Eagers Automotive Limited (APE) Earnings Call Transcript & Summary

Thanks, Nick. Good morning, ladies and gentlemen. My name is Tim Crommelin, and I Chair Eagers Automotive Limited. Welcome to the company's 66th Annual General Meeting since listing on the Australian Stock Exchange in 1957. It's just gone past 9 a.m. here in Brisbane. And the company's Secretary, Denis Stark, has advised that a quorum is present. I, therefore, declare this meeting open. This meeting is being held as a hybrid meeting with shareholders able to attend either in person or online. Shareholders online are able to watch our live webcast and also ask questions and vote. I'd now like to introduce directors in attendance today here in Brisbane and/or online. Joining online are Dan Ryan and Greg Duncan, who joined us from Sydney; Marcus Birrell from Victoria joins us from overseas; David Blackhall joins us from the ACT and Michelle Prater joins from Perth. Here in Brisbane, our Finance Director and CFO; Sophie Moore; and our Chief Executive Officer, Keith Thornton, joined me here, both here with me. And Nick Politis, who is Eagers' largest shareholder, sends an apology for this meeting as he is overseas. It's pleasing to see that we have senior management here and those joining us are Denis Stark, our Company Secretary; Edward Geschke, the Chief Operating Officer for Eagers Automotive; Paul Warburton, Executive General Manager of Financial Services; Amanda Ellison, Head of Legal; and James Couper, Senior Executive of Operations, and welcome again to all shareholders who joined us. I'd also like to introduce our auditor, David Rogers from Deloitte. David will be available later in the meeting to answer any questions in relation to audit matters. The secretary has advised that there are no further apologies. So with that, we'll get started. Given this is a hybrid meeting, I need to run through a few procedural matters, so please bear with me. Only shareholders and their representatives and attorneys and proxy holders who are attending here in person and holding a blue admission card and those attending online are entitled to ask questions and vote. For attendees here in person to ask a question, you'll need to raise your hand after I invite questions, and we'll get a microphone or whatever to. Online attendees can submit questions at any time by selecting the Q&A icon on your device, select the relevant topic from the drop-down box, then type your question, and press the send button. Your name will be read out with the question at the appropriate time. Online attendees can also ask verbal questions by following the instructions below the broadcast window. Although online questions can be submitted at any time, I will address them only at the relevant time during the meeting. If multiple similar questions are received, we will try to group them together. I'll also ask James Couper, our Senior Executive of Operations, to introduce online questions at the appropriate time. Just before I get on to the voting process, welcome to Dr. Alan Porter, a large shareholder in Eagers. So welcome. Our voting process, which is -- should be up on your screen, Slide 4. All voting today will be conducted by a poll, I'll open voting shortly. For attendees present in person, your blue admission card is your voting card, you need to mark the appropriate boxes and lodge the card at the ballot box before voting closes. Proxy holders with large voting cards will be deemed to have voted in accordance with the instructions attached to their card. Proxy holders who are entitled to cast open votes will need to mark a box beside the relevant notion to indicate how they wish to vote. For attendees online, the Voting icon will appear on your device when voting opens. Clicking on the icon will present your voting options for each motion. Simply select one of the options to cast your vote. You may change your vote at any time until I declare voting has closed. All attendees, whether online or in person, may submit votes at any time from when voting opens until I declare voting closed. Finally, I appoint Lewis Brimelow of Computershare Investor Services to conduct the poll and be the returning officer for this meeting. I now declare voting open on all items of business. Now move to the Chairman's address. But before we proceed with today's formal business, I'll present my report for the year ended 31st of December 2022. Shareholders, welcome again. And on behalf of Eagers Automotive Board, I welcome you to our Annual General Meeting. Following my reflections on 2022, I will then invite our Chief Executive Officer, Keith Thornton, to provide his report on our 2022 performance, current trading and the year ahead. 2022 was a rewarding year of progress for Eagers Automotive. Looking back, like many businesses, Eagers Automotive was largely able to move on from the challenges faced by the retail sector during the global pandemic and capitalize on favorable market dynamics. Most importantly, though, we were able to leverage the strong operating platform we have built in recent years as we continue to grow through execution of our Next100 strategy. From a financial perspective, the company delivered a statutory profit before tax of $442.2 million and a record underlying operating profit before tax of $405.2 million. Directors are also pleased to be able to continue rewarding shareholders with strong returns to declaring a record ordinary total dividend of $0.71 per share based on 2022 earnings versus $0.625 for the year ending 2021. In June 2022, we announced our on-market share buyback, where we are able to why back up to 10% of issued capital. To December 31, 2022, Eagers had bought back 1.5 million shares, representing 0.6% of the shares on issue. The buyback program, which will continue to be in place, reflects our focus on active capital management and is testament to our strong balance sheet and record available liquidity. Sustainability and ESG. Throughout 2022, we continued our sustainability journey and our focus on environmental, social and governance initiatives, and we published our second annual sustainability report in the annual report earlier this year. Our group-wide sustainability strategy supports our corporate strategy and addresses the ESG issues, which we believe are of utmost importance to our company and stakeholder groups. Whilst this is just one step on our sustainability path, our vision is to be the most admired automotive group by delivering sustainable growth through the optimization of our operations, our people and our environment. We are now almost 5 months through the new financial year. In the first 4 months of the year, demand for vehicles continued to exceed supply, and our order bank continues to grow to record levels with an extended runoff period. This positions the company strongly to continue to deliver for our shareholders. Despite a number of challenges in the operating environment, including port congestion, bio security issues and the cost pressures that exist across the broader economy, we are pleased to report that the underlying net profit before tax for the period up to April '23, that's the first 4 months, is in line with our 2022 levels. Keith will comment further on this shortly, including our plan to be uniquely positioned to lead the transition to a lower emission future. Our balance sheet and financial position remain robust, providing the capacity and flexibility to support disciplined investment in accordance with our Next100 strategy. The company remains well positioned to take advantage of industry opportunities as they present. Eagers Automated track record of delivering consistently strong results does not happen by chance. The record underlying financial performance achieved in 2022 is down to the company's strategic direction and, importantly, professionalism, dedication and relentless focus on execution by our entire team. The Eagers Automotive team has delivered day after day, year after year for all shareholders. And on behalf of the Board, thank you. Thank you also to my fellow Board members for your counsel and insight and for your tireless commitment to Eagers Automotive and our shareholders. And finally, to our shareholders, thank you for your ongoing support and commitment. Looking forward, we're excited about the year ahead, and we'll continue to deliver for all shareholders. I'd now like to invite Keith Thornton, our Chief Executive Officer, to address the meeting on the company's progress. Following Keith's address, we'll deal with the formal business of the meeting. Thanks. Keith?

