Fleetwood Limited (FWD) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to the 2022 AGM of Fleetwood Limited. My name is John Klepec, and I'm the Chair of the Fleetwood Limited Company. With restrictions now easing, we thought it was prudent to take a hybrid approach and keep the online version going whilst we revert back to the traditional person-to-person approach to AGMs. I'll begin by acknowledging the traditional owners of the land on which we meet today, the Gadigal people, who are the traditional custodians of the Eora country. We pay our respects to elders past, present and emerging and also acknowledge traditional custodians, the many lands that we're meeting from online today. We have a quorum, and I declare the meeting open. With me today is our Board. Bruce Nicholson, our Managing Director and CEO; Jeff Dowling, our Non-Exec Director and Chair of the Audit Committee; Adrienne Parker, Non-Exec Director and Chair of the Nominations and Diversity Committee; Mark Southey, Non-Executive Director and Chair of the Rem Committee; and on the end there, Martin Monro, our Non-Executive Director, and he is the Chair of our Risk Committee. Also joining us from management today here on my right for those in the room is Andrew Wackett, our CFO; and also Company Secretary. Unfortunately, Liz, our General Counsel and Company Secretary, is ill. So she is not with us today, but we acknowledge all the work that she's done for the meeting today, and she'll be listening to us online. Before I invite our MD, Bruce and CEO to speak, I'll begin today's proceedings with some initial comments including about Fleetwood's recent results and our operating environment. Overall, Fleetwood is heading in the right direction. However, the result of the (sic) [ Building Solutions ] business, as frustrating as it is disappointing, is just not acceptable. The Board and management and staff are absolutely focused on the need to return the whole company, especially the Building Solutions business to profitability in FY '23, and importantly, increase our earnings and generate an acceptable level of return on assets for our shareholders. There's still more work to be done to capture the opportunity that we believe that exists in the current market that we operate in the Building Solutions. FY '22 saw the commencement of Bruce as CEO. He took the reins of Fleetwood back in -- at the very start of the financial year in FY '22, which now we're looking back on it as a great time, it was a time of great uncertainty given the global pandemic and everything which prevailed around that time. This prevented him from meeting many of his new colleagues face to face for more than 5 months. And given the issues that we were having in terms of the management of the company, it was a considerable bridge to cross. His leadership has been critical to Fleetwood successfully navigating that pandemic, recruiting key management as a foundation for a new team to rebuild our flagship business and return it to profitable operations. Throughout the rapidly changing conditions endured in the past 12 months, the Board and executive team have remained focused on the implementation of the strategic plan, which remains appropriate and must continue to progress despite the ongoing attention, Building Solutions operational issues have demanded from the executive on a day-to-day basis. This strategy has been central to the management of operations and decision-making during the year despite the variety of challenges that impacted operations. Bruce will address that more in detail of how we -- the operations of the business, the issues that we're confronting, plus the direction of where we want to take the business and where we need to get to capitalize on that opportunity that exists in the market. Significant opportunities remain for all Fleetwood businesses, and we look forward to delivering on these for the benefit of all shareholders. Building Solutions is a leader in the modular construction industry for the education, custodial, mining and affordable housing market segments across Australia. The acceptance of modular construction and modular products continues to grow, and we are positioning to be a major participant in this segment of the Australian market. The senior management team in the Building Solutions business in several states has been substantially replaced, reflecting some of the underlying issues that have impacted the FY '22 financial results. In a full employment market, as we have had and continue to have, it has been difficult to find the right people in a timely manner, which has exacerbated issues on 2 major projects, one of which has just been completed currently. After a quieter year at Searipple in FY '22, the future for Community Solutions is positive. The recent 5-year agreement with Rio underpins the base utilization for the medium term of that facility. Meanwhile, the North-West of Western Australia has multiple upcoming major project across different commodities, which will require accommodation of solutions in where our Searipple is located in Karratha. The forecast level of activity presents a material opportunity for the Community Solutions business. Additionally, many state governments are actively looking at affordable housing solutions, which represent similar opportunities. Many of you would have seen the recent budget has also focused on this across the Australian landscape. RV Solutions continues to benefit from strong domestic tourism demand. While some of this demand is forecast to decline as international travel returns, the larger fleet of imported and domestic caravans already purchased will continue to fuel the secondhand and aftermarket demand for the services and products of RV Solutions for years to come. Finally, I would like to thank our shareholders for their ongoing support and acknowledge my fellow Board members for their commitment and hard work during the past year. Despite the unacceptable performance of Building Solutions, this past year, our priority is to bring the business back to profitability, and we look forward to meeting the challenges in the year ahead. I personally remain excited about the future for our business and committed to the group achieving the business transformation and performance we expect and know is possible. I would now like to hand over to Bruce to overview the operational performance of Fleetwood and comment on the outlook for the coming financial year. Bruce?

