Delegat Group Limited (DGL.NZ) Earnings Call Transcript & Summary

Good afternoon, everyone. Can you hear me? Microphone Wheaton? Can you hear me now? Is it better? Okay. Perfectly. Good afternoon. On behalf of the Board, I'm pleased to welcome you here today to the 17th Annual Meeting of Delegat Group Limited since listing in April 2006. My name is Graeme Lord and I have the privilege of chairing your Board of Directors. I can confirm that we do have a quorum present. And given the time is now 2 p.m., I will declare the meeting open for business. After 2 years of COVID-19 disruption, it is great to be meeting both here in person today as well as meeting the meeting being held online via the Computershare online meetings platform. And I want to say a special thank you to shareholders who have come in person today. After 2 years, it's great to come together. This allows shareholders, proxies and guests to attend this meeting virtually. For those not present, there is a live webcast of the meeting available, and you'll be able to read the company documents associated with the meeting on the NZX announcement platform. In addition, as shareholders and proxies, you will have the ability to ask questions and submit votes. [Operator Instructions]. Alternatively, you can call Computershare on 0(800)-650-034. Please note while you can submit questions from now on, I will not address them until the relevant time in the meeting. Please note that your questions may be moderated or if we receive multiple questions on 1 topic, amalgamated together. Finally, due to time constraints, we may run out of time to answer all of your questions. If this happens, we will answer them in due course via e-mail. Voting today will be conducted by way of a poll on all items of business. In order to provide you with enough time to vote, I will shortly open the voting for all resolutions. At that time, if you are eligible to vote at this meeting, you will be able to cast your vote under the vote tab. Once the voting is open, the resolutions will allow votes to be submitted. To vote, simply elect your voting direction from the options shown on the screen. You can vote for all resolutions at once or by each resolution. Your vote has been cast when the ticket appears. To change your vote, simply see change your vote, you will have the ability to change your vote up until the time I declare voting closed. I now declare voting open on all items of business. The resolutions will now be open, vote tab. Please submit your votes at any time. I'll give you a warning before I move to close voting. Let me now introduce you to my fellow Board members. Today, we have Steven Carden, Managing Director; Jim Delegat, Rose Delegat; Dr. Alan Jackson, Phillipa Muir, Chair of the Remuneration Committee; and Gordon MacLeod, Chair of Audit and Risk Committee. Also in attendance far end is Murray Annabell, group's Chief Financial Officer, who will act as minute secretary. I'd also like to welcome our auditor partner, Andrew Dick from Deloitte to the meeting and our legal adviser, David Jones, from Heimsath Alexander. To open, I'm not aware of any apologies anyone would like to advise the meeting. If there are, please type in technology and Murray Annabell will ensure that these are appropriately recorded in the minutes. The notice of meeting has been seen to all shareholders together with the annual report, and I propose that together with the agenda, they'll be taken as read. The minutes of the 16th Annual Meeting held on the 70th of December 2021 have been approved by the directors and Murray Annabell, who is holding a copy should any shareholder wish to receive one to view. Firstly, I will address the annual report incorporating the directors' report, financial statements and unqualified audit report covering the year 30 June 2022. I will then comment on Delegat Group's 75-year anniversary, our strategic goal and key success factors and Board succession planning before handing the meeting to the Managing Director who will cover the 2022 performance in more detail and the group's future growth plans. Following Mr. Carden's remarks, I will ask if there's any discussion on the annual report Chairs and Managing Director's presentation before moving on to the formal business of resolutions. The year ended 30 June 2022 was another strong year for the group on our journey to building a leading global premium wine company. The alligate achieved global sales of 3,360,000 cases. Is that better? Okay. Thank you. Is that doing better? I might lean in a bit just to make sure that -- you can hear okay? As I was saying, Delegat achieved global case sales of 3,360,000 cases in a 2022 year, 6% higher than the prior year. The group generated an operating net profit after tax of $58.1 million, down 11% on the prior year. The decline relative to the prior year was due to the high cost of goods associated with the impact of the lower yield in 2021 vintage as well as significant inflationary cost increases, both locally and globally. Strong cash flows from operations of $65.6 million were delivered. Accordingly, your Board considered it appropriate to maintain the dividend distribution in line with last year and declared a fully imputed dividend of $0.20 per share. Your Board remains cognizant of both dividends to reward shareholders and the need for reinvestment for long-term growth. This year, we are celebrating our 75th anniversary. Delegat has grown from its original 10 acre vineyards and West Auckland to embrace 3 brands, 20 premier vineyards and 4 state-of-the-art wineries in 3 of the world's great on regions, Marlborough, Hawke's Bay and Australia's Barossa Valley. In the annual report, Jim Delegat a poignant letter, celebrating our 75-year