Well, thank you, Chairman. Good morning, shareholders, and thank you for your interest in Eagers Automotive Annual General Meeting. Today, I'll begin with a brief review of the company's operating and financial performance in 2022. I'd then like to update on our strategic priorities and the progress we made against them in 2022, our year-to-date training in 2023. And then finally, we'll turn to our outlook. As the Chairman mentioned, in 2022, the operating environment for automotive retail in both Australia and New Zealand was able to largely move on from the pandemic-related disruptions of 2020 and 2021. Now all this was a welcome return to more normalized labor availability and consumer activity. It did not mean the year was without unusual and sometimes unprecedented external influences. New vehicle supply continued to be impacted by a shortage of components, including semiconductors to a varying extent across most OEM partners. While the onset of the conflict in Ukraine further exacerbated supply limitations, continuing COVID-related disruptions to global shipping and logistics channels and further extended lockdowns in China also added to an extremely uncertain supply environment. Now while supply remained constrained, consumer demand for new and used vehicles remained strong, with the monthly average order rate for the period improving even further on the strong levels of 2021. The ongoing monthly difference between our order book, the number of orders we take and the vehicles we supplied continue to build throughout the year. Our order book is at record-ever levels, increasing by more than 74% in 2022 on the already record levels of 2021. This order book provides a minimum 2-year runoff period and will help support ongoing strong margins and, importantly, act as a hedge against any economic headwinds. The significance of our order book cannot be overstated. It's a key differentiator against other consumer discretionary companies that Eagers Automotive is sometimes compared to and which face more immediate impacts from tightening general economic conditions. Supplementing this very strong underlying demand is the beginning of a generational shift towards lower emission vehicles. This shift is supported by government incentives. It's mandated by ESG demands on fleets. And importantly, it's also driven by evolving customer demands. This dynamic will continue over the coming decade. It's not a short-term transition, and we believe it will only gain momentum in the foreseeable future. As a company, we are very deliberately and uniquely positioned us to support our customers and our OEMs, both existing and new, to capitalize on this incredible market shift. More on this later. Within this context, Eagers Automotive has continued to perform strongly. In 2022, we maximized volume in a challenging supply environment. We expanded margins on 2021 levels, and we've continued our relentless approach to cost control, particularly targeting tech-enabled productivity gains. In parallel to this operational execution, we continue to make meaningful progress on our strategic initiatives to set up the next phase of growth for the company. So turning to our operational and financial highlights, which you'll see on the screen in front of you. Eagers Automotive delivered a record underlying operating profit before tax of $405.2 million for 2022, as noted by the Chairman. In addition, we recorded a full year underlying return on sales of 4.7%, which is the key margin metric for our industry. We closed the year with an exceptionally strong balance sheet position, with available liquidity of $631.1 million and owned property portfolio of $607.6 million, which was up from the $448.3 million 12 months earlier. This financial performance underpinned the Board's decision to approve a record full year dividend of $0.71 per share in 2022 and continuing a long tradition of rewarding Eagers shareholders. Moving now to our progress against our key strategic items. Presented on the screen is Eagers Automotive's Next100 strategy. As I reiterated this time last year, I clearly articulated a consistent strategy is key to effective execution and long-term value creation. Hopefully, you won't see Eagers presenting a new strategy every year. In a nutshell, our Next100 strategy identifies the key pillars required for responding to the challenges, but maybe more importantly, the opportunities of our industry, focusing on delivering better outcomes for our stakeholders while building a sustainable and growing business over the long term. However, our strategy is only relevant if we, as a company, hold ourselves accountable for execution. And in 2022, I'm pleased to report that we accelerated our progress against these key strategic priorities. On the screen -- move to the next round, I'm sorry. On the screen, you'll see some of the key strategic objectives and notable progress against those strategic items. I think it should move now. Starting with property. We continue to execute on our property strategy with the intent to best shape an omnichannel approach responsive to current and future customer wants and needs. In 2022, we continue to target strategic properties for acquisition while exiting selected external leases, which gained greater control and consolidated and improved the customer experience and productivity of our property footprint. In the last 12 months, we acquired $148.3 million of property, taking our total portfolio value to more than $600 million at 31 December. Our owned property portfolio not only underpins the financial strength of our company, but also reduces our exposure to inflationary pressures on our property cost base. Moving along and turning to people. Throughout 2022, we continue to invest in technology to improve both the customer experience and employee productivity. In turn, this allows the business to continue to redesign the roles we employ and the output we can create from these roles. The technology we develop in-house proprietary to Eagers. It's unique in the industry. And it will pay long-term dividends via a lower