Future Generation Global Limited (FGG) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. Welcome to the Seventh Annual General Meeting of Future Generation Global Limited. I'm Geoff Wilson, and as acting Chair of your Board of Directors, I'll be chairing the meeting today. This is a hybrid meeting I've held both online and in person. The hybrid meeting format allows those that cannot join us in person, to participate. Before we begin, I'd like to acknowledge the Gadigal people of the Eora nation, and pay my respects to elders past and present, who have been custodians of this land on which I stand for tens of thousands of years. I also acknowledge the custodians of the land on which our shareholders and fellow directors currently stand to view and listen to this AGM. Joining me today in person my fellow are directors on left, Frank Casarottii, Kiera Grant, Sarah Morgan, Jonathan Nicholas. And joining me online is Geoff R. Wilson and Kate Thorley. And Kate is also CEO of Wilson Asset Management. I'm delighted to also be joined by the CEO of Future Generation Global, Caroline Gurney. On our far left, Caroline commenced her role as CEO in September 2021, and has been leading Future Generation Global into an exciting period. We also are joined by joint Company Secretary, Jesse Hamilton, who is also CFO of Wilson Asset Management. Also, we have Sarah McIntosh of Mertons, who is here one of our pro bono service providers, and a representative from our auditors Pitcher Partners that's Sylvia Wallace, who's down the front there. Thank you, Sylvia. And Sylvia will be available to address any questions relating to the company's financial statement. Jesse will also be acting in his capacity as moderator. So if there are any questions online. As it is just after 2:30 p.m., and a quorum is present, I declare the meeting open. The notice of meeting has been circulated to shareholders and in the absence of any objections, I'll be proceeding on the basis of the notice has been taken as read. I will do our best to use technology to keep this hybrid meeting as succinct as possible. Earlier today we lodged the Chairman's address with the ASX, and I encourage you to have a read of the document in your own time. Those who have logged into the webinar with your username and name and password will have the opportunity to submit questions online as well as to vote on all the resolutions. If you have already prepared a question that has not been sent to us prior to this meeting. You can start submitting questions now using the online meeting platform, and we will aim to answer it at the appropriate time during the meeting. If it relates to a specific resolution, please state the resolution number at the start of the question before submitting. In the interest of streamlining the meeting, we'll aggregate all the questions related to a specific resolution and answer them before we formally put that motion for resolution -- put forward that motion for resolution. As this meeting is also being held virtually, we also need to factor in a time delay in receiving those questions. So as we explained to the previous administration that it's important to have not only virtual meetings, but virtual meetings and in-person meetings. So please make sure that you submit your questions or comment early. If you wish to ask a question, please click on the message icon, this is for the online people, located at the bottom of your screen, if viewing from a phone or the top of your screen if viewing from a laptop. Type your message into the Ask a Question box and click the arrow button to the right-hand side of the message box. An audio question line is available to members and appointed proxy holders. To use this service, pause the broadcast before clicking on the link under Ask Audio Questions. Ensure your browser can access your microphone, a new page will open, as shown on the right, please enter the requested details and click submit request to join the audio question queue. You will hear the meeting while you wait to ask your question. With regards to voting, because we are doing this online, I'm going to proceed to open the polls now. So the polls are open. So you can vote from now until I inform you that we've closed the polls. If you change your mind about any of your votes, you can also override your original vote between now and when the polls close. If you've already submitted a proxy form or voted online prior to this meeting, you are not required to vote again. I will now take a few minutes to explain the voting procedure that we'll use online today. When I open the poll, which I have, the voting icon will appear on the navigation bar. Once you click on this, the resolution will appear on your screen. Simply select one of the options to cast your vote. If you change your mind, simply select another option. You can change your vote as many times as you wish until the closing of the poll. Your vote will have been submitted when the voting option icon changes color. There is no submit button. You can vote at any time during the proceedings until I declare the voting closed. I will close the voting after all resolutions have been considered once we have concluded the question-and-answer section. I'll give you a clear prompt in the meeting to warn you of the closing of voting. The votes cast online during the meeting will be combined with the vote submitted before the meeting, and please note that only shareholders, proxy holders or shareholder representatives may vote. For those of you who've logged into the webinar as a guest, you'll be able to view our webinar, but not submit questions or vote. In terms of -- now just go through the Chairman's address. Over the last 12 months, we've obviously faced a challenging period, both social, economic and human challenges, both here in Australia and globally. The second year of the pandemic, obviously, saw an easing of restrictions in Australia, and a bounce back in economic growth. The new year