Austin Engineering Limited (ANG) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. I'm your Chair, Jim Walker, and it is my pleasure to welcome you to the 2022 Annual General Meeting of Austin Engineering Limited. I'd like to introduce you to your directors and our Chief Financial Officer and Company Secretary, David Singleton, who is our Managing Director; and Non-Executive Directors, Chris Indermaur and Linda O'Farrell. Unfortunately, Non-Executive Director, Sybrandt van Dyk, was unable to join us today due to personal reasons. Our Company Secretary, Katina Nadebaum, and our Chief Financial Officer, Gareth Jones, are seated in the front row. Representatives from the company's auditor, BDO, Dean Just, up here and will be available to answer questions on financial statements in relation to the audit. The Company Secretary has informed me that we have a quorum present, and I therefore declare the Annual General Meeting of Austin Engineering Limited open. I'm pleased to advise that shareholders who are not able to attend physically are able to watch and listen a live webcast of the meeting. The webcast will be the only opportunity to view the proceedings of the presentations at the AGM and the shareholders to submit online written questions during the meeting. However, the webcast is provided for convenience only and does not replace a physical AGM. Shareholders will not be able to participate in the meeting or vote via the website facility. Given the logistics and the fact that people watching over the webcast are not taken to be present at the meeting, we propose to address any questions that are sent through over the webcast at the end of the meeting and once the meeting formalities are concluded. I'd like to explain the format of today's meeting. Firstly, I will give the Chair's address. I will then invite David Singleton to give the Managing Director's address. And after David's presentation, we will consider resolutions outlined from the notice of meeting. I'm very proud to say Austin Engineering has performed strongly on both an operational and financial level over the year. Despite significant macroeconomic volatility and continued impact of COVID-19. Austin's refined strategic focus on enhancing margins, intent with improving our product range, performance and customer support delivered a strong full year result, including a 155% rise in EBITDA to $32.5 million and a 525% rise in net profit after tax to $20.6 million. The results exceeded our forecast and were a direct result of the growth measures integrated as part of the company's global strategic review undertaken last year. David will step through the initiatives undertaken by the company to increase orders and sales to improve our product range and performance and customer reach. Together, this has resulted in a significant improvement in financial and operational aspects of the company, and crew fleet has set us up with a buoyant momentum and robust financial performance that is sustainable in the longer term. We have released new products on to the market using the latest in technology and innovation. The lightweight HPT truck body and JEC high-performance buckets are the best-in-class and showcase Austin's superiority, engineering expertise in creating products that meet the changing needs of the customers and offer improvements in safety, efficiency and environmental footprint. Our bucket product base will significantly be enhanced by the recently announced acquisition of Mainetec. This Australian-based producer of high-performance buckets with the whole excavator and dipper range will allow us to grow our bucket market offering domestically and to expand that offering internationally, especially into the Americas. David will speak more about that acquisition shortly, but it is an excellent addition to our company from operational and a financial perspective. Our enhanced focus on prudent cost control, increased utilization of the TAM in Indonesia into the Austin supply chain and our agile hub and spoke strategy has enabled us to source materials and labor in a highly efficient manner. This has allowed us to effectively manage rising costs for input materials like steel as well as the tight labor market in Australia. Well, as pressures have resulted in a difficult time for Asia Pacific region, this has been offset by record revenue and earnings and margins in North America and South America, which looks to be able to be sustained. Sustainability has been a key focus of the Board during the fiscal year. We have made significant strides in this area on a number of fronts. We are cognizant that clients increasingly want greener, more sustainable solutions that are safer and increased productivity. Our people's safety and well-being are a central part of our business and continue to be critical focus areas for Austin. We are pleased to report a significant improvement in our safety performances once again this year. We released our sustainability report last month, and that details Austin's environmental, social and governance credentials and provides a baseline to work from. Austin is building a safety-first environmentally conscious and diverse business that will ensure a prosperous, long-term future ahead. The substantial strategic innovation we have undertaken during the full year of 2022 has given us a solid platform for 2023. We are set up for a strong year ahead with increased orders and much improved business. We'll pay a fully franked final dividend of $0.03 per share later this month, bringing the dividends for the year to $0.05. Our policy reflects the importance of paying dividends to our shareholders, balanced with the priority of retaining the financial flexibility to enable the continued execution of our growth strategy. We'd like to welcome our new Non-Executive Director, Linda O'Farrell, who has recently joined the Board. In fact, her first Board meeting was today and who is with us here today. Linda has held senior resource executive roles in people, culture, leadership development roles with Newcrest, BHP Mount Gibson Iron. Linda currently is at FMG as a Director of Fortescue People. And we are very grateful that we have Linda to join the Austin Board. Next month, we welcome our new CFO, who is with us here today as well, Mr. David Bonomini, to Austin. David has global experience in leading governance, regulatory and commercial initiatives in high-growth companies and was most recently CFO of Orbital UAV, which has operations in Australia and the U.S. I'd like to thank our current CFO, Gareth Jones, for his contribution to Austin and ensuring a smooth takeover to David. Thank you. In closing, on behalf of the Board of Directors, I'd like to extend my thanks to our CEO, David Singleton, and the management team for achieving excellent growth while navigating a challenging year and wide-scale inflationary pressures and the lingering impacts of COVID, which are continuing to ease. To our workforce on sites around the world, along with our contractors, suppliers, support services, you are key to our success, and we thank you for another year of hard work and commitment to a safe and successful operation. Thank you to my fellow directors for their wise counsel and support and also to our Company Secretary, who works long hours getting us all prepared for this. Lastly, thank you to our shareholders for all your commitment to Austin and its growth strategy. I'll now hand over to David Singleton for his CEO and management director's address. Thank you.

