EVT Limited (EVT) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. It has gone 10 o'clock, and I'd like to welcome you to the Annual General Meeting of Shareholders of Event Hospitality & Entertainment. I'd like to also extend a warm welcome to our shareholders who are participating through our online meeting platform. There's a quorum present, and I declare the meeting open. The company has received 241 proxies, representing 134,990,806 ordinary shares or 83.7% of the issued share capital. I'd now like to introduce you to my colleagues on stage. From my right, Mr. David Grant.

Good morning.

Mr. Peter Coates, our Lead Independent Director.

Good morning.

Ms. Jane Hastings, our CEO.

Good morning.

To my left, Mr. David Stone.

Good morning.

And Patria Mann.

Good morning.

Friends, due to travel restrictions, our colleagues Valerie Davies and Richard Newton are not able to be here in person, but they are joining us today using the available technology. Good morning, Valerie.

Good morning, Alan. Good morning, everybody. It's pleasure to be with you.

Thank you. And good morning, Richard.

Good morning, Alan, and good morning everybody else.

Friends, we also have with us today in person and online a number of our senior executives. Ms. Tracey Driver from KPMG, the group's auditor, is also here today. A few procedural matters. In the event of an emergency during today's meeting, our cinema staff will direct those of you attending in person through the appropriate assembling point. Every effort has been made to ensure the meeting runs smoothly. However, if any technical issues arise and it becomes necessary to provide procedural information in respect of the meeting, updates will be provided on our website and also through the ASX. We will begin the meeting with addresses from myself and our CEO, Jane Hastings, then go through the formal proceedings, which this year comprises of 7 resolutions. The resolutions will be decided by poll. Voting on the resolutions is now open. For those of you attending using the online meeting platform, the voting icon will appear on the navigation bar. Once you click on this, the resolutions will appear on your screen. You can vote at any time during the proceedings until I declare the voting closed. You can also change your vote at any time throughout the proceedings. For those attending in person, you can fill in your voting card at any time during the meeting. If you need any assistance, simply raise your hand and one of the attendants will assist you. I will give a clear prompt later in the meeting to warn of the close of voting. Shareholders attending in person, please hand in your voting card at the end of the meeting to one of the representatives from Computershare. We will also answer questions and comments from shareholders later in the meeting. If you are attending online, we encourage you to start submitting questions and comments now, and we will address them later in the proceedings. If you have any difficulties in asking questions, please refer to the user guide, which can be accessed through your online platform. For those attending in person, I thank you for your attendance. You may also ask questions or make comment, if you have a blue or yellow card. Simply raise your hand when I start taking questions, and one of our attendants will be with you. This year, we will take questions and comments after all of the items of business have been presented. This includes questions directed to the auditor. For those of you in the room, this means that I will ask you to hold all of your questions and comments until later in the meeting rather than after each item. Rest assured you will be given a reasonable opportunity to ask questions and comments. However, to ensure that shareholders as a whole have a reasonable opportunity to be heard at today's meeting, I will, as your guide, ask you to limit your questions or comments to 2 and to be reasonably concise and limit the time of your questions. Questions and comments should relate to the items of business under consideration at this AGM. Friends, now I turn to the ordinary business. The first item of business deals with the financial statements of the group, the Director's report and the external auditor's report for the year ended 30th of June 2020. The statements and Director's report were approved at a meeting of the Board of Directors in August this year and are contained with the annual report, which has been sent to all shareholders. I have a pleasure in presenting these statements to you, and in doing so, would like to make a few comments on the group's activities. It's a pleasure to welcome all shareholders and visitors back to Event Cinemas for this Annual General Meeting of Event Hospitality & Entertainment and to also welcome those participating online. The conduct of this annual general meeting, with friends and colleagues joining us by technology as well as in person, is unique in the company's history. Before we discuss a year of extraordinary challenges for our business, I would like to briefly note a comment at the Annual General Meeting of Spencer's Pictures in 1919. The Chairman then, Arthur C. Cocks, quote -- pointed out that, "During the past financial year, power of theaters have been seriously affected by the influenza epidemic." Friends, the current challenges, though, facing the global economic cinema exhibition industry are unprecedented. We are, as ever, reliant on the supply of quality film content, particularly from Hollywood, and the major studios are reluctant to release big budget titles, whilst many cinemas in the U.S., in particular, are closed. A few titles have been released directly to streaming platforms. However, the blockbuster titles that bring audiences to cinemas in their droves, have been delayed and waiting for a broader exhibition release. We have invested in best practice COVID-safe environments, and there is much pent-up demand for our cinema goers to watch a great film at an Event cinema. I note that our company has endured for over a century through many challenging periods, and we are well placed to manage and respond to the challenges presented by COVID-19. The film lineup for 2021 underlines the great opportunity that lies ahead for those exhibitors that are able to