Codan Limited (CDA) Earnings Call Transcript & Summary

So good morning. Good morning, ladies and gentlemen. My name is Graeme Barclay, and I am the Chair of your company. We acknowledge the Kaurna people of the Adelaide Plains as the traditional custodians of the land we are meeting on today. We pay our respects to Elders past and present and recognize the enduring connection of Aboriginal and Torres Strait Islander peoples to country. As Chair of this meeting and on behalf of my fellow directors, I'm pleased to welcome you to the 2025 Annual General Meeting of Codan Limited. It's just after 11:00 a.m. and as a quorum is present, I declare the meeting open. Today's meeting is a hybrid meeting. In addition to the company representatives and shareholders present, in the room with us here at The Drive, shareholders, proxy holders and guests can participate in the meeting virtually via Computershare's online virtual meeting platform. Virtual attendees can watch a live webcast of the meeting, and shareholders and proxy holders can ask questions and submit votes. As previously mentioned, my name is Graeme Barclay, and I became the Chair of your company on the 1st of February 2023. It's my pleasure to introduce the current Board of Directors of Codan to you, and I will ask each director to acknowledge or put their hand up as I introduce them. Firstly, I'd like to introduce Kathy Gramp. Kathy was appointed to the Codan Board in November 2015 and is Chair of the Audit and Risk Committee and a member of the Remuneration and Nomination Committee. Next, I'd like to introduce Sarah Adam-Gedge, who was appointed on 1st of February 2023 and is a member of the Audit and Risk Committee. Sarah is retiring by rotation in accordance with the company's constitution and is standing for reelection. Next, I'd like to introduce Heith MacKay-Cruise, who was appointed on the 1st of March 2023 and is a member of the Remuneration and Nomination Committee; finally, our Managing Director and CEO, Alf Ianniello, who joined the Board in January 2022. We're also joined by Michael Barton, who will act as the Company Secretary for this meeting. Michael was appointed to the position of CFO and Company Secretary in September 2009. I've asked Michael to address some of the administrative matters in relation to voting procedures for today's meeting and to read out any shareholder questions that we received prior to or during today's meeting. And I'll ask him to do that at the appropriate time. You will note the slide displays to those attending virtually how to ask a question and how to vote on the virtual platform. Technical difficulties could arise during the meeting, and I note that I have the discretion to determine whether and how the meeting should proceed if we experience such technical issues. If I have to exercise this discretion, I will have regard to the number of shareholders impacted and the extent to which participation in the business of the meeting is affected. I now declare voting on all items of business to be open. The vote icon will soon appear for those voting online. You may submit your votes at any time. I appoint Nigel Bulling of Computershare Investor Services to be the returning officer and to conduct the poll. As outlined in the Notice of Meeting, where your directors are able to express a view on resolutions, your Board strongly recommends that shareholders vote for the resolutions. The Notice of Meeting and explanatory memorandum was distributed to all shareholders on the 19th of September 2025, and I propose to take them as read. The format for today's meeting is an address from myself as Chair, an address from our CEO on Codan's strategy, financial performance in FY '25 and year-to-date, and the near-term outlook. We'll then move to the formal resolutions to be voted on at the meeting, following which there will be an opportunity for shareholders to ask general questions. Proxies have been received from 415 members, representing over 75% of the company's voting shares. These will be reported to the ASX for each resolution. As we get to each of the resolutions and prior to shareholders being asked to cast their votes, the proxy votes will be displayed on the overhead screens for members' information. Before Alf's address, I'd like to take a few minutes to reflect on the progress that Codan has made over the past 12 months and how the 2026 financial year is shaping up so far. As I said, I extend a warm welcome to all shareholders attending today's meeting, and I consider it a privilege to be the Chair of your company. The FY '25 year has been another successful year for Codan, achieving 22% growth in group revenues 28% growth in group EBIT and 27% growth in group NPAT, so net profit after tax. Each of our businesses contributed to the improved financial performance in the past 12 months. Our Communications business comprising Zetron and DTC grew revenues to $413 million, up 26% on the prior year and grew segment profit to $108 million. Importantly, segment profit margins improved to 27%, up from 25% in the prior year as revenue scaled and cash generation also improved, assisting the group's net leverage position at year-end. The closing order book increased to $253 million, up 28% over the prior period order book of $197 million, which is a strong lead indicator of continuing growth for the current FY '26 year. With the successful acquisition of Kagwerks in FY '25, together