Infratil Limited (IFT.NZ) Earnings Call Transcript & Summary

[Foreign Language] Welcome to Infratil's 31st Annual Shareholder Meeting. I can confirm that we have a quorum and declare the meeting of shareholders properly constituted. As in previous years, shareholders were given the option to join today's meeting in person or online. And in addition to those in the room today, I'm very pleased to welcome those of you participating online. On the screen is a picture of the virtual meeting platform, and the boxes show where to clip to get a voting card, how to ask a question. But if you need any help, you can call the number displayed in the blue bar at the top of the platform. I also advise the meeting that members of the press and non-shareholders may be present. At the completion of the meeting, those who are here in the room with us today can join directors and management for refreshments. But before we progress to the business of the meeting, I'd like to introduce you to your directors. So I'm Alison Gerry. I'm the Chair of the Board, and I'm an independent director. I'm a member of the Audit and Risk Committee and the Management Engagement Committee, which we refer to as the MEC, and I'm seeking reelection at today's meeting. Jason Boyes is a non-independent director and is also our Chief Executive. Kirsty Mactaggart is an Independent Director. Kirsty is the Chair of the MEC and a member of the Audit and Risk Committee, and Kirsty is also seeking reelection at today's meeting. Andrew Clarke joins us from Melbourne. Andrew is an Independent Director and a member of the Audit and Risk Committee, and Andrew is also seeking reelection at today's meeting. Paul Gough joins us from London and as an Independent Director and a member of the MEC. And Anne Urlwin is an Independent Director; and Anne is the Chair of the Audit and Risk Committee. Peter Springford is an Independent Director and a member of the MEC. And unfortunately, due to a ski accident, Peter is joining us online today. We also have Andrew Carroll, our Chief Financial Officer; Matt Ross, our Deputy Chief Financial Officer; and Brendan Cavani, our Company Secretary, in the room today. Ed Louden and Gavin Silva join us from KPMG, our auditors. We also have directors and managers from our businesses here today. Jason Boyes is also a Director of CDC and Longroad Energy; Andrew Carroll is a Director of 1NZ; and Matthew Ross is the Director of Wellington Airport. Now moving to the meeting proper. I will take the notice of meeting as read. Proxies have been lodged by 883 shareholders, holding 262,025,785 shares, and this represents 26.7% of the ordinary issued capital, excluding our treasury shares. I can also advise that the Board has confirmed the minutes of the last annual meeting held on the 22nd of August 2024 as a true and correct record of that meeting. But before we move on to the formal matters, I'd like to take a moment to reflect on the year that's been. The past year is a testament to the resilience of our portfolio, our commitment to look past short-term turbulence and keep sight of the opportunities ahead as delivering for our shareholders, and we're confident in our strategy and optimistic about what's a hit. That's not to say we haven't faced challenges, and it's a theme of this year's annual report: Navigating beyond the noise. It's fair to say that the world has felt increasingly uncertain. We saw volatility emerge from questions around AI growth and data center demand, followed by shifts in U.S. budget and renewable energy legislation. Closer to home, a telco competitor also lost confidence of some investors. In a portfolio as diverse as Infratil's, encountering 1 or 2 events is not unusual, but this year, we faced 3 in quick succession, and each touched our largest investments. These moments of volatility remind us that while we remain focused on long-term value, we must also be agile and transparent. When market sentiment diverges from our view of underlying value, we respond through increased disclosure, active management and a disciplined approach. Our share price recovery is reassuring. But as we scale, and particularly with the current, more concentrated portfolio, we can expect episodes of volatility. But I want to be clear, the current vintage of Infratil assets is one of the strongest we've seen. We know many shareholders have been attracted to Infratil because of our investment in CDC and with good reason, it's a very high-quality business. But my message to those investors is that Infratil is more than any single asset. Infratil is an enduring platform that has invested wisely in ideas that matter for over 30 years, and our long-term performance speaks for itself. We've consistently met our target return of 11% to 15% per annum over a 10-year period. And that's not luck or one-off success. It's more than picking 1 or 2 investments that are good. Our secret source is a disciplined and consistent approach. It's identifying thematic opportunities, backing exceptional management teams and our Manager, Morrison, executing with focus and intent. The real strength of Infratil lies in our ability to evolve, spot what's next and to act decisively. That's what sets us apart. That's what gives us confidence in the road ahead. Looking back on FY 2025 in the period since, 4 milestones stand out. First, we acquired an additional stake in CDC, and this move strengthens our governance position giving Infratil a majority of directors on the CDC Board. And we think this is a meaningful step in shaping the future of one of our most strategic assets. Secondly, we completed the merger of Contact Energy and Manawa Energy. And third, Infratil was included in the ASX 200 index, a significant recognition of our scale and performance and the first of our FY 2026 strategic KPIs to be achieved. And finally, we announced the sale of RetireAustralia. That's fantastic to do. This marks the beginning of our disciplined divestment program based on businesses that are unlikely to scale under our ownership. Each of these milestones reflect our commitment to active management, strategic clarity and long-term value creation. While the Board and manager have always been clear on our strategic priorities, this year, we've taken steps to sharpen this clarity, and we've added structure, enhanced the transparency and have begun communicating these priorities more directly with shareholders. We're also formalizing key elements