Australian Agricultural Company Limited (AAC) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. My name is Donald McGauchie and as Chairman, it gives me great pleasure to welcome you to AACo 2024 Annual General Meeting. And of course, this is our 200th year as a company. As is now past 10:00 a.m. and I've been advised that a quorum is present, I declare the Annual General Meeting of Shareholders open. I begin by acknowledging the traditional custodians of country throughout Australia and the land on which we're meeting today, the Turrbal and Jagera peoples and their connections to land, sea and community, pay respects to their elders past and present and extend respect to any First Nations people who are with us today. Some housekeeping matters. Can you please ensure that your mobile phones are turned off? I'd also like to point out the emergency exits, which are at the back of the room. The Notice of Meeting was sent to shareholders on the 24th of June and will be taken as read. The AGM is also presented by live video webcast to allow shareholders and interested parties to observe the meeting online. The link to the live video webcast can be found in the Notice of Meeting. I'd like to remind shareholders and interested parties that the live video webcast is view only, and shareholders who joined the live video webcast will not be able to vote or ask questions, although people have been invited to put questions to us in writing earlier on. I'd now like to introduce my fellow directors, some of whom are here in person and some of whom are joining us via telephone, first of all, Mr. Stuart Black, Mr. Anthony Abraham, Mr. Neil Reisman, Ms. Jessica Rudd, Mr. Marc Blazer, Ms. Sarah Gentry and Mr. Josh Levy. Please note that myself, Mr. Black, Mr. Reisman and Mr. Levy are each standing for reelection, details of which are included in the Notice of Meeting. I'd also like to introduce David Harris, our Managing Director and Chief Executive Officer; Emily Bird, our Company Secretary and General Counsel; and Glen Steedman, our Chief Financial Officer. We also have with us today Scott Guse representing AACo's auditors, KPMG. Mr. Guse is available to answer questions relevant to the conduct of the audit and the preparation and content of the independent external auditor's report. We also have in the room representatives of Link Market Services Limited, our share register. Before moving to the formal part of the meeting, I will address some procedural matters. We will then proceed with the business today as it is set out in the Notice of Meeting. The financial statements and reports will be discussed first. We will then deal with each of the remaining items set out in the Notice of Meeting, being the remuneration report, the election of directors, the increase in nonexecutive directors' fee cap and the renewal of the proportional takeover provisions. There will be an opportunity for comments and questions in respect to each of these items of business. So let me begin my Chairman's address. So welcome again to Australian Agricultural Company Limited 2024 Annual General Meeting. I'm pleased to be with you today from the Royal International Convention Center and be joined in the room by our Australian-based directors. Our international directors are joining us over the phone today. Thank you to everyone attending in person and those listening online. AACo's 200th anniversary in 2024 is a cause for celebration and indeed significant reflection. We consider how the company has evolved over 2 centuries, from a largely sheep enterprise established to develop and cultivate land in New South Wales to Australia's largest beef and cattle producer with one of the world's largest Wagyu herds. One of our company's great successes over the time has been how it has transitioned from a company with numerous individual properties and basically run as individual properties to a fully integrated and modern supply chain. The bulk of this shift came in recent times in both the drive to become simpler, more efficient and to better manage our branded beef product as well as being a part of a plan to create a more stable base for the company to go into the next 200 years and as we set out, as we look at that future, and I'll talk a little bit more about that shortly. With that transition, though, to a modern integrated supply chain and substantially complete, and it will never be totally complete, the benefits are now starting to flow through to the business. We saw that in '24 with another positive year for AACo. Shareholders should be proud of the operating results produced by executive and management team as well as all employees here in Australia and globally, and we are indeed building our global team quite strongly. The results once again demonstrated the resilience of the company. While the operating and statutory numbers are down on the previous year, they reflect global changing conditions and challenging conditions indeed, which included increased supply of beef in some markets as well as higher inflation and a sharp fall in cattle prices that occurred at the end of last year. Notwithstanding those dynamics, the results are still among the best the company has produced: the second highest operating profit since this metric was introduced as a key measure of performance, total sales revenue that increased 7% to $336 million, and overall meat sales revenue that increased by 10%. The negative statutory results were