milestone. In the letter, he paid special tribute to our fellow builders of the industry, the families, the individuals and the companies that have held fast to a vision and done the hard work of viticultural pioneering, shown a real dedication to wine excellence and built global markets through thick and thin. As one of the companies that has led the emergence of the New Zealand wine industry on the global stage, we can take pride in Delegat's 22-fold growth over the last 2 decades and the exponential growth of Oyster Bay to become the #3 premium wine brand in the world. A glass of our super premium wine is enjoyed somewhere around the world every minute of every day. This journey has been made possible by the passion and determination and skills of our global team who have built this company and established Delegat as a global leader and Super Premium wine. I would like to make special acknowledgment to Jim Rose Delegat. They are true visionaries and we have eliminated our pathway to success. Jim and Rose embody the values that form the foundation of our supportive high-performance culture, Aim High, Mastery and Winning Together. These enduring core values will remain at the heart of our future growth and success. Our strategic goal is to build a leading global Super Premium wine company. To do this, our global team strives to excel on 4 key success factors. Firstly, to establish and grow leading global Super Premium wine brands that resonate with consumers around the world. Secondly, to build a global distribution for our brands, establishing enduring and mutually beneficial relationships with customers and distributors around the world. Thirdly, to develop vineyard supply in 3 of the world's great wine regions and optimize supply chain efficiency. And fourthly, to grow and make the world's most sought-after wine styles with an uncompromising dedication to Super Premium quality. These key success factors are mutually reinforcing. So to achieve extraordinary results, our global teams strive to excel on all 4 key success factors simultaneously. Over the past year, we have undertaken a Board renewal process, balancing depth of experience within our business and ensuring that we have a benefit from a broader range of governance experience and competencies. The Board now comprises 7 directors, including the managing director and 6 non-executive directors of whom 3 are deemed independent directors. Board was delighted to welcome Steven Carden as Managing Director in January. Steven's prior career includes management consulting with McKinsey & Co in New York General Manager of PGG Wrightson Australia and CEO of Pamu, otherwise known as Lanco Steven's strategic thinking capability for ties in growing international businesses and focus on creating an environment where people can achieve their potential as an ideal match for delegate group, as we embark on the next stage of our upbuild a leading global Super Premium wine company. As noted during the introductions, the group's 3 independent directors are Dr. Alan Jackson, Phillipa Muir, as Chair of the Remuneration Committee; and Gordon MacLeod, Chair of the Audit and Risk Committee. When Steven joined as Managing Director, long-serving Independent Director, Alan Jackson, took on the role of Independent Chair to support the management transition process. On behalf of the Board, I would like to take this opportunity to thank Allan Jackson for his exemplary leadership as Chair during the period of management transition and his ongoing commitment to the group. Gordon MacLeod was appointed as an Independent Director in February, increasing the number of independent directors to 3. Gordon is an experienced business leader and brings significant knowledge regarding international growth finance and businesses with strong founder cultures. Rose Delegat, Jim Delegat and myself are nonexecutive directors who are not deemed independent. In September 2022, after the completion of the management transition process, I was appointed Nonexecutive Chair; and Jim Delegat, transitioned from Executive Director to Non-Executive Director. Jim remains deeply committed to Delegat Group and continues to provide valuable input into the strategic direction of the group. My association with Delegat commenced in 1999 when I joined as Manager Planning and Financial Analysis and includes serving as Managing Director from 2014 to 2018 and is acting Managing Director for 10 months until earlier this year. It is a privilege to work for shareholders and stakeholders as company Chair. With these changes, your company is well placed with a Managing Director and Board with the expertise and experience to build on our success to date, grow sustainable earnings and deliver for all of our stakeholders. As per the meeting agenda, both Steven Carden and Gordon MacLeod are seeking reelection at today's Annual Shareholder Meeting with the full support of the Board. The results achieved in 2022 are a testament to the strength of the Delegat business model and the caliber of our people. Your Board would like to take this opportunity to thank our people. Our global team has once again shown great resolve and resilience to deliver success in a challenging year. The workload and operating environment endured this year have asked a great deal of our teams around the world, and they have responded magnificently. Our people have built a unique culture, founded on our values of Aim High, Mastery and Winning Together, and the commitment and the talent of our global team underpins our success and positions the group well to deliver on its future growth plans. Steven Carden, the group's Managing Director, will now provide a more fulsome report on the 2022 year and the group's future growth plans.

