Fleetwood Limited (FWD) Earnings Call Transcript & Summary

Okay, good afternoon, ladies and gentlemen, and welcome to the 2024 Annual General Meeting of Fleetwood Limited. Is that sound okay? There's a bit of echo up here. Is it okay back there? Does it sound okay? Okay, my name is John Klepec. And I'm the Chair of Fleetwood Limited. Once again, we have taken the -- a hybrid approach for this year's AGM with those here present in the Rydges and also the audience that joins us online. I wish to start with acknowledging the traditional custodians of the land, the Gadigal people, on which we meet today; and pay respects to elders past and present. So we have a quorum. I declare the -- formally declare the meeting open. We've got a bit of background party noise there. That should be in here. With me today, starting on left-hand side, Adrienne Parker, who also looks after our Diversity and Nominations Committee or Nominations and Diversity Committee; Martin Monro, who is the -- looks after our Risk Assurance, Chair of that committee. And then on the right-hand side here, Jeff Dowling, our audit head, Audit Committee head; Mark Southey, who looks after our Remuneration Committee; Bruce Nicholson, which you all know, our MD and CEO. And new to the team, on my immediate right here, is -- welcome her to the Fleetwood team -- is Samantha Thomas, who's our new General Counsel and company Secretary. So any formal matters, please address it to Sam. I'll have to flip. I forget I'm doing the -- we've done all that. Okay, I think that's it for me. I'd just go -- there's no slides [ from mine ], so you can focus on me, I suppose. The past financial year FY '24 has been one of mixed performance across our 3 businesses, each navigating through different cycles. As I mentioned in the letter to -- in our annual report, as we look forward to FY '25, we anticipate a strong overall outlook for Fleetwood and with 2 of our businesses in particular going through an up cycle, being the communities and Building Solutions business, but Bruce will expand on that more when he speaks in detail about that going forward. So focusing on FY '24, I'm pleased to report a significant improvement in our financial performance this year, particularly with the Building Solutions business returning to profitability. This is a noteworthy achievement. And whilst we recognize there is still a lot of work to do, we are committed to building on this foundation and enhancing our financial returns for you, our shareholders. In a nutshell, they are not sufficient as they are now in the Building Solutions, and it's every intention to make them efficient. In Community Solutions, the lower demand from Searipple Village in Karratha carried over from the previous financial year into the first half of FY '24. However, in the second half, we saw an uplift due to the Rio contract new and improved numbers coming through and an overall increased demand in the Searipple surrounding market of Karratha. We have also seen the benefits of increased rents at the Osprey Village which we operate in Port Hedland. This upward trend has continued in our Searipple Village, where as you would know from our recent announcements, et cetera, where -- current contracted base occupancy FY '25 has increased to 72% following the signing of the Perdaman take-or-pay contract several weeks ago. And they've put their first people into the camp just last week. I'll -- extra note which is not in the thing: That 72% is the average for the year, so there are times where it goes above that and times where -- in the beginning of this financial year, it's been below that, so just bear that in mind. Not 72% is the top. It's the average for the whole entire financial year. The management team remains dedicated to maximizing utilization of Searipple Village. Ideally we want it to be full house 100% over the course of the strong demand cycle which is expected to continue for the next 2 years. Turning to Building Solutions. We operate in a market anchored by significant government contracts, which are growing with the introduction of compulsory kindergartens across several states, mainly in the east coast of Australia. The second half of the year saw the impact of project delays and deferrals as government spending was reassessed, and this impacted our second half operational results. The housing sector, where we're increasing our presence, saw a breakthrough as we entered the new financial year, with demand for affordable housing driven by government initiatives across Australia. Notably for us, the Queensland's government to -- commitment to deliver 600 modular homes in the next 2 years highlighted this trend and delivered first -- Fleetwood's first large contract for 60 homes in this particular sector. With the recent announcement regarding the release of the -- half the future fund, the Housing Australia Future Fund, we remain confident that this is a segment where Fleetwood is well placed to grow and expand. We are proud to be recognized as a leader in modular construction serving various sectors, including education, custodial, key worker, lifestyle villages and affordable housing. The acceptance of modular construction continues to grow, and as Australia's largest modular manufacturer, we are well positioned to capitalize on this momentum. As we have stated previously, Fleetwood has existing capacity to supply over 1,000 homes into the east coast of Australia to significantly impact on the severe housing shortage that we hear about every day of the week in the press. Our Build, Transform and Grow strategy remains our overall guiding strategy in the Building Solutions operations. That business is now in a transition phase, where we were mainly focused on the build, into more of a balance between building and transforming that business. And we're also lifting the eyes to look at how we grow that business into the future. That has enabled us to continue to deliver improved earnings on the back of our own experience and key learnings from both Australia as well as the more mature overseas markets as we continue on the growth phase. As I mentioned, we haven't been in the position before where we could spend significant amount of time on that growth phase, but in particular as part of Bruce's mandate in the immediate term is to -- how do we grow this business into the future as the cycles come off on the Searipple business, so our goal is to evolve our operations, industrializing the modular construction process without incurring high capital costs or risks as we do that. Following 3 very strong years, we faced a downturn in our RV Solutions business, impacted by cost-of-living pressures that has affected discretionary consumer spending. While the short-term outlook remains subdued, we remain optimistic about the medium-term recovery, supported by the substantial fleet of caravans currently in service across Australia. RV Solutions is well positioned to meet the needs of the OEMs and the aftermarket demand when that market rebounds. That business in particular had served us very well coming out of COVID, when the Building Solutions business wasn't performing. So the benefit of having 3 operations is, when 1 drops off, the other has managed to compensate. So although RV Solutions has dropped down and it's been replaced by Building Solutions, it has been an operation that has served us very well in the last 4 years. Now I'd like to take a moment to commend our dedicated Fleetwood team of over 650 employees for their hard work and commitment over the past year. Their efforts have driven progress against our strategic goals and improved our financial and safety outcomes. Particularly on the second one, the safety outcomes in the Building Solutions business, the averages there have -- thanks to hard work by Andrew here in the audience, have considerably improved, where we're now in a position where we can hold our heads up that we have a safe operation. Lastly, I extend my heartfelt thanks to you, our shareholders, for your continued support; and acknowledge my fellow Board members here today for their dedication throughout the year. As we embark on FY '25, we do so on a solid foundation poised to develop the future operating model of Building Solutions whilst ensuring we improve our returns to shareholders to acceptable levels. I'll now hand over to Bruce, our MD and CEO, who will present FY '24 operational performance and more on the outlook for the current financial year. Over to you, Bruce -- hopefully, my voice wasn't too...

Thanks, John. You did well, actually. John has been very, very ill, so thanks, John. I'm pleased also to welcome you to our Annual General Meeting; and to share an update for FY '24 performance and probably, more importantly in October, our outlook -- where am I on the slide? [ I'm going to ] push that button...

[indiscernible].

