EML Payments Limited (EML) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by, and welcome to the EML Payments Limited Annual General Meeting. I would now like to hand the conference over to Mr. Peter Martin, Chairman. Please go ahead.

Good morning, and welcome to the EML Payments Limited 2021 Annual General Meeting. My name is Peter Martin, I'm the Nonexecutive Chairman of EML. Before I begin, I'd like to recognize the traditional owners of the land on which I speak, the Gadigal people of the Eora Nation, and pay my respects to elders past, present and emerging. I'd also like to acknowledge the traditional owners of the lands on which you all participate from. Thanks for joining today's meeting. Once again, we'll be completely online due to the COVID-19 pandemic and the related health concerns that have continued into 2021. I do hope that all of you care about -- those of you who care about keeping safe and well as the challenges of COVID-19 continue to impact us. It will assist to further curb the spread of the COVID-19 virus and encourage greater participation and engagement amongst our shareholders. I want to assure you that you will have the same opportunity to participate today as you would at a physical meeting. This includes being able to ask questions through the online platform or a teleconference facility to ask a question and voting using electronic voting card. I'll discuss these processes a little later, but I'd encourage you to download the virtual meeting online guide from EML's website if you haven't already done so. If we do experience any technical issues today, a short recess or an adjournment may be required, depending on the issue. If this occurs, I'll advise you accordingly. I'll now move to the formal business of the meeting. This meeting is being convened in accordance with the provisions of the Corporations Act. It's now after 10 a.m., the nominated time for the meeting, and I've been advised a quorum of shareholders is present. The meeting is validly constituted, and I'm pleased to declare the meeting open. I'd now like to take the opportunity to introduce my fellow directors joining us via audio link. The directors are available to answer any questions that apply to them: David Liddy AM, Deputy Chairman, Independent Nonexec Director and Chairman of the Remuneration Committee; Tony Adcock, Independent Nonexecutive Director and Chair of the Audit and Risk Committee; Melanie Wilson, Independent Nonexecutive Director and Chair of the Investment Committee; Mrs. Emma Shand, recently Director; and Tom Cregan, our Managing Director and Group CEO. Mr. Cregan, together with Group General Counsel, Paul Wenk; and company secretary, Sonya Tissera–Isaacs, will be joining us via audio link from Melbourne. We also have Rob Shore, Group Chief Financial Officer, joining us via audio link from Brisbane. Also joining us via audio link is Andrea Roy, audit partner of the company's auditor, Deloitte Touche Tohmatsu; and representatives of the company's share register, Link Market Services Limited, who are providing the virtual meeting platform today. Mr. Wenk will be reading out questions submitted by shareholders using the online platform later in the meeting. Today's meeting will occur in the following order. Firstly, I'll provide you with a brief update on the business over the past year. We'll then hear from our Group CEO, Tom Cregan, who will discuss the 2021 fiscal year and the year ahead in more detail. Thirdly, we have 6 resolutions for today's meeting. After the resolutions have been read and votes are being tallied, there'll be an opportunity for shareholders to ask questions of the Board or management. This year, holders will be able to ask questions online during the meeting, and we've introduced a new functionality to allow holders to dial in and ask questions via voice. To utilize this teleconference facility, holders must use their unique PIN provided to them by Link Market Services. If you don't have a phone PIN and would like to ask a question via the phone, please contact Link on 1800 990 363 now to get your PIN. [Operator Instructions] Voting on the resolutions will be conducted by way of a poll using the electronic voting card you should receive after clicking the Get A Voting Card button. I encourage shareholders who have questions to submit your questions as soon as possible during the meeting during (sic) [ using ] the online platform teleconference facility. We've received a number of questions prior to the meeting, most of which have been addressed during the presentations. If you have any trouble using the online platform or teleconference facility, please refer to the virtual meeting online guide on EML's website or please feel free to contact the help line shown on the screen. Today, you're going to hear 3 things: EML's business continues to grow very strongly, and our earnings guidance range has not changed. We're making solid progress in our remediation efforts within our Irish subsidiary, PCSIL, and expect the outstanding issues with the Irish regulator, the Central Bank of Ireland or CBI, to be resolved. Thirdly, our Sentenial acquisition opens up the world of open banking to EML, one of the most exciting opportunities in payments. We're obviously very disappointed with the large drop in our share price related to the CBI matter. In our view, the present valuation significantly understates the fundamental value and the upside potential of EML. EML has continued to grow rapidly across geographies and business units in 2021. Over 60% of our global revenue now comes from Europe, over 20% from North America and the balance from Australia. Over 85% of our revenues are recurring, which provides a very strong underlying platform for growth. Our financial results for 2021 have continued to be impressive with very strong growth of 42% in gross debit volume and 60% in revenues. Excluding PSF (sic) [ PFS ] regulatory and compliance costs, EBITDA increased 65% from the prior year. Operating cash flow for the fiscal '21 year was up 121% to a record $48.8 million. In April 2021, we signed an agreement to acquire Sentenial, a European leader in open banking and account-to-account payments. The acquisition completed on 30th of September this year and will be included in our results from 1st of October this year. Sentenial is a first mover in the high-growth area of open banking in Europe. Sentenial's highly regarded technology and product suite significantly expands our European footprint and can be leveraged across our other geographies over time. In fiscal year '21, we invested a total of USD 7 million in 2 U.S.-based fintechs, Hydrogen and Interchecks, under our Accelerator strategy. The business development team is working closely with both companies to integrate our products and services. Both programs are on track. You're aware that we're in communication with the Central Bank of Ireland relating to the PCSIL subsidiary of Prepaid Financial Services, which we acquired in fiscal year '20. In the first quarter of fiscal year '22, PCSIL has generated approximately 30% of our global revenues, and we expect that to continue. We're executing a comprehensive remediation plan in PCSIL to meet CBI's concerns. The plan is on track to be substantially completed by Christmas with any residual items in place by March 2022. The team in Ireland has established a positive working relationship with the CBI, and we expect that any residual concerns will be resolved. We've incurred significant one-off costs in PCSIL in fiscal year '21, and we'll carry increased overheads in terms of personnel and systems in future years to meet or exceed best practice and CBI requirements. Naturally, we'll be looking for other efficiencies to mitigate these costs. CBI has been concerned about the rapid rate of growth of PCSIL. We think that this can be managed, and we've already eliminated some legacy high-volume and low-margin programs under PCSIL and created significant headroom for growth at potentially better margins. The CBI issue is a salutary reminder of the heightened regulatory concern regarding digital payments that we and many of our peers are observing, particularly in Europe. The approaches to the management of risks are not necessarily consistent from one regulator to another, and we'll be taking this into close consideration as we plan our future growth strategy. In fiscal year '21, we launched the Change for Good program and converted 20% of our issued plastic cards to sustainable alternatives. This is just the beginning. EML is investigating a more comprehensive ESG program to meet our stakeholders' expectations. Over the past year, our management team and staff led by our CEO, Tom Cregan, have performed admirably under very trying circumstances. I'm delighted to welcome David Curneen to the senior management team as Chief Operating Officer reporting to Tom. David is a dual Irish and Australian citizen and is presently resident in London. Once again, I thank the members of the Board of EML for their support, dedication and commitment in a very challenging year. I also welcome Emma Shand to the Board. Emma joins us from a senior executive role at NASDAQ in the U.S. She brings to the Board extensive international experience, a strategic mindset and a high level -- and high-level technical knowledge. At EML, we believe that a dedicated commitment to our clients, our staff and the communities in which we operate will deliver superior results to our shareholders over the medium and long term. EML will continue to grow rapidly in the future. We operate in one of the fastest evolving industries in the planet, and you can expect us to take maximum advantage of the opportunities that this presents now and in the future. I'll now hand over to our Group CEO, Tom Cregan, to take you through the results for fiscal year '21 and talk more about the year ahead.