Thank you, Graeme. Good afternoon, everyone. It's great to be with you today. Since joining the company in January of this year, I've had the privilege of meeting the entire Delegat team both here in New Zealand and in our offshore markets. What is obvious throughout the business is the significant pride Delegat's staff have and what the company is achieving. Equally obvious is the deep commitment to the values of Delegat that Graeme mentioned, Aim High, Mastery and Winning Together values embodied in so much of what the company does every day around the world. I consider it a privilege to work with this great team and one of New Zealand's most well-known global brands. So turning to the recent performance of the business. As noted by the Chair in 2022, the group achieved a record global sales of 3,360,000 cases and operating net profit after tax of $58.1 million in a year impacted by the COVID-19 pandemic and associated supply chain disruption and inflationary cost pressures. The group's global sales target and a [ coupling ] sales of 3,360,000 sales is 6% higher than the previous year. Were it not for the difficulty in getting products to the market due to ongoing global port congestion and constrained shipping line capacity, global case sales would have been higher. This is an excellent result and testament to the strength of our brands, the relationships with our distributor partners and the effectiveness of the global sales team. As was the case last year, the ongoing COVID-19 pandemic continued to have a tangible impact on market conditions. Consumers continue to gravitate towards established brands that they know and trust, such as Oyster Bay. Social distancing requirements and ongoing lockdowns in some of our major markets continued to reduce sales in the on-premise channel, although we saw a strong recovery in this channel throughout the second half of the year. Our in-market sales teams remain a strength of the business, and they have engaged productively with customers and distributors throughout the year. The group sales continue to be well diversified by market, with 48% of our sales from North America, 32% in the United Kingdom, Ireland and Europe and 20% in Australia and New Zealand and the Asia Pacific region. The North American market remains a key focus of growth. Sales in North America grew by 8% to a record 1,608,000 cases despite sales volumes again being hampered by reduced shipping line capacity and port congestion. Through the pandemic, consumers continue to trade up to better quality wines while engaging in new purchasing behaviors, driving more at-home consumption and online sales. Further, U.S. consumers' demand for premium imported wines such as Marlborough Sauvignon Blanc also continued to increase. Wine in the premium and above price bands has increased its share of the wine market and now accounts for 25% of all wine consumed sorry [indiscernible], has increased its share of the wine market significantly since 2015 and is predicted to continue growing to 2025. Imported wine now accounts for 25% of all wine consumed in the U.S., and New Zealand is the fastest-growing source of imported wine. Building on the underlying popularity of New Zealand wine in the U.S., the group's success continues to focus on ensuring that the Oyster Bay brand achieved strong distribution growth while also lifting rate of sale per point of distribution. Oyster Bay is now the category-leading New Zealand wine brand in the U.S. market. and Oyster Bay Sauvignon Blanc is a top 5 white wine by value. The U.S. remains a major growth opportunity for the group. In Canada, Oyster Bay continues to be a leading -- category-leading wine brand across its range. This success is underpinned by a strong distribution base and high rate of sale with Sauvignon Blanc, Chardonnay and Pinot Grigio leading growth in each of the major provinces. Canada continues to be a major growth opportunity in the years ahead. Despite the supply chain constraints, sales in the United Kingdom, Ireland and Europe were about 1% lower than the prior year at 1,060,000 cases. This result is particularly impressive considering the introduction of a price increase in the market during the year. Such a robust performance reflects the power of the group's brands and distribution platform and a region where demand for quality New Zealand wine remains very strong. Oyster Bay has maintained its Super Premium category position in the United Kingdom. Sauvignon Blanc, Chardonnay and Merlot continues to be category-leading wines above GBP 8 in the individual varietal categories irrespective of Origin. Barossa Valley Estate sales recovered from last year as consumers return to the hospitality sector. And in Ireland, Oyster Bay continues to achieve success as the #1 premium New Zealand wine brand. In the established New Zealand and Australian markets Oyster Bay is a category-leading Super Premium wine brand. Australia and New Zealand and Asia Pacific region achieved case sales of 692,000 cases, 12% higher than in the previous year. In Australia, Oyster Bay Sauvignon Blanc is the top-selling wine by value. Oyster Bay Chardonnay remains as a top-selling premium chardonnay whilst Oyster Bay Pinot Noir and Merlot are category leaders. The New Zealand business had a very good year with sales increasing by 9% over last year, again driven by the reemergence of on-premise activity. And in China, despite disruptions from ongoing lockdown, the group again experienced strong growth as wine consumption evolves. China represents long-term growth opportunities for the group. Oyster Bay remains an enduring brand in our major markets, popular with both customers and consumers alike. Being named fan favorite in white wine in Australia is an example of the brand's extraordinary popularity among discerning wine consumers. Our people are at the heart of the company, and we're proud of the progress we're making across a wide range of initiatives. Our recently completed culture survey indicates an 80% engagement score, which is very high. As we continue to improve company communications with our staff, their connection to our strategy and their working environments around the world, we expect ongoing positive results on staff culture. Attracting both permanent and seasonal staff remains a very important part of our people program with competition for talented staff as intense as ever. Delegat remains a sought-after employer, and the caliber of our team around the world continues to improve. We've undertaken a range of initiatives from work health and safety programs, diversity and inclusion initiatives and expanding leadership and training programs to further enhance our staff's experience with the company. The group's goal is to establish Oyster Bay and Barossa Valley Estate as leading brands in the Super Premium wine category globally. Based on wine consumption patterns, the