with the investment in sales and engineering capability at both DTC and Kagwerks during FY '25, we continue to see significant opportunity for these businesses to grow, both organically and inorganically in FY '26. Our Minelab business achieved a 16% increase in aggregate revenue to $254.8 million achieved organically with segment profit growing 26% to $98 million and segment margins improving to 39%, up from 35% in the prior year, reflecting the higher margins achieved on gold detectors and the operational leverage this business has as revenue scales. Supported by the high gold price, which has continued into FY '26, Minelab Africa had a strong year booking a 64% increase in revenue to $115 million, reflecting broad demand across the region other than from Sudan, which remains largely disrupted. We were pleased Minelab Rest of World revenues exceeded FY '24 levels in a challenging consumer market, reflecting extension in both our retail distribution and e-commerce channels. Countermine's performance was below what was achieved in FY '24 as global funding for humanitarian projects became tighter. And this prompted us to plan to reposition our product development efforts towards military applications. We remain committed to our clearly articulated 3-pillar strategy: invest in ourselves, strengthen our core business and disciplined capital allocation. Pillar 1 is to invest in ourselves by continuing to build business development, engineering development and operational capability around the globe so that we are well positioned to win new business in large growing addressable target markets. Pillar 2 is to strengthen our core businesses through sustained engineering investment in product development to maintain our competitive position across all segments remains core to Codan success, and we have a pipeline of new product development projects underway in each of Minelab, DTC and Zetron. Minelab has 4 new detectors scheduled for release during the current year, which will have a positive impact on FY '26 revenues, although the full year benefit of these releases will not be seen until FY '27. Pillar 3 is to diversify earnings and create value through the allocation of capital to inorganic growth of the Communications business, which has worked well to date and remains an important focus for FY '26. During FY '25, we successfully completed the Kagwerks acquisition, in line with our strategy, which expanded our relevance in the U.S. defense ecosystem and enabled access to the funded net warrior program of record. We've been clear that where we identify acquisition opportunities that allow us to expand our addressable markets or cost effectively accelerate differentiated product development or fill technology gaps or that provide complementary technologies and capabilities, we will continue to pursue these opportunities where we believe the outcome will be accretive for shareholders. With net debt at $78.3 million at 30 June, we have a low debt-to-EBITDA ratio of less than 0.5x. Recently renewed banking facilities of $250 million plus $150 million accordion capacity subject to approval provides us with the financial flexibility to pursue small- to medium-sized on-strategy acquisition opportunities as they are identified. FY '25 has been an excellent year for Codan shareholders with EPS growing by 27% and dividends per share also growing by 27% compared to the prior year. In addition, Codan's share price has risen more than 2.5x from $12.03 at 30 June 2024 to $34 being the closing share price yesterday. And the market capitalization of your company is now approximately $6.1 billion. So turning to executive remuneration, and there are a couple of resolutions on the resolution list today in relation to this. The remuneration structure and outcomes for FY '25 are set out in detail in the remuneration report. You will note that we have continued to make changes to the remuneration structure to motivate the executive team to achieve superior performance with an equity-based superior performance incentive scheme for our CEO and executive team, which we introduced in FY '25 to further align their remuneration to shareholder outcomes. For FY '26, we've increased the EPS compound annual growth targets by an additional 3% per annum for the LTI and SPI schemes. The SPI scheme, so superior performance incentive scheme, which is resolution #4, now requires 3-year compound annual growth in EPS of 17% at entry and greater than 24% at the top end of the range for the FY '25 to FY '27 period. We see this very close alignment of executive reward with shareholder returns as an important principle that will continue to guide how your Board structures executive remuneration. The outstanding results we have achieved in FY '25 don't just happen. They are the collective outcome of all of the excellent work done by more than 1,000 employees globally. And on behalf of the Board and myself, I thank the Codan executive team led very effectively by Alf and all Codan employees around the world for their efforts and contribution during FY '25 and the FY '26 year-to-date to building a stronger Codan. Thank you to my Board colleagues for their hard work, wisdom and collegiate approach. And finally, to our shareholders, we appreciate you have a choice how and where you invest, and we thank you for your continuing support of and investment in Codan. Please now welcome your Managing Director for his address.

