Cedar Woods Properties Limited (CWP) Earnings Call Transcript & Summary

Good morning, and I thank you for joining Cedar Woods' 2022 Annual General Meeting. My name is William Hames, and I am Chairman of Cedar Woods. It's now 10 a.m., and as a quorum is present, I formally declare this meeting open. I would like to begin by acknowledging that this meeting is held on the traditional lands of the Noongar People from the Whadjuk region. I'd also like to pay my respects to Elders, past and present. I welcome also all of our shareholders who are joining us in person today and also via the web platforms. Turning to the agenda. I will provide you with a recap of our strategy, highlight some of our financial achievements in FY '22, and I'll also comment on the share price. We will then hear from our Managing Director, Nathan Blackburne, who will provide an overview of '22 and our progress on ESG, showcase some of our projects, comment on the market conditions and finally, comment on our outlook going forward. Then I will return to the formal meeting proceedings as set out in the notice of meeting. Voting on all resolutions will be conducted by way of a poll. Shareholders will be able to submit their questions in writing on an Open Briefing platform at any time until the end of the meeting. If you have questions, I encourage you to submit them early as possible because we have a moderator in place who will receive the questions and provide them to me. We have a long agenda and a limited time and may -- and we may not be able to answer all questions. If you have a question, it will help us if you can note the resolution to which it relates to, unless it is a general question. This session is being recorded, and a webcast of today's presentation will be available via the ASX on our website after this meeting. The notice convening this meeting and related documents have been made available to shareholders on our website. I propose that this notice be taken as read. The minutes of the previous meeting members have been signed by the Chair and placed on the shareholders' minute book. I would like to welcome my fellow directors and members of our executive team who are here with us today. To my immediate right is Nathan Blackburne, who is our Managing Director; Robert Brown, who is our Deputy Chairman; Valerie Davies; Jane Muirsmith; and Paul Say, who is not here, but he is here virtually. He's here joining the meeting by telephone. Paul is our Director from Sydney. So he is here with us.

Thanks, Bill.

Thank you, Paul. It's good to know you're there. Right. Excuse me. I want to recap on our strategy because it is our key to all of our success, and it's been there for a long time. Our strategy has always been to grow our national portfolio, diversified by geography, product type and price point so that it continues to hold broad customer appeal and we can perform well in a range of different market conditions. We've certainly seen some changing market conditions recently. This strategy is a key differentiator for our business. We are not bound by 1 single market or 1 single product type. We have a variety of products and projects that attract different buyer profiles. In '22, we saw a lower first-time buyer numbers and higher investor numbers with investors capitalizing on the low vacancy rates and also rising rents. Downsizers and upgraders also featured strongly across our portfolio. In line with our strategy, we have a presence in Western Australia, Queensland, Victoria and South Australia, and a growing number of well-located projects in each of those states. And in '22, we continue to supplement our project portfolio by some strategic new acquisitions. Let's briefly review the financial highlights of 2022. We were able to deliver good return metrics for our shareholders. The following outcomes were achieved. We settled 955 lots, which generated $333 million in revenue. This resulted in a net profit after tax of $37.4 million, which was 13.9% up on last year's results. Our earnings per share was $0.457, and that was up 12.3%. The full year fully franked dividends were $0.275, which was up 3.8%. And our return on equity was 8.9%, which again improved from 8.2%. Our revenue improved, reflecting the ability of our diversified portfolio to respond to improved market conditions and also a government stimulus. The company's balance sheet remains strong with gearing at 47% at the lower end of our target range, which is 20% to 75%. We ended the year with $500 million of presale contracts. That's up $22 million on the prior year. And it is a record for the business at this stage at year-end. So overall, a year of good growth. And later, Nathan will talk to you about our expectations for this year. Our share price, I wanted to explain some of the dynamics at play. History always shows there is a negative correlation between interest rate movements and price of property stocks. In a rising interest rate environment, ASX-listed property companies generally experienced a downward stock price pressure in '22. The S&P ASX 200 REITS Index declined by more than 15% over the year to 30th of June '22. And residential developers like Cedar Woods were generally harder hit. Noting the impacts that increasing borrowing costs have on new housing sales. This, of course, coincided with what we've got now in the industry, material increases and also general living -- increase in the general living costs. Another factor impacting our share price was our exit from the ASX 300 index in March. This came about due to the concurrent rise in the price of commodities companies and the decline of property stocks. Falling out of the index meant that the index funds had to sell. Of course, returning to the ASX 300 remains one of our key objectives. Notwithstanding the reduction of our share price, we have delivered a strong growth in earnings and dividends over the past 2 years. And our sector continues to have some very strong fundamentals, including housing supply shortage nationally, strong employment, and we now have inbound migration occurring. As interest rates stabilize, these sectors tailwinds continue, we expect the sentiment to return in favor of listed property companies. We have now a short video to show to you of how we're implementing our strategy. [Presentation]