Thank you, Jim, and good afternoon to everybody. It feels like a room full of friends and good colleagues, who have helped us out over the last -- and helped me out over the last 15 months in this role. So I thank all of you. We have BDO auditors here. They transferred from Brisbane to Perth, so they have to go through that transition this year. We've done that very successfully and I appreciate their support. A number of representatives here from Eros. Eros have done great job in helping us to rebuild the shareholder register at the institutional level for the company over the last 12 months or so. And I think we got have thought about what our share register would have looked like a year ago compared to what it does today. It could not have been better than I could have done about that period ago. So thank you to the Eros team for the work that you've done as well. We've got JWS, law firm here as well. JWS helped us with the recent acquisition of Mainetec. I've been through a number of acquisitions with law firms in the past. JWS did great job, really, really effective and rightsized as far as what we needed for that. And also, Pete here from UBS, who also assisted us with the acquisition of Mainetec again, our [indiscernible] firm, very capable firm, able to come down and do the work at the level that we were operating in. So thank you to UBS as well. I'd also like to recognize that we're going through a changeover of the CFOs at the moment. The fact that one of them sat down there and one of them sat over there, it's not representative of the working relationship. They've actually been working very closely together to make sure that there's a smooth handover. Gareth and I have worked together before, so that's been a pretty easy process. Gareth's got some other things he wants to do with his life, which I think is great. And Dave joins us from Orbital Engineers. So -- and also, we've got 14, 15 shareholders and some shareholders in the room here as well, 14 or 15 on the web link. So I'm just going to run through a few slides now, just to give you some thoughts about the past and what we've done over the last 15 months in the business, but more importantly, how that provides some clues to how we think about the future and how the future will show because that in any senses is what we're all focused on today. A year ago, I published a strategy for the business. And because I'm a fairly simple guy, we broke it down into 3 parts, 3 steps to heaven. And actually, we did it in a triangle and we said there were 3 elements that we would focus on. And that's really been our guidance since then. So one point was about reducing our overhead level, sort of cost of running our business on a day-by-day basis to what I saw was a competitive level. Second thing was to improve our manufacturing operations to become more efficient and have a cost leadership as a manufacturer here -- both here in Australia and overseas as well. And the third element was to improve our product range, invest in our product range and make sure that we're continuing to have leading products. So what I'm going to talk about is a little bit about the progress we've made on that and the impact of that. And again, how that -- how it gives us the clues about the future and what the future might look like. And I'll try not to use any of the slides that all of you will have seen from the full year results. So it's -- you don't have to go through it quite yet. So we talk about the cost base of our business. And in about 5 months, we took $11 million out of the operating cost base of our business. Much of that was people in North America and in Australia, in particular. I've been through that. Unfortunately, in my career, I've been through people reduction programs forever. I started in the United Kingdom, when unemployment was 14%, 15%. And when you laid somebody off, you wondered whether they would ever work again, in fact something. What's really pleasing in the environment we're in at the moment, at least, is when somebody leaves the business, they probably walk out on Friday, and they walk into another job on the Monday. And the business is much more efficient and capable as a result of the cost reduction program that we've gone through. Of that $11 million, we invested $3 million of that into product development and other activities, and $8 million of that went through and into the bottom line of the business and drove some of the improved profitability last year. And that's essentially done as an activity. And all we need to do is just make sure we keep it at efficient level. We talked about -- I talked a year ago about advanced manufacturing. And I can't change my wording on that a little bit now to think about our manufacturing cost leadership. And one of the things that I've known about manufacturing all through my career is that there are no prizes for being an inefficient manufacturing operation. It does you no good whatsoever to be more costly than the competition. It either drives to annual margins or it drives to annual win rates or it puts you out of business in the end. And so what we're doing is driving for cost leadership. And I think we've made tremendous progress but also on a journey to much more of that. Top left-hand corner. I realized that in Austin and Australia alone, we were going out and buying steel around 30 times a year. So that's 2 or 3 times a month, we would go out and place a steel order, relatively small steel orders and typically with stockists. What we chose to do was to aggregate our annual demand and go out twice a year. Our annual demand initially for Australia and then we brought in Indonesia quite quickly. We brought in the Indonesian demand as well. Now that sounds pretty simple, right? But if you think about going and doing a weekly shop, and you think about it