Good morning, ladies and gentlemen. It's a pleasure to welcome you to the 2025 Codan Annual General Meeting, my fourth as the CEO. I'm pleased to see so many familiar faces here in person, and I also extend a warm welcome for those joining us online. Thank you for your continued support and engagement with Codan. Your presence today reflects the strong interest and commitment of our shareholders in the company's future. And I appreciate the opportunity to share Codan's progress and outlook. FY '25 was another strong performance for Codan. In what remains a challenging global environment, our teams executed with discipline and focus and delivering record results. At a group level, revenue grew 22% with net profit after tax up 27%, achieved alongside improved cash generation and disciplined capital allocation. Communication was the standout performer, delivering 26% revenue growth with segment profit up 34%. Defense is now 38% of Communications revenue, reflecting our continued focus on long-term high-value markets such as unmanned systems and soldier-worn technologies. Our order book grew 28%, providing a strong foundation heading into FY '26. Minelab also delivered a strong year, revenue up 16%, with segment profit margins increasing to 39%. Particularly pleasing was the growth in Africa, where revenues exceeded $115 million, up 64%, supported by strong demand and favorable conditions in key artisanal gold markets. Looking ahead, 4 new product launches are scheduled in FY '26, really positioning Minelab for another exciting year of growth. We declared a fully franked dividend of $0.285, an increase of 27% over last year, reflecting both the strength of our results and our confidence in the future. Our strategy remains clear: building a stronger Codan through sustainable growth, disciplined acquisitions and continued investment in innovation and people. The group continues to focus on areas where Codan can differentiate and lead. Strengthening our foundations in communications, accelerating Minelab's product leadership and investing in systems, people and culture that allow us to scale sustainably. During FY '25, Codan completed the acquisition of Kagwerks, a U.S.-based leader in operator-worn soldier systems. Integration into DTC is progressing well, and Kagwerks provides access to the Nett Warrior Program of Record, further strengthening our U.S. defense ecosystem. Together with DTC's tactical mesh networking and Zetron's command and control solutions, Codan now is positioned as a full system provider in defense and public safety communications. This acquisition exemplifies Codan's disciplined approach to strategic growth. It's targeted, capability enhancing and aligned with long-term customer needs. Beyond acquisitions, Codan invested approximately $69 million in engineering across its 3 businesses, representing around 10% of group revenues. This investment ensures that the group remains at the forefront of innovation and product development, supporting long-term competitiveness. Importantly, our investment is increasingly directed towards future technologies, multi-waveform radios, AI-enabled soldier systems, next-generation command and control platforms, and a new range of metal detectors. These capabilities not only expand our addressable market opportunities. They deepen customer relationships by embedding Codan more directly into mission-critical operations. Codan also took important steps to enhance organizational scalability. The appointment of Pieter Guichelaar as group Chief Operating Officer is strengthening operational execution across our businesses and advancing our IT and AI initiatives. These changes ensure Codan remains agile and resilient while maintaining the discipline and efficiency that underpin sustainable shareholder value growth. Codan is proud of its progress in sustainability, governance and culture during FY '25. On the environment, Codan has established systems to measure Scope 1, 2 and 3 emissions, ensuring that future targets are both ambitious and credible. Codan is taking a measured approach, building robust data and capability before setting long-term commitments that are operationally achievable. On the social front, Codan continues to support education, innovation and community initiatives from scholarships and STEM programs to global clean-up efforts. Our long-standing involvement in initiatives such as the Variety Bash, along with new programs such as Codan's multiyear indigenous scholarships and targeted STEM opportunities reflect our commitment to the community where we operate. Codan's success continues to be underpinned by its values, customer focus, trust, high performance and can-do attitude. These values guide how our teams operate, how we engage with our customers and how we deliver on our commitments. They remain central to Codan's culture and provide the foundation for sustained performance and long-term value creation. So moving to the outlook. The conditions observed at the 30th of June 2025 have largely continued into FY '26, supporting Codan's growth outlook across both Communications and Minelab. Elevated defense spending and ongoing geopolitical tensions continue to support demand across our communications markets. The business remains on track to deliver 15% to 20% revenue growth for FY '26, with first half growth expected at the upper end of this range, noting that the first half of FY '25 included Kagwerks for only 1 month following the acquisition. Zetron's business in the U.S. continues to be affected by government shutdown and funding delays. In September 2025, Codan received purchase orders under the Nett Warrior Program for Kagwerks totaling approximately $24.5 million, with delivery scheduled across both the first and second halves of FY '26. These will contribute to overall divisional growth throughout the whole year. Sustained growth in the gold price continues to support Minelab with demand for gold detectors in Africa running above what was seen in the second half of FY '25. As a result, Minelab's overall revenues for the first quarter of FY '26 have exceeded the monthly average achieved in FY '25 by 16%. While revenues in Africa are typically weighted to the second half, it's too early to determine whether that same seasonality will occur this year. With continued balance sheet capacity, a renewed $250 million debt facility and a disciplined approach to capital allocation, Codan remains well positioned to continue investing in the business and pursue future acquisitions that enhance the quality and predictability of our revenues. In closing, FY '25, was a year of strong delivery for Codan, underpinned by the dedication of our people. I would like to thank our employees around the world for their commitment, our executive leadership team for their strategic vision and our shareholders for your continued trust and support. Together, we are building a stronger Codan, one that is diversified, innovative and well positioned for sustained growth. Thank you.

