with the USD 50 million grant funding from the U.S. government for Austal to expand into steel shipbuilding in Mobile?

Okay. As it's related to U.S. growth, David, I think you're probably best qualified to answer that one.

Yes, certainly. Certainly, they are linked. The Mols activity -- sorry, the Mols acquisition is linked in that it's created more capacity and more capacity, in particular, but also land capacity, for us to operate in what we think will be a bigger shipbuilding environment going into the future. But there are also areas of it that were not linked to that. So the use of having a floating dry dock allows us to expand our support activities in the Alabama region. And in fact, we're already seeing interest from commercial operators, but particularly the U.S. Navy, to doing more work in Alabama than we've previously done because we have that facility. So partially related to steel ship manufacture, but also related to our growth in the sustainment business as well.

Another question from Jeff Reed on behalf of the ASA. We understand that you're in negotiations to acquire a shipyard in the Subic Bay Area of the Philippines. The U.S. naval base is also in Subic Bay. Please can you describe the logic behind this proposal and the benefits which it would bring to Austal?

Once again, David, if you could do that.

So we, at Austal, have never actually announced an attention to buy the Subic Bay facility from the Hanjin shipyard. It was something that was released by the Philippine government and the Philippine banks involved. However, I will say that it is an exceptional facility that could offer a great deal of both strategic benefits as well as operational benefits, and it's something that we have confirmed previously that we've got some interest in. I will just separate the 2 items, though. The Hanjin shipyard is a modern shipyard in the Subic Bay region. It was built about 10 years ago. It's the fourth or fifth largest shipyard in the world and has the largest dry dock facility, believed to be the largest dry dock facility in the world. In fact, built the largest container vessel ever built in the world. It is not the ex-U.S. Navy base that is no longer operational in the Subic area.

One final comment from Jeff Reed on behalf of the ASA. In relation to the remuneration report, thank you for producing the remuneration report, which is clear, concise and comprehensive. It's a very good example which companies of similar size would do well to emulate.

I think we should make mention of our chair of the Rem Committee on this one. Sarah's been very diligent in ensuring that it was a more useful document this time. So I think that the credit for that goes to our Board member, Sarah Adam-Gedge.

No more questions.

There being no further questions, we will now proceed to the resolutions to be considered at the meeting. All resolutions will be put to a poll. However, there will be an opportunity to ask questions relating to each resolution before the poll is completed. Please follow the virtual meeting online guide via the link on the screen 2. Voting card and cast your votes online by selecting for or against or abstain for each resolution and ask questions or make comments on the company. Again, I would invite shareholders attending online to send through questions as soon as possible after registration rather than waiting until each resolutions brand. I declare the poll open. Resolution 1 is for the adoption of the remuneration report. The resolution appears on the screen in front of you. I've also been advised that the proxies shown on the side have been received. In respect of this resolution, I draw your attention to the voting exclusion statement contained in the notice of the meeting. I also note that a vote on this resolution is not binding on the company. Although I'm personally excluded from voting on this resolution, I intend to vote the undirected proxies I hold in favor of the resolution, making 97.73% of the eligible votes in favor of the resolution. Adrian, are there any questions in relation to this resolution?

No, John.

Thank you. As mentioned, we will proceed to a poll an all resolution, that the poll will be conducted by the company's share registry and finalized at the end of the meeting after all resolutions have been considered. We will now move to Resolution 2. Resolution 2 concerns my own reelection as a director. As I obviously have an interest in this resolution, I will hand over to David Singleton to chair the meeting for this item.

Thank you, John. The resolution appears on the screen in front of you. I have been advised that the proxies shown on the slide have been received. I note the Board, with John abstaining, has recommended John's reelection as a director. I will vote the undirected proxies in favor of the resolution, making 96.4% of eligible votes in favor of the resolution. I don't know, are there any questions?

No questions.

If there are no questions, then I'll hand back to the chairman for the next resolution.

Thanks, David. We will now move to Resolution 3. Sorry, I'm mixing pages. We'll now move to Resolution 3. Resolution 3 concerns the election of Mick McCormack as a director. The resolution appears on the screen in front of you. I've also been advised that the proxies shown on the side have been received. I will vote the undirected proxies in favor of the resolution, making 99.96% of eligible votes in favor of the resolution. I and the rest of the Board recommend Michael's election as a director. Are there any questions relating to this resolution, Adrian?

No.

Thank you. We'll continue on, now move to Resolution 4. Resolution 4, 5 and 6 deal with the issue of share rights to some of the non-executive directors of Austal. At the last 3 Annual General Meeting Shareholders approved the grant of share rights to nonexecutive directors so that participating directors will be remunerated through a combination of cash and share rates. Resolution 4, 5 and 6 seek shareholder approvals to continue the grant of share rights for 12 months following this Annual General Meeting. Resolution 4 concerns the issue of share rights to Ms. Sarah Adam-Gedge. The resolution appears PAUSE on the screen in front of you. I've also been advised that the proxies shown on the side have been received. I will vote the undirected proxies in favor of the resolution, making 97.83% of eligible votes in favor of the resolution. In respect of this resolution, I draw your attention to the voting exclusions statement contained in the notice of the meeting. In accordance with listing Rule 14.1, the company will disregard any votes cast on this resolution by Madam Gedge and any or associates. Adrian, are there any questions relating to this resolution?

No questions.

Thank you. We'll move on to Resolution 5. Resolution 5 concerns the issue of share rights to Mr. Chris Indermaur. The resolution appears on the screen in front of you. I've also been advised that the proxies shown on the side have been received. I will vote this the undirected proxies in favor of the resolution, making 97.83% of eligible votes in favor of the resolution. In respect of this resolution, I draw your attention to the voting exclusion statement contained in the notice of the meeting. In accordance with listing Rule 14.11. The company will disregard any votes cast on this resolution by Mr. Indermaur or any of his associates. Are there any questions in relation to this resolution, Adrian?

No questions.

Continue on the Resolution 6. Resolution 6 concerns the issue of share rights to Mr. Michael McCormack. The resolution appears on the screen in front of you. I've also been advised that the proxies shown on the side have been received. I will vote the undirected proxies in favor of the resolution, making 97.83% of eligible votes in favor of the resolution. In respect to this resolution, I draw your attention to the voting exclusion statement contained in the notice of the meeting. In accordance with listing rule 14.1, the company will disregard any votes cast on this resolution by Mr. McCormack and any of his associates. Are there any questions on this one, Adrian?

No.

Resolution 7 concerns the issue of short-term incentive rights to David Singleton. The resolution appears on the screen in front of you. I've also been advised that the proxy shown on the side have been received. I will vote the undirected proxies in favor of the resolution, making 99.74% of eligible votes in favor of the resolution. In respect of this resolution, I again draw your attention to the voting inclusion statement contained in the notice of the meeting. Adrian, are there any questions relating to this resolution?

No questions.

Thank you. This is the last resolution. Please ensure that you complete your vote now. I now declare the poll closed. However, you will still have 5 minutes after the poll has closed to complete your votes. A 5-minute countdown vial will shortly appear on the top of your screen, and voting can be completed within this period. If you have any questions, please refer to the virtual meeting online guide on the screen in front of you. [Voting]

There being no further business, I now declare the meeting closed, and thank you for registering and joining us today. The votes will now be counted by our share registry, and the results of the poll will be announced to ASX shortly. As is common at the end of the AGMs, I, again, thank all our shareholders for their confidence in the company. And without it, these meetings would be far more difficult. So thank you, and thank you for joining us. Goodbye.