Good morning, and welcome to the 2021 Annual General Meeting of EML Payments. My name is Tom Cregan, Group CEO and Managing Director. And it's my pleasure to be speaking with you today. I acknowledge the Boonwurrung and Wurundjeri peoples, the traditional owners of the land from which I present today, and pay my respects to their elders past, present and emerging. I'd like to take this opportunity to remind shareholders to register for EMLCON4, which is tomorrow. We had over 1,000 watch the sessions last year. And there's no better way to understand EML, what we do, why we do it and who we serve than listening to our customers and understanding how we are helping them achieve their business goals and why they partnered with EML. As shareholders are aware and as outlined in our FY '21 full year results presentation, our strong set of financial results with growth across all metrics was significantly impacted by the one-off challenge associated with the Central Bank of Ireland investigation and their communications on May 13. In the 11 months leading up to that communication, the company have navigated 2 significant one-off challenges: The first being in managing the impact of COVID on our business, our people and the communities in which we operate in; and the second was Brexit, which necessitated the movement of our European programs from the U.K. to Ireland. The Brexit process was challenging given the significant uncertainties inherent in the Brexit deal that existed until late in 2020, which required our team to be highly agile and efficient in order to minimize any negative impact to our customers and their cardholders and, ultimately, to our shareholders. I would like to think that we have demonstrated to shareholders that whilst these situations, be they the CBI, Brexit or COVID, are disruptive, and we would rather them not occur, our job when they do occur is to focus on resolving the issue whilst continuing to execute our growth strategy so the company can continue to grow for the next 10 years as it has for the last 10. And I'm confident that the CBI issue will be resolved without long-term detrimental impact to the company. As Slide 10 outlines, we operate within a massive global payments industry. And when you look at Slide 11 and see forecasted open banking CAGRs in the range of 10% to 50% a year, we have a thematic which supports long-term growth, driven by constant innovation. Looking at our financial results on Slide 12 and 13. Excluding provisions made for the CBI event, EML had a strong year with GDV up 42% to $19.7 billion, revenue up 60% to $194.2 million, underlying EBITDA up 65% to $53.5 million, underlying NPATA up 54% to $32.4 million and operating cash flow up 121% to $48.8 million. We also signed 121 contracts for new programs with 85 of those in the GPR vertical, and we implemented 144 programs with 95 of those being GPR programs. And from a business development perspective, we ended the financial year with 313 deals in our pipeline, which we believe represents potential GDV in years 3 to 4 postlaunch of approximately $10.5 billion. Our historical win rate for new business is approximately 40%. So when we show our pipeline, it isn't to suggest that we will win every deal. In other words, if our pipeline includes -- indicates potential GDV in year 3 to 4 of $10.5 billion and our win rate is 40%, then we would expect to achieve 40% of that in 3 to 4 years as the new programs mature and scale, which at our average historical GPR yield would generate an incremental $40 million to $50 million in revenue in 3 to 4 years. It is a strong result, which we were proud of. Obviously, it has been affected by the CBI issue, where we took an $11 million -- $11.5 million one-off charge, which included provisions for remediation and advisory services related to remediation and a provision for potential fines, reducing EBITDA to $42.2 million versus our underlying EBITDA of $53.5 million. It's worth noting that the $42.2 million is still up $10 million or 30% on the prior year. On Slide 14, we show our unaudited results for the first quarter of FY '22, which are as follows: GDV excluding Sentenial, which didn't close until October 1, was $5.5 billion, up 14% compared to the prior comparative period; revenue of $52.4 million, up 29% on the prior comparative period; gross profit of $34.4 million, up 20% on the prior comparative period; underlying EBITDA of $11.2 million, up 11% on the prior comparative period. Overheads were $23.2 million, up 24% on the prior comparative period; and underlying NPATA of $4.6 million, up 41% on the prior comparative period. Revenue growth was excellent despite our temporary inability to launch new programs in Europe associated with our PCSIL licensed entity, which talks to the organic growth rates that we experience in the business as programs mature and GDV expands. The earnings contribution from our increased revenue and gross profit was largely offset by our increase in overheads. Some of those overheads include employee costs and the cost of new resources in Europe, recruitment costs for executives and nonexecutive directors, insurance increases related to significantly higher D&O policy costs, higher internal and external audit costs and a greater investment in IT. At a segment level on Slide 15, the GPR segment increased GDV by 19% over the prior comparative period with margins flat and an increased revenue yield. We launched the Northern Ireland stimulus program, our largest government stimulus program, at 1.4 million cards at GBP 140 million in GDV, following on from the GBP 10 million Jersey government stimulus program. And we saw increases in GDV in our Salpac/Payroll and gaming segments. The G&I segment increased GDV by 24% over the prior