due to factors largely outside our control and the requirement to report the unrealized value of our herd at that point in time. And we've seen that fluctuate quite dramatically, but it's a paper number. With cattle prices hitting 4-year lows in that period, the value of the herd decreased, leading to a statutory net loss after tax of $94 million. While we saw a $78 million increase in our pastoral properties, the herd valuation decrease resulted in a small decrease in net assets to $1.52 billion and led to a reduction in the NTA to $2.51 per share. Through the hard work of our commercial teams, AACo was able to largely maintain or increase prices on branded beef in most of its target markets and regions. Our markets and our customers recognize and are willing to pay premium prices for high-quality Wagyu that we are producing. And this was reflected in our results. However, the global dynamics did have an impact outside of the restaurant quality center-of-plate cuts, in products like Trim, where prices can shift quickly when there's an oversupply in the broader market. That's where we were able to see the success of the current strategy as we allocated our product strategically into our markets to take advantage of or limit the impact of those global dynamics. I hope many of you may have heard David Harris talk about the strategic view and the full year results presentation recently. Our aim is to use the success of the current strategy as the foundation, then leverage our world-class assets and our extensive skill base combined with a rich heritage that has helped us become a global leader to expand the opportunities that we have while building on what we already do. We have progressed significantly over recent years, and the commercial results demonstrate the success of our integrated supply chain. Now the Board and management are looking to where the company goes into the future. From the original Shorthorn cattle, 15 Durham Shorthorns were brought out on one of those boats that came out in the first -- in our first fleet. They came -- obviously came from England. We have constantly sought to invest and improve the quality of our animals and the suitability of the animals for the land on which we manage them. The new strategy will continue this effort, building a better beef program and improving on the quality genetics that we possess. Dedicated and targeted programs involving our best bulls and cows accelerated through commercial scale intensive artificial reproduction technology will help us breed and grow animals with traits that are more desirable for the country and the customers. We also possess pastoral leases and properties that are recognized as being amongst the highest quality in the world. I've had the opportunity now to visit many of them through the last -- or through these last 12 months and quite recently, across Queensland and Northern Territory. And I can report that they are all in excellent condition. In fact, I think the northern countries are probably as good as they were in '14 and pretty much the best I've seen them in my time in the company. Our new strategy will leverage their size, scale and location to pursue new opportunities and new venture streams, new revenue streams. Nature will lead our ambitions, a theme that you will see throughout the new branding and marketing activities of Westholme. As an example, we're in the final stages of assessing our first carbon sequestration project and move to register that with the regulator. Along with our other properties, the review will also consider the best way to utilize the Livingstone facility. We've said for a number of years that we believe this asset is a strategic value. So we have continued to maintain the facility with the knowledge and the potential for any future opportunities and prospects. We are open-minded about what those opportunities might be and -- so that we can achieve the very best value for shareholders out of that investment. And we'll strategically invest in opportunities with key partners that can help us build on our market-leading positions and innovate for the future. We look forward to sharing more details of that strategy and opportunities that we are pursuing with the market and our shareholders in the future. As I flagged last year's AGM -- at last year's AGM, AACo invested heavily in the supply chain in 2024. With a view to securing the future by creating a resilient company, the Goonoo property expansion, which will increase supply into our global markets is an example of this, and that was quite an expensive project that came in on budget on time and demonstrates the conscious and intentional effort to invest in the company. The other initiatives I've spoken about as part of AACo's future strategic direction will require new and expanded investment. And for that reason, we will not be paying a dividend in '24. I also marked the start of a new horizon for the company, which we are confident will place our company in a better position to grow into the future. And that will ultimately benefit everybody, all of our customers and shareholders and staff. It's once again been an honor to lead the Board in '24, and I acknowledge their work and guidance through this year's challenges. It's a very hard-working Board that you have in this company, and they really put in. And I certainly appreciate the effort and thoughts and ideas that come from them. We recently welcomed Josh Levy onto the