On behalf of the Board, I would like to thank Cedar Woods' management team and all employees for their endeavors in what has been a rewarding but very challenging '22, and for placing us in a solid position going forward into 2023. The Board acknowledges their hard work, and we thank them for their efforts. I would also personally like to thank my Board colleagues for their continued engagement and enthusiasm over the past year. And finally, I would like to thank you, our shareholders, for your ongoing support. I will now hand over to our Managing Director, Nathan Blackburne.

Thank you, Bill. And good morning to everyone here or afternoon to those attending online on the East Coast. I'm going to provide an overview of the year's activities, challenges and achievements, and review some of our projects, then provide some commentary on the outlook for you. I also wanted to acknowledge the Traditional Custodians of the land from which we are presenting to you today, the Noongar People from the Whadjuk region. Cedar Woods delivered a strong profit -- delivered strong profit growth in FY '22, and I'm pleased that we've managed to deliver good distributions for our shareholders and to be dependable in terms of the dividends that we pay. These returns are evidence of the diversity and the quality of the portfolio that we've been able to assemble. We have a solid bank of presales, and we are busy delivering those, and they give us a great head start to FY '24, though noting that the sales rates have come back, which we've talked to you about in other announcements, and I'll touch on again today. Operationally, it's fair to say that FY '22 was fairly challenging. And this state persists -- is expected to persist through FY '23 with -- and you've seen some recent events such as the major weather events on the East Coast. You're aware of the labor shortages, the rising interest rates and the difficulties that the construction sector has experienced. Day to day, this has meant program delays across several projects and projects generally being more management intensive. But our staff have done an excellent job in overcoming those challenges and positioning us the best we can be for the period ahead. And this has been a really competitive environment as well for talent, having a workplace culture, a compelling value proposition and flexible working practices have all helped us compete in this space. And our engagement surveys and staff satisfaction surveys are evidence of the work that we've been doing here. We continued our investment in systems and technology throughout the period, further creating a source of advantage for our business. We have stronger controls, a higher security posture and are better analyzing our data across the business in support of our marketing efforts and our product design efforts. I'm happy with the state and status of our portfolio that we've been able to assemble. The additions that we made through FY '22 see us now with 34 projects, and a pipeline of over 10,300 lots or dwellings. And this provides a substantial pipeline for us to deliver growth in earnings into the future. So this year, we continued to implement our enhanced ESG strategy. The strategy builds on our enviable track record on sustainability and social responsibility over a 30-year period. Our efforts on environmental, social and governance issues are not separate from our operating and financial performance. We do see these things as inextricably linked. The efforts we make in these areas create shareholder value. Our long-established community grants program, for example, creates goodwill and connection in the communities that we operate in. Supporting grassroots clubs and organizations enriches these communities and creates a better environment for our customers to live in. Grants towards local foodie clubs, mothers groups and so on typical of the things that we assist. The sustainability initiatives we deliver on our projects, reduce operating costs, improve livability and attract buyers. The electric vehicle charging stations and solar-powered communal areas at many of our apartment projects, for example, have immediate positive impacts. Providing specialist disability accommodation in an increasing number of our apartment projects has occurred over the past couple of years. The shortages of suitable disability accommodation is something that our business is very keen to make a greater contribution towards. And finally, our national partnership with the Smith Family continues. The Smith Family is Australia's leading children's education charity, and this cause is very dear to us as it is a step towards breaking that perpetuation of disadvantage. And here's another video for you which shows one of the initiatives we put in place with the Smith Family at our Glenside project in South Australia, where we had a group of students come in and spend the day with us. [Presentation]

