Carclo plc (CAR.L) Earnings Call Transcript & Summary

Good morning, ladies gentlemen, and welcome to the Carclo Plc Annual General Meeting. Questions are encouraged and could be submitted at any time via the Q&A Tab situated on the right-hand corner of your screen. Please just simply type in your questions at any time and press Send. [Operator Instructions] The company may not be in a position to answer every question submitted today. However, all questions will be reviewed with responses published on the Investor Meet Company Platform. I'd now like to hand over to Executive Chairman, Nick Sanders.

Thank you. Good morning, everybody. And it's very good to see people here in-person after the pandemic and also for the first time to have investors joining us online as well. So it's now 11:30, and we have a sufficient number of members present so that we can start today's proceedings. and declare the 2020 (sic) [ 2022 ] Annual General Meeting open. As has already been said, I'm Nick Sanders. I'm the Executive Chair of Carclo plc. And as I said, this is our first hybrid AGM. So we look forward to your feedback on that and how it goes. So I'm pleased to here welcome you all here to Milton Gate and for those of you who joining us virtually on the Investor Meet Company Platform. Before we begin, there are a couple of housekeeping points to mention. Firstly, could I ask that everybody switches off their mobile phones or put them on silent so that we don't get any interruptions. Secondly, I'm advised that there are no planned fire alarms or tests today during the meeting. Therefore, if an alarm does sound, please head down the corridor straight towards the toilets, which is down that way and turn left to exit the building. Addleshaw Goddard staff will be on hand to assist with any evacuation should it be necessary. For those of you who joined virtually by the Investor Meet Company Platform, your microphones being muted to avoid any unnecessary interruptions. If you have any questions for the Board, you will be able to submit these at any time during the AGM. The Board will respond to any questions submitted, if not during the meeting, by responding via the platform. So to introduce our Board today, I'm joined by my fellow directors, and I'd like to introduce them to you briefly before we begin. Starting with my immediate right is our Senior Independent Director and Remuneration Committee Chair, Joe Oatley. Next to Joe is Angie Wakes, who is our Company Secretary. To my left is Phil White, the Group CFO; Frank Doorenbosch, who is currently acting as a consultant to the business; and Eric Hutchinson, who is a Nonexecutive Director and Audit Committee Chair. So getting down to the business of the meeting, as for many companies, the impact of the pandemic has been continued to be felt throughout the year. In the latter part of the year, the war in Ukraine has resulted in added uncertainty. Our priorities have been to ensure the safety and well-being of our people and the communities that we operate in and to safeguard the long-term sustainability of the business. Despite these challenges, I'm pleased to report that the group has delivered a significant year-on-year growth in sales and underlying operating profit and a significant reduction in the pension deficit. Ladies and gentlemen, we will allow time for questions in the meeting. However, we will move forward to the formal business of today's meeting. The notice of the AGM is set out on Page 3 and Page 4 of the circular. With your permission, I would like to take the notice concerning the meeting as read. Thank you. The notice of meeting includes 14 items of business for your consideration today, and explanation of each of these is included in the circular. In summary, the first 2 resolutions involve the approval of the receipt of the 2022 annual report and accounts, including the annual statement by the Chair of the Remuneration Committee and annual report on directors' remuneration. In accordance with best practices -- best practice, resolutions #3 to #7 concern the reelection of the directors. We've provided additional information about the directors seeking reelection on Pages 9 to 11 of the circular. Resolution 10 relates to the amendments to the rules of the Carclo plc Performance Share Plan, the amendment is summarized in the explanatory notes to the business of the AGM on Page 7 and relate to the removal of the 5% in 10-year dilution limit that is currently contained in the rules of the PSP in respect to discretionary share plans. The remaining resolutions are our standard approval authorization resolutions relating to the reappointment of our auditors and the authorization to determine their remuneration, allotment of shares and disapplication of pre-emption rights, purchase of own shares and holdings of general meetings other than the AGM on shorter notice. For information purposes, please find on your Chair a note showing the closing proxy voting figures. These indicate for, against and withheld figures for each of the resolutions set out in the notice of the meeting. This can be viewed on screen by the Investor Meet Company Platform. I'm delighted to announce that all proxy votes received were overwhelmingly for the resolutions and would like to thank all shareholders for their continuing support. I will now offer all shareholders their appointed -- those appointed as proxies and any corporate representatives the opportunity to ask questions. If you would like to ask a question on any of the resolutions proposed at today's meeting, please raise your hand. Please tell us your name and, if relevant, who you represent. We will also answer any questions that you have previously submitted by the Investor Meet Company Platform. Thank you.

I'm a small shareholder. I just got one question on the reappointment of Mr. Oatley. He doesn't own any shares in the company. I was wondering any explanation why that is Most of the small shareholders think it's -- Well What's Mr. Oatley moment.

Let me comment on that first, and I'll let Joe to comment as well. Joe is the longest-serving member of the Board. He's been on the Board and been absolutely integral in reshaping the Board and getting the business pointing in the right direction. So Joe is a very important part of the team. And as the longest-serving director he is preferably - he is the senior independent as well. Joe, do you want to comment?