Thanks, John. For those of you who are online, we're on Slide 5 now, just kicking off. It's [indiscernible] MacGregor school up in Queensland. Having recently passed my first anniversary with Fleetwood, I've been reflecting on the challenges that the business has faced in the last 12 months, and the key lessons learned as well as the challenges and changes required and starting to be implemented into the business. I'm pleased today to be able to provide shareholders with an update on our path ahead. In many ways, financial year 2022 has been a pivotal year for the company. The way we've identified and overcome the challenges; the way we've developed our Build, Transform & Grow strategy and commence the implementation. We've become One Fleetwood in the last 12 months, and we're positioned and shaped the business for the next several years. As John noted, the impact of COVID lockdowns and management changes last year has meant understanding the business and winning the hearts and minds of our leaders, hasn't been without its challenges. We recently brought together the top 50 leaders in Fleetwood to gain alignment on our strategy, our vision and purpose, our values as well as workshopping, our transformation and improvement plans, particularly in the Building Solutions business. While transformation and change are often difficult subjects to discuss, I was energized by the debate, the engagement of our leaders at the strategy -- sorry, I'll step back from that. I was energized with the debate and engagement of our leaders with the strategy and what it means for them and how they can play their part in delivering for our company. Moving over to Slide 6 now, our operating segments. Turning to the Fleetwood operations, financial year 2022 delivered mixed results across the 3 businesses. As John said, the performance of our Building Solutions business is clearly unacceptable, and I'll outline several changes to prevent the recurrence that have been implemented and will continue to be implemented and addressed as this financial year goes along. Moving to Slide 7. At Fleetwood, we've introduced a clear vision, purpose and set of values. Our vision is to be the leader in reimagining sustainable places, and our purpose is to create innovative spaces so that people can thrive. We are well placed to achieve these. We have a platform, we have the products, we have the innovation platform and the people now to deliver on those vision. Our values guide the way we operate on a day-to-day basis. First and foremost is Zero Harm to our people and to the environment. We want people to go home from work at the end of the day in the same condition they arrived in the morning. We want to make a positive contribution to the environment. We need to embrace innovation to help us grow and achieve our vision and purpose. Innovation will set us apart from our competitors and be a key differentiator. We can achieve more through collaboration, working together and leveraging our combined strengths, national footprint and capabilities. And finally, with everything we do, we do it with the utmost integrity. As we set up there, we say what we do, we do what we say. And we also hold ourselves fully accountable for our decisions and our performance. Moving over to Slide 8. As I said, FY 2022 recorded an EBITA loss of $12.3 million compared to $26.3 million profit in FY '21. As previously reported, this underperformance was related to the Building Solutions business and, in particular, overruns on major projects, materials and labor shortages as well as COVID-19 pandemic construction industry lockdowns. Community Solutions delivered a sound result to the expectation given the short-term excess capacity in the Pilbara as we have previously flagged. While the RV business -- sorry, Solutions business delivered a strong result on the back of, as John said, domestic travel demand and is likely to remain solid for the first half of this financial year. We've been prudent with our working capital and CapEx and maintained a strong cash position at the end of the financial year with $55.3 million despite those difficulties we talked about in Building Solutions. To drive business improvements, several long-term strategic initiatives have commenced, including the appointment of a new EGM of our Building Solutions business, David Bolton; a new National Sales Manager, Tom Gleeson, National Manufacturing Manager, Tara Goldsworthy to drive diversification and revenue and to deliver our manufacturing transformation. We've also appointed a new Executive General Manager for our important WA business, Giles Everest. Demand for Searipple is strengthening with several major