Many thanks, Alf. So let's turn to the formal business of the meeting. So before moving on to the various resolutions, I'm going to ask Michael to briefly run through the voting procedure.

Thanks, Graeme. There's 2 options available for shareholders today. Firstly, if you're voting in person, shareholders were given a blue or a pink admission card when they registered for the meeting. The pink card's been issued to joint shareholders, where one of the joint shareholders has already been issued with a blue admission card. For attendees who are voting in person, persons entitled to vote on the poll are all shareholders, representatives and attorneys of shareholders. Proxy holders who hold a blue attendee card. On the reverse of your blue attendee card is your voting paper and the instructions. Attached to proxy holder's attendee card is a summary of proxy votes with details of the voting instructions. By completing the voting paper, you are deemed to have voted in accordance with those instructions. In respect of any open votes a proxy holder may be entitled to cast, you need to mark a box beside the motion to indicate how you wish to cast your open votes. Shareholders need to mark a box beside the motion to indicate how you wish to cast your votes. A Computershare representative will collect your completed voting paper at the appropriate time during the meeting. And note that it's only persons who are shareholders or holders of a blue or pink card who are entitled to address this meeting. If you're voting online, for shareholders and proxy holders who are eligible to vote, select the vote icon and all resolutions will be activated with voting options. Cast your vote. Simply select one of the options. There's no need to hit a submit or an enter button. The vote is automatically recorded. You will receive a vote confirmation notification on your screen. Voting of all items of business today will be by poll, and you can change your vote right up to the time until the Chairman declares voting closed. Back to you, Graeme.