Is that Slide 17? Thank you. As we reflect on the financial year 2024, I'm proud to report significant progress in our journey and to share our improved results that underscore the effectiveness of our Build, Transform and Grow strategy. Our Build, Transform and Grow strategy provides the road map for medium- to long-term improvement in the quality and consistency of our earnings. The build phase involves improving capability, systems and processes; lifting brand awareness to underpin long-term sustainable growth. This includes aligning national workflows, developing common processes and procedures to deliver consistency right across the Fleetwood business. We've invested in enhancing our capabilities and our focus on building a quality pipeline in work that will drive our future success. Our vision is to be the leader in reimagining sustainable space and is underpinned by 5 core values: zero harm to both our people and the environment, collaboration, integrity, accountability and innovation. The values guide the way our people operate on a day-to-day basis and have been integral in creating a positive culture within our businesses. And I'm confident that this will have a positive impact on our transformation and lead to a successful FY '25 for Fleetwood. In FY '24, we saw year-on-year improvements in earnings. Our earnings before interest and tax increased to $8.2 million, a significant uplift of 95% from the previous year. Similarly, our net profit after tax climbed 90%, reaching $3.8 million. These results not only reflect the resilience and dedicated of our entire team but demonstrate our commitment to financial growth. In line with our strong performance, we've declared a fully franked dividend for the full year of $0.05 per share, a 138% increase on the $0.021 per share declared in FY '23, reinforcing our commitment to maximizing returns for our shareholders. The share buyback announced on the 14th of May 2024 resulted in the acquisition of 144,000 shares to the end of June. And we've had an ongoing focus on capital management; delivered a return on capital employed of 6.5%, up 3 basis points on the previous financial year. And whilst we have debt and bonding facilities in place, we have no drawn debt. As John said, safety remains a priority. And our investment in safety and in particular the Fleetwood body care program has contributed to a 30% improvement in safety performance. We also saw our employee turnover reduce for the second year in a row, reflecting the business stabilizing and the company building a solid foundation from where to run from. We are making significant progress in enhancing our systems and processes, with the successful implementation of the ERP system in our New South Wales business now behind us and a continued upgrade of our RV business' IT systems. Moving to Community Solutions' performance. We've had a strong result this year, particularly in the second half of the year where we delivered an earnings before interest and tax of $11.5 million. Increased occupancy driven by contracted rooms from clients like Rio Tinto have started to ramp up and are significantly improving our profitability. Osprey Village in Port Hedland remains fully occupied, with a wait list of potential tenants. And management revenue increased in correlation with the increased rental revenue generated throughout the village. Our Searipple Village in Karratha had an occupancy of 34% across the entire FY '24 and -- as John said, as an average, with shutdowns in the first half and increased long-term contracted rooms in the second half, as I said. We are positioned well for the upcoming Karratha demand, with Searipple undergoing a refurbishment of rooms, gymnasiums and general facilities to refresh the camp last year. And this was completed last financial year. Looking at the strategic outlook for Community Solutions. Our strategic outlook for Community Solutions business in FY '25 is improving, and our focus is on optimizing Searipple Village and leveraging the emerging opportunities in Karratha. We are focused on maximizing the potential of the Searipple Village across the economic cycle, with base contracted business now secured, while we seek to continue to layer additional demand. Our Searipple Village is set to benefit from a strong outlook, with contracted occupancy for the full financial year of 72% with the recent Perdaman project announcement, which positions us really well to capitalize on increased planned projects across the oil, gas, fertilizer and green energy sectors. I would like to point out that this -- we have 70% -- 72% occupancy contracted on a take-or-pay basis -- and is a base foundation for earnings at the village. This will underpin our earnings for this financial year, with upside from any further contracted or casual room nights at Searipple. Projects from key players like Perdaman, Yara and Woodside will drive significant demand for our facilities. The Karratha region in itself is set for a transformation, with multiple planned projects expected to come online over the coming years. This represents an incredible opportunity for Searipple. And by aligning our services with these developments, we can ensure that we -- our accommodations meet the needs of a dynamic workforce in the region and contribute to the region's economic growth. Our Osprey Village continues to demonstrate the robust demand for remote key worker accommodation and social housing in Western Australia. With a strong wait list for tenants, this highlights the critical need for accessible housing solutions in the region. We are committed to addressing this demand, ensuring that we not only provide shelter but also foster community well-being. Another pillar of our strategy is the commercialization of our Glyde technology platform. Positioned as a digital and ESG market leader, Glyde is -- not only enhances operational efficiency across our operations but also strengthens relationships with our customers. By extending and enriching these partnerships, we can provide innovative solutions that address the evolving needs of our clients, ensuring that we remain at the forefront of our industry. In addition, we intend to explore build, own, operate/transfer and build-to-rent opportunities within the mining, residential and key worker sectors. These strategies will allow us to balance the cyclical nature of the communities business, creating stable revenue streams beyond Searipple whilst also supporting community development. I want to be clear that we'll always be prudent in assessing these opportunities. And we've recently appointed a new Head of Communities based here in the east coast, who will look to partner with our Building Solutions business and the industry to look at the opportunities as they present themselves. Moving to Slide 12 and our Building Solutions business. Pleasingly, this year, Building Solutions returned to profitability, reinforced by our strategic initiatives that we've implemented. We focused on delivering quality revenue in modular construction, supported by our education panel base business; and diversifying our revenue streams by extending our offering to the mining and lifestyle village sectors and pushing further into the housing and industrial sectors while targeting sustainable margins and enhanced procurement savings, with $2.5 million in savings delivered in 2024. While we faced some delays, as John said, in project decision-making in the second half of 2024, I'm very optimistic about the future. The recently announced $40 million contract with QBuild to construct 60 modular homes in Queensland is a testament to this optimism. And we're recently accepted onto a housing paneling with QBuild to deliver further housing needs over the coming 3 years in Queensland. There are several tenders currently underway. As a result of this announcement and the elevated workbook, we've observed a better-than-expected start to the FY '24 performance in Building Solutions. The current order book as at now remains elevated at $182 million in Building Solutions, up from the $127 million in June 2023. The combination of a solid first quarter and an elevated order book provides a solid base as we move into the second half of this financial year in Building Solutions. Moving to Slide 13. We've made significant progress following the reset of the Building Solutions which commenced about 2 years ago. Our focus on FY '25 is to continue this forward movement and expedite our transformation efforts. This involves aligning across the business, focusing on securing quality work and executing to meet defined margins, simplifying our operations and improving our utilization and productivity. To facilitate this, we're consolidating all of our Building Solutions businesses as well as our design and estimating functions under one national leadership structure to accelerate our transformation. We will continue to focus and drive the manufacturing KPIs across our factories and manufacturing hubs, where we are starting to see improved utilization and productivity across the business. In addition, we're bringing a national center of excellence together for our sales and operational planning, as we use this function to drive national decisions. This will help us stay agile in responding to commercial opportunities while truly leveraging our national footprint in Building Solutions at one Fleetwood. As we've said, the Build, Transform and Grow strategy is the road map to improve the quality and consistency of our earnings moving forward. Our vision is clear: to be the leader in modular manufacturing, specifically by winning made-for-modular projects that exemplify our commitment to innovation and excellence. We're already seeing growth in the acceptance of modular construction as a quality, cost-effective and timely solution. This trend is driving growth in our brand recognition; and opens new opportunities across various sectors, including, as we've said, social housing, defense, key worker accommodation and private education. As a leader in modular, we are effectively collaborating -- sorry. We are actively collaborating with various levels of government, organizations and industry partners to truly demonstrate the benefits of modular construction. Our commitment is reflected in our current order book, which has grown significantly. This momentum is pivotal as we move towards more repeatable modular projects, enhancing our efficiency and delivery. To support this vision, we've improved our systems and processes that will underpin our financial stability. Our focus is on modernizing and including automating design and reducing manufacturing complexity. This transformation from builders to manufacturer is under development and leverages insights, experience both here in Australia and, as John said, from overseas more mature markets. Moreover, we are committed to maintaining low capital intensity in the Building Solutions business, which will ensure we remain flexible as the industry continues to evolve. Delivering on the Build, Transform and Grow strategy to meet our near-term goal of achieving a 15% return on capital within the next 2 years through a more simplified business model focused on improved utilization and productivity. Together, these initiatives will position us not just for the immediate future but for long-term growth and sustainable earnings as the leader in modular manufacturing in Australia. Moving to RV. The RV Solutions business faced some significant challenges, as John said, due to the economic pressures reducing consumer discretionary spend. Although the short-term outlook is subdued, I remain very optimistic about the medium- to long-term prospects. The large fleet of over 870,000 camper vans, caravans and camper trailers in service across Australia supports ongoing aftermarket demand for our products and services. And our ability to adapt and innovate will be key as we navigate these challenges. As we know, the market conditions have been tough. Our revenue declined 9.2% after accounting for the price increases we passed through. This reduction aligns with the broader trends in the caravan manufacturing which saw a decline of approximately 20%. This has had a cascading effect on our OEMs and aftermarket segments. Our ability to fully pass on the rising input costs has been limited, and as result of that, we experienced reduced gross margins and EBIT dilution last financial year. This has further compounded the challenges we faced. In FY '24, we did see a reduction in our capital employed by the RV Solutions through improved collections, leading to a decrease in trade receivables, while our enhanced inventory management practices have resulted in a reduction in inventory levels in the RV business too. These measures are critical for maintaining liquidity and ensuring that we can respond effectively to the market demands. Whilst the sector faces headwinds over the next year, our RV business is expected to remain profitable over the year. Our ability to adapt and innovate will be key to navigating the current economic challenges whilst positioning ourselves for future success. Given the current economic pressures impacting consumer discretionary spend, we've implemented targeted price increases where we can to help recover costs. And while we are aware of the challenges this poses, it is essential for maintaining our margin integrity. Additionally, we've completed a thorough review of our operating costs to improve product and branch profitability, where rightsizing our cost base right now is underway and will ensure that we remain resilient through the economic cycle. To support our growth, we are undertaking a digital refresh of the brand. This includes simplifying our sales processes through platforms such as Shopify, which will enhance our online and retail sales across branches and across our dealer network. By making it easier for customers to engage with us, we can drive sales and improve our overall customer experience. Our key focus in this business is on new products and driving our structural solutions products, including the sandwich panel walls, the premium Invictus entry doors and our aluminum wall frame business. All these products are gaining serious momentum and strong uptake from new and existing customers in RV. We're also launching a full range of batteries, chargers and panels under the brand [ e-gen ] by Camec to capitalize on the move to off grid and sustainability in this sector. By enhancing our capabilities in these areas, we aim to increase profitability and deliver superior products that meet the evolving needs of our customers. We'll continue to introduce new accessories and products for both OEMs and the aftermarket. And this innovation is vital for keeping our offerings fresh and relevant and ensuring that we capture the attention of both existing and new customers. As we focus on electrification and sustainability, these new products will play a key role in our future growth. So in summary and looking ahead. We are confident that the growing acceptance of modular construction, coupled with a strengthening order book and increased forward bookings at Community Solutions, will drive a very significant earnings growth in FY '25. Our commitment to innovation and sustainable practices positions us well for future opportunities. And we continue to embed the Build, Transform and Grow strategy in the business, with the aim of focusing on quality revenue through diversification, generating sustainable margins, increasing our utilization, reducing our overheads to improve earnings. This is underpinned by our leadership capability across the business and a successful way of executing our strategy. The company's dividend policy remains at -- to pay out 100% of net profit after tax. Our balance sheet remains strong, and we'll be prudent in the way we leverage this strength to support our growth. In conclusion, I'd like to thank our shareholders, for your ongoing support and trust in our vision. Together, we will continue to build, transform and grow, ensuring Fleetwood remains a leader in modular construction and community solutions. With that, I'll hand back to John.