comparative period. And as we head into the peak holiday season, where we have historically seen incremental GDV of $400 million, translating into revenue of circa $24 million and gross profit of circa $19 million. Based on what we've seen in October, we're seeing GDV recover to FY '20 levels in most countries with the exception of the U.K., down approximately 12% and Germany down approximately 30%. GDV in the Digital Payments segment increased 8% versus the prior comparative period. We launched Buy Now Pay Later programs for Humm and Laybuy, which we put into this segment. And of course, we closed the Sentenial acquisition on October 1, having received change of control approvals from the FCA in the U.K. and the ACPR in France. Moving on to Slide 16. We provided guidance for the FY '22 year in August earlier than in previous years due to the financial impact the CBI matter was projected to have on our business in FY '22 and the market expectations at that time. That original guidance was GDV of $93 billion to $100 billion, revenue of $220 million to $255 million, EBITDA of $58 million to $65 million, NPATA of $18 million to $34 million and operating cash flow conversion rates of 80% to 90%, which was 87% in FY '21. The assumptions underpinning our guidance were that G&I volumes in our malls would improve back to FY '19 levels, the last year that wasn't COVID impacted; FX rates would be neutral; provisions for remediation costs would be sufficient to cover the actual costs; an increase in our compliance cost in our European business of $3.5 million; an increase in general overheads, including insurance costs, which rose by more than $1 million year-on-year, audit fees and head count; neutral interest; and the consolidation of Sentenial from October 1, including our planned investment of $2.5 million and a projected EBITDA between 0 and a negative $3 million. As you'll see, we have tightened the revenue range to be between $230 million and $250 million, and we have kept our underlying EBITDA guidance between $58 million to $65 million in place. As in all prior years, the biggest swing factor in our first half and full year results will be our mall sales volumes in Q4, given $19 million of incremental gross product contribution is derived from seasonal volumes. And within that, it's the peak 2 weeks leading up to Christmas which are critical. In FY '20, shareholders will recall that we lost most of that last 2 weeks, given large-scale retail lockdowns across North America and Europe in December. That impact was offset by higher breakage. And whilst it's possible that lockdowns or restrictions could be imposed in certain countries, our assumption is that this will not occur and that year-to-date GDV trends, where we are comfortably ahead of the same time last year, will continue but with breakage rates returning to historical levels. We expect to see increased overheads in the second half with the annualization of salaries from new hires, particularly in Europe. But we have opportunities for upside that we think will offset that, including improved treasury yields in the second half subject to regulatory approval, improved dormancy fees on European GPR programs, expired e-monies in the United Kingdom associated with our injection of GBP 14 million, circa AUD 27 million, of funds in August 2021 based on a historical safeguarding audit, which will unwind over the coming years as both revenue and EBITDA; and savings on third-party processing costs as more materially significant programs transition across to the TRACE platform. We feel that the basis for maintaining our FY '22 underlying EBITDA is sound. We have excluded certain revenues from our forecast related to new business launches in Europe because of the uncertainty that surrounds that. But if that was to be resolved favorably, then that would represent some additional upside. Moving on to Slide 18 and our regulatory update. EML has been working constructively with the CBI in relation to regulatory concerns it raised in May about our subsidiary, PCSIL. Our advisers in Ireland understand Ireland's unique regulatory landscape and are accustomed to dealing with the CBI, which regards e-money institutions as inherently high risk and expect these institutions to have very strong AML and CTF frameworks in place to mitigate this risk. As outlined in August and reiterated today, the Central Bank of Ireland has not identified any instances of financial crime, AML or CTF events, nor deficiencies with respect to safeguarding, capital adequacy or solvency measures. The remediation plan that we have committed ourselves to is focused on our control frameworks. And it is the position of the Central Bank that unless control frameworks are to their expectation, then an unacceptable risk of AML/CTF exists. PCSIL has completed 45% of the Level 1 tasks in the remediation plan as of the end of October and is well advanced on remaining items. It's provided 3 detailed updates to the Central Bank and will continue to provide monthly progress updates through to completion. As advised to shareholders on October 7, the company received a second minded-to letter referring to material growth and program limits. The PCSIL Board responded to the CBI in writing on the 28th of October and as yet does not have a formal response. The Board of PCSIL continues to engage with the CBI and will update investors when we have sufficient certainty with regard to next steps. What we can provide certainty on is that our focus to implement the remediation plan as quickly as possible is unchanged. On the business development front. In Q1 FY '22, we signed 23 contracts and launched 64 programs and ended the quarter with 114 programs in implementation across our operating regions. Of those 