projects in the Pilbara advancing during the year. Since the end of the financial year, we've been awarded a 5-year contract with Rio Tinto for a accommodation at Surpal, which underpins the future utilization and earnings of that business. Cost and price management in RV Solutions remained strong and led to an excellent result. If I move over to Slide 9, Building Solutions major project overview. Specifically speaking to the Building Solutions results, major project underperformance accounted for approximately 80% of the $24.3 million loss in that business. Specifically, the vast majority of the loss related to the Rio Tinto Ti Tree Rail Camp Upgrade mining project in Western Australia. The project experienced significant delays in cost escalations during the year and in preparing the year-end accounts a further review of the project and its associated risks was undertaken, and we adopted a conservative approach and a further onerous contract provision of $8.9 million was taken at the year-end. Fleetwood's intention is to complete the project, and we'll continue to pursue a number of material claims, which remain the subject of ongoing commercial negotiations with Rio. These claims have not been accounted for in the financial year 2022 results. On a pleasing note, the result -- recent performance of the project has been within our estimates and expectations. However, the onerous contract provisions accounted for in the results, will impact that cash position in the first half of this current financial year. Other major projects such as the Centers for National Resilience also affected the efficient flow of work through our many facilities. The result is reduced utilization and unrecovered overheads further impacting our performance. When we realize the impact of these major projects we're having on our Building Solutions business, we implemented the following criteria to pivot our bidding for new work to lower risk projects that better align with our current capabilities. Specifically, our criteria are buildability and flow through our factories, have we got the right margin on the project? Do we have a deep understanding of the risks and opportunities on the project and can we manage them? And is the client or customer the genuine part we want to deal with? The result of this pivot has been that from a higher 50% of our order book in December 2021, major projects only accounted for 15% of our order book at the end of June. And as at the end of September, it only accounts for 5% of our order book, which really relates to the tail of these projects that commenced last calendar year. We've also implemented a detailed lessons learned from our projects and have a far more robust project review process in place in the business, which has already seen us walk away from several key projects in recent months. While this reduced our revenue in FY '23, our business profitability will improve. Moving over to Slide 10 now, our Building Solutions performance. Building Solutions recorded significantly more revenue compared to our previous corresponding period. And as mentioned, this revenue was driven by the award of the Center for National Resilience contracts in Melbourne, Brisbane and Perth. Whilst on their own profitable for the company, these projects were of one-off nature and will not contribute materially to the FY '23 result. Second half earnings reflected the ongoing underperformance of the into Rio Tinto Ti Tree Rail project and significant impact of supply chain issues leading to cost escalations, material and labor shortages being filled across the entire building industry. Further significant delays in cost escalation were experienced on the Ti Tree Rail Upgrade project in Western Australia and works remain on track to substantially complete this by the end of the first half in FY '23. In addition, a combination of project delays associated with poor weather on the East Coast as well as labor and material shortages resulted in lower-than-expected progress on projects in New South Wales, Victoria and WA during the second half. Specifically, we have been struggling to outsource qualified trades in key materials. Overall, the order book remained solid at $116 million compared to $130 million at the end of June 2022. If I flip to Slide 11 now with our lessons learned for Building Solutions. When reviewing the performance challenges that Building Solutions experienced, several key issues were identified and subsequent changes have been implemented to either prevent or mitigate the reoccurrence of these in the future. The main issues identified include the relative size and scope of these major projects in comparison to our order