group classifies markets is established, growth or emerging. Understanding the level of maturity of our markets is essential for setting business strategy. Marketing activities have been tailored to the specific needs of each market and phases of brand development. Marketing programs are designed to grow consumer awareness and affinity, supporting distribution and rate of sale growth for its brands. The group works closely with its retail partners to develop highly effective in-store activations that support rate of sales and nurture long-term brand affinity. In the consumer environment, the group uses a mix of media channels both online and off-line to attract and engage premium wine consumers. The challenge of maintaining our supply chain, as I mentioned earlier, over the last year has been significant, and we are accordingly very proud of our supply chain team's efforts to navigate poor container availability, canceled shipping bookings and delays in ports throughout the world. Our ability to ensure our retail customers have inventory to sell throughout the year is more important than ever given the ongoing delays in the supply chain. The investment in warehousing and supply chain infrastructure has been a critical component to lift our sales over the last 12 months. And while we've seen improvements in some trade routes, we anticipate this challenging environment to continue for the industry over the next 2 years. The 2022 harvest delivered exceptional fruit -- quality fruit across all 3 of our wine regions. The group harvest of 44,861 tonnes was up 20% from the 2021 harvest, which had been an unusually small harvest. Whilst Marlborough and Hawke's Bay growing season experienced above-average rainfall and the vintage outcome has delivered excellent quality wines, the group has appropriate inventories to achieve the 2023 forecast sales of 3,672,000 cases as noted in the annual report. Group developed 245 hectares of viticultural land in financial year '22, which is being planted in the current year. Group is developing another 299 hectares in the current year and has a further 290 hectares of viticultural land, which will be planned to progressively from FY '25 onwards. Overall, the group now has 4,365 net hectares of Vineyard and vineyard land, 4,023 hectares in New Zealand and 342 hectares in Australia. Of this, 81% are owned or managed by the company and 19% is from our grower partners. Delegat continues to invest in assets to support our growth strategy. During the year, under review, the group generated cash flows from operations of $65.6 million, as mentioned, which more than funded the $39.4 million invested in growth assets, including development of the group's wineries, land acquisition and vineyard development. Delegat will invest an additional $51.9 million from financial year '23 to provide earnings growth in the years ahead. The group has a strong balance sheet with shareholders' equity of $499.5 million, net bank debt of $248.7 million and undrawn syndicated bank debt facilities of $87.3 million as at the 30th of June 2022. The group's retained earnings and syndicated bank debt facilities provide appropriate funding for our capital investment program and growth plans. September 2022, the group acquired the 200-hectare Dashwood vineyard in the Marlborough, Awatere Valley. This vineyard has been leased by the group for 20 years and delivers excellent quality fruit consistently, is located in a prime or a culture growing area and is contiguous with our other vineyards that Delegat has purchased over the last decade. This acquisition achieved certainty of grape supply to support the 10-year plan at a lower financing cost to the business. The incumbent syndicate bankers consisting of Westpac, Bank of New Zealand and China Construction Bank and Hong Kong Shanghai Banking Group support this acquisition through a new $40 million facility, reinforcing our well-established and enduring relationship with those finances. With respect to the current year to June 2023, the group is at to achieve our plans to grow sales by 9% to 3,672 000 cases. A component of that growth will be our Barossa Valley Estate brand. While the Barossa business only represents about 70% of the group's assets, 3% of group production and about 2% of group sales, it remains an important part of the company. The whole Australian wine industry is going through a challenging period at present with access to China effectively suspended over the medium term with the resulting supply imbalance. Despite these challenges, Barossa Valley estate remains a quality asset and the Barossa Valley Estate team is producing outstanding quality wines. Illustrating this, the wines were awarded medals metals at a range of internationally recognized wine competitions over the last year, including the 2021 Sydney, Adelaide and Melbourne Royal Wine Shows and the San Francisco International Wine Competition. Overall, the group continues to forecast the FY '23 operating profit result to be in the range of $60 million to $64 million. The forecast operating net profit after tax is higher than this year's results due to increased case sales. The group will continue to closely monitor and manage the potential impact of ongoing supply chain disruption and cost inflation, noting that these factors present some risk to the achievement of forecasted sales and profit in FY '23. Beyond financial year '23, the group is confident in the group's ability to prosper and drive sustainable sales and earnings growth over the longer term. Accordingly, the group continues to invest in its assets, brands and people in line with our strategic goal to build a leading Super Premium wine company. The group has revised its sales growth projections to 3, 826,000 cases in FY '24 and 3,947,000 cases in FY '25. This represents a moderated rate of sales volume growth relative to the projections contained in the annual report. This will enable an increasing focus on value growth in addition to volume growth in an inflationary environment to ensure sustainable earnings growth over the next few years. The primary driver of planned sales growth in Oyster Bay is Oyster Bay sales throughout North America. Finally, as noted earlier, our people are key to the company's performance over the last year and to realizing the group's future goals. We are indebted to their hard work and appreciative of the way our people again brought to live our core values of winning together in a challenging year. They have collectively built a high-performance team culture that is respected across the global wine industry. Your company is very well positioned to grow sales and achieve sustainable earnings growth in the years ahead on our journey to build a leading global Super Premium wine company. Lastly, I'd like to thank you, our shareholders, for your ongoing commitment and support. Thank you very much.