Thanks, Bruce. Okay, we're now going to the more formal part of the meeting -- before that, we'll have some questions. Okay, so today's AGM is opportunity for shareholders to hear and put questions to the Board. The Managing Director and CEO, who you've heard from, Bruce, gave a comprehensive overview of the business. And I must submit apologies for not mentioning the presence of our auditor from -- Fiona Drummond from Ernst & Young, who's sitting here next to Cate, our CFO, in the front row here. So apologies for that. I should have introduced you as part of the team at the start, and also Cate. I think you all know Cate as well, who's in the front row here. So anyway, to ask questions. Because we are hybrid and -- we welcome all shareholders and proxy holders attending in person or those online to ask questions. As in the past years, only shareholders, proxy holders, attorneys or corporate representatives are permitted to vote or ask questions. There are 2 ways to ask questions. If you're here, raise your hand. And we'll give you the mic and we'll -- you can ask the question to anyone who's here at the -- in the room. [Operator Instructions] Please ensure your questions are relevant to the shareholders as a whole. So I throw it open. Are there any questions relating to my address, Bruce's overview of the business or any of the Board members present or our auditor partner here from EY? Yes.

Look. These businesses are all pretty diverse and very cyclical. They seem to run 3 years from now. Or you take any 3-year period. They go from profit to loss. Would it not be sensible to sell the businesses when they get to a point of doing well? Because we know or history shows that, in 3, 4 years time, they'll be unprofitable.

Well, my quick answer to that is we can do better than we have in the past. And not all the businesses have actually gone -- when they go through the headwinds of a market, they haven't gone into the red, other than Building Solutions. Community Solutions, last year, at 34%. Occupancy is a low occupancy. And it still returned a fairly decent EBIT, so -- and the RV business, likewise, is at breakeven today of slight positive 1 point. And then -- and looking forward, we believe we can keep it above water, so it's not a case of they go profit, loss, profit, loss. It's more of a case that profits can stay higher. When they come down, they're not as high as -- like Searipple is an example. You're doubling the occupancy. Of course, you're going to have increase in EBIT, but when it -- the trick is to keep the business. When it goes through the cycle, it's still positive and it still returns a over-the-cycle ROCE of greater than 15%. So as a -- and that's why we started to change the language around the Building Solutions business, as the aim is that it returns a ROCE of 15% for it to remain in the portfolio. And that's not just 1 year or whatever. It's through the cycle. So disagree that it's we're into a loss making when it's the down cycle. And in the Building Solutions business in particular, we believe we can do better. We have. We've improved that business. The strategy that Bruce has embarked on since he's been -- coming to the business as CEO has substantially changed that business. We're now into the transition as we're transforming from a construction business, into a manufacturing business. And the overall aim is to industrialize. Construction is one of the last industries around that went through -- that is going through an industrialization process. I was involved in mining in the past, and mining did it only 20 years ago. Construction is yet to go through that process. And it is now -- and modular is the first -- if you look at the construction industry, modular can be the first one that goes through that process. We're still constructing as we were when I was in school, which is a fair time ago now.

So to summarize then. You intend to keep all 3 of these businesses pretty much no matter what.

We intend to keep them providing they get a return on capital for the shareholders.

Are you telling me that caravan parts makes 15% ROE -- or ROCE?

Over its life cycle, yes. Over the term of the cycle, yes, it can. It has. It did -- look at the -- if you look at the profits post COVID, it was very high. If there is a -- the other part of that is, if it -- someone else can do better with it and it's a better value proposition in someone's -- someone else's hand than it is under ours, of course, you take the opportunity that arises. Basically, if you think you can make $10 out of something and someone gives you $20, you take the $20, so...

So we are open to selling the bits.

If someone puts a takeover offer on the company of $4, would I say no?

Well, you're...

I'm not quoting numbers, but of course, we're dealing with hypotheticals. So we only can deal with what's in front of us. And we're working that asset as hard as possible, squeezed the lemon on costs in that business down to bare minimum. It is a really tough market to pass on costs at the moment. We have to see that through, but we have to continue to operate that. Things just aren't that easy to buy and sell whatever and you pick the top of the market. The market is not silly. It's the same. If -- I'll give you an example, if you try to sell Searipple: For the next 2 years, if you multiply that earnings, people are going to say, "Well, that's great. That's when the occupancy is here, but when the occupancy goes down here with the cycle in the market, I'm not paying you 10x that earnings. I'm paying you 10x down here," or somewhere in-between. So's it's great to be able to pick it but very difficult. So does that answer your question? No. You're shaking your head.