now, now you have got to shop for the next 6 months, you're going to have a really clear perspective on what you need over the next 6 months. Who's going to come and visit and what you're going to cook and what you're going to do over the next 6 months in order to get that right. Otherwise, all that happens is you keep doing top-up, you bought things you're never going to use and you have to keep top-ups. The same thing goes with getting that right for manufacturing. And you have to know what steel you're going to buy. Steel comes in many sizes and many types and so it brings some real complexity. And that's why we were buying steel so often. So we went into a process of aggregating our demand in Australia and in Indonesia and now go out to buy steel around about 2 or 3 times a year, a much bigger buy. Now what that's allowed us to do is not buy from stockist but buy from -- directly from the mills. And if I just give you an indication of the cost benefit of that, quite often, we will pay -- if we go to a stockist, we will pay $6,000 a tonne for steel. If we go to a mill, we buy that same steel but less than $3,000 a tonne. Now if you imagine that steel is half of our cost base and you can halve the cost of that steel, then the opportunity that you have to drive cost effectiveness in your business is huge. And if you can do that in a unique way, that is something that we can do in Austin that other people can't do because they're a much smaller business, then it gives us a natural competitive advantage. It gives us a big element of that cost leadership that we're looking for. Now we're not there yet. We're just about to bring South America into that equation, and then we will bring North America in as well. This prediction of what steel we need for the future is pretty tough. You get it wrong; you make mistakes. Sometimes you under buy and sometimes you overbuy. And that will take some time to settle down. But nonetheless, we are on a pathway and on a journey that will make a significant difference to our business. Below the top right, a couple of things, I think, that we should justifiably be very proud of is the U.S. business really took on a challenge last year to improve their manufacturing efficiency. They've been a business that has typically achieved 11% or 12% EBITDA numbers for many, many years, the same business with the same people doing the same thing, last year achieved an EBITDA level of over 20%. And they did that by carving a 30% man hours out of their operational base. So real focus on getting 30% more efficient and they did that over a period of about 5 or 6 months of reproducing the cost of steel supplies and getting their overheads down as well. It's a really first-class effort. And Indonesia as well, we've seen good efficiency improvements in Indonesia as well. Now in Indonesia, those efficiency improvements in labor are not so financially important in the sense that the cost of labor is a much small proportion in Indonesia than in is somewhere else. But it is important in terms of being able to use people more effectively in the organization, so not swamping the factory with people because of inefficiency. In Chile, last year, we had our first real operational profit in that business. I would say forever. I'm not sure if that's true because I haven't got a result forever. But certainly, if you go back 5 or 6 years, it's the first time we had a proper profit out of that business where we've allocated all the costs to that business rather than hold them in the center. And then we look at how efficient that business has been. And that's been very pleasing. And then advanced manufacturing has really -- one of the focuses we have for advanced manufacturing was improve the quality out of Indonesia. Now quality is always important in our business, but it's particularly important in Indonesia for us because the future I have for Indonesia is to be the core or the hub of our manufacturing operations globally. That is to say we will build as much as we can in kits or full assemblies or subassemblies in Indonesia and deliver those into Australia, into America, where we not only have high labor rates but real problems in getting hold of people and retaining people. We all know about the West Australian story associated with that. If anything, it's slightly worse in Queensland, in Mackay and it's just as bad in Wyoming, where we have our U.S. operations. So everywhere across the operations, including Antofagasta in Chile, matter of fact, we've got real problems on labor. So if we can get the quality of our operations in Indonesia up to an international standard, which we strive to do, then that becomes seamless. I've been able to bring goods out of Indonesia and into those other operations. And I think we made tremendous strides on that this year. And then I said we wanted -- the third point of the triangle if you remember was product leadership. And we've got 2 new products this year. And I'd like to thank [indiscernible] who invests tens of millions of dollars in thinking through their advertising strategy. And so we've lived our strategy, and this is now our largest ever truck tray. So it's not our best ever iPhone. It's our largest ever truck tray. And that's a true statement, of course, because why would you build another one that's heavier than the last one in the same way that that's true with iPhone? But it is our latest ever truck tray for Rio Tinto. We were able to give them 7.3 tonnes more carrying capacity per tray, just on the back of taking that way down. Now what that really means to Rio Tinto is that's $2.8 million per tray per annum they get additional revenue through. Multiply that up by 400 trays, and you're in the $1 billion kind of category for the cost savings for them. So these are really significant numbers when you're paying $350,000 per