Capral Limited (CAA) Earnings Call Transcript & Summary

Good morning. Thank you for attending today. I'm Rex Wood-Ward, Chairman of Capral. On behalf of the Board, I'd like to take this opportunity to welcome you all to this general meeting. To meet the requirements of Capral's constitution, a quorum of 3 shareholders is physically present at the Parramatta venue today: Capral's Managing Director, Tony Dragicevich; Capral's CFO, Tertius Campbell; and a Capral employee shareholder. As a quorum is present, and it's past the appointed time of 10:00 a.m., I declare the General Meeting of Capral open. Board members Philip Jobe and Kathy Ostin are present online. Unfortunately, one of our nonexecutive directors, Graeme Pettigrew, is unable to attend today, and we have his apologies. The notice of meeting and explanatory memorandum have been provided to shareholders, and copies are available on Capral's website. That notice sets out the items to be considered at this meeting and will be taken as read. [Operator Instructions] Please be aware that there's a delay from when you submit a question and when we receive that question. So it's better to submit your questions ahead of the item of business to which it relates. Your questions will be collated and addressed at the appropriate time. This meeting is really to consider the 2 agenda items and the 2 resolutions that are in the notice. But before commencing with those formalities, I'd like to hand over to Tony, who'd just like to give shareholders an update.

Good morning, everybody. And as Rex stated, I just want -- thought it was appropriate to give an update on our current trading performance. So as stated in our -- in the ASX announcement on 27th of October, Capral continues to experience strong demand -- rebound in demand following the weak June quarter, which was impacted by the global pandemic. Capral's manufacturing plants are currently operating at full available capacity, and market conditions remain strong for the December quarter. The government housing stimulus packages continue to have a positive impact on new house sales and underpins recovery in the residential building market. Following a period of import supply disruption, Capral is now benefiting from the trend towards Australian-made and is growing market share against imports. The positive impact on earnings resulting from last year's restructure of Capral's Bremer Park operations continues to deliver improvement in earnings. As a result of these factors, Capral is expecting a strong finish to the 2020 year and for this to continue into the first half of 2021. On this basis, Capral advises that its FY '20 earnings will likely be towards the upper end of the guidance range provided on the 22nd of October 2020. Thank you. I'm going to pass you back to Rex.

Tony, I'll leave you with the shareholders and address the question that they've had.

Okay. We have a question here from [ Delta Asset Management ]. "Can you give us an idea of what percentage volume has increased due to Buy Australia as against import product?" So the volume increase is a result of moving -- of market share won from imports, is around -- roughly between 5% and 10% of our total volume. As reported at half year, we saw, certainly at the half year, a 2% market share swing in favor of -- to Capral from imports, which resulted in about a 10% impact on our extrusion volumes this year.

Thanks, Tony. There are no more questions currently. So I will proceed with the formalities of the meeting. As indicated in the notice of meeting, voting on each of the resolutions being put to the meeting will be conducted by a poll. The majority of shareholders who submitted proxy forms appointed the Chair of the meeting as their proxy. Any shareholders who appointed someone other than the Chair as a proxy will be taken to have appointed the Chair as their proxy since the proxy they appointed has not been able to physically attend today's meeting. As indicated in Capral's notice of meeting, the Chair will vote undirected proxy votes in favor of all resolutions. I now declare the poll open. The poll will close after item 2, and the results of the poll will be announced. The first resolution, resolution 1, is the approval of the 30:1 share consolidation. The first voting item is the approval of a 30:1 share consolidation, which is an ordinary resolution that requires a simple majority of more than 50% of votes cast in favor to pass. The wording of the resolution is shown up on the screen. We have not received any questions at this time. I'm just confirming that. And so we will proceed with the poll, and the total number of valid proxy votes received are displayed on the screen. From that, we can see that 61% of the issued capital voted, and of those, 99.8% were in favor. So the resolution is passed. Resolution 2, approval to modify the constitution. The next item of business is the approval of the modification of the constitution, which is a special resolution that requires at least 75% of votes cast in favor to pass. The wording of that resolution 2 is now shown on the screen. We have not received any questions on this item, and I'll confirm that. On that, the total number of valid proxy votes received is displayed on the screen. And from that, we can see that 60.4% of the issued capital shares voted, and of those, 98.7% were in favor of the resolution 2. The resolution 2 is therefore passed. To confirm, the results of both polls or that all these resolutions have been passed and the detailed results of the voting will be released on the ASX after the meeting. Before I close the meeting, there is one other question, which I will hand over to Tony.

Okay. We have a question here. Another question from Delta Asset Management. The question is that, "The plants are currently running at full capacity. How will you be able to manage greater orders if they are received?" We do have the ability to run weekend overtime on the current shift patterns we're running. We also have a press that's mothballed at Bremer Park. As you recall, when we did the restructuring of Bremer Park last year, we mothballed one of our presses. We do have the capability of -- bring that prospect online again, but that will take 2 to 3 months' worth of work. And we'll need to be certain that the current order levels, which are at our seasonal peak, will continue into the new year before we take that decision. So at the moment, we're managing demand by working weekend day overtime. So I hope that answers your question satisfactorily.

As there are no further questions, and we've dealt with the business of the meeting, being no further business, the General Meeting of Capral is now closed. I wish to thank you all for your attendance today.