Well, no. That means to me you'll never sell them. You're going to...

[indiscernible].

No. Maybe, Bruce, you jump in. I'm losing my voice.

So John [indiscernible]. Is that on? Can you hear me?

Yes.

Yes.

Look. It's actually a good question. We absolutely understand there are 3 quite different businesses with quite different levers driving them. The RV business is going through a tough time. Will we sell if someone offered us full and fair value? It's actually in our shareholders' best interests. That's what our job is, to act in the shareholders' best interests, right? Right now it's probably not going to sell for full and fair value whilst the market is down. And we're working with RV Solutions, for example, to make it fit and ready for when the market ticks back up. And somebody may walk, offer us full and fair value, but actually we're acting as a true owner who loves it. We're investing in the IT systems. We're investing in new products and things as a true owner, but it's a portfolio play for us, okay, so our interest is in what's best for shareholders. If somebody come and offers full and fair value for any part of the business, of course, it's for sale.

[indiscernible]

I think what the Chairman is saying is...

No. [ But I'm sitting there ]. And I said, if someone walked up and sit, "Here. Here's $4," for Fleetwood as a whole...

No one is going to do that...

Well, they might. They might.

[indiscernible]

We don't know, so we're open to [ anything ].

Hypothetical.

I mean it's like anything. People speak to us about Searipple. I regularly get asked as Cate and I get around, "Would you sell Searipple at the top of the cycle?" If somebody is prepared to pay full and fair value at top of the cycle, everything is for sale, but who would, given [indiscernible]? Now the RV business was up for sale and -- or being strategically reviewed 3 or 4 years ago. We were offered nothing for it. And I'm grateful that we kept it through the cycle because it did very, very well. So the answer is what we're trying to do is actually do a little bit more to actually connect the benefits of Building Solutions and the synergy with the Community Solutions. Because I don't think we've done a great job with that in the past. And so that's part of the strategy we're developing in terms of Community Solutions and opportunities beyond just Searipple and Osprey. Does that give you some comfort or...

I think, but let's move on to another question.

We have some questions on the line.

Yes. Well, however you want to do it, I'm happy to...

Absolutely. So we have one here from [ Mr. Stephen ]...

Sorry. I was looking at [indiscernible].

[ A lot that are coming through today ]. Through from [ Mr. Stephen Mayne ], on a similar topic: Australia is currently in the midst of an unprecedented deluge of takeovers that has contributed to listed entities on the ASX falling by 170 or 7.4% to 2,124 since June 2022, including 20 straight months of decline. There have been -- already been 27 major takeovers above $200 million completed, so far, this calendar year, with another 10 deals in the works. The ASX is losing long-standing names such as CSR, Boral, Blackmores, [ Newcrest ] and [ Crown ]. And given the lack of new floats, there appears to be a clear mispricing between public markets and private markets. "Why are public markets not valuing ASX-listed companies like yours more highly? And what are we doing to avoid being gobbled up like so many other companies? Is there a logical buyer such as Gerry Ryan's Jayco operation?"

That's a -- more of a -- not a direct Fleetwood question. That's more of a question about how capital markets work and public versus -- if -- look, a public company. If someone wants to make a takeover of private companies, I'd have to say the -- being a private company is actually less onerous than being a public company, without a question. The governance and the regulation that has been put in place -- sustainability is coming in 2 years time. That puts an enormous burden on the smaller companies, which if you're private, you don't have as much to fear. And look. I don't think it's going to change anytime soon. For every company that's taken over -- I'm not sure the gentleman's name who asked the question -- there's new companies that get listed all the time as well. So there's new companies that come out. They get listed. The market -- and other markets. The shareholders are looking for some way to invest. Not everyone wants to invest as a private individual. And superannuation funds, et cetera want the visibility and the governance that does come at a cost under the public company structure. And maybe regulations -- personal opinion is regulations should be overhauled, but that's a personal opinion, not a company opinion. Because we just keep on piling more and more and more regulations on companies without taking anything away. And that then becomes, well, if you're of a certain size, is it worthwhile to go down that path. But we'll continue to stay listed. Opportunities are there for listed companies. And we're not going to be looking for shareholders for money, which is one of the main reasons to be listed, so that's not on the agenda for us, but share stays as is. So I'm not sure how relevant that is to Fleetwood. And the Gerry Ryan thing. The RV business, relative to the rest -- the Building Solutions business and the Community Solutions business is a much bigger part of the pie than RV, so I wouldn't think that anyone who was interested in, hypothetically, taking over Fleetwood would be from the caravan industry. The caravan industry is going through a massive amount of consolidation, et cetera. Them taking on Fleetwood, taking on a modular building business and a major community solutions business, I'm not sure there's a fit there.

Wonderful. We have another, from [ Mr. Christopher Kirkley ]. What effect on Queensland business do you see the changes of government in Queensland having?

I'll defer to Bruce on that because he's closer to the meetings with the government and the department than I am. So...

Yes. Look. So we're actually quite comfortable with the change of government up there. We think there may be a slowdown in some decision-making as they review it, but the 2 sectors that make up 90% of the work we do in Queensland are the education sector and now the housing sector with this expansion. And the government has been very clear that they don't intend to interfere in any of those programs, so whilst there might be a slowdown for a month or 2 whilst they review what's happening and there's change of ministers and change of [ our ] executive directors, we're actually seeing right now there's still quite a bit of work coming through the pipeline in those sectors. They're tendering a lot of work there, so it's had no immediate impact. I think the other important message for the shareholders is to know that we have very clear visibility through our new systems and processes right out to the final quarter of this financial year. And we have a very solid order book up in Queensland, so we -- even if there's a slowdown in things, we don't think it will impact Fleetwood at all. And I think it would be wrong to think that any state government is willing to play with social and key worker accommodation or schools right now whilst the social discourse is going on around...

Hopefully, the trend is that Queensland is the leader of the pack and the rest of the states follow suit. Because their acceptance of modular and -- for housing and for, in particular, the education sector is way bigger than anywhere else in Australia. If that trend was to go through the rest of Australia, we'd have significant uplift in all the other states. Because that state is zooming ahead. It's a state that's growing. Any other questions, Sam?

No other questions at this time.

Here we go, one from the floor.