cost base, higher income opportunities and a better customer experience. Those 3 things are the holy grail of retail: better customer experience, lower cost and more income. Turning to finance. We continued our relentless focus on finance and insurance results, which remains a key lever in generating additional gross profit and organically expanding our margin profile on a transaction-by-transaction basis. Simply put, the more transactions we do that include finance, the better our margins. While conditions for finance have been as challenging as we have seen, our performance remained consistent, and the delta or the difference between Eagers performance and the general industry was at an all-time high. This relative performance is something that we take great pride in. Moving to innovation and growth. We invested in greenfield opportunities via new market representations with existing partners while also establishing material partnerships with new entrants to the Australian market. In addition, we introduced new innovative retail formats that exceeded all expectations, providing signpost to the automotive retail innovations we will continue to undertake and the growth we can deliver. We expanded our national footprint through the acquisition of multi-franchise dealership groups in the ACT and also in South Australia. The ACT business has a diverse portfolio of strong performing brands and represents more than 30% of all vehicles sold in the region. The acquisition in Adelaide added further scale and complementary brands to our already substantial South Australian operations, and both transactions included substantial strategic property. These acquisitions, combined with growth in our existing partner portfolio via greenfield points with brands such as Ford, MG and Volvo and growth in our retail partnerships with new entrants such as BYD, Cupra and Chery, will underwrite approximately $1 billion in incremental revenue growth in 2023 as compared to 2022. Not many companies can go into a year knowing they have $1 billion in additional revenue baked in. During 2022, we delivered a key component of our Auto Mall strategy, leading the transformation of automotive retail and launching AutoMall West at Indooroopilly Shopping Center in Brisbane, and we remain committed to leading innovation in retail solutions for our partners. I think you'll see up on the screen there. There are some images of the Automall in Indooroopilly. Those who are Brisbane-based, I hope you've had the opportunity to experience it. It is an incredible facility totally unique in the industry. In fact, it's globally unique for automotive retail group to take that many brands into a dedicated shopping environment like this. And between Indooroopilly and Ravenna, we're now taking more than 330 orders a month. We're seeing 2,000 -- more than 2,000 individual people walk into the Automall per day, and they're spending on average 15 minutes when they're in there. So this has been an amazing success story for the business. Finally, we continued our journey on growing Australia's largest fixed-price, pre-owned business, easyauto123. The business delivered revenue and volume growth of 25% and 20% respectively, in an extremely competitive market for preowned vehicles. Our plan to profitably grow easyauto remains a major priority and also a major opportunity to create significant value for shareholders. Turning now to our trading year-to-date 2023. And as the Chairman said, it would be fair to say that 2023 has not started without its challenges. On a like-for-like basis, demand continues to exceed supply, and our order book has grown further through to the end of April 2023. This dynamic has been accentuated by the widely reported port delays and biosecurity issues that have materially impacted Australian vehicle deliveries in the first 4 months of 2023. The top 10 brands in Australia by volume, excluding Tesla, so effectively it's the top 9 brands in Australia, are down 10.2% year-to-date in a market that has a headline growth of 2.2%, evidencing the unprecedented disruptions to major brands. It's also worth noting that Eagers has 88% of its volume represented in these top 10 brands. In addition, our business in New Zealand was impacted by 2 major weather events started this year centered in Auckland, where we exclusively operate. This has contributed to the New Zealand market being down 15% year-to-date, and that's directly impacted our year-to-date profitability in this region. Finally, we're not immune to the cost pressures that exist across the broader economy, upward pressure in all key expense categories, the most notable being interest costs on inventory continuing to challenge our business. But despite the myriad of headwinds that existed in the first 4 months of 2023, we are very pleased to report that the underlying net profit before tax for the period to April 2023 is in line with 2022 levels. This trading result reflects stronger gross margins on a per vehicle basis. It's supported by deliberate and structural cost-out initiatives in the areas that we, as a company, control. And the strategic growth initiatives completed in 2022 have provided a hedge against the like-for-like new vehicle impacts thus far in 2023. These initiatives last year have contributed to revenue growth of 9% year-to-date on a reported basis. Now while this incremental turnover growth has also been dampened by the same supply disruptions mentioned earlier, the company's forecast of an incremental $1 billion in revenue in 2023 remains unchanged. Supporting this underlying operational performance in 2023, we continue to deliver on our strategic priorities. We are pleased to announce the acquisition of Ireland's of Cairns, and you'll see some images on your screen now. Ireland's of Cairns is a long established -- it's established in 1919, actually, long established and iconic multi-brand dealership group based in Cairns in Queensland. It represents Mitsubishi, Isuzu Truck, RAM and Jeep franchises. This acquisition will include approximately 24,000 square meters, 6 acres of property