navigate through the immediate period. To this end, I must reiterate the words from my late father who always maintained that the company's best days will forever lie ahead. I also firmly believe this comment. The 2020 annual report, which includes the financial statements for the year ended 30th of June, was released to shareholders in September. The group's total net loss after tax for the year was $11.4 million, whilst the normalized result after tax from continuing operations decreased 83% to $18 million. As foreshadowed in July, following the successful completion of our refinancing process to assist liquidity, the group did not pay a final dividend for the year ended the 30th of June and will not pay an interim dividend for the half year 31st of December this year. Future dividend payments will be the subject of Board consideration and approval, having regard to the relevant circumstances, including lender gearing relationship requirements and the group's trading performance. The group's total cash balance at the 30th of June was $67 million, with total debt outstanding of $488 million, which provides a significant headroom in terms of available liquidity following the overall increase in the group's debt facility to $750 million. Event has always prided itself on the strength of its balance sheet, which is underpinned by premium property holdings, and our strong balance sheet has assisted in securing the renewal and increase in our debt facilities. Your Board continues to review, assess and monitor appropriate capital management initiatives and strategies. This program is managed within the context of, and in the short term, ensuring adequate liquidity is available to meet the challenges presented by COVID-19, and in the medium to long term maintaining a strong balance sheet and maximizing sustainable and long-term earnings for shareholders. The group has made significant progress with the approvals process for major redevelopments of the properties located at 458 George Street and 525 George Street in Sydney. The stage 1 development application for the 525 George Street development, which included ground floor retail, a 7-cinema complex, a new 450-room Atura Hotel and Conference Center and 72 residential apartments was approved in May, with a design competition about to commence. The planned redevelopment for 458 George Street will integrate with the State and Gowing's buildings and include ground floor retail, an extension of a QT Hotel, a new commercial office tower -- and the new commercial office tower. Council approval will be sort in 2 separate development applications, one for the podium, including the retail and hotel components, and a separate application for the commercial tower. The group will consider appropriate funding options and structures for these major property developments. These include the potential involvement of development partners, where appropriate. I refer shareholders also to the recent release to the market of the property portfolio information that was presented by our management. The group has been guided by the third edition of the ASX Corporate Governance Council's Principles and Recommendations during the year, and the Corporate Governance statement has been published on the group's website. This statement sets out the corporate governance practices and procedures and should assist shareholders in understanding and appreciating the importance placed by the Board upon good corporate governance. The Board and committees of the Board remain committed to ensuring that the group's corporate governance practices are consistent with the principles and recommendations, the fourth edition of which will be applied for the year ended 30th of June 2021. Your Board also maintains a focus on appropriate remuneration policies and procedures. The details of this approach are dealt with in the annual report. In particular, the group's policies are designed to, as far as possible, ensure that remuneration packaging is reflective of an employee's duties and responsibilities and to enable the group to attract, motivate and retain high-caliber executives. In considering appropriate remuneration for senior executives, the Board resolved to implement a one-off recognition and retention award to recognize the additional effort required from the CEO and her executive team during the COVID response period and during the forthcoming recovery period, aimed at the importance of retaining the executives during this crucial period. The recognition and retention award for the CEO will be considered by shareholders later in the meeting. Ladies and gentlemen, in my 40 years as Chairman, I have never experienced more challenging conditions than we face today. COVID-19 has turned the world in which our businesses operate upside down. The return to normality for our cinema exhibition business is subject to global theatrical market conditions, and our Thredbo and Hotel businesses will continue to be subject to the relaxation of government restrictions. These critical factors at this stage are beyond our control. Your Board management continue to focus on optimizing the group's position so that it can effectively navigate through this period, and in the longer term, be able to take advantage of appropriate opportunities as they arise. I and the Board wish to acknowledge the outstanding efforts of the CEO, especially in the leadership shown in responding to the impact of COVID-19 in our operating businesses, which I am confident, which will provide a strong platform for the future. To the rest of our executive team and the group employees, I extend our thanks and appreciation for their collective and personal efforts. We are proud to have such a depth of experience and recognize the contribution you have made, which has been and will continue to be invaluable as we face the challenges ahead. There are difficult decisions that had to be made, and we have seen many of our valued employees leave us. And to them and their families, I express my appreciation for their past support. Friends, I'd like to also thank my co-directors for their efforts during the year. And in particular, thank you, our 8,000 shareholders, for your ongoing support. I'd now like Jane to present her address. Thank you very much. Jane?