Charlie Kingston from K Capital. Probably a similar question, but I do think it's fair. But just a few comments around the initial questions around being listed and the benefits. And should the 3 divisions be all together? Because, I suppose, if you look back, the stock hasn't really done anything over 10 years. And I certainly appreciate that Bruce is -- I think, started 2021, when the stock was around a bit over $2. And again, no growth since there, but the team is relatively new. And yes, you're for sale every day. That's why you're listed, but you can also be proactive. As you said, you tried to -- or did the strategic review for the RV business, which didn't amount to anything, but I suppose, just asked differently, like, you look at Fleetwood. And again it's done nothing over 10 years or longer. It used to be a very good company. I appreciate there's been a lot of management change and various impacts over that time, so certainly not all on the current management and Board, but in 2016, I think one of your current shareholders said the business should be broken up. You should be selling off assets. I'm not really sure what happened since then. If anything, there was a big boom in manufactured housing. I don't think we've really capitalized on that yet. RV has gone up and down. You've closed the -- or you sold the previous RV business for $1, but nothing seems to be working because the stock is still hovering around about $2. Yes, you paid a few dividends. All your manufactured housing peers, I think, are private. I don't think that there's any other listed operator. I think there was a lot of private equity interest in the space, especially in the U.K. Despite you being the biggest, you're not really getting a good margin on that business. And I think you've -- you said you target a 15% ROCE, which I think -- I don't want to get into the weeds, but your assets in that business is [ $67-odd million ]. So if you can get that, that's $10 million EBIT on well over $300 million of revenue, which is a pretty poor margin, I would have thought, so fair enough for the market not to want to value that business very highly, but from what I understand, a lot of the bulls on the company think you have a lot of property, hidden property value, one in Searipple. Who knows what that is worth? You don't really ever put a value on that. And there's also the argument that it will need to be replaced at some time, so maybe that's a bit of a liability, but my understanding is there's a lot of hidden asset value, which I don't think you ever refer to. But it does just -- I understand that you're for sale every day. And if somebody presented you with a $4 bid, you would be in favor of that, but given how long Fleetwood has done nothing for its shareholders and -- I would just add that it does seem a little bit misaligned with the shareholding of the Board or lack thereof. You -- all your salaries are certainly well in excess of your shareholding in the company. It does seem a bit misaligned. And to play devil's advocate: Maybe there's a bit of job preservation in not actively seeking buyers for various segments of the business. I understand, yes, your for sale every day, but you can also actively engage with the process. So I suppose the question is how long would you tolerate a share price at $2. What levers can you pull to, I suppose, excite the market? The buyback has been very minimally deployed. That hasn't really been activated, so yes. I mean for me there seems like a lot of value there, but the stock has done nothing for 10 years, so I'd just like to hear your assessment of value, what you think it's worth. And if the status quo continues, what levers can you pull? Can you sell off some properties? Can you sell off a division? Because if we're here in another year's time at $2, what -- when do you say enough is enough and run a proper process?

Okay, okay, thanks for the question. First thing I would say is you're living in the past. Live in where we are now and where we're going. This is a good company, and we will make the returns on the business that are acceptable. You can't go back to 2016. That's unfair on the present management team and where we are today. What's gone is gone. We can't do anything about that. Yes, there's been mistakes, whatever. I'm not going to go there. I'm not going to explain any of it. We've spoken about where we are today and where we're going forward. There is no need to go down the path of asset sales, et cetera. We have not -- I've said it to other questions and we've -- maybe it hasn't come across clear in the address: We are making good progress. We are making good progress. The ROCE on the Building Solutions business is the first hurdle. That doesn't mean we'll just, "Oh, we get to 15%. That's great. Let's kick back and go down the beach." That's the first hurdle. It can be more. It should be more. The modular that you're talking about. There's a lot of hype around modular in terms of the industry, et cetera, but you have to deliver. Overseas people that have done this -- [ TopHat ], as an example, just went -- it broke 200 million. If you go down the wrong path on this -- the market is there, but you have to be able to capitalize and make money out of it, so we're not going to go down the path of building a robotic factory that builds something that no one wants as others have done overseas, so live in the present and hang in there. Hang in there. Things are heading the right way. Bruce couldn't be more confident in his presentation. And I can't be, as a Chair, more confident than what I'm saying now. The past is the past. And yes, it's taken a while to get to where we are. We would like to have done it faster, but industrial businesses are tough gigs. We're not selling mobile phones where there's unsatiated demand or some new tech that -- valuing companies at 6,000x revenue or whatever the multiples are. We're a true-blue Australian company in the industrial space. We don't get the multiples more than what we make. And our focus is 100% on making as much as we can out of the assets that we have. And we don't need to go and sell this or do this or dress up or whatever or to divert attention. "Don't look at the business. Look over there." Look here. We're here. We'll answer the questions on the operations of the business. We don't have to do [ pin-and-thimble ] tricks to spruce things up. The share price will look after itself in the long term if we make the returns that we expect to make, and that's all we can focus about. I'm not concerned about if it's $1.98, $1, whatever. Our thing is the market will recognize what we make and what we are going to make into the future. And that's where I'd say you need to focus, not on 2016 or whatever.

Understood. I'm certainly not attributing all that period, but it's just 10 years and now you are in charge of it. You've been in change for a while, but specifically on those topics of the value of the properties, do you have any thoughts there? Because...

I'm presuming you're referring to, what, Searipple. Searipple, we -- well, Searipple is a business. It's not a property [indiscernible] you wouldn't sell.

Searipple and some Perth properties...

And once again that is a -- it's a very difficult thing to put a value on. And while we're making the returns we're making, why wouldn't we keep it and keep on running it? That's got a good future. The other property that we own, I'm presuming you're referring to the warehouse in Perth. I don't know how involved you are with industrial land at the moment, but the leases on industrial land are [indiscernible] gone across Australia. It's one of the highest increases I've ever seen in my time of operating things. It's like eye watering, the increases. Owning land is not a bad thing because you're not exposed to massive increases in lease rates which is occurring. And once again, if you start to move things, it's where do you go to, where the facility -- you can't just pick up an operation and move. It comes at a cost. And if that's -- if we're going to do that just for dressing up the balance sheet, we've got better things to do than messing around with that.

[indiscernible]. You're missing the point. Like the market isn't recognizing any of that value. And if there is value there...

Well, buy more shares. You'll make money in...

Well, I suppose the devil's advocate would say, "Why isn't the directors and management buying shares?" because...

We have. We've bought shares. And there's also...

Those shares are worth so much less than your annual salary. It does seem misaligned. Is that a fair comment?

No, but look. This is always the it's up to each individual to make decisions. And there's only limits of timing, et cetera, so -- and take the buyback, for example. We had to suspend the buyback because we're in negotiations with Perdaman, which is obviously a market-sensitive thing, so we could not actually continue to do the buyback in that period of time. So it's the same as for the directors, same as it goes for the company. It goes for the directors as well, so the directors will support the company. And the shareholding has improved over the last 2 to 3 years. It's improved greatly. So we're not -- this is not our company. This is a public company, so we're no different to any other public company. You get the annual report of, take the annual report of any company. Pick NAB, NAB the bank. You tell me how many shares each of those directors have in the company compared to what they get paid for it. The Chairman of NAB is probably $1 million a year. Has he got $1 million in his shares? Unless they're given by the company, probably not.

I don't know. May be...

I'm just quoting a -- I don't know that for a fact. I could be -- someone is probably going to Google and prove me wrong, but so be it.

All I'm saying, it would be...

So if someone could check: How many shares does the Chairman of NAB have that -- worth -- part of the salary or packaging, whatever? Or wasn't part of -- I don't know if he's a past employee -- anyway, I think we have to move on, last question, your last question.

[ You ] understand the point. When Fleetwood was performing very well, there was an aligned [ shareholder ] driving it, so...

We've given you plenty of time. Last question...

No. I'll wait for another item [ talking about the remuneration report ].

Okay. Okay, so there being no more questions, everyone is all good...

Yes.

Okay, we've gone past how to ask a question. Now we go into how to vote. Okay, we'll now move to the very formal part of the proceedings and deal with the resolutions. I declare the voting -- declare open the voting for all -- I'll say that again. I declare voting open on all items of business. Voting today will be conducted by a poll on all items of business. In order to provide you with enough time to vote and in case you're not able to stay for the full meeting, I'll now open voting for all of the resolutions. If you're eligible to vote at this meeting, there are 2 ways you may cast your vote: in person here or via the online platform. If you are present at the -- in the room, you may use the voting -- the blue voting card which was handed out when you came into the room. And the blue card is for all resolutions. To vote, please do so by either for, against or abstain. Your voting cards will be collected prior to the end of the meeting. If you don't have a PIN or believe you're entitled to vote but do not have a voting card, please raise your hand now; and we'll have someone address it. Everyone is all good to go. For those online. If you're casting your vote using the platform, select the vote icon; and the voting options will appear on your screen, once again the 3 options. A tick will appear to confirm the receipt of your vote once you do so. There is no need to hit submit or enter button, as the vote is automatically recorded. To change your vote, don't change it from for to against, but if you want to change your vote, select "click here" and change your vote and select a different option to override your initial vote. You can change your vote up until the time I declare the voting closed. If you require any technical assistance during the meeting, please refer to the online meeting guide available on our website or contact Computershare. We have worked hard to ensure this webcast runs smoothly. However, should you experience any technical difficulties: A recording of the meeting will be made available on our website shortly after we conclude. Now to the resolutions. Here we go. The first, standard resolution of AGM's is the -- to receive and consider the annual financial statements of the company and the reports of the directors and auditors for the year ending 30th of June 2024. This item of business does not require a vote. However, the reports are open for questions. As I said, Fiona here from Ernst & Young is available to take any questions, as is Cate, our CFO, any technical questions about the conduct of the audit, preparation of auditor's report, the accounting policies adopted in preparation of the financial statements and the auditor's independence. Are there any items of -- or any -- sorry, any questions relating to this item of business? There is a question. Go for it.

