Evoke plc (EVOK) Earnings Call Transcript & Summary

Good morning, and welcome to the 888 Holdings plc Annual General Meeting. [Operator Instructions] I'd now like to hand over to Lord John Mendelsohn, Chairman. Good morning, sir.

Good morning. I am Lord Mendelsohn, Executive Chair of 888 Holdings. It is now 9:00 in the morning here in London, and I'm delighted to welcome you to the 2023 Annual General Meeting. I'm also very pleased to welcome shareholders who have chosen to follow the proceedings over the online Investor Meet Company platform. Shareholders are invited to submit any questions over the online platform. We will aim to respond to questions relevant to the business of the meeting and those which have been submitted in advance. Shareholders not able to attend in person or wishing to vote at the meeting have been strongly encouraged to do so by completing a form of proxy or a form of direction as appropriate. And again, just a reminder, shareholders are not able to vote over the online platform. I would like to introduce you to my colleagues here today to Yariv Dafna, the Chief Financial Officer; Mark Summerfield, an Independent Non-Executive Director; Andria Vidler, an Independent Non-Executive Director; and Ori Shaked, a Non-Executive Director. The business of the meeting is set out in the notice of the Annual General Meeting and with your consent, I would like to take the notice of meeting as read. Good. Thank you. I will now explain the procedures for dealing with today's business. During the meeting, resolutions will be proposed before they are put to the meeting. Any questions from the floor must be asked when the business is on the table. We will respond to questions asked over the Investor Meet Company platform and which are relevant to the business of the meeting at the time of reading the relevant resolution. Indeed, people should be aware that at any time and in advance, questions can be submitted through the platform. Only shareholders can ask questions. The meeting can only consider matters detailed in the notice of meeting. In accordance with Article 102 of the company's articles of association, I as Executive Chair will enforce all resolutions put to the meeting will be decided by poll. Only shareholders or their proxies may vote, and the scrutineer today will be the Company Secretary, Elizabeth Bisby. In accordance with Article 109 of the company's articles of association, every shareholder should have one vote for each share of which they are the registered holder. If shares are in joint names, then only the first named shareholder may vote. Regarding shareholders who have sent a form of proxy to the company's registrars appointing me to vote on their behalf, I will vote on each motion in the manner instructed on the forms of proxy or when the form is left blank, at my discretion. Votes cast will be verified against the register of members and the results of each poll will be announced as soon as possible and will be published on the company's website. The necessary quorum being present, I now declare the Annual General Meeting open. The first item of business is to receive the annual report and accounts 2022. I now call upon Angelique Linares on behalf of E&Y to confirm the contents of the report of the auditors to the members as set out in the annual report and accounts.

I confirm.

Thank you. The report and accounts in respect of the year ended 31st of December 2022 have been circulated and made available to members for the statutory period. I will address any shareholder questions on the report and accounts. There being no further questions, I now propose as an ordinary resolution that the annual report and accounts for the period ended 31st of December 2022 and the reports of the directors and auditors thereon be and are hereby received and approved. Members present may now vote. [Voting]

Very good. We now move to the remuneration report, other than that part containing the remuneration policy. And I remind shareholders that the remuneration report has been prepared on a voluntary basis, and I open the floor for shareholders' questions on this. Are there any questions? There being no further questions, I propose as an ordinary resolution that the remuneration report other than the part containing the remuneration policy contained in the annual report and accounts 2022 be and is hereby approved. Members present may now vote. [Voting]

Thank you. Now on the election and reelection of directors. As required by the articles of association of the company, all the directors are retiring and standing for election or reelection this year. These are Resolutions #3 to #10. I will address any shareholder questions on the election or reelection of directors. Are there any questions? There being no further questions, I propose the election or reelection of each of the directors set out in the notice of meeting, each as an ordinary resolution. And that I, John Mendelsohn, Anne de Kerckhove, Mark Summerfield, Limor Ganot and Yariv Dafna are recommended as directors by the Board be and are hereby reelected as directors of the company; and that Andrea Gisle Joosen, Andria Vidler, and Ori Shaked, recommended as directors by the Board be and are hereby elected as directors of the company. The next matter is Resolution #11, the reappointment of the auditors, and this is the resolution that Ernst & Young LLP and EY Limited Gibraltar be and are hereby reappointed as auditors for the purposes of meeting the company's statutory requirements. I open the floor for any shareholder questions relating to this. There being no further questions, I propose the passing of Resolution #11 to reappoint Ernst & Young LLP and EY Limited Gibraltar as company's auditors as set out in the notice of meeting as an ordinary resolution of the company. Members present may now vote. [Voting]