obviously has brought challenges with inflation and interest rates rising after a very prolonged period of interest rates, falling, probably a 10 or 20 -- up until recently, we had a 10 or 20-year bull market in interest rates. Obviously, the ongoing war in the Ukraine, and the lockdowns in Beijing has helped contribute to uncertainty and volatility in this climate. From our perspective, the Board's, and I'm sure all of you shareholders, the events in the Ukraine are heartbreaking and our thoughts go out to all those affected by the conflict. In Australia, our social impact partners in the community, and the community-facing roles, have really seen a significant increase or a surge in demand and increased distress among young people and their carers. Their resilience and ingenuity to continue and increase support for young children is both inspiring and very impressive. The social footprint of our charity partners is widespread and goes to the heart of our purpose. Future Generation Global was established with a hope of recognizes the -- recognizing this severely underfunded area of mental illness by government and philanthropists. The last few years has shown us the utmost importance of investing in preventing and combating mental illness in young people. I'd like to thank you all, our shareholders, our fund managers and all our pro bono service providers for being part of this unique social impact companies supporting our dual objective of providing solid investment returns over time while working with very vulnerable young Australians, affected by mental ill health. Now I just -- I'd like to turn to the actual results, the period -- the 12-month period to December 2021. That's the -- I'll refer them as the 2021 financial results. The operating profit was a solid year, was a little over $67 million. The dividend, there was a strong increase in dividend, a couple of hundred percent. And there was significant savings in fees that were forgone by our pro bono service providers and fund managers. This is effectively, the $9.9 million. This is the money that would have been -- if you -- if the fund managers and the service providers were charging us, that's what they would have charged us. That allows us to invest $6.1 million in mental illness-focused charities. In terms of the dividend -- sorry, the NTA dividend and profit reserve, the pretax NTA as of April, the end of April, was $1.44. It's been a challenging period with the market under quite a bit of pressure over the last month or so. The dividend that we've paid since inception, a little over $0.09, $0.095. And the final dividend that was paid on the 27th of May 2022 was $0.03 per share. Currently, we're sitting on a list at the end of April, a profit reserve of $0.4833, and that is before the $0.03 dividend is paid on the 27th of May. So there's a very strong profit reserve there. The franking -- our ability to pay a fully franked dividend, obviously, we need the franking, and that's we need to pay tax to do that. This profit reserve is a -- not necessarily a realized profit reserve. So we don't have the same level of franking. So that's why when the franking comes in, we'll pay the dividend over time. I would -- now in terms of -- I'll turn to the formal business now, and I'll take each item and resolution in the order they set out in the notice of meeting. Our meeting today involves the consideration of 3 resolutions. While you're welcome, as I said earlier, to submit questions at any point in time as we move through the resolutions, then please do. When writing your question, please state, as I mentioned earlier, at the start of the question, whether it relates to our financial report or type the resolution it relates to. Since the poll is already open, if you would like to vote, as I mentioned earlier, please vote. If you make a mistake or change your mind, please just select your preferred voting option, and this will override your original vote. I note that Boardroom are the returning officers for today's meeting, and they will be conducting the poll, they are our share registry. Certain votes will be excluded in accordance with the Corporations Act and the ASX listing rules. The proxy votes will be shown after the discussion of each resolution. The Board recommends approval of each resolution. And as Chair, I'll be voting all open votes provided to me for each resolution. We'll advise the ASX as soon as the results are determined, which should be a little later today. In terms of the financial statement and reports, again, you may submit any questions you have. The first item of the business is to receive and consider the financial report, the directors' report and the auditor's report for the year. I mentioned earlier that our auditor, are Pitcher Partners, Sylvia Wallace is here present to answer any particular questions. This -- there's no resolutions on this matter. It's not required. And now I'd just like to pause to allow you to submit any questions. First of all, do we have any questions from the floor? No. And Jesse, online any questions? No. As there are no questions, we'll continue to the items of business for which a vote is required. So resolution 1 relates to the adoption of the remuneration report. Again, please submit any questions or comments on resolution 1 now, if you haven't already. The company has received proxies amounting to the 25,871,587 in favor of this resolution, 1,305,108 against, and 5,598,993, open, of which [ 4,346,619 ] have been granted to the chair. And for these, I'll be voting in favor of the resolution. The -- now are there any questions on the resolution in the room. No? Jesse, anything online? No. Thank you for that. As there are no questions, I'll put the motion that the resolution be approved as set out in the notice of meeting. If you're a shareholder or a proxy holder, please vote. So anyone in the room needs to fill out their voting card? Or are we -- because we're not doing on the show of hands, are we? No?