Just a question. I did ask it on the earnings call, but it is a bit strange that the company does report free cash flow before lease repayments, when clearly, lease repayments are a very large cost for the business? Free cash flow of $5.7 million positive, but then there's a minus $8.4 million lease repayments, so the business lost money...

No, I didn't. The accounts are presented in accordance with the accounting -- I'll jump in there, the accounting standards. We don't make a decision on how we report leases, et cetera. That's a very -- you'd know accounting standards are pretty black and white. You don't mess around.

No, no, no. Free -- well, can the auditors confirm if free cash flow -- is that the correct definition? Or should free cash flow -- I think that's a subjective measure. You can choose how, in your presentation, to...

Cate, do you want to -- okay, [indiscernible] I won't answer. You address...

[ I don't know ]. You're very defensive. I'm just trying to ask a question. Like it seems strange that you're saying free cash flow is positive when cash flow is going down. So it's...

No, that's all right. We'll get the -- we'll have the auditors respond. I won't speak.

[indiscernible] here you go....

Cate or Fiona...

Charlie, we've had this question before. And we acknowledge the point you're making about free cash flow, but we do prepare that in accordance with accounting standards, operating, investing and financing. And I get it. Leasing, it does sit below that. And yes, technically, you should offset them to get a true free cash flow generated. Well, we don't feel we've misled you in any way because we feel that you can see that, anyway. So I feel we're arguing somewhat about semantics and titles on it. And we feel that you can see that clearly yourself. And I think the point that I made on the earnings call and I'll reiterate today was that we had an improvement in our operating cash for the year. And that was pretty clear. So I think it -- should probably acknowledge that we did do that, as opposed to the preparation of the accounts in accordance with the cash flow statement. Thanks -- if you'd like to refer to Fiona as well for a more technical answer, but...

[indiscernible].

Yes. Cool.

Any other questions? That's it -- I think the mic is not on. I can't hear -- can...

[indiscernible]

[indiscernible]

We maybe just go on the -- we -- if you just speak loudly, we can hear you.

[indiscernible]

For those online, the mics are not working very well -- no, it's not on either.

[indiscernible]

Mic...

[indiscernible]

Okay.

Is there -- could you get a valuation done of your properties? I'm not suggesting that you sell that, but maybe it would reassure the market that there is significant value in Fleetwood, which is why I'm interested to suggest. We're not going to sell it, but we think the value of an industrial property is worth [indiscernible]. Because that would help allow the market to value this conglomerate more appropriate, I would think. Is that a possibility...

Do you guys want to answer that? Because, I mean, I don't know off the top of the head when the last valuation of that property was done. You're talking about Perth...

[indiscernible]

So for starters, we don't own all of Searipple, okay? So that's one thing that you need to be very clear about. So that would be sharing, selling a part asset. The back story to this, and I'm relatively new at Fleetwood, is that the assets are held at historical cost, what they were purchased at, so you're right. The portion of Searipple that we bought many, many decades ago is on the books at cost. And the other asset that we own -- or we have rights to own in terms of a long-term ground lease is the High Wycombe property. And I believe that we do disclose that in our goodwill note. You can see the value of that there. So it's an accounting policy choice; and that was elected many, many, many years ago. And that would be up for the Board to take under advisement to determine -- to move away from historical costs and to move to fair value, but that's probably not the most critical thing for us to do today.

[ So you always value ]...

Yes. It's in there.

[indiscernible] [ value ] [indiscernible] [ properties worth ], whatever.

That is the value. It's been valued.

[indiscernible]

I must have missed that...

That is -- it's been valued by 2 external property -- it was in November last year, yes.

[ It's current security for the Westpac facility too ].

So that actually has a -- I mean look in the -- if you look at the goodwill note, you'll see that -- I think it's gone up by about $1 million in the 2 years since the last valuation.

So Searipple...

No, High Wycombe, which is the Perth industrial site, yes.

[indiscernible]

Okay, okay.

Okay. So are there any more questions, Sam? No. Okay, we'll move to the next item of business [indiscernible]. Have I gone too far here?

[indiscernible]

Resolution 1. Okay, this resolution is to adopt the remuneration report that forms part of the company's annual report for the financial year ending 30th of June 2024. The remuneration report details the principles used to determine the nature and amount of remuneration, sets out the remuneration details for 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. Voting on the resolution does not bind the company or directors and is advisory only. The proxy votes in relation to resolution 1 are on the screen. Are there any questions relating to this resolution? Yes, go ahead.

In terms of the -- this is from [ Mr. Stephen Mayne ]. In terms of the resolutions, do any of the proxy advisers cover us? And if so, did any recommend to vote against today's resolutions? Have there been material protest votes against the remuneration report or any other item up for today? And what were the reasons?

Yes, I can answer that. There was 2 proxy adviser reports. One was all for. One was against me because of my position as Executive Chair of Wellard. So they saw that as -- think it is technically over-boarding or something along those lines, so they -- that was ISS. So one -- it was Glass Lewis was 5 for. And the only one was -- resolution #2 was against myself, so otherwise, it was all for. That was only part of his question, yes. Okay, so there being no further questions, I'll now put it to the meeting, that remuneration report for the year 30th of June 2024, as set out in the company's 2024 annual report, be adopted. Please select your vote by marking or casting one of the options available, if you've not already done so already. [Voting]

We now move to resolution 2, which is the reappointment of me -- it sounds funny, saying that. As the Chair of the Board from the -- I was -- is my reelection as a director. I was appointed a nonexecutive director on the 19th of November 2020 and as Chair of the Board from 26th of February 2021. A copy of my bio was set out in the notice of Annual General Meeting sent to you all and on our website. The Board, with me abstaining, unanimously recommends that shareholders vote in favor of this resolution. The proxy results in relation to resolution 2 are on the screen. Are there any questions relating to this resolution?

Again we have one online from [ Mr. Stephen Mayne ].

Okay, from -- [indiscernible].

"Does John believe that -- a high-profile period in your career working for Gina Rinehart turned you into a better professional independent director?" Does Fleetwood do any work for Hancock Prospecting? And does John's history working for the company insist in this regard?

The last bit. Fleetwood does not do any work for any of the Hancock Prospecting companies. I think we tendered on one of the Roy Hill expansions or something like that, but as -- to my knowledge, there is no work that has been done for any of the Hancock groups. And absolutely, my experience there was a great time in my career. And it has obviously benefited me in roles that I currently have, so yes.

Lovely. [ Mr. Mayne ] has another question. He's just been looking at the NAB annual report, but in paraphrasing, are you prepared to buy more Fleetwood shares and work on your position of your equity stake being double his cash fees...

So the NAB Chair has got double his equity...

Yes...

I think that I've -- okay, I should have...

The NAB Chair and...