Okay. Thanks, Michael. So in addition to those procedures outlined by Michael, the Notice of Meeting provides details of the motions to be put to this meeting. And I will give shareholders the opportunity to ask questions or comment as we get to each of the motions. The first motion relates to the financial statements and reports. And it's to receive, consider and discuss the company's financial statements and the report of the directors and auditor for the year ended 30 June 2025. We're not required to formally adopt these documents by way of a resolution of shareholders. However, I would be pleased to take comments or questions from shareholders on this item. The Notice of Meeting invited shareholders to submit written questions to the auditor if the questions are relevant to the conduct of the audit, the preparation and content of the auditor's report, the accounting policies adopted by the company in relation to the preparation of the financial statements and the independence of the auditor in relation to the conduct of the audit. Codan's auditors are represented by KPMG partner, Mr. Neil Ediriweera, is present and available to answer questions where appropriate. I can advise the meeting that we've not received any written questions for the auditor. So I invite shareholders and proxy holders attending if they have any questions in relation to this motion. So nothing in the room. There was one question submitted through the online system not directly relevant to the annual report, but I will take it at this point given it was asked under this resolution, And it relates to the impact of tariffs on the company's business. And I think that's much more a forward-looking question than a backward-looking question on the 2025 annual report, but I might just get a couple of comments on the impact of tariffs from Alf.

Thanks, Graeme. So when you're looking at tariffs with respect to Codan, it's really the exposure sits in North America obviously and really in Zetron and Minelab, any of the product that we import. So with Zetron, Zetron being a public safety organization is largely exempt due to a treaty between Mexico, the U.S. and Canada. So we're not experiencing any issues with tariffs there. And with respect to Minelab, the U.S. volume represents approximately 10% of their total turnover. And when you look at the impact, the guys in Minelab have done a very good job in either making amendments into the supply chain or just adequately lifting their prices in market. So at this point in time, we would suggest that tariffs will have a very -- it won't be a material impact to the performance of Codan as a group.

Thank you. Are there any other questions, Michael, in relation to that item? Okay. We'll now move on to the ordinary business of the meeting. And as set out in the Notice of Meeting and in the sample proxy form, as Chair of the meeting, all undirected proxies will be voted in favor of each of the resolutions. So resolution 1 is the adoption of the remuneration report for the year ended 30 June 2025. Section 250R(2) of the Corporations Act requires that the remuneration report be adopted at the AGM. Please note that the vote on this resolution is advisory only and does not bind the directors or the company. Please note that the details of the proxy votes are shown on the slide or on the online screen. Does any member wish to speak to the proposed resolution, ask a question or make a comment? Is there any questions online? So no questions or comments. You are invited to lodge your vote for resolution 1 as an ordinary resolution. And for those voting online follow the instructions that Michael outlined earlier. Resolution 2 is for the reelection of Ms. Sarah Adam-Gedge as a director. In accordance with clause 9.3 of the company's constitution, it's been agreed that Sarah will retire and being eligible, offer herself for reelection at this Annual General Meeting. Accordingly, resolution 2 provides for the reelection of Sarah as a director of the company. All directors unanimously support this resolution. Details of the proxy votes are shown on the overhead screen and on the online screen. And before you lodge your vote, I would like to invite Sarah to address the meeting regarding her reelection. Then, we'll open it up for questions and comments before votes are cast.