_ Yes. In terms of me personally coming you said, you're right. I'm not a shareholder at the moment. That's not to say I won't be in the future. But in terms of my personal finances and when I buy and sell shares, it's not going right for me to do it up until now.

I guess you get GBP 50,000 a year [indiscernible] .

It can. I think my entire focus has been on my time look after one helping the business, first of all, survive, which is -- I don't know -- How long it be a shareholder. It's been more than a couple of years we got some difficulties and we got through that. And subsequently, putting all matters into making sure we're performing.

I'm small shareholder [indiscernible] seeing the other directors buy shares in the company that was given paid with this year.

Good. So I mean [indiscernible] .

Okay. Thank you. Any other questions?

The One tiny question. My name is Robert I know you've been unable and haven't paid for a long time dividends. What is the likely future possibility of paying dividends?

The position on that is that in the short term, we can't because of the agreements that we have with the pension trustees to make the contributions and about where any excess cash in the business gets allocated. So it's something that we keep in view and we discuss regularly with the pension trustees. So what I can say is it's not something that we can do in the immediate future, but obviously, it's something we'd like to return to do as soon as we're able to do. And the key to do is being able to do that is to execute on our strategies of growing the sales and the profits of both of the divisions, but also working on the reduction of the pension deficit as well. So all of those things play into our ability to pay dividend. So I can't give you a date where I'll say, yes, we will resume that. But certainly, our Board intent is that we review it as soon as we can, but I don't think that's an imminent thing.

Sure. Okay. If I may just turn to a question that's been submitted online, if I may, which reads as follows. Is the high level of debt sustainable as interest relates arising?

Thank you. So we regularly look at our debt position. We look at the cost of servicing that debt, and we do sensitivity analysis regularly, and we discuss that with our banks. And so yes, we think that the servicing that debt is affordable. Clearly, we've modeled a range of outcomes if inflate interest rates zoom up massively, we'll have to reassess that. But at the moment, we're comfortable that we can service the debt we've got within a decent range of sensitivities.

That's great with that. There are no further questions online. If I may hand back to you.

Thank you. As there are no more questions, I shall explain the poll voting procedure. As noticed in the AGM -- as noted in the AGM circular, we shall be inviting you to vote on a poll rather than on a share of hands. Our shareholders on their proxies or their proxies or corporate representatives are entitled to vote on the poll On registration, you should have been given a polling card, you will need this polling card to vote. If you wish to vote on the poll in more than 1 capacity, for example, or if shareholder in your own right and have also been appointed as someone else's proxy, you will need a separate poll card for each capacity in which you vote. If you need a further poll card, please raise your hand and it will be passed to you. Shareholders who are here today and have lodged proxies by 11:30 on Tuesday of this week did not complete a poll card unless they wish to change their vote. If you have cast a vote a proxy vote in advance and you decide to vote at the meeting, your votes at the meeting will supersede any proxy votes you may have already lodged -- many shareholders have already sent in a proxy appointing me to vote on their behalf. I will vote as they have instructed me. If they have given me discretion as to how to vote, I shall be voting in favor of the resolutions concerned on their behalf. If you do not have a poll card or need additional poll cards or a pen, please raise your hand now and a representative of our registrar team will come and assist you. Okay. I think we're all good there. So now turning to the poll process itself. When the poll procedures commence, you should complete your polling card in the places indicated by inserting the full name of the shareholder and cross in one of the spaces marked for, against or withheld in respect of each of the resolutions. Please note that a withheld vote is not a vote in law and will not be counted as a vote for or against a resolution. If your vote has not been cast entirely one way in respect of all of your shares, you should enter the number of votes being cast alongside the separate process you insert for that resolution. If you're using the polling card to vote only some of the shares registered in the shareholders' name but not all of them, you should enter the number of shares you are voting with the card. If you have any questions or need any assistance with filling in your card, please speak to the representative of the registry, who will be available at the end of the meeting. the poll will remain open for 10 minutes after I close the meeting. Are there any questions on the polling procedure? Okay. Thank you. As there are no more questions, I now formally put to the meeting each of the resolutions are set out in the notice of meeting and declare the voting open. Once you have completed your card, please ensure that you have signed them and hand them in to a representative of our registrar. The results of the poll will be determined by the registrar as scrutineer. As this will take a little while, the results of the AGM will be announced to the London Stock Exchange and published on our website as soon as reasonably -- I would like to thank everyone for attending today's meeting and wish you a safe journey home. Thanks also to those who have joined via the Investor Meet Company platform. That concludes the meeting, and I declare the 2022 Annual General Meeting closed. The poll will now remain open for 10 minutes. You're invited to join the directors for light refreshments in the room immediately outside at this meeting room. Thank you.

Mr. Chairman, thank you very much indeed. Can I please ask investors not to close this session as you'll now be automatically redirected to the opportunity to provide your feedback in order that the Board can better understand your views and expectations. I just want to take a few moments to complete, but I'm sure it'll be highly valued by the company. On half of the Board of Carclo plc, I would like to thank you for attending today's Annual General Meeting. I want to make sure a very pleasant morning.