centrally located in Cairns in the -- right in the middle of the automotive retailing precinct, with settlement expected at the end of this month. The addition of this business and property will further expand our footprint and complement the existing operations we have in Townsville in North Queensland, also providing a beachhead to grow with partners such as BYD and consider our easy auto rollout plans in the future. Turning now to our outlook. And the screen -- the image you are seeing on the screen at the moment is the outlook that we presented with our year-end results in February this year. Now traditionally, May and June represent the largest selling and delivering sales months of the year. And in the past, this has largely been driven by the ability to sell and therefore, deliver immediately from stock. In the current environment, however, our performance in May and June is likely to be more influenced by the number of vehicles arriving and the associated ability of the ports to process sold cars in a timely manner. Unfortunately, this is outside our control. It's also worth highlighting, however, that June 2023 does represent the end of the current elevated instant asset write-off, which requires buyers to have a vehicle delivered by June 30 to qualify. This will add considerable further impetus to end of financial year sales from unsold stock available for delivery before the end of the financial year. Given the uncertainty and variability around both these factors, it would be inappropriate to provide specific guidance at this stage on our expectations for the first half of 2023. However, both factors have the ability to be favorable to our near-term performance. For the remainder of 2023, we are encouraged by the pipeline of stock expected to be delivered by our major partners as well as the general easing of supply constraints. When combined with the strong margin environment, which will continue to be underpinned by our multiyear runoff period from our order bank, supported by our disciplined cost management and with clear strategic plans and expected revenue growth, we remain confident '23 will be another solid year for your company. Finally, turning back to the generational shift in auto powertrains. Eagers Automotive has been proactive in positioning the business to play a leading role in the transition to lower emission future, particularly in the affordable, and I stress the word affordable, new energy vehicle segment. Now NEV, the new energy vehicle segment captures both electric vehicles or BEVs, B-E-Vs, and plug-in hybrid electric vehicles or PHEVs, P-H-E-V. We continue to make rapid progress with our plans, uniquely positioning the company to deliver on this generational opportunity for our shareholders. This progress will become more evident to shareholders as we continue to roll out our network and marketing to support our partners in this space. We remain very confident that our business structure, scale and strategy combined with the strength of our balance sheet provides the company with the capacity and flexibility to pursue accretive growth opportunities while also mitigating against any economic headwinds. Our aim is to continue to balance growth with profitability, investing carefully in the future of automotive retail while continuing to provide strong and sustainable annual returns. On the screen now, you'll see the top 5 takeaways as we came into 2023 in terms of how the company expected to perform this year. What they highlight is that we expected material revenue growth, supported by sustainable strong margins. We expect to continue to lead this EV transition. We are focused on growing easyauto as a preowned used car business, and we will utilize the strength of our balance sheet to grow. As we sit here today, we feel like we are very much on track against those 5 key takeouts for 2023. In closing, I'd like to finish with a few important acknowledgments. Thank you to our customers, many of whom are also loyal shareholders. It's our privilege to be able to provide products and services to each and every customer. Your ongoing support is greatly appreciated, and we will never take your custom for granted. I'd also like to recognize and thank the great team members in Eagers Automotive in both Australia and New Zealand. This team is the best in the business, and they worked tirelessly in 2022 to contribute and lead a record result. Thank you to the Eagers team. Thank you also to our directors for your continuing support and advice. Eagers Automotive has always been a company with deep industry routes. We aim to be the benchmark in our industry, and it certainly helps having the direction, expertise and experience of true industry leaders on our Board. The company and, selfishly, myself as CEO are incredibly fortunate to be able to draw on such deep industry knowledge and well-established industry connections from directors, who are significantly invested in and therefore aligned to the long-term success of the business and all shareholders. Through our OEM partners, we are proud to represent your brand. Our position as your retail partner is a privilege and it's a responsibility we take very seriously. We will continue to focus on being a preferred partner for your business. For all our business partners, including financiers, landlords and suppliers, your ongoing support and partnership are fundamental to Eagers' long-term success. Finally, thank you to each of our shareholders, large and small, for your ongoing support, your confidence in and your commitment to Eagers Automotive. We are proud of our company's tradition in delivering for shareholders and also the role we play in communities, being able to serve our customers but also being able to assist those in need through the Eagers Automotive Foundation. Last year, we provided another $1.5 million in charitable support by the foundation, evidencing the great work the company does in this area. So finally, and in closing, as I always say, we, as a company, remain very excited for what the future holds. Thank you for your attention.