So I now wanted to talk to you on market conditions. The key factors that determine property market conditions include the broader economic conditions, employment levels, population growth, interest rates and supply. Rising interest rates, inflationary pressures and the resultant drop in sentiment have impacted sales, creating headwinds for the residential property sector in particular. And this lower sales volumes was evident in our Q1 FY '23 sales results. And we do expect those weaker sales conditions to persist throughout FY '23, but with a rebound expected in FY '24. There have also been adverse weather conditions in Queensland and Victoria, in particular, and that has slowed progress at projects across the industry, Cedar Woods included. And for us, that will result -- or that has resulted in some delays to stages, hopefully, just a week or 2, but our teams are doing a great job in trying to make up that lost ground where they can. I do expect we'll see some divergence in the performance of the various jurisdictions that we operate in with the more affordable markets to outperform. And I especially think that this is going to be the case for WA, which is relatively well priced and stronger in terms of the economy here. In fact, there's a good case to say that the downturn in sales will be fairly short-lived. And there are a few reasons for that. There are many positive fundamentals that I've talked a little bit about, but mainly the strong economic conditions, the security of employment that people are experiencing across the nation. Inbound migration has rebounded, and we are seeing the effects of this across the industry. Households, on average, are in a strong position to withstand interest rate increases. And that's because of the job security, the wage growth that is being experienced, and the savings that they've accumulated. We expect investor demand for property to be fairly strong, driven by the attractive yields and with the low supply of rental stock as well as rapidly rising rents. And this is across capital cities in Australia. And finally, there's a limited supply of new housing across most product types and locations, and I've got a slide on that. So we think that the combination of these factors will put a floor on volumes for both established housing and new housing and will put a floor on volumes. And that we'll see good conditions in FY '24, surprising markets to the upside. So it's worth talking a little more about the supply constraints. The shortfall in new dwelling supply is widespread. And it can't be addressed quickly. The shortfall will persist for several years, in our view, as it will take time for projects to be approved and then delivered. These charts show the number of apartment launches on the left and the number of apartment project commencements or apartment commencements on the eastern seaboard in the last 10 years. And it's worth having a detailed look at those charts because they tell a really compelling story. As you can see, the numbers have been dropping from that '16, '17 peak, down to considerable lows now. And those low volumes of apartments that are being delivered across jurisdictions is likely to persist for some years. And the FY '23 numbers will probably be lower than the '22 numbers shown on this graph. Many approved projects aren't being delivered due to construction sector capacity limitation as well as costs. Development finance availability is also restricting supply with the major banks restricting lending over the last couple of years. As population growth returns and investor demand remains high, supply shortfalls across most product types and geographies will intensify from where it is at the moment. And those with supply that is ready to go in 2023 and 2024 are expected to benefit, but especially so for apartments and townhouses because the commencements on these particular product types is particularly down. So some good news for our sector is the strong increase in migration. Net inward migration was the strongest on record. There were 96,000 net arrivals in the first quarter of 2022. And the deficit in skills across the nation will ensure that pressure is there to keep those intake levels up. Interstate migration continues to benefit Queensland, WA and South Australia, where Cedar Woods has a significant presence. Student visas are also increasing strongly, all supporting the need for more housing. And this population growth supports both aggregate demand in the economy as well as the new housing sector that we're in. To support future earnings, in FY '22, we maintained a growth mindset, acquiring around 6 sites across the nation. In Melbourne, we acquired land that will yield nearly 800 lots in the busy Northwest growth corridor and an apartment site in Southbank, which is pretty close to the CBD. In Perth, we supplemented our land bank in the north with land that will yield over 1,500 lots as well as acquiring a small infill site in Rockingham. With capacity in the portfolio to achieve our short and medium-term earnings growth targets, we are now just concentrating on delivering those projects. Well-designed and sustainable projects are key to Cedar Woods' approach. And to give you some insight into this, I wanted to show you some of the projects that we've been working on. The Rivergums project commenced 2 decades ago and has been a steady performer through a number of property cycles. This is a major master-planned community located in Baldivis, WA with over 1,400 lots. It was pleasing to see the forward planning and the sustainability initiatives of the project be recognized with an award by the Urban Development Institute of WA. So we got an award to the project very recently called the Judges Award, which is one of the higher awards in the round, and we received it for the design, the amenity, the sustainability initiatives, the heritage story and the community initiatives that we've implemented. Eglinton is an 86-hectare site in Perth's Northwest growth corridor that we acquired in FY '22. This new community will be conveniently located, just 500 meters from the near complete Eglinton train station. The estate will have around 1,200 lots over several neighborhoods and is expected to contribute to earnings over an 11-year period from FY '24. The first stage of approvals is already in hand, and we are gearing up for the project launch right at the moment. Glenside. This is a project in Adelaide that is 3 kilometers from the Adelaide CBD, and it will deliver around 1,000 townhouses and apartments over 17 hectares. And it's a really special and substantial project that's proving successful and meeting with strong and consistent demand. And it really fits with our business model neatly in its infill nature, in its high quality and our ability to deliver sustainability initiatives across the project. And we're achieving premium pricing across each stage that we've been delivering. Monarch Apartments within that development is currently being constructed. It has EV charging facilities, solar panels to common areas, and an overall 7-star energy rating, which is very high compared to other apartment projects around the country. The next apartment building, Banksia, will be our fourth and is 70% sold, and we've recently given the builder the go ahead. So Boston Commons is a strata office project that we're doing in Williams Landing, Victoria, and that's benefited from post-pandemic interested in suburban offices with sales being very strong. The project has 77 office suites, some ground floor retail and is 90% sold. And construction is commencing at the moment on this one as well. So the depth of interest in this product has allowed us to increase sales prices 25% over the previous strata office development that we did. And these price increases have balanced the construction cost increases that we've encountered as well. So now and finally, to comment on the outlook for Cedar Woods. There are solid fundamentals, as I said, supporting the housing sector, a strong economy, low unemployment, job security and wage growth. And these are the factors that we look to in determining the outlook for our sector. However, we do have the rising interest rates and inflation that are impacting sentiment and therefore, sales which we expect to continue over FY '23. A relatively short interest rate cycle is expected with rates peaking in FY '23 or shortly after. And a number of factors give us confidence that the demand for new housing will rebound. Supply constraints, combined with increasing migration, strong investor demand, all of that will put a floor on values and volumes. And we expect a solid turnaround in FY '24. And importantly, our outlook is underpinned by presales of $514 million, which partially derisks our future earnings. On Tuesday, we announced -- or actually, I should say, continued growth in earnings is expected in FY '23, and earnings will be significantly weighted to the second half due to the timing of stage settlements. On Tuesday, we announced the company will market for sale the Williams Landing Shopping Center in Victoria in an open market process. Earnings for FY '23 may be increased by the sale of the Williams Landing Shopping Center. However, the timing and the proceeds from any sale at this point in time is, of course, uncertain. And the company's outlook is subject to market and construction sector conditions. So finally, our national pipeline of more than 10,300 dwellings, offices, lots, many in high-demand locations with low competition, positions Cedar Woods well for the future. So I'm now going to hand back to our Chairman. Thank you.