No. Only if they wish to fill their voting card out, if they've already voted. Their vote still stands as is.

Okay. Thank you. resolution 2 relates to the reelection of Jonathan Nicholas as a Director. Again, you may submit any questions you have. From myself as acting Chair, the -- we've known Jonathan for a long period of time. He -- in his previous role as CEO of ReachOut. Jonathan, in the early days of when Future Gen Global was being put together, came on a number of our shareholder presentation roadshows. I remember quite finely the one in New Zealand. I don't know why I remember the one in New Zealand, well, but it really did help us significantly in there. And when he retired as ReachOut and set up his consulting business, we were very excited that we could get him to join our Board. Jonathan, could I just pass to you for a minute or 2, just to say a few words, and if there are any particular questions.

Yes. Sure. Thank you, Geoff. And all I can say is this is a great honor to have served on the Board so far. And should there be an opportunity to continue serving on the Board. It would again be a great honor as you said, Geoff, this has been my area of passion and interest in mental health in young people since I lost a friend of mine to suicide when I was 14. The work that we did in that FGG support in ReachOut meant that we're able to help a huge number of young people and their parents. And I think in these times with the pandemic, the work of FGG and the support of shareholders and all the partners is going to grow in importance. So for me, it's a brilliant model, and one that I hope that I can continue to contribute to. So thank you.

No, look, thank you, Jonathan. And just looking at the proxies, we'll just go through there. The shareholders would like you to continue as well. And if we look at the proxies, we've got 26,697,906 in favor of the resolution, 1,671,000 against, 5,628,373 open. Of the open ones, 4,395,999 have been granted to the Chair. And of those, I'll be voting in favor of the resolution. The -- are there any questions in the room? Jonathan? Any questions online? No. Thanks, Jesse. So I'm pleased, as I mentioned earlier, you can vote at any point in time online. So as there's no further questions, I'll put the motion that Mr. Nicholas be reelected as set out in the notice of meeting. If you could now vote. [Voting]

Resolution 3 relates to the reelection of Geoff R. Wilson as a Director. You may submit any questions you have. The -- we're very fortunate to have Geoff on our Board. Incredible experience with KPMG. He also chairs our Audit Committee, which is a great -- he's got a great skill set to really to work with us on that. And to me, it's hard to get high-quality people from a -- that have a very strong, potentially global, experience background in that area. Now I know now Geoff isn't physically in the room with us today, but he is online. So I'll just pass to Geoff. If you can just say a couple of words, Geoff? And then -- well, actually, maybe do I -- maybe I should take you through the proxies. Again, similar to Jonathan, so I can put you out of your misery you're being reelected. Well, high probability, assuming the poll, assuming all shareholders vote the same way as the proxies. So I'd like to pass Geoff, if you can just say a few words. Thank you.