Board. Josh replaced Shehan Dissanayake, who represented -- who resigned and retired from the Board during that period. I want to thank Shehan for his service and dedication over many years, which included time as an Executive Director and as Deputy Chairman. Company Secretary and General Counsel, Bruce Bennett also moved on from the company in '24. Bruce sat with us on the Board in that position for almost 2 decades. And I certainly like to thank him for his service and wish him well in his future endeavors. Emily Bird has joined us today as the replacement Company Secretary and General Counsel; and Emily certainly got a take into the work of the company in the last few months. The Board remains totally united and committed to the strategy and success of the company. As I said in the beginning, our 200 years of operation is an opportunity and time to reflect. It's also a time to celebrate, and we are doing so modestly as well as with the industry at Beef Australia recently in Rockhampton, which we had the pleasure of the Prime Minister and the Premier of Queensland and the 2 ministers for northern development and agriculture joined us along with 400 other people at that lunch. The focus has been on our employees while honoring those who came before us with the history of the business. It's our employees who deserve the lion's share of the credit for the success this year in all of the things that we've done. And I have to say I thought the staff overall represented you as shareholders and us as a company wonderfully well at Beef Week and Dolly's Dream and the other events. We've really shown the professionalism of our team now, and that stands out when we have a direct comparison with the rest of the industry. Thank you to all our shareholders. Some of you are here today. We acknowledge your support and trust, and we will continue to look to the future with the interest of all shareholders. So I'd now like to hand over to our Managing Director and Chief Executive Officer, Dave Harris, for his address.

Thank you, Donald. It's an honor to be joining you here today as the Managing Director and CEO of AACo. Welcome to all of you here today in Brisbane and following online, and a big thank you to the team for organizing today's Annual General Meeting. As Donald shared with you, this calendar year marks 200 years of operations for your company. From its beginnings, in the Port Stephens area of New South Wales, the Australian Agricultural Company has and continues to exist to benefit the land, its animals and the people. These include our employees, communities, customers around the world, and in doing so, it's also working in the best interest of shareholders. The same is true for the financial year 2024, with another year of progress, even in the face of difficult global conditions that persisted throughout the year. Conditions such as the increased global meat supply and the reduced live cattle prices did have some impact on the results for FY '24. But pleasingly, perhaps more than ever, we also saw the positive impact of the branded beef strategy that we have been building and sharing with you for several years. Through that strategy, we were able to deliver a $50.5 million profit for FY '24. This was AACo's second largest operating profit in recent times and the second consecutive year that the company posted a full year operating profit above $50 million. The operating cash flow for the period was $9.3 million, while revenue increased to $336.1 million. Our herd also grew 5% in the period to circa 455,000 head. Being able to achieve this outcome in the same year as one of the sharpest downturns in cattle prices in recent history should give shareholders confidence in the direction and the management of the company. The foundation of our strategy is a strong global network of distributor partners with established and new relationships across our global markets supporting our strategic distribution of our product. We're able to leverage that network to place the right cuts of beef in the right markets at the right times, taking maximum advantage of the conditions as they exist at any point in time or as was the case at some time in this year, limiting the impact of unfavorable conditions as they occurred. We consider markets individually as well as part of an interconnected network with each market playing a role to realize short-term opportunities whilst also positioning ourselves to maximize the full potential from our brands in the future. By focusing on utilizing our assets to sell high-quality Wagyu beef that is desired by chefs and consumers around the world, our approach is designed to even out some of those peaks and troughs that can exist in selling cattle. Like I said earlier, cattle prices hit a 4-year low in the period, which was the primary influence behind a weaker statutory performance. The herd valuation adjusted down $149.4 million, leading to a statutory net loss after tax of $94.6 million. We are required to revalue this entire herd based on market values at each reporting period. This feeds directly into those statutory numbers and even though the increase or the decrease in value is unrealized at that point in time. So whilst the reduction in our cattle prices certainly impacted our balance sheet and statutory performance in FY '24, you can see that it had a more limited impact on our operating performance. Now of course, our branded beef program is one key initiative