Thank you, Nathan. Now I will return us to our agenda. I will now move on to the formal business for today's meeting as contained in the notice of meeting. And afterwards, I will take general questions regarding the company. I have made rulings on the appointment of proxies as follows. I report 230 valid proxy instructions were received by the company by 10 a.m. on the 31st of October 2022. The minutes of this meeting will record in respect to each resolution voted upon, the total number of proxy votes exercisable by all proxy appointments, the directions in the proxy forms and the total votes for, against and those abstaining. The proxy votes received will be shown as we address each resolution. I will move each of the resolutions and then take questions or questions afterwards. If you have an online question and have not submitted it already, please do it now. The first item of notified business is to receive and to consider the financial report for the year ended 30th of June 2022, and the accompanying directors' report, directors' declaration and the auditor's report. I now table these documents and invite any questions from shareholders that relate to the financial report. Questions on the conduct of the audit or the auditor's report may also be directed to Helen Bathurst, a partner from our auditors, PricewaterhouseCoopers, who is in attendance today. Thank you, Helen. Please note that we will take general questions from shareholders later in the meeting. And accordingly, I ask any questions now be limited to those relating to the financial report. And if asking a question, please raise your shareholder card, state your name, who you represent and then ask your question. There is a roving microphone available for questions. Please speak into the microphone when you have questions. Are there any questions from the floor? Are there any questions from the platform, from our online platform? No? Thank you. Okay. As there are no questions, I will now move to the next item of business. We now turn to the resolutions to be put to the meeting. We will move directly to a poll for all the remaining items of business. Okay. If there's anyone here in person who believes they are entitled to vote but have -- they have not registered to vote, please raise your hand for any assistance. The persons entitled to vote are all shareholders, representatives and attorneys of shareholders and proxy holders who hold green admission cards like the one on the screen. On the back of your admission card, there is also a voting card and instructions. Proxy holders have a summary of proxy votes attached to their admission card, which details the voting instructions and the items of business. In respect to any open votes, you need to mark the box beside each motion and indicate how you wish to cast your vote -- your open vote. Shareholders also need to mark the box beside each motion to indicate how you wish to cast your votes. Please ensure you print your name where indicated and sign the voting card. At the end of the formal business, please lodge your completed voting card in the ballot box to ensure that your votes are counted. Ordinary resolutions 1 and 2 relate to the reelection of the Chair and Deputy Chair. So I will now hand over proceedings to our Independent Director and Chair of the Remuneration and Nominations Committee, Valerie Davies.