Yes. Thanks very much, Geoff, and good afternoon, ladies and gentlemen. As with Johno, I greatly appreciate the opportunity to be considered for reappointment to the Board of FGG. I'm honored to represent your interest as both Chair of the Audit and Risk Committee and as a Member of the Board. And like Johno, I also have a strong personal connection to our core underlying purpose particularly around youth mental health, and really appreciate the opportunity to serve a company with such a strong and clear focus and purpose. In terms of the work that I'm able to contribute around the Audit and Risk Committee, I'm very fortunate to have a strong Board and strong members of the Audit and Risk Committee. We've been working very closely with the company, and I'm pleased to report that the company is particularly invested in strengthening its risk management framework, and I think that will stand the company in good stead for a number of years to come. As I say, as Geoff mentioned, I'm very focused on leveraging my professional and international experience and the experience that I gained from other boards that I'm associated with to the benefit of Future Generation Global. And should I be reelected today, I look forward to continuing to serve your interest and continue to remain focused and committed to our purpose. Thanks, Geoff.

Yes. Thank you very much, Geoff. And just in terms of the proxies, I just -- you can see the numbers there. But I'll read through the numbers. There's 26,896,159 in favor of the resolution, 982,671 against, 5,510,963 open. Of the open proxies, 4,358,589 have been granted to the chair. And for those, I'll be voting in favor of the resolution. Now do we have any -- in the room, do we have any questions for Geoff? No. Jesse, online? No. So actually, I'm going to close the voting in a minute or so. So if you need to vote online, please vote on those resolutions. For those -- so thank you. We have now addressed all 3 resolutions, whilst some of you have completed your voting during the meeting. Again, if you haven't, could you please vote? As mentioned earlier, Boardroom, which is Future Generation Global Share registry, will conduct the poll via the online votes that you submit and combine these with the votes that were cast online before the meeting, which I referred to as the various proxies we've received. I now declare the poll closed, and I formally charge Boardroom to count the votes. I mentioned earlier, the results of the meeting will be released to the market when they become available. They'll also be available on the Future Generation Global website as soon as possible. So we are now taking any general questions for shareholders. Any questions which are able to be addressed during this allocated question time. We will definitely answer them later. I actually don't think we'll necessarily have that problem. So I'll pause now to see -- are there any more general questions in the room or online? Any more general questions in the room? No. Any general questions online? Okay. Ladies and gentlemen, as there are no other formal business for the meeting, I now declare the AGM closed. I'd just like to give you a bit of an update about where things are from a shareholder perspective, when Future Generation Global was established almost 7 years ago, we carefully selected our initial charities to help young people affected by mental illness through increased research and various services. If you've read our monthly updates, which details the positive impact those charities are making with the support and investment made by Future Generation. And we'll continue to update you on the support of those very charities. In finishing my address, there is a number of people who I would like to give a special thanks. In addition, I can't thank enough the fund managers for all the incredible work they do on a pro bono basis. And it's their generosity that makes this possible. Also, I'd like to thank the service providers. I would also like to thank my fellow Directors and the various committee members for their significant time, experience and skill that they put into Future Generation, and all this work is pro bono. I'd also like to thank and acknowledge our new CEO, Caroline Gurney, who is leading Future Generation in a new exciting phase. The team of Wilson Asset Management, which a number are here. Thank you again for your support. It's -- it is -- it allows Future Generation to continue to perform as it does. Probably in finishing, I'd like to thank all the shareholders for your support. It has been a challenging period. The market is always uncertain, and there's been a lot of uncertainty and volatility in the market recently. I mean the good thing is we all know that in the medium to long term, the equity market performs. And we've got who we believe are the best global fund managers, managing money on all our behalf. So thank you for the Sydney Sofitel Wentworth for allowing us to have this function here today. And I just would like to thank everyone that's been involved, and look forward to seeing you at the next AGM. Thank you very much.