Well, thank you, Graeme, and good morning, everyone. I appreciate the opportunity to address the meeting and to outline my background and experience. I joined the Codan Board in February 2023 almost 3 years ago, during which time the company has continued to perform well. I bring over 30 years of experience in digital and technology, operational leadership as CEO for organizations locally and globally, significant customer relationship management and sales expertise as well as governance experience to the table. From a digital and technology perspective, the last 20 years of my prior executive career was in leadership roles of global IT companies such as IBM and Publicis Sapient. This has involved helping companies improve the products and services that they offer to their customers and improving operational performance through the use of technology. This is relevant to Codan as Codan designs, builds, integrates and delivers technology-enabled solutions to its communications and metal detection customers. I'm a chartered accountant fellow and have a keen interest in and currently studying cybersecurity, which, together with my early career at PwC and Arthur Andersen, brings strong commercial finance and risk experience. My commercial experience includes customer engagement with both large-scale corporate and government customers, including defense as well as in the business to consumer, retail and online channels. I'm a full-time professional Non-Exec Director, and I currently serve on 3 ASX-listed boards, which are Emeco Holdings, Bravura Solutions and Aussie Broadband. In February 2025, I retired as Deputy Chair and Non-Exec Director of the Global Defense contractor Austal Limited after 8 years on that Board. As recently announced in November, I will also transition from the Board of Emeco, which is a Perth-based mining services company, to join the Board of GrainCorp. I have extensive experience in international markets in both my executive and Board career, including the U.S., Latin America, Asia and parts of Africa. This global perspective, together with my digital and cyber experience, strong commercial finance and customer relationship management skills and my diverse Board portfolio experience will be areas that I hope to continue to contribute to Codan to deliver shareholder value. And I look forward to continuing to contribute to the future success of the company, working alongside my Board colleagues and with the management team and thank shareholders for their support. Thank you. And I'll pass back to you, Graeme.

Can I open up this resolution to questions? Is there anything online, Michael? Any comments or questions? Questions or comments in the room? Stephen?

My name is Stephen Howie. I'm a corporate proxy representative for the Australian Shareholders' Association, representing 57 shareholders and who hold about 290,000 shares in Codan. Thank you very much, Sarah, for your address to shareholders. You have quite a depth of experience, and I'd like to make a comment, if I can, Graeme as to how this experience is communicated to shareholders. Codan's current Board skill matrix reflects the collective skills and experience of your Board members and is included in your governance statements. The Australian Shareholders' Association has a preference for the disclosure of each of the directors' assessed skills and competencies and for this information to be included in the annual report. Will Codan reconsider the format of the Board skill matrix and include it in the annual report in future as it will assist shareholders when voting on reelection of directors?

Yes. A good question, Stephen. And we continuously are looking to improve in the way that we're engaging with our shareholders. So thank you for that observation. We have had the opportunity to sort of liaise directly with the Australian Shareholders' Association on a number of issues. This being one of them. And we acknowledge that we could improve how we disclose the skill set of our directors to shareholders. In the past, we've taken the view that the collective matrix of the skills and it's really the collective that's important to shareholders, together with the quite detailed biographies that we included in our annual report, sets out the individual contributions of those directors by acknowledging that we could go one step further. And as you've just heard from Sarah, she brings a huge number of skills to the Board that are not particularly reflected in the biography. So we thank you for your suggestion, and we will consider. Are there any other questions or comments on this resolution? Okay. Let's move to casting -- shareholders can cast their votes on this resolution, please. [Voting]