from our broader strategy. Our enterprise-level strategy and everything we do is about maximizing the potential of our assets through 3 principal activities: firstly, the marketing and distribution of high-quality branded beef into global markets; secondly, the breeding, growing, feed lotting and trading of our animals; and lastly, the ownership, operation and development of the amazing pastoral properties that we are fortunate to have stewardship over today. So let me take some time now to share the company's progress against these 3 areas and other initiatives that we're pursuing. Firstly, to the progress in our markets. Significant brand development in FY '24 will help unlock opportunities while also helping lay the foundation for potential growth in our meat sales revenue, which increased 10% in FY '24 when compared to the prior period. I'm particularly proud to have relaunched the brand 1824 through the year after a period of strategic development. That brand honors AACo's history and 2 centuries of perfecting our craft and will play a really important role in the company's branded beef program going forward. As discussed earlier, elevating a product selection to be sold and targeted brands has proven to be a successful strategy for AACo over recent years. We've achieved this success through the growth of Westholme and Darling Downs. 1824 will now focus on maximizing revenue through new distribution channels outside of those existing brands and allow us to reach even more customers globally. There was also a considerable brand development work undertaken with Westholme to position it for further opportunities in FY '25. By now, some of you will have seen the relaunch of the Westholme brand with events on our properties and in major Australia cities and around the world. It now better represents that connection that Westholme has to our land and more clearly articulates what goes into producing the exceptional Wagyu that is sold under this brand around the world. I'll share more with you in the future and with some updates, but I encourage you all to visit the Westholme website or any social media channels to learn more. Now while that brand work is aimed at developing new and potentially improved prospects for our future, FY '24 was a year of further progress as we were able to maximize value from our global distribution networks. Headwinds, which included the ongoing herd liquidation in the U.S. increased overall supply in Korea and heavy competition for those higher prices that exist in parts of the EU market meant that we had to manage supply and use our global distribution network to create what we call price tension in different markets. The result of that was that AA was able to largely maintain or increase prices in most of those branded beef markets in those target regions in FY '24, a strong outcome when considering those market factors. Some of the other year's key highlights included coveted menu placements in North America and achieving price growth across ultra-premium product offerings; launching a premium tea within Darling Downs in Korea to help recapture market share, where there is local -- where the local supply of the Hanwoo product is very significant at present; as well as expanding our presence through new opportunities in Indonesia and Thailand; and establishing new partnerships with distributors here in Australia as we reintroduced that 1824 brand that I spoke of earlier; and encouraging results through product innovation trials, including Wagyu bacon and burgers. We also took a strategic approach to building capacity in our global commercial teams alongside additional investment in marketing activities, product activations and digital engagement. Brand awareness has increased through these activities, positioning the company well as we continue to navigate the ever-changing global landscape. Now it's really going to be the case that every market is progressing at the same pace at the same time every year. So with this in mind, our strategic approach to production allocation through our global distribution networks becomes a genuine advantage. Our ability to consistently produce high-quality beef with a production system that allows us to do it at scale also sets us apart. When it comes to the second activity, the breeding, growing, feed lotting and trading of our animals, AACo invested heavily in infrastructure this year, including $36.5 million business investment program, which is $16 million more than the prior period. By aligning that spending on initiatives with our strategic priorities, we have created opportunities that will ensure long-term benefits and returns for AACo. One of those opportunities, and Donald mentioned it earlier, was the Goonoo property expansion that was completed during the second half of the year as well as increasing the value of the property. The expansion increased intensive supply chain capacity by 12% in that period and will allow us to boost supply into global markets in the future. We have also adjusted the profile of our herd over the period, producing more Wagyu animals to further leverage our branded beef sales opportunities. We transitioned to a new processor in FY '24, also better positioning AACo to maximize the opportunities that the increased capacity and supply will bring. These projects and the 5% herd growth that I spoke to earlier demonstrate a conscious and intentional effort to invest in the company's future. Now