114 programs in implementation, 36 are delayed by the CBI issue. It's important to note that a single contract can result in multiple program launches that generate GDV and revenue growth. For example, our contract with the Home Office in the United Kingdom launched with the Aspen program in May and a second program related to that program launched in the first quarter of this financial year. The programs we support for local market authorities in the United Kingdom might launch with one program, but over time, those are extended. And during COVID-19, we have seen new programs launch supporting funding for mental health, domestic violence and targeted welfare payments. Our incentive gift card partners have customers they sign that launch multiple programs with them. So whilst the incentive partner is one contract to EML, that can lead to multiple programs that drive GDV and revenue growth. The drivers of GDV growth and, therefore, revenue growth are multifaceted. It's the organic growth that we see in programs that are in market, which scale over time, new programs launched with existing customers and the contribution from new customers. And if you look at our projected year 3 to 4 GDV from our pipeline, that's where our confidence comes from in forecasting future GDV growth. Slide 20 takes us into why we believe open banking will be a significant opportunity for EML and leads into 3 new customers that were signed recently. Slide 21 is critical to understand because there are 2 components to open banking: The sending and receiving of real-time payments and the sending and receiving of real-time customer data. When you think of real-time payments, you look at Slide 22, which is a customer pushing funds to a gaming company direct from their bank account instead of via a credit card, or Slide 23, which allows an individual to set up recurring payments instead of the pain of setting up a direct debit payment and then the difficulty in canceling this payment down the track. When you think of data, you look at Slide 25 and think about consumer lenders who need real-time information, when you are paid, how much you are paid, other indebtedness you have and so on, before they can decide how much to lend. And then you marry that up with our GPR capabilities, and you have an exciting customer value proposition. For example, our customers in the Buy Now Pay Later space, we can support -- we do support in-store and online payment solutions today. The Buy Now Pay Later providers could use our open banking functionality for pulling funds from their customer. And they can use open banking to identify upfront if the customer is a legitimate customer or represents a higher credit risk. And they can factor that into their own unit economics. Or a lender using open banking data to determine how much it wants to loan to a customer and having us provision that loan instantly through a digital wallet on their phone. That's the power of the combined business and why we acquired Sentenial, but success won't come from osmosis. It will come from the work of our teams building this out in Europe and, ultimately, across all of our regions. The work of combining the Sentenial platform with our TRACE platform has commenced, giving us one new digital payments platform supporting prepaid and open banking in Europe. TRACE can then be multi-instanced in the cloud and will, within a matter of years, give us one global prepaid and open banking platform, which was the ultimate vision of Project Accelerator, providing customers with a feature-rich, fully embedded payment solution via a simple, single touch point. On Slides 29, 30 and 31, we showcase 3 of our prepaid contracts that we signed in the first quarter. The first is Banco Sabadell, a Spanish bank that we have contracted with to provide a prepaid digital wallet solution called Nomo. Banco Sabadell was established in 1881 and is one of the largest banks in Spain, operating in 20 countries, including the United Kingdom and Mexico. Flexischools is a new customer who has an established and successful business in Australia providing payment services in schools and will be launching a physical and digital wallet solution to help children better manage their money. And BetMakers will be familiar to many of you and is an established gaming business that is using our technology to launch a payout card in Australia. And we're exploring payment opportunities in the North American gaming market. And finally, on Slide 32, we can highlight 3 partnerships that we're excited about from a distribution perspective. Seamless is the brand we have selected for payments that will be made incorporating card payment technology from EML and noncard payments from Interchecks, one of our FINLABs investments. The second is Hydrogen, our second FINLABs investment, which went live yesterday with our first customers and payments. Dozens of companies have gone through our issuing bank approval process. And we expect many more programs to go live in the coming months, many of which are early-stage fintech businesses. And we have completed an integration with AptPay, a Canadian-based payment business that has incorporated our card payment technology. And that market launch occurred recently at Money20/20, supporting card and noncard payments in Canada. All are aligned to the vision of Project Accelerator. We're always both excited and grateful that these companies are trusting us to be their payments technology partner, and I look forward to providing further updates in due course. Thank you for your attendance today. And with that, I'm happy to hand you back to the Chairman who will take you through the resolutions and invite shareholders to submit questions online or via the teleconference facility.