Thanks, Alan, and good morning, everybody. There's no doubt the past year has been unprecedented period in the 110-year history of Event Group. From droughts to bushfires, from floods to COVID-19, we have and we continue to face challenges daily. I could not be prouder of how well our teams have responded and continue to step up to deliver shareholders the best possible results. We are challenge-fit, scenario-ready and agile, so we can pivot and face the challenging conditions as they continue to evolve. This in itself is a monumental achievement. As Alan mentioned, we have a strong balance sheet, underpinned by a valuable property portfolio. We successfully increased our debt facilities during this period to $750 million with the majority maturing in 2023. Our net debt at June 30 was $421 million. Safety and well-being remained the group's highest priority. We implemented best-in-class COVID-safe operating practices with advice from infectious disease experts. Our cinema customer satisfaction scores have improved significantly, with our Net Promoter Scores up 30 points in Australia and 14 points in New Zealand since we've reopened. This ensures that as COVID-19 government-mandate restrictions ease, our businesses are ready. Turning now to the results for the year ended 30 June 2020. Our normalized profit for AASB 16 interest and tax for the year was $34 million, down 78.5% on the prior year, principally as a result of the COVID-19 impact. Pre-COVID-19, we made solid progress on delivering against our strategic plan, achieving group revenue, EBITDA and PBIT growth. In fact, the adjusted EBITDA result was the second highest EBITDA result in the group's history for the period July to February. Then COVID hit and the government-mandated restrictions almost entirely wiped out revenue overnight, which was down $262 million before subsidies in the last 4 months of the financial year. We took swift and effective action to mitigate the impact on cash flow and profitability. We were proactive in developing operating models to deal with each phase of government restrictions and identified ways to innovate and take advantage of the scarce revenue sources. As an example, we initiated an active cost reduction program with all cost categories under review and participated in government subsidy arrangements, where applicable, all of which mitigated 53% of revenue decline for the COVID-19 period. The statutory loss for the year of $48 million after tax includes a number of individually significant items, principally impairment charges, including hotel property impairments, cinema impairments, and a number of impairments were also booked for the Village JV sites in Melbourne. The Entertainment Group delivered a strong pre-COVID result and has maximized efficiencies during the COVID period, which will deliver benefits for us into the future. For the period from July to February -- July '19 to February 2020, we achieved good revenue growth of 5.4% on the prior comparable period, and market box office performance July to February was the best result since the year ended 30 June 2017. Results from new initiatives during this period were exceeding expectations. And whilst admissions were relatively flat, all other key performance metrics were on growth, including average admission price, up 5%; a record spend per head was achieved in 7 of 8 months as we enhanced our food and beverage strategy. We also continued to deliver strong online revenue growth, up 19.4%. And our direct customer relationships remained exceptionally strong, with Cinebuzz representing more than 86% of online transactions in Australia. Our strategy was working, as demonstrated by the results. In New Zealand, revenue in the pre-COVID period was particularly strong, increasing 15%. The group outperformed the New Zealand market and achieved a record revenue and earnings result for this period, and all key metrics delivered strong growth. We had great momentum, and then COVID hit, resulting in government-mandated closures of cinemas in all of our markets. New operating models were developed and swift cost reduction actions were implemented. We have made solid progress against our entertainment strategy to maximize our assets by investing in fewer, better locations and innovating with our Cinema of the Future concepts by expanding our premium offerings at key locations across Australia and New Zealand. All of these initiatives were completed over the pre-COVID period, so the benefits were not fully reflected in the pre-COVID results. As part of our continuing strategy to improve our asset portfolio, we closed Mackay City cinema, exited leases at Cronulla and Manuka. And subsequent to year-end, we've also confirmed the closure of Adelaide City, Arndale and Townsville City, all of these cinemas that had been loss-making for many years. In relation to the Entertainment Germany division, the completion of the sale of the division to Vue is still in progress and is subject to the divestment of 5 remaining sites as directed by the Federal Cartel Office, the FCO. As recently announced, the sale process for the remaining 5 sites is well advanced with a shortlist of 3 parties, all of which have received in-principle approval from the FCO, subject to a final review and approval of the transaction documents. With the sale and purchase agreement -- whilst the sale and purchase agreement with Vue was conditional only on FCO approval being obtained, Vue has sought to renegotiate the terms of the transaction and put a pause on the divestment process for the remaining 5 sites. We remain in discussions with Vue and -- whilst continuing to reserve our full legal rights in relation to the transaction. In terms of performance for the Germany market, the pre-COVID period in Germany from July to February was very strong, with revenue increasing 15.3%. During this period, the overall German market experienced a solid recovery, with German market admissions up 15.9%. All key metrics in the German circuit were also favorable. All locations in Germany were closed in March 2020 as a result of German government directive to close cinemas in response to COVID-19. And as with our Australia and New Zealand divisions, immediate action was taken to reduce costs and efficiently maintain assets, with costs down more than 40%. Turning now to our Hotels and Resorts division. The result was also defined quite distinctively by 2 trading periods: the pre-COVID to February 2020 period and the COVID-19-impacted period March to June 2020. Looking at the pre-COVID-19 period. Despite the impact of Australian bushfires and restrictions on inbound tourism from China, which disrupted markets from December, the group traded well in the pre-COVID period, with revenue marginally down, adjusted EBITDA and PBIT slightly above the prior comparable period. Over this period, owned hotel occupancy increased 2.7 points, and revenue per available room increased 3.2%. We generated strong market share, trading ahead of many of the markets we operate in. Pleasingly, also our overall TripAdvisor rankings, how our customers rate our experience, also improved across the group. During the COVID period from March to June 2020, there was a deterioration in trading conditions as a result of the government-mandated travel restrictions imposed globally and throughout Australia and New Zealand. In response, we innovated and shifted our revenue strategy to focus on securing revenue from new market segments, including government quarantine business, work-from-hotel