to sustainability, which is fundamental to the last key activity, the ownership, operation and development of our pastoral properties. Significantly, AACo's depth of understanding in this important area increased in FY '24 and our approach to addressing our impact on climate followed. As we've said before, AACo takes a broad view of sustainability. We seek opportunities to have a positive impact on nature across our cattle production systems. Our cattle operations span over 6.5 million hectares of land. And the focus is not just what we are doing but also very much how we are doing it. Through how we operate, we can be part of the solution to addressing nature-related challenges, which can lead to a positive impact on climate. We're really excited about the direction and the opportunities for the company in this important area. Now among the notable progress -- other progress in FY '24, AACo signed up as a Tier 1 partner in the zero net emissions from Agriculture Cooperative Research Center. As part of the bid team, AACo played a key role in the early development of the CRC, and we are looking forward to the program of work that follows its recent formal launch. This is Australia's largest ever CRC and AACo's 10-year investment reinforces our commitment to sustainability and the efforts to reduce our emissions. In addition to the CRC, AACo also completed the first phase of our Rangelands Carbon by Satellite project. That includes delivery of a product for testing that we anticipate will eventually allow us to measure landscape carbon at scale. Once completed, we hope the product will remove one of the barriers from entering soil carbon markets as well as unlocking new understandings about the potential for soil carbon sequestration at scale in Northern Australia. AACo conducted a unique analysis of the way carbon moves through our supply chain in FY '24, which will inform our emissions accounting as well as opportunities to reduce emissions. And we progressed further work into methane reducing feed additives, including trialing different methods of delivery and opportunities in the grazing environments. We've also completed another year of the beef cattle herd management program, which is designed to improve and track cattle productivity. Details about these initiatives and more can be found in AACo's fifth sustainability report that was released recently. I really do encourage you to head to our website for a read and to learn more about the investment and the progress that we are making across the sustainability program. Our global operating environment includes more than just supply and demand dynamics. We closely monitor consumer trends as well as the potential impact of trade and other mechanisms that could impact our market access. The EU deforestation regulation is one of these examples. The regulation that were announced in FY '24 and will come into effect in FY '25, we are really engaged with the conversations around their implementation in Australia and are preparing our own supply chain in readiness. More broadly, global meat sales conditions remain uncertain for FY '25. The analysts predict global oversupply of beef will ease in late FY '25, which if realized, should allow us to capitalize on branded beef sales opportunity as market conditions ease. We should also be helped by reducing inflation, albeit with higher baseline input costs than the same time last year. Our supply chain has benefited from consecutive favorable seasons across the Northern breeder properties that, again, you heard Donald talk to earlier that are contributing to strong pasture growth and increased productivity. Combined with the full year being realized -- of benefit to be realized from that Goonoo property expansion in FY '25, we anticipate healthier cattle and increased supply of our premium Wagyu. Our people serve as the foundation that underpins everything that we do. I'm proud of our teams here in Australia and across the globe and the progress that we have made in this area over the period. We want them to not just believe that AACo is a great place to work, but also have the experience each day. And so it was really pleasing to see an uplift in the employee engagement score in FY '24. Some of the progress can be attributed to the delivery of our employee value proposition, which highlights the extraordinary nature of working at AACo. We are also actively working to provide learning and growth opportunities for employees, including prioritizing internal promotions where possible and appropriate. Through our initiatives, we've increased the number of women in leadership by 6% over the period, including reaching equal gender representation amongst our senior leaders. In closing, I'm extremely humbled to lead this organization in its 200th year. The passion and the drive of the people who work here brings me tremendous satisfaction and energy. Thanks again to the entire company, our employees around the world, the executive team and the Board for their dedication in FY '24, and thank you also to the shareholders for your support of the company. The strong results we delivered during the period once again highlight the quality and the enormous potential that exists in our people, our animals and the land and the beef that we produce. We will continue to take advantage of the opportunities to unlock further potential through FY '25 and beyond. Thank you. And I'll now hand you back to the Chairman.