Thank you, Steven, for your presentation. At this stage of the meeting, we would like to ask if there are any questions in respect of the annual report, my Chair's presentation with the Managing Director's presentation. [Operator Instructions] While that is happening, we'll take any questions from the floor. Please note that if there are any questions raised of a similar nature, we may cover these off together. Please go ahead and send us any questions online. And please feel free to ask any questions from the floor at this point.

Changes and review [indiscernible] if they've made any changes to the Kingdom market.

It's Mr. Sanderson, is it? Thank you. Good question. So for us, the U.K. business continues to track very well. The main impact that we face is due to the, I guess, weakness of the sterling currency, the exchange rate is less favorable for us as an exporter from New Zealand to the U.K., which therefore makes sales less profitable into the U.K. at a given price. So with that being said, really the best option for the company post-Brexit is to continue to hold a strong market-leading position in the U.K. but ensure that our financial returns from that market deliver a good return on capital employed, which means really managing the market, both over the last year that we've had in the year moving forward to make sure we are looking at getting good price realization from the U.K. market. So that in the main has been the real impact from Brexit and how the U.K. economy is tracking today. But it's a very strong part of the business still, and we have extremely strong distribution. So we feel confident that it will continue to be a very strong market into the future. Bruce, you have a question?

Thank you. Bruce Takoma shareholder and [indiscernible] for the share association. Graeme report is very life it your environmental and social goals over 2 paragraphs on Page 20. Can you tell us more about your ES duty and how you're planning for partially reporting in year '24?