book and the traditional scope of work of Building Solutions has done in the past. The more bespoke nature of these projects increased the requirements for skilled labor and reduce the manufacturing efficiencies that more standardized modular construction offers. In addition, labor supply shortages, material supply shortages rapidly drove higher raw material costs, further eroding our margin on medium- to long-term projects. To address these issues, the forward order book has not been taken on any new projects or complex projects, as I've just said. A return to a more standard product platform will reduce complexity and allow our margins rise back to acceptable levels, and recent leadership restructuring aims to improve the coordination across the business and the use of technology designed to foster collaboration, innovation and scalability within the Building Solutions business, but also knowledge transfer within the broader Fleetwood business. If I go to Slide 12, our strategy and outlook for Building Solutions. We anticipate an improvement in earnings in FY '23. This is expected to come from a combination of a solid order book, a reduced impact of the major project cost overruns and overhead reductions. Unlike previous periods, the current order book does not have any material major one-off projects, as I've said before, or high complexity projects in an environment of limited skilled labor and outside our traditional scope in building materials -- Building Solutions. During FY '22, these included the highlighted Ti Tree Project and the Centres of National Resilience as well as several other bespoke projects. While Building Solutions will continue to feel the ongoing effects of labor shortages and higher raw material costs in the near term, we're seeing volatility as expected to reduce in coming months. Opportunities within government, including housing, education and defence are expected to increase as adoption of modular and building gathers momentum. As an example, the Western Australian Department of Housing is now using modular solutions for their affordable housing after engagement with Fleetwood in the last 12 months. Our Build, Transform & Grow strategy provides a road map for a medium to long-term improvement in the quality and consistency of our earnings. And the build phase involves improving our capability, systems and processes, lifting our brand awareness to underpin our long-term sustainable growth. The business has moved to a national functional leadership model to improve coordination and effectiveness in our important functions of sales, estimating and design, procurement, manufacturing, health safety in people and finance. The senior management teams, as John said, in several states have been substantially replaced, reflecting the underlying issues that have impacted our last financial year's results. The transform component of our strategy includes revenue diversification and moving from being a bespoke builder to a repeatable builder and a manufacturer. This involves qualifying work coming to our pipeline against the key measures I've meant before, buildability for modular, correct margin, understanding of risks and opportunities and the right customers to partner with. The major work streams in our transform include aligning our national workflows and developing a common set of processes and procedures across the entire Building Solutions business, introducing a Sales & Operational Planning system to improve our capability to push and pull orders through our factories to optimize those factories utilization, balancing the build complexity with standardization of modular components to open up pathways to automation in the future and focusing on national procurement to reduce our costs by consolidating our purchasing and leveraging our buying power as a national business. Over the medium term, this is expected to see a stable growth in earnings, able to effectively leverage the advantages of modular; reducing the build time or speed of construction; lowering the cost, especially when design variations are considered; improving the quality when compared to in situ or stick builds as they're called; and better ESG credentials, especially around waste, sustainability and the ability to recycle, repurpose and reuse the building of the Fleetwood manufactures. Moving to Slide 13, our Community Solutions business. We finished with an EBITDA of $8.3 million and a revenue of $31.7 million. As expected, Community Solutions returned a similar result in the second half of FY '21, ahead of major project demand. The COVID-19 rosters we experienced in FY '21 were not repeated during FY '22 and while we also saw the