Thank you, Keith. Very impressive address as always. Ladies and gentlemen, just before we move to the formal part of the business, we do have 2 screens in the room. So if anyone towards the back or middle would like to move -- come down the front, move down to the center a little more where you can get in front of the screen. We've got lots more slides, so I don't want anyone to miss out on getting adequate viewing. So if anyone wants to get it a little closer to the front, now is the time to do it. We'd love to have your down here. Can you get a good look there? That all right? That screen work? It does. Okay. Thank you, shareholders. And again, thanks to Keith. If we move to the formal business for today, proxy votes received should be up on your screen. Details of all proxy and direct votes received prior to this meeting on each item of business are showing on the 2 screens in the room and externally. Obviously, directors are very pleased to see the very strong support we've had from shareholders. Our 2022 annual report and Notice of Annual General Meeting were made available to all shareholders on the 21st of April 2023 and will be taken as read. I remind all shareholders that questions on agenda items will be addressed during discussion on the relevant item of business and before voting closes. General questions will be addressed later in the meeting. The first item of business is financial reports, and that is to receive those financial reports for 2022. They are included in the annual report starting on Page 53. The Corporations Act requires the financial report to be put to the meeting each year.

If there are any questions on financial reports, we will address them now. Now is also the time for our auditor to answer questions on the audit, the auditor's report, our accounting policies and auditor independence. I ask shareholders who are present and in person any questions that anyone may have on the financial reports. Yes, we have one if -- we'll get a microphone to you, sir.