business for customers wanting to self-isolate, and our strong brands have benefited from weekend leisure business with the local drive market. The ability to secure revenue and introduction of new operating models enabled the group to keep all owned and the majority of managed hotels open in a manner that produced more favorable results than closing the hotels. Best-in-class COVID-19 programs were also designed for each brand. The restructuring undertaken during the COVID-19 period and the new operating model implemented are expected to deliver annual operating savings in excess of $3 million when trading recovers. We made good progress with our strategy to invest in priority assets, with upgrades completed to guest suites, shared spaces and the pool area at QT Gold Coast; guestrooms, suites and lobby at QT Sydney; additional meeting spaces at QT Melbourne; and the public areas, restaurant bar areas and pool area were also upgraded at Rydges Geelong. In addition, Rydges Capital Hill was closed in February due to the severe storm damage and recently reopened in September as Rydges Canberra after a multimillion-dollar refurbishment. We sold Rydges Townsville, but retained the property under a licensing arrangement. We also secured 2 other licensed hotels, Powerhouse Tamworth and Powerhouse Armidale. We were also successful in winning management contracts for Rydges Sydney Harbour, which was formerly the Holiday Inn at The Rocks; and Rydges Port Adelaide, a new 180-room hotel opening in 2022. We have, since that time, added 2 new hotels to our portfolio, including a management agreement for Rydges Formosa Golf Resort located outside of Auckland in New Zealand, and we've secured a license agreement for the Tank Stream Hotel in the Sydney CBD. QT Auckland, the tenth QT in the group, is planned to open in November with 150 rooms, and the property is looking fantastic. The hotel is well positioned in Auckland's Viaduct and offers a differentiated experience in the Auckland market. We will also be launching the Atura brand in the New Zealand market, rebranding the Thorndon Hotel as an Atura, and we are really excited to expand this brand into New Zealand. Now turning to Thredbo Alpine Resort. So many challenges have been faced over the past 12 months, from the direct threat of bushfires requiring a full evacuation of the resort to the heavily mandated COVID-19 restrictions in place in order to enable Thredbo to operate this snow season. Despite this, our team have been incredible at pivoting to exceed expectations throughout a very challenging period. We achieved a record revenue result in November and December driven by a 35% increase in mountain biking revenue, just before the bushfires closed the resort in early January. Second half results were negatively impacted by bushfires in January and February. However, we managed to open Thredbo for mountain biking after the bushfires in January and before pre-COVID in March. The demand for weekends in that period was immediate and broke records demonstrating how strong and fast recovery can be. Government-mandated restrictions delayed the opening of the 2020 snow season to 22nd of June, losing 3 weekends. Despite these headwinds, the normalized PBIT result was the third highest in Thredbo's history. We were also able to make good progress during the year on the Thredbo strategic plan focused on increasing capacity and improving the skier experience. This included the construction of the Merritts Gondola, Australia's first Alpine Gondola, which, despite challenges, was completed on time and on budget. We also enhanced the Dream Run, introducing snowmaking capabilities. Summer 2020 will see the continuation of the construction of a new Dream Run mountain biking trail. And we made great progress in the development for future lift replacements. I will now comment on the current year and our performance over the first quarter. Due to the continued impact of COVID-19 and government-mandated restrictions, the group's net loss for the first quarter after tax, including discontinued operations but before AASB 16, was $23.6 million. And group EBITDA, including discontinued operations but before individually significant items and AASB 16, was a loss of $6.9 million. Excluding discontinued operations, the group EBITDA was a profit of $15.6 million. Pleasingly, Property, Thredbo and our Hotels divisions all delivered EBITDA profit results, whilst Entertainment, solely due to the film lineup delays, resulted in EBITDA losses in each market. Thredbo, despite COVID-19 operating requirements and very poor winter conditions, I think it's been quoted the worst winter in '20 years, are restricting capacity by up to -- by more than 50%, achieved an EBITDA of $24.4 million, which was only 18% of prior winter. To achieve this solid result, the Thredbo offer included all products, services and pricing, was reengineered to ensure we are able to attract strong demand and maximize visitation for our commercial partners in the village and deliver a positive return for the group. These changes were implemented with an incredibly tight time frame and at the highest standard. We maximized available capacity in a COVID-safe manner, delivering a premium experience for customers, and yield was up 66.4%. These initiatives also resulted in a 1.5% EBITDA margin improvement on the prior comparable quarter. This was an exceptional result. The group's Hotels and Resorts division also pleasingly made a positive EBITDA contribution for the first quarter of $4.4 million. Our strategy and ability to secure scarce revenue opportunities is working. In Australia, the domestic market is also showing good levels of demand, and this has been particularly evident on weekends and in regional locations. The October long weekend was the busiest weekend for our hotels since January. In New Zealand, the market is showing stronger signs of recovery with good occupancy, around 70% for owned hotels, given no domestic travel restrictions are in place in the market. This was a solid result for our Hotels division, given state government interstate border closures, no international travel and no Trans-Tasman bubble eventuating in this quarter. We believe that being a local operator with strong local brands and marketing systems gives us a unique competitive advantage, and this has been evident in our market share results. In addition, our new operating models are mitigating the impacts, and we're gaining pleasing profit retention and recovery ratios recorded across the group. Our Property division delivered a first quarter EBITDA result of $2.7 million, down around 30% as a result of the impact of COVID-19 on rental income receivable from our tenants for certain properties. As Alan highlighted, we have made good progress on our 2 major developments projects, 458-472 George Street, and you're sitting in the 525 George Street property. The COVID impact has not delayed our progress on these projects. The group's Entertainment division result was impacted by -- in the first quarter by 2 main reasons. Firstly, the Victorian lockdown directly impacting our Village joint venture circuit, and secondly, a continued delay of film releases by major studios. As a result, EBITDA for the Entertainment Australia and New Zealand group was a loss of $12.8 million. However, I wanted to highlight some key facts. Now more than 85% of international markets have reopened, which is putting pressure on studios to supply product. Markets that have a strong supply of local