Thanks, Tom. We now move to the formal part of today's proceedings. And after this, we'll address any general shareholder questions for the Board, Group CEO, audit partner or the Group Chief Financial Officer. For resolution-specific questions, we're going to answer those as we move through each of the resolutions shortly. And I propose that the order of taking questions will be as follows: First, from any holders who have asked a question online via text; and secondly, from any holders who are using the teleconference facility via voice. The notice convening this meeting was dated 14th of October 2021 and made available online to all shareholders of the company at that time. The matters requiring consideration today are outlined in detail in the Notice of Meeting. Unless there are any objections, I'll take the Notice of Meeting as read. We have 7 items on the agenda today for shareholders to consider. Six of these are in the form of resolutions. The resolutions will be displayed on the screen. EML's share registry provider, Link Market Services, will conduct the voting by way of poll, and Matt Foster of Link will act as returning officer. Votes will be counted after the end of the meeting and results published on the ASX and EML's website. Shareholders can cast their vote using the electronic voting card received after validating their online registration. To validate registration, you'll be asked to enter your securityholder reference number, that is your SRN, and you'll also need to enter your postcode if you're in Australia or country if you're outside Australia. To then cast your vote, click the Get Voting Card button if you're intending to vote. You can finalize and submit your vote up to 5 minutes after the end of the meeting. The company has received a number of proxy and direct votes on each of the resolutions. The votes already cast will be set out on the slides shown on each resolution. On my screen, I don't have the actual valid number of proxies shown. So I'll have to put this on pause and get the actual numbers for you.