tray, but you save a customer $2.8 million a year and you can multiply that up. So you can see why that's important to a customer. And also buckets, we launched a new series of high-performance buckets this year. These are what are known as liner in those buckets. So instead of putting wear liner kits on the inside, which is a lot of weight and dangerous, dangerous to cut them out at the end of the operations, you put that weight in to stop the bucket from wearing. But as I say, you put 5 tonnes of material in, that's 5x less carrying capacity. What we've done here is produce a line of the bucket, which means that the structure of the bucket is made out of a better material and constructed in a different way. So you actually don't need the lines at all. Although I will say some of the miners want a line on this bucket and then they want to put liners in it but takes time. So what is that -- so some of the stuff come out of the annual report [indiscernible] clear but what does all that mean? So we're 12 months into this or we were 12 months into this at the end of the period, but what does that all mean? Well, we're seeing our EBITDA profitability jump as a result of -- primarily as a result of those cost savings I've talked about, the $8 million that we took through cost a little bit in the manufacturing area and last year from an average that was sort of in that 9% to 10% level previously to 16%. So that feels good. And we've also got our return on equity up to 19% from what was around 9% to 10% before. Now the reason why that's important is that one of the ways we try to differentiate this business from a normal mining services business is to say this is essentially a capital-light business. And we don't invest a lot of capital. We don't buy a lot of yellow goods. We don't have hundreds of millions of dollars of capital on our balance sheet. We have relatively straightforward factories and equipment that goes in those factories. And as a result of that, we have a relatively low capital investment. Therefore, once we get the profitability right, we get a really good return on equity. We've seen our order book grow. So our order book at the beginning of FY '23, this current financial year, was 74% better than when we started in FY '22. And in fact, we're a couple of months into the year, 2.5 months into the year and the whole of that first 6 months of order book is now completely covered. And we're well into the second half as well. Now I can remember being 4.5, 5 months into the first half of last year. And we still -- we're only about 92% of our first half was covered by order books. So we're in a great position from order coverage as well. And our win rate has stayed high. We've gone -- in Australia, for instance, we've gone from a win rate around about 40% to a win rate that's now about 80%. And that's been about focusing on the strategy of how to win rather than just feeling our offers to mining companies. That's been a real sea change and for us that helps our predictability around steel purchases and those kinds of things. Buckets produced, this is a relative scale on a massive scale. So it wasn't 1 bucket, it's set at one. And then we've increased the number of buckets by about 4.5x from FY '21 and -- sorry, FY '20 and '21. And the reason for that is partially more focus and partially about the product launch of the new HP bucket, which has gone down particularly well. And I'll talk a little bit later about buckets going forward. And the last point is that our net debt has been coming down over several years. We've managed to continue that trend as we go forward. So I think a pretty solid set of numbers as we go into FY '23. Right. So what can we expect next? And boringly, I have to say it's really about more of the same. And it's more of the same in most parts because what we've done so far is to get the ball rolling, but the ball hasn't got to its end game yet. And so what we're doing through 2023 and into 2024 will be really about extracting those benefits that I've already talked about. So if I look at the cost base, we will just maintain the cost base. So that's kind of commitment we have to make sure we keep the cost base at a level. That does create some strains. I can tell you, every week, someone tells me how they can't possibly operate with that amount of overhead. And I have certain sympathies for something from time to time when they say that. But it's important to our business that if we're going to invest more in an overhead, we do that on the basis of a bigger revenue base, not on the basis of just cutting or increasing our cost. One of the things I know about business is really easy to put cost in and really, really hard to get it back out of it. So the discipline of maintaining that cost base is something we'll maintain here. The next thing is manufacturing cost leadership. So I was told the other day that we are the tenth biggest buyer in the world of high hard temperature steel. This is the basic wear steel that we use in our business, the tenth largest in the world. Now when you think that the others are made up of $100 billion company like Caterpillar, Liebherr, Hitachi, Komatsu, those kind of companies, right? But it's actually a very strong position for us to be in. So our buying power is now becoming quite significant. And this is why we're able to buy steel at a lower cost than our competitors. And that's a really important issue for us to bake in. But we're not there yet. We're still making mistakes, where we haven't got the right material for a particular product, if we go out and we have to buy it on a market, it cost $6,000 a tonne or $7,000 or $8,000 a tonne rather than $3,000 a tonne. That's still happens. We do -- we run out of material. We don't have the right material. So we still got a lot of finessing to do in all of that. And