Certainly, I -- Delegat Group is a founding member of sustainable Wine Growing New Zealand, and it's in our DNA, it's sort of been part of how we operate and run our operations. So it's something that we do feel passionately about. I think, Steven, I might call on you to talk about Bruce's question in terms of what we're doing currently and what our plans are into the future?

Yes. Thank you, Graeme. Yes, look, certainly, it's a significant focus for the business at the moment as it is for any business. at present. As Graeme mentioned, the company actually has a very impressive and proud record of sustainability. It doesn't talk a lot about it, particularly publicly, but it has been doing a huge amount. We've certainly got a lot of focus at the moment on getting ourselves organized for compliance with the Task Force on Climate-Related Financial Disclosures, which is coming up in the next couple of years. And that's involving a fairly significant program of work at the moment where we are, auditing and reporting on our carbon footprint through, to Envirocare, and that's just one of the number of initiatives we've got underway at the moment to improve our sustainability program, and we look forward to talking a bit more in detail about that in the years to come with our annual reporting. I think another component to it is all the work that we're doing with our people, particularly around diversity, equity and inclusion programs around the world, the introduction of new benefits for our staff, a huge amount of investment into learning and development for our people so that we are building very strong relationships internally with our staff and developing our people from across our regions and globally as well as we can. So it is very much front of mind. Thank you, Bruce.

One more question. You've got a hunk of receivables over 90 days in the U.K. Is that being recovered at all?

Yes. So with the global supply -- the short answer is yes. So we have no concerns about recovering the money, how it came about and Murray, you can help me here for go up track is the, with the supply chain disruption at the moment, a lot of the shipments are taking a lot longer to reach in market the customer, so the U.K. in this case. And there becomes a discussion about win something as payable and the customers sometime take a view, we still don't have the product. Even though we're an FOB customer, we should be starting the clock in terms if it's 60 days when the ship sales from New Zealand, they sometimes take the view will -- we don't -- we haven't received it here in the U.K. So we're not comfortable paying you on time from our perspective. So there are some discussions of that nature and inevitably, what happens is we get paid, but with a few customers, it has been a few weeks late, which we do find frustrating. That is really a direct result of the shipments taking quite a long time in many cases to get to where they got to get to arrive in the customers warehouse. Any other questions at the stage of the meeting?

Julie, shareholder. And the difficulties about shipping and the uncertainties about shipping have been noted. Is it possible to have a little bit more around what your strategies and plans are for coping with obviously, it's a little bit difficult in New Zealand being a small and far-flung country?

Yes. Good question. And there's been a lot of hard work in the global supply chain team to address exactly that. And one of the strategies that was put in place from a supply chain point of view during the year that we've had is to open an additional warehouse in the U.S. So previously, we just had a warehouse on the West Coast of the U.S., but we've opened another one on the eastern side of the U.S. And really, that was to give us more routes into that market because the western seaboard of North America seems to have been particularly congested the ports there and has been one of the most challenging areas to get product into. And in many cases, it's not just us ordering the place in the order with a shipping company. But in the case of an FOB, a customer that organizes the shipping. So we've been working closely with our customers to try and get them to be fully aware of the lead times and work together so that we can achieve things because if you miss shipments in September, you miss Christmas promotions, and that's been a challenge. So working with our big customers around the world to get orders in on time to give us the best possible chance of making the sale, and shipping the wine and opening up that second warehouse in the U.S., which has additional costs and to have more inventory sitting in that additional warehouse but has given us an improved ability to meet our sales goals. So that has been some of the main things we've done. I would also say we have taken a decision where we can to carry a little bit more inventory in our end market warehouses, whether that be in Australia, the U.K., U.S. to provide a little bit more buffer against some of the uncertainties that have come around with shipping. Many orders have been booked with the freight forwarder in the shipping line and then canceled 2 or 3 times before they actually leave. So there's been a tremendous amount of work that has gone into just getting product to market. So I think our supply chain, global supply chain team has done an incredible job over the past 2 years and still continuing and pleased to report culture engagement survey wise that the engagement remains as strong ever with our team. So that's a short synopsis of some of the things that we're doing, many of which have come at an extra cost, but we feel are worth making that investment. Any other questions from the floor? Do we have any online questions? Okay. Very good. Thank you. I will record that the 2022 annual report has been received and considered. Now we will proceed to the ordinary business on the agenda. As I mentioned earlier, the resolutions in the vote tab are now open for all items of business. These resolutions were outlined in the voting papers that were mailed to you with the notice of meeting and annual report. And we have 4 resolutions to discuss and vote on today. To vote, these instructions, I think, are for the online people, simply select your voting direction from the options shown on the screen and please select by clicking on the radio button for either for against or abstain. You could put all resolutions at once or by each resolution. Your vote has been cast when the tick appears. To change your vote, simply sale change your vote. You have the ability to change your vote up until the time I declare voting closed. Once all 4 resolutions have been voted, Computershare, our registrar will collate all the votes cast by shareholders along with the proxy votes and the company will post the final results on to the NZX platform been available. I can confirm that item 1 to 4 are all ordinary resolutions. Firstly, election of directors. So agenda item 1 election of Steven Carden as Director. In accordance with the rotation provision of the constitution, Steven Carden retires from office and being eligible offers himself for reelection. Steven will now briefly address the meeting.