Thank you, Mr. Chairman, [ George Bomber ], Director of Fair Case. You mentioned several times about a record profit for the year. Those figures don't reflect in the figures in the annual report that I picked up this morning. You talk about a profit there, and it gives me a figure in here of $442 million and the previous year of $456 million, and you keep mentioning that we had a record profit. So that statement doesn't align with the figures that are in the annual report.

Do you have a question?

Hang on. Thank you, about $405 million. But Keith, safely you may wish to comment on that.

We referred to the underlying profit. So you'll notice in the speech and all references we talk to the underlying profit, which excludes extraordinary profit on things like sale of property. So it's a record underlying profit of $405.2 million compared to the previous year. It's not a record statutory profit, which is the number that you're referring to there.

Okay. So those figures don't actually appear in the 5-year summary?

You may well be correct there. But they've been released to the market at our year-end results. You're absolutely correct in -- or as you're correct, without having a very detailed look at it. But absolutely, the underlying and statutory profit numbers have been released at a year-end result, and we've been very careful to always talk to underlying because that is -- it excludes extraordinary one-offs like profit from a sale. We think that is sometimes not misleading, but they are one-offs. They're not repeatable. So we like to talk to underlying results because that gives us much better and a more true sense of the health of the business.

Yes, that probably should be reported in the report then, which are not.

There's a reconciliation on Page 33 of our investor presentation that we released in February 2023.

Yes. They should all be together. Thank you.