content are recording better than pre-COVID attendances for local films. For example, Savage a local film in New Zealand, Eight Hundred in China, which had the best week since February 2019 last week. Just over the weekend in Japan, an anime film, Demon Slayer, achieved $44 million in a 3-day opening weekend, which was the biggest ever opening weekend for any film in Japan and Japan's history. In our markets, smaller films are being released, and they're exceeding expectations, such as After We Collided and Unhinged in Australia and New Zealand. The majority of these films released in the quarter have, therefore, exceeded pre-COVID estimates. All customer demographics have returned to the cinema, attending in a similar pattern to prior year, taking into account the number of films released. There was limited impact from the COVID-19 operating restrictions on box office performance due to our ability to program across multiple screens and the limited number of releases. Independent distributors have been leveraging this opportunity well. COVID-safe operations have been well implemented. And as I mentioned, our satisfaction scores were up 30 points in Australia and 14 points in New Zealand. Customers are spending more when they're coming to the movies. Our spend is up 30% in Australia and 11% in New Zealand, with an increased premium -- increased preference for the premium experiences up to almost 26% versus 21% in the prior comparable period. The data demonstrates that cinemas are lacking movies, not customers. Our group 3-year strategic plan and priorities remain unchanged as they were delivering results and will continue to deliver results when the COVID-19 government restrictions are lifted. However, parts of this plan are on hold until trading has normalized. This year, we are focused on being agile and able to pivot to deliver shareholders the best results in a restricted COVID-19 market. For the group and within each division, we remain focused on our 3 strategic priorities for each operating division. One, grow existing revenue, including ensuring COVID-safe operating procedures. We've enhanced our sales models and structures. We're continuing to innovate on our products, and we're very focused on yield management with fewer customers walking in the door. Two, maximizing our asset performance, including the divestment of noncore assets and the continued planning and preparation of our major property developments, whilst other major upgrade projects will be deferred until normal trading conditions return. And thirdly and very importantly, business transformation, including continuing to refine our new operating models, investing in our IT environment to drive further efficiencies and continued strict cost control. COVID-19 and government-mandated restrictions do make it impossible to provide an outlook, given the changes that are occurring on a daily basis. However, I will aim to provide some insight into each division based on what we know today. For Entertainment, looking ahead for cinema, studios have moved all major film releases that were expected in the remainder of the first half, with the majority of titles moving to the second half or later in 2021 as a result of the continued COVID-19 disruption in the U.S. market. At this point in time, whilst we are hopeful Wonder Woman 1984 will release in December, we are preparing our operations for no major releases through until the end of March. With no major releases, we are working to a better-than-closed operating model, screening second-tier films and sourcing alternate content to generate revenue. We are trialing more ways to generate revenue from cinema spaces, including arcade game options and venue hire. We also continue to refine our cost base, working with our landlords to find the best way to mitigate losses. Whilst the film lineup continues to move, the first half result will be an EBITDA loss in all the markets we operate in for Entertainment. We are prepared for the immediate period by actively managing all that can be controlled. As we stand here today, the 2021 calendar is shaping up to be one of the strongest, with so many blockbuster titles waiting to release, including Bond: No Time to Die, Fast & Furious 9, Jurassic World. There's 3 Marvel titles, Minions, Venom, Top Gun, The Batman. We couldn't write a better film lineup that's waiting to be released into the future. For Hotels in terms of trading, our operating models are ready for an irregular pattern of recovery due to the changing government mandates. Whilst we cannot predict one government will change travel restrictions, we believe that the Hotels group without -- with the success we've had in securing new revenue and our focused cost strategies, will breakeven or be EBITDA positive for the first half. In Thredbo, the positive feedback and result from the winter season strategies and the pent-up demand for leisure travel and activities all bodes well for Thredbo to continue to maximize its summer mountain biking revenues. For Thredbo, whilst we're performing exceptionally well under these restrictions, we're not going to return to pre-COVID revenue levels until government restrictions are lifted. In terms of relevant government subsidies, we will qualify for the next round of JobKeeper covering the October to December period across our Entertainment business, Rydges Hotels and QT Hotels. Atura Hotels and Thredbo will not quantify for JobKeeper, given first quarter trading. There is no support accessible for our industries in New Zealand. And in Germany, we will expect to continue to qualify for short-time pay, which assists in subsidizing certain permanent employees costs. Overall, whilst the markets and industries we operate in continue to change on a daily basis as government mandates continue to evolve, based on what we know today, we expect the group to deliver an EBITDA loss for the first half. There is a lot of pent-up demand for our businesses, and we continue to see green shoots as government restrictions ease. We are agile, we're able to respond to the changing market conditions. We've designed and implemented best-in-class COVID-19 operating practices. We are focused on managing the immediate headwinds, and the changes we have made to date will deliver benefits into the future. I would now like to take the opportunity to acknowledge and thank our capable and experienced team who continue to dedicate themselves through the most challenging period in the company's history. We have had to make some tough decisions together, and none have been made lightly. We do not underestimate the energy, commitment and skill that you all bring daily to ensure the best possible outcomes for shareholders. I would also like to thank and recognize your families, your partners, your friends for their support and understanding for all the time that you're giving to us to support the business. Times like these demonstrate how important a strong culture is, and I'm so very proud of how we continue to rally together to face unprecedented challenges and explore new possibilities. I also want to recognize all of our frontline staff for their understanding, flexibility, passion for learning new ways to operate, ensuring our COVID-19 practices are delivered and, therefore, delivering the best customer experiences every day as this is what counts the most. I would also like to thank all of you for your support and interest in attending and participating online and attending in person at this morning's meeting. Thank you.