Given the proxy votes received, which represent roughly 75% of the company's issued shares, I have great pleasure in passing resolution 2 in advance of all the other votes being counted but to reelect Sarah as a Director of the company. Resolution 3 relates to the approval of the grant of performance rights to Alf, and the proxy totals are now displayed overhead and on the online screen. You're invited to lodge your vote for resolution 3 as an ordinary resolution. This relates to the long-term incentive award to your Managing Director and CEO. It's an equity-based incentive plan focused on multiyear performance delivered for shareholders with 67% of the award linked to growth in the earnings per share and 33% linked to relative total shareholder returns measured over a 3-year period. This structure creates strong alignment with shareholder outcomes whilst also supporting the retention of executive KMP, including Alf. In FY '24, the Board increased the required EPS compound annual growth targets from a range of 2% to 8% at entry and 13% at maximum -- sorry, from 2% to 8% to 8% to 13% at maximum. And these targets were retained for the FY '25 LTI plan. For this year's plan and the resolution that shareholders are being asked to vote on, the targets for the EPS compound annual growth rate component have increased to 11% at entry and 16% at maximum, with a higher starting base level using the FY '25 EPS of $0.571 per share as the starting benchmark. As required under ASX Listing Rule 10.14, shareholder approval is sought for this issue of performance rights to a director. It is your Board's belief that this creates direct alignment with shareholders' interests and enables our CEO to participate in the significant shareholder value that will be created by performance in this range. Further details in relation to the share plan rules, rationale, the performance hurdles and the mechanics of how the incentive scheme operates were set out in the explanatory memorandum. Does any member wish to speak on the proposed resolution? So are there any questions or comments online? Nothing online? Any shareholders or members of proxy holders in the room, any questions or comments on this resolution? So there being no questions or comments, I now move to the members to cast their votes for resolution 3 in respect of approving the grant of performance rights to Alf for his long-term incentive. Resolution 4 relates to the approval of the grant of performance rights in relation to the superior performance incentive scheme. Proxy votes are now shown on the overhead and online screen, and you're invited to lodge your vote for Resolution 4 as an ordinary resolution. So this is to approve rights to Alf in relation to the superior performance scheme that I mentioned during my address. And this is to incentivize and motivate Alf and the management team to deliver superior performance in the range of 17% to 24% in compound annual growth in earnings per share over the FY '25 to FY '27 period. The proposed superior performance incentive would result in the potential to earn up to an additional $1 million of remuneration through the issue of performance rights, so it's equity-based, not cash-based, calculated in the manner described in the explanatory memorandum and requires to be fully earned 24% increase in earnings per share each year between FY '25 to FY '27. As required under ASX Listing Rule 10.14, shareholder approval is sought for this issue of performance rights to a director and again, creates direct alignment with shareholders' interest by directly linking additional reward to the superior performance delivered to shareholders. Are there any questions in relation to this resolution? Anything online? Okay. So there being no questions or comments, I now move that the members cast their votes for resolution 4 in respect of the grant of performance rights in relation to the superior performance incentive. Now that is the last of the resolutions or the formal business for the meeting. I'll pause for a few minutes to allow those online and those in the room to finalize their voting. And whilst we do that, I'm happy to open the floor to any general Q&A, so not related to the resolutions but anything that shareholders would like to either comment on or ask the Board or the management team a general Q&A. Anything online? Anything in the room? Thank you.

I was wondering kind of if the gold price has any material effect on the [indiscernible].

We get asked that question quite a bit. We believe there's been a link between the increased gold detector sales and obviously, the gold price. We've never actually aligned that sort of -- we really never quantified it. But obviously, it's given us some significant tailwinds in Africa, and so an elevated gold price will help the sale of the current gold detectors we have and the ones that will come out in the future. So we're quite unique as an organization because as we're diversified, you have exposure to gold and you have exposure to defense at the moment, and those things are quite positive for us. But to draw a direct link, I don't think we've got enough data to say that.

I think it's positive. I think that's definitely.

[indiscernible]

Do you want to -- go bring a microphone for you, [ Joseph ], and then everybody can hear?

My name's [ Joe Stewart ], and I'm a shareholder. I've already voted. My question is about the capital structure and the way that we fund the company from a debt to equity point of view. Now Codan uses debt on its balance sheet. And although it's relatively cheap, debt's always subject to some clause or bank panic attack. I was wondering, considering the company's share price, I think it's roughly 50x earnings or something like that, that it might be worthwhile funding some of our future projects using an equity capital raise, if it's cheap to do so, rather than being subject to a bank panic attack if we breach one of their covenants for some random reason, first. Second, dividends. Australians really, really, really love franked dividends. But if we can retain earnings at very high rates of return, would you consider keeping the dividend where it is, and I'm sure this company can grow its earnings in the future and retain earnings and use that as a means of funding our growth rather than asking banks for money. That's -- it's a capital management question, and it's a dividend policy question. Can any of the Board or the Chairman or the Managing Director -- probably not Managing Director but the Board have any comments on that sort of [ general aimless ] question?

Yes, I'm happy to take this question.