impact -- full impact of the increased room supply in the Karratha market. Osprey Village in Port Hedland remains fully occupied with a waitlist of potential tenants. Slide 14, our strategy and outlook for Community Solutions. The recent 5-year agreement with Rio Tinto underpins the base utilization and profitability moving forward for that business and creates a strong negotiating position for ongoing negotiations with additional clients to support the planned major projects over coming periods. Subsequent to year-end and further smaller contracts have been secured with Woodside and Yara Fertilizers, which further underpins future demand for our Searipple operation. The commercialization of the keyless lock and energy management system using the Fleetwood develop Glyde technology is underway. Fleetwood developed the technology and its availability to deliver through our Building Solutions business positions the company to be a real digital market leader. The outlook for Community Solutions is buoyant with strong prospect at Northwest WA sorry, WA's Northwest will see significant future development of key projects in oil and gas, fertilizer and green energy sectors. Securing of existing demand for current customers places Fleetwood in a strong position for the medium term. A growing number of low-carbon economy projects are currently under consideration in the northwest of WA, and the requirement for communities to house facilitate these projects is significant in our medium-term for the Community Solutions business. In addition, Community Solutions is well placed to pursue Build Own Operate/Transfer or Build to Rent opportunities in the residential aged care sector and to leverage our ability to source new villages at a competitive cost for our Building Solutions business and utilizing Fleetwood's balance sheet. Our RV Solutions business finished FY '22 with an EBIT of $9.8 million on a revenue of $81.2 million. The result was driven by strengthening of both the OEM markets and the aftermarkets and excellent trading conditions created by ongoing interest in domestic tourism. Strong management of pricing against increased raw materials and freight costs allowed gross margins to be maintained and excellent cost control of the operating costs or an increased demand translate into earnings growth. Continued growth in the new caravan registrations and sales of second-hand caravans has been a key contributing factor to the growth of RV Solutions over the past 12 months. The medium-term outlook for RV Solutions remains positive. While international travel has resumed, the forward order book for manufacturers remains at solid levels. The business remains likely -- likely remain a strong position through exposure to the locally built RV markets via our parts business Camec, and to overseas imports through our services and certification business, Northern RV. The recent booming caravan sales during the past 2 years will likely continue to deliver demand for our aftermarket service and renovation offering and continued strong management of price and input costs is expected to support margins moving forward. New products such as sandwich panel walls and aluminum wall frames are now coming to market in the RV Business. The increase in second-hand van sales -- sorry, the increase in second-hand van sales provides an opportunity for our products and promotion of renovations through our service offering. Challenges do remain around raw material supply and price, freight costs and across the skilled labor, although we are seeing these ease. The potential impact of recent interest rate rises, fuel increases and the impact on discretionary spending are being monitored closely in the RV business. If I move to Slide 17, our summary and outlook. Overall, the business positioned to generate improved results in the future. All 3 businesses have clear plans to improve revenue, quality to capture future opportunities, increase utilization, manage costs and, in doing so, improving our margins. These plans aim to return the company to profitability this financial year, and I note that our dividend policy remains a payout of 100% of our net profit after tax. The company is becoming more adept at identifying and managing challenges, and I'm confident that the team will continue to find ways to identify and successfully navigate these challenges as they occur. Our balance sheet is expected to remain solid despite the payment of the onerous contract provisions of FY '22 and upcoming seasonal peak in education spending. I'd like to thank all of our shareholders for their understanding during these difficult times. And I'll now hand back to our Chairman.