Thank you, Jane. Friends, I'd now like to proceed with an overview of the voting procedures. And just to let you know, I will present the resolutions to be considered in due course. Prior to that, I appoint Maria Dzopalic of Computershare Investor Services as the Returning Officer. As I mentioned at the start of the meeting, voting on the resolutions is currently open, and you can vote at any time until I declare the voting closed. The results will be released to the ASX and published on the company's website at the conclusion of the meeting. Any directed proxies given to you by a shareholder will be automatically cast as directed when the poll is closed. Any undirected proxies given to the Chairman will be voted in favor of the relevant resolutions. For those of you attending online, your voting icon will appear on the navigation bar. Once you click on this, resolutions will appear on your screen, along with the for, against and abstain options. Simply select one of these options to cast your vote. When voting is closed, your final voting selection will be recorded. If you have any difficulties, please refer to the user guide, which can be accessed through the online platform. I'll now move to the resolutions for today. First is to adopt the remuneration report. The remuneration report is set out on Pages 21 to 33 of the annual report. This report explains the structure of and the rationale behind the group's remuneration practices and the link between the remuneration of senior executives and the group's performance. It also sets out remuneration details for each director of the company and for each member of the group's senior executive team during the year. And it makes it clear that the basis for remunerating non-executive directors is distinct from the basis for remunerating executives, including our Managing Director. I now move that members adopt the remuneration report for the year ended 30th of June. Next item is the reelection of directors. This item concerns the reelection of Ms. Valerie Anne Davies, who retires by rotation in accordance with the constitution. Ms. Davies' background and qualifications have been outlined within the explanation notes to the Notice of Meeting and on Page 3 of the report. Accordingly, I move that Ms. Valerie Anne Davies, being a director who retires by rotation in accordance with the rule 8.1(d) of the constitution and being eligible, is reelected a director of the company. The next item concerns the reelection of Mr. Richard Gordon Newton, who retires by rotation. Mr. Newton's background and qualifications are outlined within the explanatory notes to the Notice of Meeting and also on Page 4 of the annual report. Accordingly, I now move that Mr. Richard Gordon Newton, being a director who retires by rotation in accordance with the rule 8.1(d) of the constitution and being eligible, is reelected a director of the company. We now get to Item 5, the renewal of the proportional takeover provisions. The takeover provisions were originally introduced at the Annual General Meeting in 1991 and required to be renewed at least every 3 years. Most recently, this was done in 2017. The provisions now require renewal, and they were last approved -- as it is 3 years since they were last approved by shareholders. Full details of this resolution and the impacts are included in the notice of the meeting. Accordingly, I now move that the proportional takeover provisions in the form of Rule 6 of the constitution of the company, as last approved by shareholders, be reinserted for a further period of 3 years, with effect from the 23rd of October. The sixth item relates to the award of performance rights to the Chief Executive Officer. Shareholders approved the establishment of an executive share performance rights plan at the 2013 Annual General Meeting. This plan provides an incentive for executives to achieve above-average performance over the medium to long term in the group's businesses, which will be reflected in higher group earnings and extended growth rates. The plan enables the company to create rights to executives and senior managers of the group. Each right, representing a right to receive one fully paid ordinary share in the company. The rights vest and ordinary shares are allocated to the participant upon the satisfaction of certain performance criteria. The Board considers the incentive to management under the plan to be an important tool in attracting, motivating and retaining talented employees and executives. And I now move the following resolution, that shareholders approved, for all purposes, including ASX Listing Rule 10.14, the award of up to 250,000 performance rights to the Chief Executive Officer, Ms. Jane Megan Hastings, on the terms set out in the explanatory notes to the Notice of the Annual General Meeting. Thank you. The next item is the recognition and retention incentive award, which your Board determined was appropriate to seek approval for this year. In response to the impact of COVID, a number of temporary adjustments were made to the CEO's remuneration package, including a voluntary reduction and fixed remuneration of $200,000 and the nonpayment of short-term incentives, even though targets were achieved, of $750,000. The Board has considered the remuneration foregone by the CEO in respect of the 2019/'20 year and is also mindful of the awards under the group's LTI plan in 2018, 2019 and 2020 that are highly unlikely to invest, predominantly due to the impact of COVID-19. In this context, the Board with Ms. Hastings' abstaining, has sought to seek shareholder approval through a one-off additional equity-based recognition and retention incentive for the CEO. This award has been designed to recognize the additional efforts required from the CEO, both during the current response period to COVID-19 and also what will be required during the recovery period, together with the importance of retaining the CEO during this critical period. The reward will be delivered in rights and will remain restricted until at least 3 years from the grant date to further support the alignment of the CEO's entitlements and shareholders' interest. There are other key executives within the group who will also be eligible for this one-off awards program under the recognition and retention program. The details of these programs are included in the explanatory notes. I'd like to now move that shareholders approve for all purposes, including ASX Listing Rule 10.14, the recognition and retention incentive award to the Chief Executive Officer, Ms. Jane Megan Hastings, on the terms set out in the explanatory notes to the Notice of the Annual Meeting. Thank you. We now have another approval pursuant to Section 200C of the Corporations Act. This involves the payment of an incentive to Mr. Hans Eberstaller. On the 1st of November 2006, the Greater Union organization, a wholly owned subsidiary of the company, entered into an agreement with Mr. Eberstaller, where Mr. Eberstaller would be paid an incentive of $365,000 in the event of a sale of the group's entire cinema operations in Germany, subject to the Board of Greater Union organization being satisfied with Mr. Eberstaller's role in the sale and the sale being at a price which is acceptable to the Board. On the 22nd of October 2018, the sale of the German cinema operation to Vue International, subject to German Federal Cartel Office approval, was announced. Mr. Eberstaller is an employee of the group and was formerly a member of the key management personnel and was also a former director of certain subsidiary entities of the group. Under Section 200C of the Corporations Act, the incentive requires shareholder approval as it is in connection with the transfer of any part of the end -- or undertaking or property of the company. I now move that shareholders approve, for the purpose of Section 200C of the Corporations Act, the payment of $365,000 to Mr. Hans Richard Eberstaller on the terms set out in the explanatory notes to the notice of this meeting. Friends, that was the last item on the Notice of Meeting. And I'd like to now invite questions relevant to any of the items of business under consideration. Questions could be aimed at the financial statements, the director's report, internal auditors report also, as conducted for the 30th of June 2020. You may also like to ask the auditor directly questions pertinent to the preparation of the audit report. Friends, before just calling for questions, I'd like to remind you that due to certain restrictions, we do not have the opportunity to use a microphone today. So in the interest of all of us in the auditorium and also those online, I'd ask you to keep your questions direct, specific and succinct. Thank you.