Thanks, Dave. I'll now outline the procedures for the rest of the meeting. There will be an opportunity for comments and questions in respect of each item of business and indeed on Dave and my addresses. After receiving the microphone, you're requested to please identify yourself and confine your questions or comment to 1 minute. In fairness to all shareholders, that should be reasonable and flexible in approach, but we request speakers to wind up their remarks if they become overly extended. Note that not all questions are guaranteed to be answered during the meeting, but we'll do our best to address as many as possible. If a question asked during the meeting has already been answered in the material released to the ASX, we will not -- which includes Dave's address and mine, we will not answer the questions during the meeting, but we instead refer shareholders to the relevant ASX announcements. Thank you to those shareholders who took the time to pre-submit questions via our share registry provider, Link Market Services. Where we have received similar questions on the same subject, we'll consolidate these questions into one when we're answering them during the items of business. After each item of business, we'll start by, firstly, addressing any pre-submitted questions. We'll then move on to addressing questions from shareholders in the room here in Brisbane. I'd like to now briefly summarize the voting procedures, which will apply to this meeting. Each resolution will be conducted by a poll. As shareholders are aware, no formal vote is required on item 1 of the agenda. A poll will be conducted on the remaining items 2 through to 8. On entering the meeting, shareholders, representatives, attorneys of shareholders as well as proxy holders should have received a yellow voting card. Relevant voting instructions and all resolutions are printed on the voting cards. I encourage shareholders and their representatives to complete their voting cards after each item has been discussed. However, voting cards will only be collected at the conclusion of discussion on all items of business. To vote, simply place a mark in one of the for, against or abstain boxes for each motion. If you mark the abstain box, your votes will not be counted for that motion. If you wish to cast some of your votes for the motion and some against, simply mark the actual number of votes or percentage for or against. Your vote will be invalid if the total shareholding shown in the for and against and abstain boxes for the motion is more than the total shareholding on the share register. If relevant, please indicate whether you are voting as an attorney or representative. At the time of voting, if you are uncertain about any of the voting procedures or require any assistance, please raise your hand and a representative from Link Market Services will be happy to help you. At the conclusion of the meeting, please ensure that you have marked your votes for the respective resolutions and then giving them, completed voting cards to a representative of Link. I do appreciate that some shareholders may have to leave before the end of the meeting. I, therefore, formally open the poll for voting on each relevant item of business now. With the poll on these matters now open, you need to have -- and if you do need to leave early, it's possible to lodge your vote by providing your completed voting card to Link Market Services. This doesn't mean that you have to vote now. You can wait for the discussion on each item and then vote. Following discussion on all Items, shareholders will be given a reasonable time to complete their voting cards and then giving their voting cards to Link Market Services. After this time, I will announce the polls are closed. I'll now outline the procedure for proxy votes. Shareholders had the opportunity to appoint a proxy prior to the meeting. If you have already sent in your proxy forms, you do not need to vote again. If you are a proxy holder by law, if you exercise your right to vote as a proxy, you must vote in accordance with any instructions given to you by the relevant shareholder. Subject to the restrictions set out in the voting exclusion statements in the Notice of Meeting, any undirected proxies on a given item may be voted by the proxy holder as they choose with some votes for the motion, some against and abstaining if desired. Any proxies that are not voted at the meeting will automatically default to me as Chair of the meeting. In respect of any directed proxies that default to me as Chair, I'm required to vote those proxies as instructed. Subject to any applicable voting restrictions, in respect of any open proxies that have been received by me as Chairman on any of those direct -- or any of our directors, those proxies will be voted in favor of each resolution as we indicated in the Notice of Meeting. I will now outline the procedures for accounting votes. Your votes will be counted by personnel from share register Link Market Services. After the meeting closes, the results of each poll will be announced via the ASX as soon as possible after this meeting and will be displayed on our website. We now move to the formal items of business for this meeting. First item of business is -- on the Notice of Meeting is to consider the financial statements and reports. I now table the directors' statutory report, the financial report for the financial year-ended 31st of March 2024 and the independent auditor's report on the financial report being item 1 on your Notice of Meeting. These documents have been made available to shareholders. The financial statements and reports are placed on the agenda for comment or questions only. There is no voting on this item of business. Please note, Mr. Scott Guse from KPMG, who oversaw the conduct of the audit, is present. Any shareholder can direct questions to Mr. Guse that are relevant to the conduct of the audit, the preparation and content of the independent auditor's report, the accounting policies adopted by AACo in relation to the preparation of the financial statements and the independence of the auditor in relation to the conduct of the audit. We'll start by addressing some of the pre-submitted questions, which have already been received and not covered by what we've had to say in the opening addresses.