Thanks very much, Bill, and good morning, everybody, again. Ordinary resolution 1 relates to the reelection of Mr. W. G. Hames, who, having retired in accordance with the company's constitution, and being eligible, offers himself for reelection to be reelected as a director of the company. The explanatory memorandum sets out Bill's credentials. The notice of meeting states that the other directors unanimously support the resolution. The proxy votes for this resolution are shown on the slide. And at this time, can I ask if there's any questions from shareholders on this resolution? Okay. Are there any questions from the online platform, Paul? No? So can I now ask that a shareholder present here in the room today, please move the motion? Thank you. Would another shareholder please second that motion? Thank you. Thank you. I'll now put the motion. Please enter your vote on the voting paper for resolution 1, and we'll then move on to the next item of business. Hold on to your paper for now. Thank you. [Voting]

Ordinary resolution 2 relates to the reelection of Mr. Robert Brown, who, having retired in accordance with the company's constitution and being eligible, offers himself for reelection to be reelected as a director of the company. The explanatory memorandum sets out Robert's credentials. The notice of meeting states that the other directors unanimously support this resolution and the proxy votes for this resolution you can see on the slide before you. Are there any questions from shareholders on this resolution? Okay. Are there any questions from the online platform, Paul? No? Can I ask a shareholder then please who's present to move that motion? Thank you. Would another shareholder please second the motion? Thank you. Please enter again your vote on the voting paper for resolution 2, and we'll then move on to the next item of business. [Voting]

Thanks very much. I'll now hand back to Bill.

Thank you, Valerie. Ordinary resolution 3 relates to the company's remuneration report. The report is set out in the directors' report on Pages 49 to 67 of the '22 annual report. Further information on the remuneration report is also contained in the explanatory memorandum attached to the notice of meeting. Following ongoing improvements made to the remuneration framework, we have received positive feedback from investors and also our proxy advisers. And hence, at last year's AGM, less than 1% of shareholders voted against the remuneration report. A summary of the significant matters dealt with during the year are set out on Page 49. Proxy votes received for the resolution are also shown on the slide. Please note the directors, key management personnel and persons associated with them are not eligible to vote in favor of this resolution, and this is reflected in the proxy votes as shown. I'll now table the remuneration report and invite questions from shareholders that relate to it. If asking a question, please, again, state your name, who you represent and then ask your question. Any questions from the floor? Any questions from -- none. Thank you. I will now put the following resolution to the meeting, that the remuneration report that forms part of the director's report for the financial year 30th of June '22, be adopted. Shareholders advised that the vote on this resolution is advisory only and does not bind the directors or the company. Can I ask a shareholder present to please move this motion? Thank you. Do I have a seconder? Thank you. I will now put the motion. Please enter your vote on the voting paper for resolution 3, and we will then move to the next item of business. [Voting]

Ordinary resolution 4 request shareholder approval for the issue of 26,409 zero-price options to the Managing Director or his nominee under the deferred STI plan for the 2022 financial year. Full details of this deferred STI plan are set out in the explanatory memorandum. The directors, other than Mr. Blackburne, recommend that the shareholder vote in favor of resolution 4. Mr. Blackburne makes no recommendation in respect to resolution 4 due to his personal interest in the outcome. Proxy votes received for this resolution are shown on the slide. If there are any questions from shareholders -- or are there any questions from shareholders on this item? None? From the platform? None. All right. Can I ask a shareholder present to please move this motion? Thank you. I do need a seconder. Thank you. Thank you. I will now put the motion. Please enter your vote on the voting page for voting paper for resolution 4. [Voting]

There is 1 more resolution to go, but we're nearly there, nearly. Ordinary resolution 5 requests shareholders' approval for the issue of 187,989 performance rights to the Managing Director or his nominee under the LTI plan for the 2023 financial year. Full details of the LTI plan are set out in the explanatory motion memorandum. The directors, other than Mr. Blackburne, recommend that shareholders vote in favor of resolution 5. Mr. Blackburne makes no recommendation in respect to resolution 5 due to his personal interest in the outcome. Proxy votes received for the resolution are shown on the slide. Are there any questions from shareholders on this item? Any from the platform? Okay. Okay. Can I ask a shareholder present to please move this motion? Adam. Thank you. And a seconder? Thank you. I will now put the motion. Please enter your vote on the voting paper for resolution 5. Now please sign your form at the bottom. When you have completed your voting, please hand your voting cards in for collection. Computershare personnel will come around and collect them. Anyone need to be? Okay. I'll wait. You'll need to sign those and collect those. [Voting]

Okay. We will now move to some general questions from shareholders regarding the performance and the management of the company, and I may also ask the Board and management. Firstly, I'd like to deal with any questions from the floor, and then after that, consider any online questions that came during the meeting, right? So can I take some questions from the floor?