we haven't brought those benefits down to South America yet. We're in the process of doing that now. We're doing our first buy for South America now and we haven't brought that to North America. A bit more difficult in North America because of trade tariffs. But nonetheless, we haven't brought that to North America. So there's a rich opportunity there as we get better at this and we get more focused on it and we're more accurate with what we're doing, we're going to see more benefits as a result of us being the tenth biggest Q&T steel buyer in the world. Site efficiency improvements. I think I'm going to talk about some disappointments in a second. But Australia, we need to do more in Australia and I'll come back to that in just a second. So that's a very big focus for this year. And the last thing, as I said before, is continuing to focus on Indonesia. Now when I started, one of the things we talked about was the possibility of opening up a low-cost manufacturing center in Mexico. What we actually found was when we studied it, if we use Indonesia as a low-cost center, we could actually deliver into North America and Canada cheaper out of Indonesia than we can out of Mexico, which is really a surprise when you think that you've got to move stuff from one side of the planet to the other. The reason why it's cheaper is that when you move from Indonesia in sea freight, which is pretty cheap, relatively cheap. When you go from Mexico to Canada, it's road freight, and that's relatively expensive, particularly when you're crossing 2 borders and multiple states. So that led us to the conclusion that TAM can become the manufacturing hub for this business. And we only just have to surface on this. So far, we are bringing some assemblies down from Indonesia and building them into our truck trays in Australia today. We're not doing that in North America. And we're only doing it in a few areas in Australia, so far. And part of the reason for that is we've become a bit of a victim of our own success in Indonesia and that Indonesia is now the first thing in the scenes and work out of Asia now alone trying to make stuff for Australia and North America. So we kind of have to just back off a little bit. Nothing worry me too much because shipping costs have been at all-time highs over the last 12 months as a result of some of the discontinuities we've seen around economies around the world and disrupted by the -- again, by the war in Europe. As shipping costs come down and as we start to get on top of extra capacity that we're bringing on in Indonesia, we'll start to push forward a bit hard with Batam. The point about this is for us to keep laser focused on the strategy and where we're going with this rather than to allow it to fall into the background. And so it becomes an important part of what we continue to do this year. So I don't normally put slides like this up because I like to pretend all in the government is rosy and fantastic. And occasionally, I feel like Mia Copper. And I don't know, I was on an airplane coming back from Batam and I must have been in a particularly visible mood and felt like we should be open about some of the things we didn't get right this year. And one of those has been Australia. And that's been a real disappointment for me. In that there's 4 wheels on our particular wagon and one of them pretty well funded and that's been Australia. It started out with COVID. COVID came late to Western Australia, as we know. And so the impact of that was probably a year or 18 months later we saw it in North America and Chile. That started to get some problems as we go through that. Labor turnover was very high and that exacerbated those problems. We have been hit with some input cost changes. So we have more fixed price contracts in Australia than in most places. And so when steel prices doubled last year, through supply chain issues centered around China, not we buy steel in China but that had an impact, Tariffs in the U.S. and then the war, 100% increase in our steel price. Many of our customers, we could change that. But 1 or 2 of our customers, important customers in this country, we were unable to pass on those costs. And we also became a victim of our buckets of success. And that was a business that made a few buckets a year, suddenly was making dozens of buckets a year. And that transformation inside the business just didn't go very well at all. And as a result of that, that it's been -- it was a cost in the year versus last year. And we're still living [indiscernible] associated with that -- with those problems at the moment. And that's an issue we've got to continue to fight through. The other review was that we started up a facility in Canada. And I take full personal blame for this in that we didn't really fit our strategy insomuch as the business in Canada was really about a support rebuild, bucket rebuild business and support business or final assembly business for our truck trays. What we found was we just weren't really in the right geographic position and didn't have the right reputation in order to compete. And we took a very rapid decision to shut it down. It's one thing getting things wrong. Sometimes, they just have to kind of walk away and don't allow that to linger. And so we closed that down. That cost us a little bit of money last year, when we went through that process. So a good learning point for us. So I'll just finish on recent acquisition and with Mainetec. You'll see that we originally paid $19.6 million for Mainetec. We announced on Tuesday of this week that, that deal had completed, and we paid the first tranche of $11 million -- $11.1 million to the items of Mainetec for that business. And we've got further payments to make in the future. Why we did this was that we were a bit player in the bucket business. And I wanted to be as strong