The next matter is Resolution #12, the remuneration of the auditors and that the Audit Committee is authorized to agree the remuneration of auditors. And I will address any shareholder questions on this. There being no further questions, I propose the passing of Resolution #12 as set out in the notice of meeting to authorize the Audit Committee to agree the remuneration of the auditors as an ordinary resolution of the company. Members present may now vote. [Voting]

Resolution #13. It relates to the power to issue shares and it's to renew the director's authority to allot for relevant securities in line with U.K. institutional shareholder guidelines as set out in the notice of the meeting. This authority will expire upon the earlier of, one, the conclusion of the next Annual General Meeting of the company after the passing of this resolution and, two, 30th of June 2024. I note that the directors have no present intention of exercising this authority and that the company does not hold any shares in treasury. I will now take any shareholder questions on this. I propose the passing of Resolution #13 to authorize the Board to allot relevant securities as set out in the notice of meeting as an ordinary resolution of the company. Members present may now vote. [Voting]

Resolution #14 is to provide authority to directors to introduce a new long-term incentive plan. The principal terms of the proposed LTIP are described in Appendix #1 to the notice of meeting. And a copy of the planned rules have been available for inspection. I will address any shareholder questions on this now. Yes?

[indiscernible] Do you mind if I ask them?

Please.

Great. So my name is [indiscernible] and I'm attending on behalf of ShareAction, who are a shareholder in this company. My question relates to the company's approach to remuneration and the living wage as well as executive pay. With inflation running at [ 10.4% ] in February '23 and price of goods and services rising even faster and many low-income households were really buckling under the pressure of the cost [indiscernible] 7.2 million are going without basic needs and services, and 4.7 million are behind on rent. We're still projecting that [ Liechtenstein ] will continue to put [ pressure ] and in this context, how does [indiscernible] and it is therefore highly encouraging to read the annual report that 888 Holdings has increased the hourly pay rate of the retail staff to a minimum of [ GBP 10.90 ] reflecting the real living wage outside if [indiscernible] and paying a living wage is one of the most important steps a company [indiscernible] However, we're coming out with living wage with credits to the employer [indiscernible] guarantee a real living wage now and in future years. And you would be ensuring that both your directly employed and regular third-party contracted staff receive a real living wage as an income. In the current context, this is rarely pretty sure. Third-party contracted workers are often in low-paying roles such as cleaning and security, so particularly exposed to the rising [indiscernible] More and more companies are making this commitment. And 12,000 employers are now living wage accredited, [ 55 ] of which are in the FTSE 100. Investors too are keen to see companies taking steps. ShareAction's Good Work program who [ augments ] the coalition of institutional investors with GBP 3.7 trillion in assets under management versus [indiscernible] supporting a living wage and encouraging companies [indiscernible] this is not only because it's the right thing to do but also because it's been demonstrated that paying a living wage [ be it ] recruitment, staff relations, can increase commitment from employees. And so that [ proves ] to us that the company will consider demonstrating a commitment to your lowest-paid worker by becoming a living wage accredited employer. And relatedly, given the widening pay ratios within the company, it can have a negative impact on workforce motivation [indiscernible] show the strength in sending them a remuneration package for its incoming CEO.