No. [ Stephen Mayne ], if you're online, go and check ANZ or someone else. So I've obviously picked a bad one. I -- look. That was off the top of the head. Look. When the opportunity is there and -- I've bought shares over the last couple of years. That's -- I'm not going to declare right here and now I'm going to pay X and spend whatever, but yes, I'm positive towards the underlying intent of his question.

Thank you.

Okay, now I put to the meeting that -- another question, yes.

Thank you, [ Stephen ], if you're listening, for following me up there, but one of the other companies that you're on the board of is Wellard. And they are essentially selling off assets and what looks to be in wind down, returning capital. And I presume that's a decision that you've made. So just bearing in mind your comments previously that -- cyclical and you're not going to sell off anything and [ yada yada ]. "If somebody wants to bid for us, they're going to bid for us," but it seemed like that was very defensive, as opposed to proactive. But what's different from, say, Wellard in terms of essentially winding up, that's what it looks to be, that company, as opposed to Fleetwood?

I'm here in the capacity of Chair of Fleetwood. I'm not going to address questions of Wellard in a public forum such as this. If you want to do that, we have our AGM in Wellard. I don't know if you're a shareholder. Come along on the -- buy some shares. And come along on the 22nd of November, and I answer that question -- 22nd or 25th. It's 1 of the 2 dates, so...

Just interested about the -- it's a differing approach, but that's okay.

No, that's it's not appropriate for me to talk about Wellard in this forum, so -- but happy -- are you a shareholder of Wellard? Out of interest.

Yes, yes, yes...

Good. Come along, 21st (sic) [ November 22 ]. You can come to Fremantle or join us online. I look forward to answering the question then. I know the first question I have to prepare for. Okay, now we're all done with questions...

We are.

I'll now put it to the meeting, that John Klepec, 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 voting by marking or casting one of the options available, if you've not already done so. [Voting]

Thank you. Okay, we move to resolution 3, which is the reelection of Mark, Mark Southey. I'm very pleased to propose the reelection of Mark as director -- Mark Southey as a director of Fleetwood. Mark was appointed just before myself, as nonexecutive director on the 10th of October 2018. Copies of Mark's bio was set out in the notice of AGM and on our website. The Board, with Mark abstaining, unanimously recommends that shareholders vote in favor of this resolution. The proxy results are up on the screen. Are there any questions relating to this resolution, to myself or even Mark. If anyone wants to address anything directly to Mark, I'm sure he'd be happy to take questions.

We have a question online again from [ Mr. Stephen Mayne ]. Paraphrasing, but given -- about the relative lack of skin in the game, is Mark prepared to buy more shares before the next year's AGM? Similar question to what you received, John.

Do you want to answer that, Mark, or are you in same answer as I had?

[indiscernible]

[indiscernible]

Okay. Look. I mean I think what the -- I have acquired [ a few more ] shares recently. I may make a decision to acquire more shares or not, but it's really I don't feel that this is the venue for me to declare what I intend to do around shareholdings, so -- I have no objection to the idea whatsoever. And I'm -- certainly feel that there's a lot of positive sentiment, [ a lot of good ] reasons for people to acquire shares at the moment, but my own personal view on that is something that will remain my own personal view until I enter into the market at the appropriate time.

Thank you.

So I'll add to that. There's more for you to buy, [ Stephen ].

So I don't think it's a laughing matter, but -- the misalignment, but anyway, Mark, you've been on the Board since 2018, so I would have thought your stake would have been a bit larger. But just a question: I mean you have been on the Board for quite some time. What do you think is a fair ROCE for building -- the manufactured building division? You've seen sort of the transformation. And there certainly have been some big issues. And you've overseen this new plan, but what do you think is a fair -- it sounds like the Chair -- you don't think that 15% or $10 million EBIT, if those figures are correct, of $300 million of revenue -- you think that's not really the target. You think you should be doing a lot better. But Mark, given you've been here, I think, the longest -- maybe not, but what are your thoughts as to a fair target? What do you think that business should be able to earn both in sort of a margin and a fair ROCE?

Your mic -- just take the mic.

Yes. Thank you. And I mean that's a fair question. I mean the -- our -- as you know, our target is to produce ROCE at above 15%. Where we can get that...

[indiscernible]

[ It's on ].

I think we -- I am certain we can improve on that. Where we can get to exactly, I -- at this point, I don't think I can give a definitive number.

Margin target. It's around [indiscernible] margin [indiscernible], from what I understand [indiscernible], but...

Look. I might add to that. Look, construction business. Look at all the construction businesses, the ones that haven't gone out of business, first of all, in the last 3 years. That's an achievement in itself. Construction businesses don't make 10% EBIT. It's 12% EBIT. Tell me which one does. The -- it -- because they have high turnovers. The -- it's the return on capital you have to look at because the construction industry, be it building a house, be it building a major -- a school, et cetera, if you've got Ma and Pa building a modular home in their backyard or in a small shed, they might do it for 1%. So it's a super competitive industry, so you can't get outsized returns. We are not a tech company that are going to get EBITs of whatever. A lot of them are negative, but anyway. So a hurdle and the target is 15%. So the target is 15%. 15% ROCE is an accepted norm. You guys are all investors. 15% ROCE is an accepted norm for return on capital employed. So that's the first hurdle. We want to achieve more than that. We think it -- we can get there, but it's an achievement to get there, in the first place. It's a tough industry. Construction is not a walk in the park. Have a look at all of the companies that have gone broke in the last 2 years. It's long. And the other point I have to make is -- you keep on repeating in there. And it's not a laughing matter. It's skin in the game. There is an equal and opposite argument against skin in the game from directors on shareholdings and because that can lead to decisions that are made purely on your own shareholding rather -- we're here for all shareholders. Our duty is to all shareholders, get the maximum return for all shareholders, so at all times, it shouldn't be, "Gee, I've got a few shares in this. I can make X, Y, Z," and make a short-term decision. It may be the wrong decision for the shareholders in the long term, so you have to balance it too. I'm not against the skin in the game, but it shouldn't be a mantra that, unless you've got skin in the game -- I can -- I won't quote names or whatever, but there's companies out there that quite recently -- big-profile guys that have got huge skin in the game. And has that changed how they operate? That can go either way, so you need to balance the two. We've improved. We've heard the comments from shareholders in the past. They would like to see more skin in the game, which has happened. Go back 2 years ago and what the shareholding is now. So we're not dismissing it. And it's not a laughing matter, so it's -- and honest, but there are -- and I'm on other boards as well where people are very aggressively opposed to any skin in the game because they believe that it clouds their judgment. And they want to be there for all shareholders. So you've got to balance the two. It's not all one way. It's not all another way. I think, if you had 100 people lined up, it'd probably be a 50-50 split.

I respectfully disagree.

Yes, no. That's exactly the -- [ there's all these sides ] to every argument.

And I think there a lot of studies that show that founder-led companies -- I don't know if [indiscernible] against Fleetwood over the long term. And we know who has won that race, but...

Anyway, any other questions of Mark's reappointment? Okay, now I put it to the meeting, Mark, being a director of the company and retires in accordance with Fleetwood's constitution and being eligible, is reelected as a director of Fleetwood. Please mark your voting slips by marking or casting one of the options available, if you've not already done so. [Voting]

Okay, we're moving to -- Bruce, you might get ready for some questions. Because I think there's going to be some now because everyone is flowing nonstop questions. Okay, resolution 4 is to seek approval to issue 243,750 performance rights to the MD and CEO of our company, Bruce Nicholson; and the issue of shares following any vesting of the performance rights in accordance with Fleetwood's long-term incentive plan for the FY '24 financial year. The information that must be provided by shareholders in order to obtain shareholder approval, under listing rule 10.14; and the terms of the long-term incentive plan is set out in the notice of Annual General Meeting which was sent to you. The proxy results in relation to this -- resolution 4 are on the screen. As you can see, it's very nearly all for, 98.46%. So are there any questions in relation to this resolution? [ Stephen Mayne ], yes. Come on.