Chairman, the valid proxy and direct votes have been received, representing 1 million -- sorry, 188,215,805 shares, which equates to 50.4% of voting shares. Shareholders have appointed the Chair of today's meeting, that is you, as proxy for approximately 166,213,326 shares voting either for or against or with discretion for all resolutions.

Thank you very much. Perhaps I can repeat that. Shareholders have appointed me or the Chair of today's meeting as proxy for 166,213,326 shares. And valid proxies and direct votes have been received for 188,215,805 shares, representing 54% of the voting shares. As indicated on the proxy form and in the Notice of Meeting, my intention as Chair is to vote all discretionary or undirected proxies held by me in favor of each resolution. As I said earlier, shareholders can submit written questions during the meeting by clicking on the Ask A Question button or via the teleconference facility. To ensure written questions reach us in time, I remind you to please submit them as soon as you can. Any general questions submitted online will be addressed after formal business is completed. Questions specific to particular resolutions will be answered when we read the relevant resolution. If we receive a number of similar questions on a single topic, we will cover these as one. If we weren't able to get through all the questions today or if there are specific questions better addressed on an individual basis, we'll respond to them after the meeting. The first item of business of today's meeting deals with the presentation of the annual financial report of the company for the financial period ended June 30, 2021, together with the declaration of the directors, the directors' report, the remuneration report and the auditor's report. No resolution is required to be moved in respect of this item. However, shareholders are now invited to ask questions and make comments on the accounts and on the business operations and management of the company. Shareholders may also ask the company's auditor, Andrea Roy of Deloitte Touche Tohmatsu, questions relevant to the conduct of the audit, the preparation and content of the independent audit report, the accounting policies adopted by the company in relation to the preparation of the accounts and the independence of the auditor in relation to the conduct of the audit. I now invite shareholders to submit any questions regarding the financials, and I'll pause for roughly 10 seconds to allow enough time to receive them from you and to check whether any questions were received. Paul, are there any questions on the financial statements?