Yes?

It's Neil Walker -- sorry, Neil Walker, I'm a shareholder. A bit over 12 months ago, I've had the privilege of having a guided tour over the Bushmead development. And I was just so impressed with the quality of what was being done there and the time and effort, and it's just a quality project. My question is, it looked very expensive. Is the company getting a good margin out of that?

I'll hand that to the Managing Director, who deals with it every day.

Thanks for the question. It's part of Cedar Woods' model which we've rolled out across the country to deliver a premium outcome in return for premium pricing. And that's exactly what we are getting at that project. If you analyze the pricing that we achieved at Bushmead relative to the nearby estates, you will see a margin of difference to reflect that additional cost. And we do regularly review that to make sure that we're achieving that premium. And if that premium starts to fall away, then we look for ways to deliver it more efficiently. But the margin on that project is very healthy, in fact, one of the strongest across the country, and it's a consistent outperformer in sales rates and sales prices.

Can I add that over 20 years ago, when we did Helena Valley Private estate, which was one of the first developments we ever did, your Deputy Chairman and Chairman stood at the 5 strand barbed wire fence and look gazingly over at that site, which was in the Commonwealth ownership at that point in time. It was a range. And we never stopped looking at that site. So when it came up, we were ready to pounce. So it takes -- there's location, location, location, but timing, timing, timing is a big thing in property. And it was always going to be a brilliant site. And we recognize that for a long time. Any other questions?

We do have a question from the online platform.

Yes?

John Ferguson, formally from Australian Shareholders Association asks. Surplus franking credits jumped 6% to $1.38 per share. What plans are in place to distribute these to shareholders?

John, you ask this question every year. I'll let Nathan have a go at this because John knows my answer.

My answer is similar, Bill. So Cedar Woods has a relatively consistent policy of paying out 50% of our earnings in dividends. That policy has served the business well over the years, balancing the capital needs of the business with giving something back to shareholders. We did deviate from that payout ratio over the pandemic. We had confidence in our business over the medium term, which saw us flex up our payout ratio to around 70%. We know how much our shareholders value that dividend, so we were keen to be as consistent with that level of dividend as possible. But we do have an intention to progressively come back to that more historical payout ratio of 50%. That has been consistently profitable, has, of course, had the flow-on effect of seeing a growing franking credit balance. We are very aware of this, and it's something that the Board regularly talks about as part of our capital management efforts. And be assured that we will look for any opportunity to get that value out to shareholders.

I mean, I thank John for this question, and he's right to raise it because we are accruing a large number of franking credits. But we are a capital-intensive industry. And so long as we see opportunities, we need that capital to expand our portfolio and to keep growing our business. So it's always a balancing act. And we were, as the managing director said, the opportunity to us to pay out more when we were coming out of the COVID situation and reward our shareholders for that hard years, there was a couple of real drops in our earnings. So we paid out more of those earnings. But there are a lot of very good opportunities emerging, and we're going to need that capital. So we -- we are slowly moving back to the 50% of our net NPAT. Any other questions? Yes.

For FY '22, you've mentioned there was like [indiscernible] lots of acquisitions under conditional contract. What's the status of those?

Back to...

So sorry, the conditional -- yes.

The conditional.

So one of those has recently gone unconditional, Leon?

Yes. So we've got, with the additional one, we do have around $100 million of acquisitions, which about half of those, we will fund in the second half of financial year '23. And the other half in the first half of financial year '24. And the business is producing operating cash flows before acquisitions, north of $80 million. So the balance sheet has the most [ power ] to absorb those.

Thank you. Any other questions? Come on. You're letting us get away, easy. Okay. If there are no more questions, I'm sure we can share over coffee. I advise that the results of the poll will be published in the ASX and on our website after the meeting. And I thank you for your attendance today. I now declare the Cedar Woods 2022 AGM closed. Thank you for attending and online.

Thanks, Bill.