Yes, sir?

Mr. Chairman. I'm [ Walt Gordon ], investor in this company. For the last 11 years, I have attended this company's AGMs. And all those years, I've stand in here and praised the excellent management team, our great employees and our Board. Unfortunately, this year, I have a different opinion. 3 years ago, I stood up and said, I'm worried about our share price to [ slip ] from [ $15 to $17 ] after we change our CEO. I was assured at the time that I have nothing to worry about. This year, our share price was $5. $5, ladies and gentlemen. I know it was a difficult year for the company and share margin, but some of the [indiscernible] have been close with our company. Our company was [ the measure of the reviews ] and always for the wrong reason. First one is [indiscernible] contracted coronavirus that was contracted conducted from [indiscernible]. Before [indiscernible], let me remind our management, we're in the hospitality industry and not the medical industry. [indiscernible] management often brand themselves as a different industry. They should resign and brand themselves in different industry. Now our hotels are contaminated with coronavirus, and who has the right mind to go and stay in our hotels? I also [indiscernible] hospitality story who declined $100 a day quarantine in their hotels. And in June, they were full of guests. The second time, the [indiscernible] was -- in our website was crashed when people try to book their [ third ] snow holiday. Everyone know that after quarantine at home for the full month, people would be to get out for fresh air and [indiscernible]. Everyone knew it except our management. I'm an owner of 2 IT companies and I know when we are expected large volume of [indiscernible] we need to manage it. Our federal government learned it the hard way [indiscernible], but the [indiscernible]. Who is going to pay for our management's incompetence? I will tell you who, us, shareholders. Our share price was recovering, but this glitch push share price down. Mr. Chairman, the Board decision to award our CEO 523,483 shares, [ as stated ] on your report. This year is the same time the shareholders loss 70% of our volume is a slap on the face of every shareholder of this company. In my opinion, all the bonuses need to be suspended for this period. I have my own shares in this company by myself, my company and myself [indiscernible]. And I would like to know when you [ bought the stock for ]. It went down from $17 per share to $5. I know, Mr. Chairman, that you are the biggest shareholder of the company, so I would like you to make some changes. I understand, Mr. Chairman [indiscernible] and this great management team who brought our company from $2 per share to $17 per share, you and your Board does not need to do much [indiscernible]