Thank you, Bruce, for that comprehensive overview of the business and the outlook for the FY '23 year. Today's AGM is the opportunity for shareholders to hear and put questions to the Board; Managing MD and CEO, Bruce; and external auditors EY, Ernst & Young. I encourage shareholders to use the various platforms available to participate in this meeting. Given the crossover between physical meeting here in the room in Sydney and those online, I'll outline some of the procedural matters associated with this meeting. We welcome shareholders and proxies holders attending in person to ask questions and online to ask questions. As in past years, shareholders, proxy holders, attorneys and corporate representatives are permitted to vote and ask questions. There are 2 ways to ask questions. If you're here in the room, raising your hand and using a microphone that is available here. Online, by typing and submitting a question on the online platform. To ask a question, select the Q&A icon on your screen, type the question into the text box and once you finish typing, hit the Send button. For those shareholders or proxy holders attending online who wish to ask the question verbally, please follow the instructions written below the broadcast. Information about the submission of questions via the online platform is set out in our online meeting guide, which is also available on our website. Please note that while you submit questions or ask questions from now, and I will not address them until the end of the meeting to ensure a streamlined approach. If your question relates to a specific item of business, please refer to that item of business when you submit your question. Please also ensure your questions are relevant to shareholders as a whole. The voting. Voting today will be conducted by way of a poll on all items of business. In order to provide you with enough time to vote and in case you are not able to stay for the full meeting, I will shortly open voting for all resolutions. If you are eligible to vote at this meeting, there are 2 ways to cast your vote, in person here in the room or via the online platform. If you're present here today, you may vote using the green voting slip, which you were handed when you entered this room. The green voting slip is for all the resolutions. When called upon to vote, please do so by marking your voting slip either for, against or abstain. Your voting slips will be collected prior to the end of the meeting. If you don't have a pen or you believe you're entitled to vote but do not have this voting slip, please raise your hand and you'll be provided with one. No one raised their hand, so we proceed. If you are casting your vote using the online platform, once the voting opens, press the vote icon, and all the resolutions will be activated with the options they're applicable. To cast your vote, simply select one of the options. There is no need to hit a Submit or Enter button as the vote is automatically recorded. You'll receive a vote confirmation notice on your screen. To change your vote, select Click Here to change your vote and select a different option to override your initial vote, if you change your mind at the last minute, obviously. You can change your vote up until the time I declare voting closed. If you require any technical assistance during the meeting, please refer to our online guide available or contact Computershare here in the room. We have worked hard to ensure the webcast runs smoothly. However, should you experience any technical difficulties, a recording of the meeting will be made available on our website after we conclude the meeting. I now declare the voting open for all items of business. I'll give you a final warning before I move to close the voting. On to the resolutions, the formal part of the meeting. The first item of business is to receive and consider the financial statements of the company and reports of the directors and auditor for the year ending 30th of June 2022. Ladies and gentlemen, this is -- this item business does not require a vote. However, the reports are open for questions, and we have arranged, for the company auditors, for the FY '22 financial year from Ernst & Young to be available today to answer any questions about the conduct of the audit, the preparation and content of the auditor's report, the accounting policies adopted in preparing the financial statements and the auditor's independence. Are there any questions relating to this item of business? Is there anything online? Okay. That's good. We'll move to the next item of business. These items are the remaining items of resolutions for your consideration and voting therein. I propose to keep the process as short as possible by noting in advance the following items. Resolution 1 is the adoption of the rem report. It's an advisory resolution only. It does not bind the Board or the company. Resolution 2 is in relation to the reelection of Jeff Dowling. It's an ordinary resolution, and we pass if more than 50% of the votes of those present and eligible to vote are cast in favor of the resolution. Resolution 3 is regarding the issue of performance rights to the MD and CEO of Fleetwood, Bruce Nicholson, under Fleetwood's long-term incentive plan and the issue of shares following any vesting of the performance rights. This will also be passed if more than 50% of the votes cast -- of those present and eligible to vote cast in favor of the resolution. The resolutions were set out in the Notice of Annual General Meeting. And as each is considered, it will be shown on the screen together with the summary of the proxy instructions received from -- by the company's secretary in respect to the relevant resolution. I intend to vote all open proxies that I hold on the card in favor of all 3 resolutions. Resolution 