and dominant in the bucket business as we are in the tray business, both here in Australia and overseas. And the way we've done that is to augment our bucket range. So we have a standard bucket, which is not shown here. We have a high-performance bucket, which is the red and gray one. And then we have these premium buckets that come out of main sector hold and the armadillo bucket. We're a bit more conservative with our naming conventions. We use JEC HPT, and they have an armadillo. Nonetheless, there are sites in Rio Tinto, for instance, where they swear by the whole bucket, and they won't have anything else on the site. And there are other sites that swear by the Austin bucket, and they don't want anything else on the site. And that's great because nearly all buckets on that -- on the Rio Tinto site, as an example, are either Mainetec or Austin bucket. So we're in a great position. And the customer base is as a blue chip as you can imagine with Rio Tinto and [indiscernible] and Glencore and Peabody, really good roll of mining companies taking those buckets. And I'm just graphically showing that, that will then, of course, with Mainetec lead to a higher number of buckets. And we're expecting to see around about 100 buckets a year, this year turning into FY '24, that kind of level. That's a long way from 16 that we were producing a couple of years ago. What Mainetec does, it brings us the whole bucket. This is a premium bucket. It sells for about $150,000 to $200,000 more than our most expensive bucket but the market accepts that because of the benefits it gives. It lasts longer. It uses less big energy. And as a result of that, the Mainetec business was growing for 3 years in a row before our acquisition was growing at 26% per annum so that we're clearly doing something right. The other below bucket is a dipper bucket, very large bucket. These are $2 million of piece type bucket. So there's a completely different segment. It's something that we are involved in, Austin is involved in but we didn't have any product leadership in at all. We just copied basically the OEM design. That's all we did. And therefore, it was a price -- always a price competition. Mainetec produced system that is demonstrably better than the OEM buckets, most of which have been upgraded for 20-odd years and as a result of that, can chose premium price. We believe that the market in the Americas, they're a dominant producer of the back-end systems for these buckets in Australia. We believe the market in the Americas, Chile, North America -- sorry, U.S.A. and Canada is worth about $0.5 billion a year of bucket replacements, spare parts and rebuilds. So it's a huge market for us to go after and one that we've got a pinprick really good position now in Australia and a pinprick in the Americas that we are going on already. And what that will allow us to do is that bigger bucket business will now allow us to invest more in being product leader. And I think that's the kind of synergistic benefit you're given, being a bigger plant, is you get to make more money. And as a result, you can more money, you can invest more in fact. And then the last thing we talk about here is this product in Mainetec. This a software system, which is a fleet-wide condition monitoring system. This is something that the miners have been asking for, for a long time, which is the ability for us to measure continuously wear rates on buckets and trays, put that into a software system, also a regression analysis and gives us -- gives a clear indication of when products need to be taken out of service or rebuild in the case of a bucket or they need to be taken out of service and replaced in the case of a tray. This is a technology that was developed by Mainetec, is being used on Rio Tinto site. And we have committed to Rio Tinto and now to 1 or 2 others that we will build out the software for trays and other -- in our own buckets such that their entire fleet of equipment will be covered by this condition monitoring software. I think in 2 years' time, it won't be at the bottom of the page when we talk about it, I think it will be at the top of the page because I think it will be the thing that stimulates a whole range of other opportunities because we're a data-rich business that understands what's going on in the mine sites for this particular equipment better than the mining companies do. So [indiscernible]. And then I know 1 or 2 analysts around a little bit of the only path we're really interested in. This is the guidance update. So we provided guidance for the Austin business at the beginning of the year. This is an update associated with the acquisition of Mainetec. This is business that sounds typical to do. We are part of the $11.1 million of the original fee revenue for the 9-month period. So we talked about -- when we did the acquisition, we talked about a run rate of $40 million per annum. We're actually only going to get 9 months of the year because of the acquisition. So we should see about $30 million of revenue this year, and that will equate to about $4.6 million worth of EBITDA. We've taken a relatively conservative view about that because there's a lot of -- this is a new business for us. We don't know that well. There's a lot of things got to happen in order to get to the end of the year. But I think if you think about the return that we're going to see for that $4.6 million in the year given that we don't -- we won't be paying any tax on that is going to be very strong cash inflow. The synergy savings around costs are already well underway. We are already shutting our Mainetec facility in Henderson, where they produce buckets. And we're transferring that to Kewdale where we are creating a dedicated bucket manufacturing operation that will only produce buckets, both Austin buckets and Mainetec buckets at a much