There is a question from [ Mr. Mayne ]. And Chair, you may consider that you've already asked and answered this, but could the CEO summarize his past LTI grants, as to whether they have vested or lapsed? Has he ever sold any ordinary shares in the company or bought any on market, without relying on the incentive scheme, to build his equity position in the company?

Bruce, do you want to answer him directly? Best if he hears from the horse's mouth.

Yes. None of the shares that have been issued to me have vested since I've been here, [ 3 years ]. And I have bought shares on market since I've been here. I have not sold any shares on market since I've been here.

Thank you, Bruce. No other questions?

[ No other ] questions...

Just ask you as well for your thoughts, Bruce, given it's topical, but your thoughts on the CEO's alignment. Do you think having more than 100,000 shares relative to your, I think, 600,000-odd base salary would more align you to shareholders? Do you think it's a good or bad thing if you were to have a significant stake? Because I think -- please correct me if I'm wrong, but was it Tate, the -- or the -- one of the founders of -- I think he had a significant stake, which I think was great for shareholders when the stock was performing very well. I think he's still on the register, so I'm probably -- I don't know what happened since, but I think...

[ Yes. Greg is still ] [indiscernible], correct.

Under his guidance, I think that the stock was certainly rated very highly. But just your thoughts on what a fair shareholding is for a CEO relative to his salary and...

Well, if we're using Greg as the proxy, [ David ] -- and thanks for the question. My mechanism is for my LTIPs to vest, which means I need to deliver results for shareholders. And that's my ambition here, so I have the opportunity with the LTIP to actually have those shares vest. Our poor performance in the last couple of years has meant they haven't vested. My ambition and my reward is in those shares vesting. That's how I'll build my shareholding in Fleetwood; as did Greg Tate, if you want to use that as the proxy.

But now I'm a big fan of alignment. And 240,000 shares, it's still less than your annual salary. It's a nice amount, but -- maybe it's more a comment. I would certainly be -- I think the target is relative share price so that the stock [ can still ] go down, and you may or may not get those. And then there's EPS, which as discussed previously is very different from free cash flow which is what dividends can get paid for, but anyway, maybe that's just a comment. I would very much support a much larger performance package if you were to get the stock up to $3 or $4. I think that would be a great outcome for all. And you should certainly get paid if that was the case, so...

[ If I could -- I appreciate your ] question, but if I could make a comment on this is that Bruce came onboard through a talent search through the market. And when you're in that process, to enter into a company and make a commitment to the size of your salary would be beyond most people's financial reality; and I think you've got to think about that in context. You want the best person in the market to come onboard to run Fleetwood. You go through a search. You can't expect people to come in on a full equity [ base relative ] to the size of their salary unless they're very wealthy -- fundamentally very wealthy people. I think it's an unrealistic expectation, but I think it's a correct expectation, to expect the CEO and MD and give them the ability to earn that equity within the company through performance rights program as indeed we have. So I just think that that's -- I think it's just unrealistic to think that people would come in -- as a CEO and an MD into a new company and to join the company with equity commitments equivalent to their salary. That just doesn't -- that's just not normal practice. It doesn't happen like that.

Yes. Look...

[indiscernible] I think, performance rights [indiscernible], but we have to say [indiscernible] performance, essentially the performance [indiscernible].

I see, okay.

I mean that's great, but I think that performance rights are a bit [indiscernible] [ more aligned assets ] [indiscernible] share price rather than [indiscernible]...

well, that's also subject -- when you asked, had the question about proxy advisers and whatever -- one of the things I do look at is the amount that is paid to CEO and whether that is in accordance with market, et cetera, so we do have to add. There are some parameters on that. You can't overload and give enormous bonuses because otherwise it's disproportionate because -- and CEOs. The fixed remuneration is not why they take on the job. A gig of CEO or MD of any company is an enormous task. And if there isn't the upside of equity, whatever, it makes it pretty hard, just to do it for the fixed remuneration. So when you don't get it for multiple years, that is a significant de-motivator in terms of your output. And I can say that as an individual and as a Chairman and a director of companies. It's you -- as a Board, we want the management to hit the target so they can get the returns. But they have to hit the targets, simple as that, so -- and they've got to be reasonable. We can't have 6x salary vesting in performance rights because that's unfair to the rest of the shareholder base. I hear your point. You want skin in the game to the max. And your belief is skin in the game will produce a better result than anything else, which is fine, but there has to be a balance that it has to be market-driven as well. You can't have an outperformance. And the structure that we got for -- Bruce has only -- hasn't been long. We went to market. It's been looked at. It is in the parameters of what's acceptable. And all going well, I hope we allocate full incentives this year. Nothing better, I'll stand here next year and say, yes, we've paid the executive team the whole lot. Great, we've hit the target. So you have -- that doesn't change. If we have 1 share or 10 shares, that doesn't change what we do. It absolutely doesn't. Believe you me. It does not change your motivation, whatever. And there are companies out there where you've got individuals that -- they've got 30%, 40%, 50%, 60% of the company. That's fine. And as Mark said, they've -- a lot of them don't even take a salary because they don't have to. So everyone's circumstances are individuals. If you're a billionaire and you own a company, getting paid $1 million is money in the glove box. So anyway, let's move on. Any other questions? All good, okay, so 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, the issue of 243,750 performance rights and the issue of shares following any vesting in 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 '24 year. Please select your vote by marking or casting one of the options available, if you've not already done so. [Voting]

Now we move on to the last resolution. We're finally there. It's the last one. Yes, I think so, right? It's the last one, is it? Yes. Resolution 5 is to seek approval for the issue of securities under Fleetwood's long-term incentive plan. Shareholder approval is sought to allow the company to rely on an exception to the calculation of the placement limits, under listing rule 7.1, on the number of securities that may be issued without shareholder approval. Further shareholder approval is also required prior to any director or any associate of any director participating in the LTI plan, under listing rule 10.14. The information that must be provided to shareholders in order to obtain shareholder approval, under listing rule 7.12; and the terms of the long-term incentive plan as previously mentioned are set out in the notice of AGM. The proxy results for resolution 5 are on the screen. You can see it's 98.48% for. Are there any questions in relation to this resolution? [ Stephen ] has left the building, [ it seems ]. [indiscernible] [ Stephen ], even if you're out there, I'm disappointed there's no question.

[ Mr. Mayne ] did leave a comment, but it's more of a comment than a question.

[indiscernible]

No, he's enjoyed the lively debate.

And no questions from the floor. Now I'll put to the meeting -- to go through all this again, thanks: that -- for the purposes of ASX listing rule 7.2, exception 13(b), and for all other purposes, that shareholders approve Fleetwood's long-term incentive plan, the terms and condition of which are summarized in explanatory notes; the grant of performance rights under the long-term incentive plan; and issue of shares upon the vesting of such performance rights in accordance with the long-term incentive plan. Please select your vote by marking or casting one of the options available, if you've not already done so. [Voting]

Okay, we'll just go around and collect the [indiscernible]. So as we do that: Ladies and gentlemen, that concludes our discussion on the items of business, and I will now close the voting system. The final votes and results will be released to the ASX later this afternoon. And that concludes -- thanks for your patience, for all the questions and everything. That concludes a longer than expected -- and the voice has held up, fortunately. So anyway, thanks for, all, making the time and effort to attend today. It's appreciated by everyone on the Board, for those that are here and also those that have listened in online. We do greatly appreciate your support of Fleetwood over the years. Many of you are long-term shareholders. And we look forward to hanging in there and delivering a return that you all expected when you first invested in the company. Thank you.