There are no questions, Mr. Chairman.

Operator, are there any questions on the financial statements via the teleconference facility?

No questions on the teleconference facility, sir.

If there are no questions, I'll move to the resolutions to be considered at today's meeting. Resolution 2 deals with the remuneration report. I put to the meeting that shareholders consider and, if in favor, to pass the following advisory resolution under Section 250R(2) of the Corporations Act, that the remuneration report for the financial year ended 30 June 2021 be adopted. Proxy and direct votes received in respect of this resolution are displayed on the screen. Again, I'd like to invite shareholders to submit any questions in relation to this resolution and pause for roughly 10 seconds and then check whether any questions were received. Paul, are there any questions on the remuneration report?

Mr. Chairman, there was one statement regarding receipt of an update in relation to the CBI matter. An update was provided in the course of your main address and also the CEO's presentation. There are no questions.

Thanks, Paul. Operator, are there any questions on the remuneration report via the teleconference facility?

No questions on the teleconference, sir.

If there are no questions, I now propose resolution as set out in the Notice of Meeting and put the motion to the vote. Please cast your vote, and I'll pause for a few seconds. And we'll then move on to the next resolution concerning the election and reelection of directors. [Voting]

We'll now move on to the next resolution, resolution 3a, reelection of Nonexecutive Director, Mr. David Liddy. I put to the meeting that shareholders consider and, if in favor, to pass the following resolution as an ordinary resolution, that Mr. David Liddy, who retires by rotation in accordance with rule 3.6(c) of the company's constitution and Listing Rule 14.5 and being eligible, offers himself for reelection. The Board recommends Mr. Liddy to you as an EML director and unanimously supports his reelection. Mr. Liddy will not vote on this matter. Proxy and direct votes received in respect of this resolution are displayed on the screen. Again, I'd like to invite shareholders to submit any questions in relation to this resolution, and we'll pause for roughly 10 seconds. Paul, are there any questions concerning resolution 3a?

No questions, Mr. Chairman.

Operator, are there any questions on resolution 3a via the teleconference facility?

No, Chair, there are no questions.

If there are no questions, I now propose resolution 3a as set out in the Notice of Meeting and put the motion to a vote. Please cast your vote, and I'll pause for a few seconds. And we'll then move along to the next resolution. [Voting]

We'll now move on to the next resolution, resolution 3b, election of Director, Ms. Emma Shand. Resolution 3b deals with the election of Ms. Emma Shand, that Ms. Emma Shand, who was appointed a director on -- in October 2021, retires in accordance with rule 3.3 of the company's constitution and Listing Rule 14.5 and being offered -- eligible, offers herself for reelection. The Board recommends Ms. Shand to you as an EML director and unanimously supports her election. Proxy and direct votes received in respect of this resolution are displayed on the screen. Again, I'd like to invite shareholders to submit any questions in relation to this resolution, and we'll pause roughly -- for roughly 10 seconds. Paul, are there any questions concerning resolution 3b?

No questions, Mr. Chairman.

Operator, are there any questions on resolution 3b via the teleconference facility?

No, Chair, no questions on the audio.

If there are no questions, I now propose resolution 3c (sic) [ 3b ] as set out in the Notice of Meeting and put the motion to vote. Please cast your votes, and I'll pause for a few seconds. And we'll then move on to the next resolution. [Voting]

I'll now move on to the next resolution, resolution 4, grant of short-term incentive options to Chief Executive Officer and Managing Director, Mr. Tom Cregan. Resolution 4 deals with the approval to grant short-term incentive options to Group CEO, Mr. Tom Cregan. I put to the meeting that shareholders consider and, if in favor, to pass the following resolution as an ordinary resolution, that approval is given for the company to grant to the company's Managing Director and Group Chief Executive Officer, Mr. Tom Cregan, 92,202 options under the EML Employee Equity Incentive Plan, which is a legacy plan, on the terms set out in the explanatory notes to this Notice of Meeting. Proxy and direct votes received in respect of this resolution are displayed on the screen. Again, I would like to invite shareholders to submit any questions in relation to this resolution, and we'll pause for roughly 10 seconds. Paul, are there any questions concerning resolution 4?

No questions, Mr. Chairman.

Operator, are there any questions concerning resolution 4 via the teleconference facility?

No, Chair, no questions.

If there are no questions, I now propose resolution 4 as set out in the Notice of Meeting and put the motion to vote. Please cast your vote, and I'll pause for a few seconds. And we will then move on to the next resolution. [Voting]

I'll now move on to the next resolution, resolution 5, approval of the EML Payments Limited Rights Plan. Resolution 5 deals with the approval of the EML Payments Rights Plan. I put to the meeting that shareholders consider and, if in favor, to pass the following resolution as an ordinary resolution, that approval is given for the purposes of Listing rule 7.2, exception 13, and for all other purposes for the EML Payments Limited Rights Plan and any grant of rights issued under the plan. Proxy and direct votes received in respect of this resolution are displayed on the screen. Again, I would like to invite shareholders to submit any questions in relation to this resolution, and we'll roughly pause for 10 seconds. Paul, are there any questions concerning resolution 5?

No questions, Mr. Chairman.

Operator, are there any questions concerning resolution 5 via the teleconference facility?

No questions via teleconference facility, Chair.

If there are no questions, I now propose resolution 5 as set out in the Notice of Meeting and put the motion to vote. Please cast your votes, and I'll pause for a few seconds. And we'll then move on to the next resolution. [Voting]

I'll now move on to the next resolution, resolution 6, approval of the grant of long-term incentive options to Chief Executive Officer and Managing Director, Mr. Tom Cregan. Resolution 6 deals with the approval to grant long-term incentive options to Group CEO, Mr. Tom Cregan. I put to the meeting that shareholders consider and, if in favor, to pass the following resolution as an ordinary resolution, that approval is given for the company to grant to the company's Managing Director and Group Chief Executive Officer, Mr. Tom Cregan, up to 254,569 performance rights under the EML Payments Limited Rights Plan on the terms set out in the explanatory memorandum to this Notice of Meeting. Proxy and direct votes received in respect of this resolution are displayed on the screen. Again, I'd like to invite shareholders to submit any questions in relation to this resolution, and we'll roughly pause for 10 seconds. Paul, are there any questions concerning resolution 6?