1. Resolution 1 is to adopt the remuneration report that forms part of the director's report in the company's annual report for the financial year 30th of June 2022. The rem report details the principles used to determine the nature and amount of remuneration, sets out the remuneration details of each director and other senior executives of Fleetwood and provides a detailed summary of the short- and long-term incentives and how performance is measured against them. The Corporation Act requires a preparation of a remuneration report and that the resolution be put to members that the remuneration report be adopted. Voting on this resolution, as mentioned, is not binding on the company or directors and is advisory only. However, the Board takes seriously view of members on this matter, and they will be given proper consideration when we review our rem practices and policies. The proxy votes in relation to Resolution 1 are here on the screen. Wherever been appropriate, by the proxy discretionary, I intend to vote in favor of the resolution. I now put to the meeting that the remuneration report for the year ending 30th of June 2022 as set out in the 2022 annual report be adopted. Please select your vote by marking one of the options available if you haven't already done so. [Voting]

We'll now move to resolution -- Item 2, Resolution 2, the reelection of Jeff Dowling, I'm very pleased to propose the reelection of Jeff as a Director of Fleetwood. Jeff was initially appointed as a Non-Executive Director on the first of July 2017 and was last reelected in 2019. Jeff is a highly experienced corporate leader with over 35 years' experience in professional services with Ernst & Young. He held numerous leadership roles within that organization, which focused on mining, oil and gas and other industries, together with senior national management roles. Jeff's expertise centers around audit risk and finance derived from acting as a lead partner on numerous large public company audits, capital raisings and corporate transactions. Since retiring as a managing partner of the Perth Ernst & Young office in 2011, he has acted in various nonexecutive director roles as both Chair of the Board and Chair of the Audit and Risk Committee. Copy of Jeff's Bio was set out in the notice of Annual General Meeting and is on our website. In recommending this election, the Board notes that Jeff confirms he will continue to have sufficient capacity to fulfil his duties as a Director of Fleetwood and recognize his contributions as an experienced, diligent and committed director. The Board, in the absence of Jeff, unanimously recommends that the vote -- shareholders vote in favor of the resolution. The proxy votes for this Resolution 2 are on the screen, where I've been appointed as proxy by the discretion, I intend to vote in favor of the resolution. I'll now put to the meeting that Jeff Dowling, being a Director of the company, who retires in accordance with Fleetwood's constitution and being eligible is reelected as a Director of Fleetwood. Please select your vote by marking one of the options available if you haven't already done so. [Voting]

My voice is struggling a bit, but we'll continue on. Resolution 3, we're getting there, is to seek approval to issue the -- issue of 222,603 performance rights to the MD and CEO of our company, Bruce Nicholson, an issue of shares following any vesting of the performance rights, in accordance with Fleetwood's long-term incentive plan for the FY '23 financial year. ASX Listing Rule 10.14 requires that shareholders' approval be obtained for the acquisition of securities by, amongst others, a director of the company under the employee incentive scheme. ASX Listing Rule 10.14, applies to the issue of performance rights to Bruce because he is the MD and CEO of Fleetwood. Resolution 3, therefore, seeks the required shareholder approval to issue performance rights to Bruce. The information that must be provided to shareholders in order to obtain shareholder approval under listing Rule 1014 and the terms of the long-term incentive plan have been set out in the notice of annual general meeting. The proxy results in relation to this Resolution 3 are on the screen. Once again, where I've been appointed as proxy by discretion, I intend to vote in favor of the resolution. I now put to the meeting that for the purposes of ASX Listing Rule 10.14 and for all other purposes, shareholders approve as further described in the explanatory notes issue of 222,603 performance rights and issue shares following and investing on the performance rights in accordance with the long-term incentive plan to the Managing Director and CEO of the company, Bruce Nicholson, in relation to the FY '23 financial year. Please select your vote by marking one of the options if you haven't already done so. [Voting]

Now we are done through the formalities of the resolutions. We'll now move into the Q&A, and we'll address any questions that we have received online. Or as mentioned, anyone would like to ask questions from here in the room, we'll address those now. So let's start with those that we've received online if we've got any. We haven't received any prior to the meeting. So these are all just as we've been speaking. So go for it.

Chair, we have a question from Mr. John Gadwood, a shareholder, asking what is the mission statement of Fleetwood?

Bruce can jump in. I think about that same thing. As Bruce said, we got values purposes, mission is...

Yes. Our mission is really our purpose. So what we do -- what we get up every day to do is our purpose to create innovative spaces so people can drive our vision. So our aspirational target is to be a leader of reimagining sustainable spaces. Our mission statement on a day-to-day basis is really our purpose. So thank you for the question.