Thank you very much for that question. I'm not sure. Was that heard adequately online? It would probably be helpful if I just took the last bit because we had a very good case made that was justifying the elements of the question. So the question centered on 2 particular ones, that would we become an accredited employer, an accredited living wage employer, and would we exercise a look at the pay ratios, restraints and other matters, when we set the payment for the incoming CEO. Thank you very much for those very important questions. And can I just first say that I'm very grateful that you noted that the pay arrangements that we put in for this year were particularly targeted to those people who would be most affected by some of the cost of living issues that are being faced by people in the company, particularly the density of the people we have in the United Kingdom. Whilst we do have a number of sites across the world with varying degrees of economic circumstance, there was a particular problem in the United Kingdom. We're very keen that our colleagues who work so well and so hugely extraordinary, so how well they work, that was properly acknowledged. So that is a very important part for us. I will certainly be happy to look into the situation about becoming an accredited employer. And I will take that forward, but I won't give an undertaking today. I haven't studied it, but I'd be happy to do that. And when it comes to the setting of the pay of the incoming Chief Executive, it will be commensurate with the type of person that we're facing. What that doesn't mean is that we have no regard to issues about inequalities or we have no regard to issues about widening pay gaps or other sorts of things. But we will certainly -- and the ambition that we have to have a Chief Executive that is fit for the future and for the long-term ambition of this company set that with regard to what that pay is. But we will not be blind to the issues that are affected around it and they come into play as a result of it. We will not be -- we will not ignore those, but we will not be setting it arbitrarily. We are clearly looking for someone of significance and quality, and that will be something which we will have to justify to shareholders later. So we'll be very conscious of it. But thank you very much for raising those questions. Are there any further questions?

There being no further questions, I propose the passing of Resolution #14 to authorize the directors to introduce the LTIP as set out in the notice of meeting as an ordinary resolution of the company. Members present may now vote. [Voting]

Thank you. I now turn to special business to be considered at the meeting. Resolution #15 seeks to authorize the company to make market purchases of its ordinary shares, subject to the conditions set out in the notice of meeting. This authority would expire upon the earlier of, one, the conclusion of the next Annual General Meeting of the company after passing this resolution and, two, 30th of June 2024. Same certain exemptions are set out in the notice. I note that the directors have no present intention of exercising this authority. I will address any shareholder questions on this. I propose as a special resolution, Resolution #15, to authorize the company to make market purchases of its ordinary shares as set out in the notice of meeting. Members present may now vote. [Voting]

Resolution #16 seeks to renew the general authority of the directors to allot certain equity securities for cash as if articles 19 to 26 of the company's articles of association did not apply to any such allotments. This authority would expire upon the earlier of, one, the conclusion of the next Annual General Meeting of the company after passing this resolution and, two, 30th of June 2024. Same certain exemptions as set out in the notice. And note that the directors have no present intention of exercising this authority. I will address any shareholder questions on this. I propose as a special resolution, Resolution #16, to empower the Board to disapply preemption rights as set out in the notice of meeting. Members present may now vote. [Voting]

Resolution #17 requests further shareholder approval by way of separate special resolution for the directors to allot equity securities for cash without first being required to offer such securities to existing shareholders and will expire on 30th of June 2024 or at the conclusion of the next Annual General Meeting of the company after the passing of this resolution, whichever is the earlier. I open the floor for shareholder questions on this. I propose as a special resolution, Resolution #17, to provide additional authority to the Board to disapply preemption rights as set out on the notice of meeting. Members present may now vote. [Voting]

The final resolution for today is Resolution #18, which request shareholder approval by way of a special resolution to amend the company's articles of association to change the U.K. address of the company stated in clause 4 of the document to the company's London office address. I will address any shareholder questions on this. I propose a special resolution, Resolution #18, to amend the memorandum and articles of association as set out in the notice of meeting. Members present may now vote. [Voting]

Ladies and gentlemen, that concludes the business of the 2023 Annual General Meeting of your company. I, therefore, declare the formal meeting closed. The results of each poll will be announced as soon as possible and will be published on the company's website. Thank you for joining us this morning and have a good day.

Thanks to the 888 Board for updating attendees today. Could I please ask attendees not to close this session as you will now be automatically redirected to provide your feedback in order that the Board can better understand your views and expectations. This will only take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the Board of 888 Holdings plc, we'd like to thank you for attending today's Annual General Meeting, and good morning to you all.