Thank you. I invite any other questions. Nothing here from the room. Thank you. If there are no further questions from shareholders attending in person, I'd ask James Couper if there are any questions from online shareholders on this item of business.

No further questions on this item, Chair.

Thank you, James. The next item of business -- sorry, if there's no further questions, we'll move to the next item of business, and that is the reelection of directors. There are item -- this item of business, there are 6 directors up for reelection, and details on the background of each director will be displayed on your screen. There is additional information on each director in the Notice of Meeting and also in the annual report. All directors are happy to respond to any specific question a shareholder may have. Agenda Item 2A, this item involves my reelection, and I will now pass control of the meeting to Greg Duncan for this item of business. Greg, who is online and is in Sydney, is the Chair of our Remuneration and Nomination Committee. Over to you, Greg.

Thank you, Tim. And good morning, shareholders. As Tim mentioned, this item of business is for his reelection as a director, and it's my pleasure to put back to the meeting. Having initially been appointed as a Non-Executive Director of the company in February 2011, Tim was last elected -- reelected to the Board at our AGM in 2020. Further information about Tim can be found in the Notice of Meeting and on your screen now. The Board derives enormous benefit from Tim's corporate and commercial expertise and his experience, and your directors recommend Tim's reelection. Details of the votes received prior to the meetings should now be shown on the screen, and I invite questions on this agenda item from shareholders attending in person today. To ask the question, you will need to raise your hand, wait for the microphone and clearly state your name. Are there any questions from shareholders attending the meeting in person in Brisbane?

Greg, I can confirm there are no questions from the floor in Brisbane.

Thank you, James. As there are no questions in relation to this matter from the floor, I ask James if there are any online questions in relation to Tim's reelection.

Greg, no further online questions, either. Thanks.

Thank you, James. As there are no questions on this item of business, I'll now hand back the meeting to Tim and move on to the next agenda item.

Thank you, Greg. The next item is Item 2b, the reelection of Marcus Birrell. In accordance with our constitution, Marcus retires by rotation at this meeting and being eligible offers himself for reelection. Marcus was last reelected to the board at our AGM in 2020 and having been initially appointed in July 2016. Further information on Marcus can be found in the notice of meeting and should also be on your screen now. Marcus is a member of the Audit and Risk Committee and has vast automotive industry experience including 38 years at manufacturer, financier and retail levels. The Board considers Marcus to be an independent director and Eagers Directors fully support his reelection. Details of votes received prior to this meeting are shown on your screens. I invite questions on this item from any shareholder who may be here in person today. To ask a question, please raise your hand. Are there any questions in the room? There is not. James, so are there any online questions on this motion?

No further online questions, Chair.

Thank you. As there's no further questions on this item, we now move to the next item on the agenda, and that is the reelection of Sophie Moore. That's Item 2c on today's agenda. And again, in accordance with the Constitution, Sophie retires by rotation and being eligible offers herself for reelection. Sophie was initially appointed as a Director in March 2017 and was last reelected in 2020. Please refer to the Notice of Meeting and on your screens for any further information on Sophie. Can I just say as shareholders, we are -- and certainly at Board level, we're very fortunate to have someone of Sophie's financial expertise, experience and caliber on the Eagers Board. Eagers Automotive directors recommend the reelection today. Details of the votes received prior to the meeting are now shown on the screen. Are there any questions from anyone in the room here? There's no questions. James, over to you, anything online.

There no further questions, Chair.

Thank you, James. As there's no further questions on this item, I now move to the next item of business, and that is the reelection of David Blackhall. That is agenda Item 2d, and it's for David Blackhall reelection to the Board. Again in accordance with the constitution, David retires by rotation today being eligible offers himself for reelection. David was initially appointed in December 2019 and David was reelected in 2020. Further information on David is in the Notice of Meeting and also on your screen now. David has over half a century of automotive industry experience. David's contribution to the Board is invaluable. David is regarded as an independent director by the Board of Eagers, and he chairs Eagers Audit and Risk Committee. Eagers Automotive directors support David's reelection today. The screens are now showing details of votes received before the meeting. Do any shareholders here in person have questions in relation to David's reelection. If so, I'll hear from you now. Seems we have nothing in the room here. James, anything online written or verbal?