higher rate than we've ever seen before. And that's part of the plan for trying to get Australia back on its feet is to separate our big trays from the buckets and have a bucket focus, have a tray focus. And by the end of October, we should have Henderson closed. It releases on the 1st of November to somebody else. So we lose the lease liability and that should save us about $700,000 a year. So we will go along with that. Material and labor will take us a little bit longer for the reasons that I've said. It will take us a while to get the right stocks of materials - steel. Deliveries at the moment for Q&T can be 9 to 12 months from order to process. So if you think about shopping upwards, not only are you thinking about shopping forward of 12 months, it's actually next year that you're trying to shop for. That's why it's complicated. And it will take a little bit longer for some of that to really become a 100% impact on Mainetec, but nonetheless, we'll get some of that this year. And I think the last point is that when we talked on the acquisition about the synergies of this business, we didn't talk at all about revenue synergies. We only talked about cost synergies and justifications on cost synergies. I actually believe the cost synergies is kind of really clear and easy to see. We'll deliver those, I'm sure. I actually believe that over time, the revenue synergies around being able to take our bucket business into North America, [indiscernible] business into North America, the Mainetec impact, I think, over the next 2 or 3 years, the synergies out of -- the revenue-based synergies will be greater than the cost base synergies we're talking about, just harder to quantify right now. That's it, I think. My 10 minutes is up. Is that right?

Thank you. Thanks, David. As you can see, pretty passionate. This now brings up the formal part of the meeting. The items of business to be considered at this meeting have been listed in the notice of meeting. The notice of the meeting has been available to shareholders in the [indiscernible] of September 2022, and I'll take it as read. Before we consider items of business, there are a number of procedural matters I wish to draw your attention to. In the interest of transparency, I intend to call a poll on all meeting resolutions. I will discuss each resolution in turn and then conduct a poll after the last resolution. Each resolution and property count for each resolution will be a slide on the screen when that resolution is being considered. I am holding undirected proxies in my capacity as Chair. And it's my intention to vote all proxies in favor of all resolutions. Any directed proxies that are not voted at the time of meeting will automatically default to me as Chair of the meeting, and I'm required to vote those proxies as directed. Rod Somes, who is in the back there from the Computershare, has agreed to act as returning officer. At the completion of the poll, Computershare staff will collect your voting cards and tally up the votes. The persons entitled to vote on the poll are all shareholders, representatives and attorneys of shareholders and proxy holders who hold green admission cards. On the reverse of your admission card is your voting paper and instructions. Yellow admission cards have been issued to nonvoting shareholders, who are entitled to speak at the meeting but are not entitled to vote from the poll. White admission cards have been issued to visitors who are not entitled to speak at the meeting or to vote on the poll. If there's any person present who believes are entitled to vote and has not registered, please raise your hand and representatives from Computershare will assist you. Okay. I shall now proceed with the business in the order as it is listed in the notice of meeting. Questions on any item that may be raised into consideration of that item. Please state your name and ask your question. The first item of business deals with the financial statements and reports. These have been released publicly and forwarded to the shareholders, who requested them and are now laid before the meeting. These financial statements and reports are for the financial year ended 30th of June 2022. This is not a resolution and no vote is required on it. On that note, I now invite questions or comments from the shareholders in relation to the financial statements and reports and will generally have the management of the company. As I advised, representatives from the company's auditors are in attendance to answer any questions shareholders may ask may wish to direct to them in relation to the conduct of the audit or in relation to the preparation of the financial statements. Are there any questions? No questions. We'll move on to the second item of business. The next item of business asks shareholders to adopt the company's remuneration report for the year ended 30th of June 2022. The remuneration report is included in Pages 27 to 32 of the annual report and that has been made available to shareholders. Unless there is an objection, I will take the motion as being read and refer you to the screen for details of the proxies received for this resolution. Whilst this is a nonbinding advisory vote of shareholders, the views and comments of shareholders will certainly be taken into account by directors when further considering remuneration matters. I note that voting exclusion applies to this resolution as set out in notice of motion. The Board recommends that shareholders vote in favor of this resolution. As I mentioned earlier, voting on this resolution will be way of poll and conducted after last resolution. Are there any questions on the remuneration report? No? I will now move to the next resolution. As this resolution involves me being -- my reelection, I'll now hand over to Chris Indermaur to conduct this part of the meeting.