Excuse me, sir. Excuse me, if I may interrupt you. We've had a request come in from one of the shareholders online who has said that they haven't been able to hear a question. I understand that you are making a statement. We accept and receive your words, and I'd like to suggest that if you have anything further to say, you contact the company afterwards in the interest of all the shareholders.

I'm here talking about the interest of the shareholders. They need to understand what happen to this great company. It's a great company, which I was -- love to be their shareholder until recently, and you are talking about a margin, [ to one ] of our shareholders' money to our CEO.

Yes. Thank you very much. I can assure you that I suffer greatly as you do. I do note that those people who bought the shares that are low, I believe, it was about $5.40, they're very pleased now. So what I'd like to do now is continue to focus on the operations of the business and the issues facing us that we need to undertake to continue to build earnings for the group and, ultimately, growth in our share price. But I do thank you for your comments.

Mr. Chairman, unfortunately, I would like to speak. There is a rule in the [indiscernible] and if you check this [indiscernible] any shareholder can speak at AGM and any shareholder can put their view, the shareholders to be able decide about performance rights, shareholders decision give the people [indiscernible]. Last year, presentation was great. Jane had presented very good picture of the company. Unfortunately, in real life, it's totally a different picture. And [indiscernible] small shareholders, the [ mode of the picture is ] they can make educated decisions, Mr. Chairman.

Well, thank you. But I think we all appreciate that the picture of the company being presented today reflects the events of the COVID intervention, it reflects the activities of management to try and minimize the negative impact of that. And yes, of course, you have the right to speak. However, it is for a reasonable amount of time to speak and to speak in a reasonable manner on matters pursuant to the company. We did afford you the opportunity last year of having an interview and a discussion on certain issues that you took, not umbrage, but you wish to raise. And I think that was the appropriate way to handle it. I think, sir, you've had a good hearing and in particular in reference to those online, I'd like to ask that we move on to the next question. If you wish to put any more comments to the Board, then please do so in writing. Thank you.

Mr. Chairman, I did it last year. I did raise it with you. But instead of you start to do some changes, I can see what [indiscernible], I can see what our shareholders' are losing their money. Shareholders tend to [indiscernible]

I'd like to say something. Since you're addressing your comments really directly at myself, and you're very free to have your opinion. But when you address your comments, it needs to be fact-based. You've got a lot of references in there, which are simply not factually correct. And we would welcome the opportunity to meet with you again. I would also like to highlight that we've had a discussion about your continued inquiry to management seeking additional benefits over and above shareholders, which I've declined. That position is always going to be that way because we like to do equal things for all shareholders and look after them. But right now, if you're going to write something that long, it's got to be factually correct. We deal in facts. We're more than happy to address those facts because we're confident in what we're doing. And we would open up that opportunity to do that. But now is not the time.

Yes. Thank you. Are there any other questions from the floor? Or are there any questions from the floor? I just asked the company Secretary, those colleagues of ours who have joined us online, David, any issues you'd like to raise on their behalf?

Yes. A shareholder participating online has asked, how would a reduction or delay in proceeds from the sale of Germany affect the group's liquidity position?

That would be determined by exactly the quantum of what that question addresses. Obviously, at this stage, we are confident that this German process is underway. As per our release to the exchange most recently, there has been a delay in the disposal of certain sites, and that has impacted to a degree. The timing of the finality of the arrangements, however, we can only answer that question if and when those circumstances arise.

And Chairman, we've had another question from a shareholder participating online in relation to Resolution 8. And the question is, will the Section 200C award be paid if the sale does not complete?

That's a matter for the Board to consider at the time in the light of the disposal or otherwise of the German business. However, I would say that at the time of entering into that agreement, it would have been fair to say that the execution of a sale document could well have been construed as a sale of the business. But if that changes, the Board will consider its position then.

There are no other questions online.

If there are no other questions, thank you very much. The voting will continue -- will close in 10 minutes time, and the formal results will be announced to the ASX and on our website later today. During this time, we'd now like to present a video showcasing the recent cinema and hotel upgrades, new hotels joining the group, Thredbo developments and our property portfolio. Unfortunately, due to COVID restrictions, we will not be able to have morning tea with you after the meeting, but we look forward to seeing you next year. Accordingly, I declare the meeting closed. And in doing so, I'd like to particularly thank Valerie and Richard for your participation. And finally, declare the meeting closed. Thank you, and I appreciate your attendance. Thank you. [Presentation]