Well, thank you for the opportunity to be considered as a Director for Delegat Group Limited. I think there are really three reasons why I'd like to stand as a Director and why this is such an exciting opportunity for me. The first one is I have a deep passion for the sector, but actually -- and particularly passionate about Delegat Group's vision to be a leading global Super Premium wine company. Delegat, as you've heard, has enjoyed tremendous success in the world stage. It's very rare actually to have an opportunity to work for a New Zealand company that has done so well on a global basis. So I'm excited and motivated for -- and want to be a part of helping lead it's a very exciting future. The second reason is I'm particularly excited about the changing dynamics of the industry And how we navigate through them as a company whether it's climate change, sustainability, ESG, the attraction and retention of key talent, emergence of new technologies and the ongoing digital revolution. These are all factors that the company needs to navigate through in the next 5 to 7 years, and they provide exciting opportunities for Delegat to extend its lead even further. The third reason is I believe I have the diverse skills and experience both here in New Zealand and abroad to help Delegat continue its extraordinary journey in the years ahead. So on that basis, I'm proud to stand for election as a director. Thank you.

I move that Steven Carden be reelected as a Director. Do I have a seconder? Thank you, Bruce. Is there any discussion for online people, please submit any questions you may have in relation to the appointment of Steven Carden as a director? We will pause for a few moments to see if the moderator receives any questions and whether there's any questions from the floor? If there are no further questions, I'll put the motion that Steven Carden be elected as a director. Please cast your vote in regards to resolution 1, using your computer or device now, and for those in the room by completing your voting cards. Thank you. Agenda Item 2, election of Gordon MacLeod as Director. In accordance with the rotation provision of the constitution, Gordon MacLeod retires from office and being eligible offers himself for election. Gordon will now briefly address the meeting.

Thank you, Graham, and good afternoon, everyone. My name is Gordon MacLeod, and I'm honored to offer myself for reelection as an independent Director of Delegat Group, my background is that I'm based in Cross church, and I've got 2 adult children, one age 20 and one age 23, and I trained as a chartered accountant. In terms of Korea, I've been a partner of PwC, specializing in corporate finance and advisory work based out of Christchurch. And prior to that, I spent 7 years living in England where I became the Group Finance Director of a London-listed high-tech company based on the world renowned Cambridge Science Pay. More recently, in October last year, I stepped down as Group Chief Executive of Ryman Healthcare, having held that role for 4.5 years. And in the 10-or-so years prior to that, I've been Ryman's CFO; and also Deputy CEO. I've been awarded as a Chartered Accountant Fellow. I have a Bachelor of Commerce from the University of Canterbury, and I'm a member of the Institute of Directors. Since the end of last year, I have become a professional Director with my principal appointments being Delegat Group, Spark New Zealand and the Breast Cancer Foundation of New Zealand. It's been my pleasure to serve the Board of Delegat since I've been appointed at the start of this year. I greatly respect and admire the founding principles values and extraordinary success the Delegat Group has achieved since it was founded 75 years ago. Jim and Rose Delegat our visionary founders, along with their forebears to work alongside and learn from. And the team at Delegat are inspirational and their commitment to achieving outstanding success. For you as shareholders, I bring a broad range of skills and knowledge to Delegat Group as an independent director. I'm a very experienced businessperson, having served large, growing publicly listed international companies and having advised a wide variety of organizations. I understand the challenges that the Chief Executive and the team faces as Delegat continues its growth path internationally whilst preserving the core founding principles that have made the organization so successful to date. And I also have a very strong finance background, which I bring to my role as the Chair of the Audit and Risk Committee of the group. So I'd be very humble to receive your support and my reelection as a Director of Delegat as we work together as a Board and with the leadership team to ensure the company's outstanding success for the long term. Thank you.