In the interest of brevity, where we've received several questions from shareholders, which are similar, we'll choose to answer one of those questions that best represents the majority of that question. We have received several pre-submitted questions regarding dividends. As addressed earlier, we have invested in our supply chain during '24 to deliver resilient outcomes for the future. AACo's future strategic direction will require new and expanded investment. As an example of this, the Goonoo property expansion, which both Dave and I have mentioned, which will increase supply into our global markets. Other examples are our sustainability and commercial initiatives as detailed in the FY '24 annual report. We intend to continue focusing our resources towards these efforts and growing the value of assets within the company. Question 2, will you be buying more land holdings for the portfolio? That question came from [ Aaron ]. Whilst we are in the process of a strategic review of our operations, the intention behind this is to optimize the value of the existing portfolio and assets within that portfolio. There are no current intentions to purchase more landholdings. If an opportunity arose for landholding, which optimized our supply chain, we would consider this on its merits. We are always open to opportunities to improve the business. The next question was submitted by [ Eric Ping Wing Lo ], who asks the annual report refers to commencement of review of the company's strategic direction. Would you be in a position to add some color to the relevant, the review and provide an update on the progress? And would you be able to comment on the price movement and price trends of Wagyu cattle since the 31st of March '24 balance date? Thank you for your question, [ Eric ]. We regard the company's -- with regards to the company's strategic review that I've shared earlier in my speech, that our strategic review intends to build a better beef program by improving on the quality of genetics that we possess. We are also looking at opportunities to further leverage our assets to maximize their value and pursue new revenue streams. We're assessing options for the Livingstone facility and open-minded about the opportunities to achieve the best strategic value for this asset. We are also looking at opportunities to strategically invest in -- with key partners to build our market-leading positions and innovate for the future. We look forward to sharing as much of that information with shareholders as it becomes relevant to share it. And we will certainly look forward to doing that because I think we're all very excited about these opportunities. With regard to the query on the price movement of Wagyu cattle, AACo's Wagyu valuation has performed on a half -- every half year and year-end throughout the use of external expertise appraisers from Elders Limited. They referenced prices received for sales of cattle, which is similar to our herd, whilst also taking into consideration their class, age, quality and location. To determine price considerations specific to our herd, on-site visits are performed to physically inspect a cattle. Given the intricacies of our herd valuation, we're unable to provide specific guidance on the price movements of any parts of the herd, particularly end of year financial '24. Certainly, there's a limited public data available on the pricing for Wagyu cattle specifically as it's quite a tight industry. We do note that general cattle pricing indicators, although not directly comparison to our herd, can provide a view of cattle pricing trends. Since the end of year FY '24, the Eastern Young Cattle Indicator has fluctuated up and down. The uncontrollable and unpredictable nature of market valuations for our cattle while we focus on operating profit is the best measure of cattle performance. The majority of our herd is held for the production of high-quality Wagyu beef in the long term, and the value of our Wagyu animals will generally not be realized through any sales of live animals. I now invite shareholders and proxy holders to ask any further questions regarding the financial statements and reports. Do we have any questions? We have one here. Get that mic.

[ Ken Rod ] is my name, a long-time shareholder and very proud to be here this morning on the special anniversary date and to see some of my fellow shareholders here as well. Always find these meetings very congenial and very friendly. And thank you, Mr. Chairman, for sending me the tie, which I now wear proudly and the cap, which I -- probably when I go shopping, and people are what's that old bloke got that cap on for.

Are you telling that we produce pretty good beef and they should be buying it.

I will. And also thank you for the warm welcome I've received this morning from some of your senior people. Much appreciate it. Now you answered most of the questions. I intended to ask about the Livingstone facility, so I look forward to hearing your results of the review there. I just hope that in the long run, the company may retain ownership of that facility, but we'll wait and see. The other little question I'd ask very briefly is that last year, you talked a lot about AACo's got vast areas of land all over the country. We know that beef is the main central activity of the company, but maybe a little bit of the ingenuity and foresight, there might be other little industries we could mingle in with the beef part of it and make use of that land. You did mention something like that last year. And I wonder if you're still thinking along that path and if any moves have been made.