It's capital management and dividend policy.

Yes, happy to take it -- take the first pass at answering that. As you've observed, the level of debt that we have in the business is minimal. So I think it's under half a turn of EBITDA in terms of the sort of net debt that we're carrying in the business. So whilst we're looking at future funding on an ongoing basis, we don't feel that the position today, we're exposed. The -- we've got a very -- I'm not going to say it's kind of -- we've got terms under our debt facilities that are -- don't give rise to the sort of concerns that you -- that you're raising. So that's the first point. The second point is that the whole question of what our future capital structure should be will be driven a little bit by both the organic use of capital, so kind of what we're using internally. I've talked about $69 million worth of reinvested engineering capital, which we expect to continue to invest that kind of resource -- capital resource into continuing to maintain the R&D spend in engineering. But where this really will get quite a lot of Board attention is for our future inorganic strategy. So for acquisitions of...

[indiscernible]

If we took a large -- correct. So I mean, I think we've said -- we've been very clear that the dividend policy of paying out roughly 50% of the net profits of the business is our current policy. But we've been very clear in saying that if a large event, possibly an acquisition or some other quite significant sort of capital commitment that the company makes, we would review that. And so your point is that is capital that we could potentially retain within the business if that made sense to help us kind of grow the business in a different way. So capital structures on the Board agenda very, very regularly and it's in the context of how we're growing the business that we look at that. So good questions. I'll take one more and then might close the voting. So for those that haven't voted, just let's wrap up the kind of voting piece.

My name is [ Mark Greaves ]. I'm a shareholder from Teaminvest in Sydney, and it's really pleasing to be over here in Adelaide. Can we talk about organic growth and inorganic growth? I know that your R&D spend is significant, and that keeps you in front of where you need to be to add to what you've got. But the -- this company has been extraordinarily successful in making acquisitions to the extent that 3 and 4 years ago, with the purchase of Zetron, et cetera, it really changed the look at this company forever. How confident is the Board and Alf in finding the next lot of acquisitions to be made?

Do you want to? You go and I'll...

We are confident. We've invested in structure and process. So we didn't have that a couple of years ago. So Daniel Hutchinson joined, and he's put together a structure around that and the process. We've got a very clear filter on what we're looking at. We've been very, very open about our inorganic ambitions in the communications space, both for DTC and Zetron. We are confident that we will find something. We have been involved in processes, and we've agreed on value or we've disagreed on value. And so some things have moved forward over the time and some things haven't. So yes, I'm quite confident that we'll continue that inorganic path. But it would never come at the expense of our organic growth targets of 10% to 15% in comms. So we need to keep that momentum going. But I think we've got firepower, so we think we can use it. And we've got really good global reach in our leads, Paul and Scott, who reside in Northern Hemisphere. They have great exposure to what's happening in the major markets.

I echo that. There's a lot of opportunity. And the key for us is to make sure that it's on strategy and really, we can acquire and integrate and then leverage the capabilities that we've acquired. As you say, I think, the last 4 years, we've been very successful in doing that and building a -- that combined Zetron and DTC, a very strong Communications business that we did not have 4 years ago, and that's been a great driver and a real engine for creating shareholder value over the last 4 years. So we're continuing to be very active in looking for the right opportunities, but we're being selective. Can I just check? Have all the votes been cast?

Still collecting the votes.

Still collecting?

Yes.

Okay. Well, maybe I'll declare the -- can I declare the poll closed?

We're just waiting to collect all papers.

That's fine. Please collect all -- please collect and ask you to collect all the votes. So after the votes have been counted, the results of today's poll will be released to the ASX and displayed on the company's website. Okay. I'm going to close the meeting if there's no other general Q&A. Ladies and gentlemen, that does conclude the formal business of this AGM. Thank you again for your attendance, and thank you again for your support of Codan. I declare the meeting closed, and I invite you to stay for some refreshments and the opportunity to meet and chat with directors and the management team. Thank you very much.