Mr. Chairman, there's one question concerning resolution #6. The question comes from shareholder, Mr. [ Malcolm Abercrombie ]. I'll read the question. "Why are the shareholders, owners of EML, not receiving additional shares to compensate our loyalty for the woeful share price that [ staff have ]?" That's the end of the question.

Well, perhaps I can address that question. Clearly, the share price is -- hasn't been good. However, when we incentivize our management team, we look at their longer-term performance and reward them accordingly. Shareholders are shareholders, and we're not in a position to award extra shares to our shareholders. But we are in a position to make sure that we incentivize our management team accordingly. And we do look very carefully at, obviously, the performance metrics and the way that the team has performed. And to be frank, we believe that the management team has performed an excellent job under very difficult circumstances over the last 2 or 3 years. So hence, we will continue to award appropriate shares subject to the team meeting required performance metrics.

There are no further questions, Mr. Chairman.

If there's no further questions, I now propose resolution 6 as set out in the Notice of Meeting and put the meeting to a vote. Please cast your votes, and I'll pause for a few seconds. And we'll then move on to the next resolution. [Voting]

Mr. Chairman, just before shareholders cast their vote, could you please check whether there are any questions on the audio line?

Yes. Are there any questions on the audio line, operator?

There are no questions on the audio line, Chair.

Okay. Thank you. I'll now move on to the next resolution. I think that brings to the end the reading of resolutions and any questions on them. I remind you that voting is open for a further 5 minutes after the close of the meeting. I'd now like to invite shareholders to ask any general questions of the Board.

While questions received during the meeting are being collated, we'll address some questions asked prior to the meeting. Paul, what is the first question?

Mr. Chairman, there is one statement and no questions. The statement comes from shareholder, Mr. [ Malcolm Abercrombie ]. I'll read the statement. "There hasn't been no ASX update on the investigation into the conduct surrounding EML Payments Limited. Maurice Blackburn has decided not to proceed further with our investigation for those who purchased EML Payments shares between 11 November 2019 and 18 May 2021." That's the end of the statement. I'll check for any questions that have been received while I was reading that. There's one question, Mr. Chairman, that's come in. It's from shareholder, Mr. [ Peter Cameron ]. I'll read the statement -- sorry, it's a question. "In regards to the CBI issues, is there any opportunity to claim on warranties that may have been provided from the business that was acquired?" And that's the end of the question.

Paul, I think that's an appropriate question that possibly you could answer as our General Counsel.

Absolutely. As shareholders will be aware from the releases made at the time we acquired the PFS business and following our announcement on the 19th of May this year in relation to the CBI matter, the share purchase agreement in relation to the acquisition contains customary warranties and indemnities. And the potential for any claims against the sellers in that regard is something that EML is looking at closely. For reasons of confidentiality as regards our obligations and [indiscernible] to say more than that other than it's certainly something that EML is looking at closely.

Thanks, Paul. Operator, can you confirm if you've received any questions via the teleconference facility?

No questions received via the teleconference facility, sir.

There being no further questions, I'd like to thank those who've submitted or asked a question. I'd also encourage shareholders to direct any questions or suggestions to the executive team at any time. I know they're more than happy to assist shareholders in understanding more about EML. That brings us to the end of the Annual General Meeting for 2021. In a moment, I'll formally close the meeting. If you're intending to vote on the formal business of the meeting, you should now finalize and submit your votes, as voting will close in approximately 5 minutes' time. As I mentioned earlier, the results of this meeting will be released on the ASX once the votes have been counted after the meeting. I'd like to thank -- to take this opportunity to thank EML's committed and loyal stakeholders, including the Board of Directors, our staff, our clients, our investors and the communities in which we operate around the world for their continued support. I'd also like to thank the team who has put so much effort into preparing today's meeting. And on behalf of the Board, I'd also like to thank everyone for their online attendance and participation at today's virtual meeting. I now declare the 2021 Annual General Meeting closed. Thank you.