No further questions, Chair.

As there's no further questions, so I'd now move to the next agenda item 2e, and that deals with Greg Duncan's reelection as a Director. Today, Greg retires by rotation and being eligible offers himself for reelection in accordance with the constitution. Greg was initially appointed in December 2019 and then elected by shareholders the following year. Please refer to the Notice of Meeting and your screen for information about Greg. Greg is regarded as an independent director. He sits on our Audit and Risk Committee. And as I mentioned earlier, he chairs the Remuneration and Nominations Committee. Greg has significant industry experience, including as a former owner of Australia's largest prestige automotive business, and he brings a unique perspective to the Board. Eagers Automotive directors recommend his election this morning. Votes received prior to this meeting are now showing on your screen. 96.97%, Greg. Going well. I invite any questions from the room. Are there any here? There are none that appears here. So over to you, James, for online verbal or written?

No further questions, Chair.

Thank you. As there's no further questions, we now move to the final reelection today, and that is the reelection of Michelle Prater. It's Item 2f, that's reelection of Michelle Prater. In accordance with our constitution, Michelle retires by rotation and being eligible offers herself for reelection. Having initially been appointed in February 2020, Michelle was then elected by shareholders at our AGM that year. Further information about Michelle is available in the Notice of Meeting and on your screens now. Michelle is a resident of Western Australia, Eagers' second largest region by size and where the AHG business, Automotive Holdings pre business, was originally founded Michelle brings a wealth of industry and commercial property experience to the Board. Eagers directors are very much in favor of her reelection today. Details of the votes received prior to the meeting should now be visible on your screen. And I would ask, are there any questions from a shareholder in relation to Michelle's reelection? Is there anything in the room here? There are no questions. So James, online, verbal or written, do we have any?

There are no further questions, Chair.

There are no questions. If there's no further questions. Thank you, shareholders. I'll move to the next item, and it is the remuneration report. Item 3 seeks shareholder approval for our remuneration report, and that's set out in our annual report starting on Page 36. Although this vote is advisory only, this is an important agenda item, and the Board is always keen to shareholders' support in this area. Support has been very positive, as you can see. The proxy votes are now up on the board, and that's at 98.47%. As I said, support is very positive. And that, I should point out, does not include any votes by directors or key management personnel, so that's shareholders other than directors and key management personnel. Are there any questions on our rem report from the room here? There is nothing. James again, online, verbal or written?

No further questions, Chair.

No further questions. I'll just move then to the final item on today's agenda. That's the renewal of proportional takeover provisions of the constitution. So item 4, and it calls for shareholders by special resolution to approve the renewal of the proportional takeover provisions of our constitution for 3 years. A detailed summary of the motion is included in the Notice of Meeting. If this motion is approved, then our shareholders and the importance of that, so it's important that shareholders approve it, that means shareholders will be able to collectively decide whether any subsequent proportional takeover bid is acceptable in principal and appropriately priced. This will reduce the risk of control of the company, changing hands with our payment of an adequate control premium for your shares. It will also reduce the risk of you being left as part of a minority interest in the company should a proportional takeover bid be made. The directors, therefore, unanimously recommend shareholders approve this notion. Proxy and direct votes received prior to this meeting, as you can see overwhelming support at 99.6%. Do shareholders have any questions in relation to this item? I'll start with the room here. No questions. So James, anything online or verbal?

No further questions, Chair.

Thank you. As there are no further questions on today's formal agenda items, I will now close voting on all items of business shortly. But first, I'll briefly pause the meeting to give shareholders one final opportunity to submit your votes if you haven't already done so. Meeting will now pause for, let's say, 1 minute, so shareholders have the chance to finalize their votes. [Voting]