I move Gordon MacLeod be elected as a Director. Do I have a seconder? Thank you, Bruce. Is there any discussion? Please submit any question you may have in relation to the appointment of Gordon MacLeod as a director. We will pause for a few moments to see if the moderator receives any questions. And during that time, we can take any questions from the floor. Anyone has any? There are no further questions. I put the motion that Gordon MacLeod be elected as a director. Please cast your vote in regards to resolution 2 using your computer device now and for those in the room by completing your voting card. Thank you. [Voting]

Agenda item 3, increase in directors' fee pool. This resolution is numbered agenda Item 3 and is an ordinary resolution. Directors seek approval to increase the directors' fee pool from $495,000 to $730,000 to ensure a remuneration level, which reflects both growth of the company and its associated increasing governance responsibilities. There is no increase proposed for the chair or director fee remuneration. As outlined in the explanatory notes to the notice of meeting, the reason for the increase in the fee pool is to accommodate an increase in the pool of nonexecutive directors from 4 to 6 directors, involving the appointment and remuneration of 1 new nonexecutive director and to reflect the change with Jim Delegat moving from Executive Director to Non-Executive Director in October 2022. Neither the directors nor their associates who hold shares will be exercising any votes in respect of this resolution as required by NZX listing rules. I move that the directors' fee pool be increased from $495,000 to $730,000. Do I have a seconder? Thank you, Bruce. Is there any discussion? Please submit your question if you have one in relation to the increase in the director fee pool. Are there any questions from the floor? There's no questions. So I put the motion that the director fee pool be increased from $495,000 to $730,000. Please cast your vote in regards to resolution 3 and using your computer or device now or for those in the room by completing your voting card. Thank you. [Voting]

Agenda item 4, auditor fees and expenses. In regard to this matter, you'll recall from last year's annual meeting, the company advised that Deloitte has been appointed as the auditor for Delegat Group and subsidiaries with Andrew Deck being the lead partner. In accordance with the Companies Act 1993, the company's auditor Deloitte is automatically reappointed at the annual meeting. Section 207S of the Companies Act 1993 provides the auditor's remuneration being fixed in such a manner as the company determines at the annual meeting. The Board proposes, consistent with commercial practice that shareholders approve that the directors be authorized to fix the auditor's remuneration. I move that the directors will be authorized to fix the auditor's remuneration. Do I have a seconder. Thank you, Bruce. Is there any discussion? For those online, please submit any questions you may have in relation to the appointment of Deloitte as auditor and the remuneration. I'm happy to receive any questions from the floor. Now there are no questions, I put the motion that directors be authorized to fix the auditor's remuneration. Please cast your vote in regards to resolution 4, using your computer or device now and for those in the room by completing your voting card. Thank you. [Voting]

So now we move to the final item on the agenda, general business. Are there any items of general business? And is there any discussion that shareholders would like to have? So if online, please submit any questions you may have in relation to any other business, and we'll pause for a few moments to see if the moderator receives any items of questions. And if you have any questions from those in the room, there's an opportunity to ask them now, all right. There are no further questions. So ladies and gentlemen, that concludes our discussion on items of business. In a minute, I will close the voting system. Please ensure that you have cast your vote on all resolutions. I will now pause to allow you time to finalize those votes. We now wait 60 seconds. [Voting]

Okay. Voting is now closed. For those in the room, please hand in your voting card to the Computershare team as you leave the room to ensure that your vote is counted. The results of these votes will be released to the stock exchange later today. At the conclusion of the meeting, the Board invites you to mix and mingle with your fellow shareholders, Board members and senior management, where tea service will be provided. With there being no further items of business, I declare the meeting closed, and thank you all for the interest you have in the company and for attending today. Thank you.