Thank you, Jim. The next item of business is the reelection of Jim Walker. Details of Jim's qualifications and experience is set out in the Notice of Meeting and the company's 2022 Annual Report. Jim has been Chairman of the company since July 2016. Unless there is an objection, I will take the motion as being read and refer you to the screen for details of the proxies received for this resolution. The Board recommends that shareholders vote in favor of this resolution. Voting on this resolution will be by way of a poll and conducted after the last resolution. Are there any questions in relation to this resolution? If there are no more questions, I'll hand back to Jim for the remainder of the meeting.

Thank you, Chris. The next item of business is the election of Linda O'Farrell. Linda joined the Board as a Non-Executive Director on the 1st of September 2022 and automatically retires as a director at this meeting in accordance with the company's constitution and being eligible to offer herself for reelection as a director. Linda is a senior executive with extensive experience in global resources sector. Details of Linda's qualifications and experience are set out in the notice of motion. We are delighted to have Linda join the Board and have an exciting time in the company's evolution. Linda brings significant expertise in human resources, people and culture. And her experience working in global mining sector will be an asset to the Austin Board as we continue to manage teams and grow our business across multiple jurisdictions. Unless there's any objection, I will now take the motion as being read and refer you to the screen and for the details of the proxies received for this resolution. The Board recommends that you vote in favor of this resolution. Voting on this resolution will be way of poll and conducted after the last resolution. Are there any questions in relation to this resolution? No? I'll now move to the next resolution. The next item of business seeks approval to increase the maximum aggregate of annual remuneration of non-executive directors by $100,000, being an increase from $500,000 per annum to $600,000 per annum. The Board has reviewed the current maximum aggregate fee limit for non-executive directors, which has remained unchanged at the current level of $500,000 per annum since it was last increased of the company's 2012 Annual General Meeting. This was almost 10 years ago. The Board does not intend to fully utilize the entire increase in the maximum aggregate fee in the short term, rather adjustment to the maximum aggregate fee limited sort to, a, create capacity to allow the deployment of further non-executive directors as and when that is appropriate in the life cycle of the country; and b, ensure that the company maintains to build these non-executive director remuneration at [indiscernible] with market rates and as necessarily to attract and retain directors of a high caliber. Additional information regarding the numeration paid to each director for the final financial year ended 30 of June 2022, and the company's approach to remuneration of non-executive directors is set out remuneration report contained in the company's 2022 annual report. Further details are set out of notice of motion, including a voting exclusion statement in respect to Resolution 4. Given the interest of the non-executive directors' resolution, the Board makes no recommendation to Resolution 4. So proxy numbers are now shown on the screen behind me. Voting on this resolution will go by way of poll and conducted at the last resolution. Are there any questions in relation to this resolution? This is the last item on the agenda. So if there are no more questions, we will now conduct the poll on the resolutions 1 to 4. Please now complete your voting cards and ensure you print your name and sign where indicated. When you have finished, please lodge it in the ballot box being circulated by Computershare, you are not being collected my hand. Please let the returning office or any company representatives present know if anyone has any queries or requires assistance to complete the voting card. Just a minute. So good? Thanks. It appears that the voting process has been completed. If there's any individual present who has not yet completed their voting card, please let the staff know. I now declare the poll closed. As mentioned earlier, the results of the poll will be available shortly and will be announced on the ASX and the company's website. A recording of the website will also be available on the Austin website following the AGM. Thank you, all your attendance, at this meeting and your interest in the company. On behalf of the Board, we look forward to your continued support. I now declare the meeting closed. And I think you now need to go to the webcast to see if there's any questions there.

No questions.

No questions? Okay. I declare the meeting completely closed. Let's catch up and have a chat outside and a cup of coffee and some biscuits and et cetera. Thanks, everyone, for attending. Very much appreciated. And once again, I'll just say thank you to Catena and the staff of Austin for organizing this today. It doesn't seem like much when you stand up here. But I know what goes behind it, a fair bit. So thank you, and thanks everyone for attending.