of our investment approach that we believe are critical to sustaining future performance as we scale. And this codification isn't just about consistency, it's about accelerating learning. Newer businesses benefit from the experience of our more mature ones, and that's vital as we grow. And we call this framework the Infratil Way. It includes our approach to portfolio company remuneration, Board performance reviews and sustainability practices. And more work is underway to embed these principles and unlock synergies through greater collaboration between portfolio companies where it makes sense to do so. This is about building a platform that not only performs, but stands the test of time. While today is our formal annual meeting, it's not the only time we meet shareholders. And Infratil remains one of the few NZX-listed issuers that continues to run an annual retail road show. And this year, we held 13 meetings in 12 cities and towns throughout New Zealand, and we met over 1,500 shareholders. Alongside this, and together with other directors, I've met about 20 institutional investors in recent weeks. And these conversations have been invaluable. A consistent theme has emerged. Shareholders are asking for greater levels of disclosure, more consistency in how we report, clearer information on independent valuations and ways to make Infratil's complexity easier to understand, particularly for the marginal buyer. This is a journey, and we know there's more to do. Our strategic KPIs have been set with this in mind to reduce complexity and provide clear markets that our shareholders can track over time. I'm pleased to report that our manager, Morrison, continues to deliver strong performance. And there's a healthy tension between Morrison and Infratil, the kind that fosters constructive challenge and sharpens decision-making. We work well together, and the alignment between us is very strong. We remain focused on delivering value for shareholders, and that includes continuing to look at our fees. Our consistent view is that the current arrangements, which include high hurdles, no incentive fees on New Zealand assets and the FY 2023 changes to allow for offsetting continues to serve shareholders well. But we've also reviewed, together with Morrison, costs that are charged under the management agreement, and we've removed about $4 million of annual costs. I'm proud to cheer a high-functioning and well-balanced Board. We've got strong capabilities and skills sitting around the Board table, and we constantly challenge ourselves to make sure we're making the best decisions on behalf of the shareholders we represent. This year, we undertook an external Board evaluation and pleasingly, per found that Infratil's Board is operating at the 90th percentile of their database. Shortly, we'll come to the formal part of the meeting where I cover the reelection of Kirsty, Andrew and myself, but I'd like to just touch briefly on Board succession. We believe that it's important for Infratil to have an independent chair. And while there are various views on Board tenure, we understand that after 12 years independence, questions will be raised. And as such, and if reelected, I expect my next term will be my last. And if that is the case, I would expect to retire at the ASM in 2028. The Board is actively engaged on chair succession to ensure that we have a smooth and orderly transition, and an announcement will be made of a decision regarding my retirement or an appointment of a replacement chair is finalized. Peter Springford has also confirmed that he will retire at the end of his current term at the 2026 ASM and will not stand for reelection. The Board is currently recruiting a director to join before Peter retires. I'd like to conclude by reiterating my key message from previous years. We remain focused on investing in ideas that matter through consistency of approach, discipline and a continued focus on execution. So with that context, I'd like to now invite Jason to speak to how we're executing on these priorities and positioning Infratil for continued success.

Thank you, Alison. [Foreign Language]. Hello, everyone. Nice to see you here today. As Alison said, I'll now look ahead, I think, to what we're trying to achieve over the next year. As you highlighted, the past year has tested markets and our portfolio in equal measure. But against that backdrop, we have made strong progress on the strategic priorities you outlined. And at the same time, our portfolio delivered operating performance towards the upper end of guidance with proportionate operating EBITDAF, as we measure it, up 9% over that year. That momentum is carried on into the current year with a strong outlook for this financial year 2026 and guidance for a further 9% increase. I'd like it to be 10%, but 9% is good enough. And while it's still early in the year, the portfolio is still, so far, tracking in line with those expectations. That's testament, as Alison said, to the resilience of our assets and to the discipline of our long-term investment approach. That consistency really has enabled us to look through the noise, stay focused on the fundamentals and position the portfolio for sustainable growth. And while some challenges remain, we've adapted quickly. At our annual results in May and an agreement with the Board, we outlined 4 key priorities to guide Infratil's medium-term strategy. These priorities reflect the scale we've achieved, growing from a market capitalization of just $2.6 billion in 2020 to nearly $12 billion today. That's a significant shift and one we hope to continue over the medium term, but with that growth comes the need for deliberate choices. How do we manage concentration in a significant asset like CDC that's grown -- that driven that growth? Where do we focus our capital to truly move the needle in the future at that scale? And how do we build a shareholder base that can support us into the future -- all questions that we talked about as a Board. Managing scale and growth is, I think, a real high-quality challenge and problem, but it requires a lot of discipline and foresight, which is where the 4 priorities that we talked about and they came from. We've actually made good progress across all the 4 priorities, as Alison said, and I want to give you an update on each of them today. So just to remind you, the 4 priorities are: Identify and scale our mix growth platforms beyond CDC and Longroad; divest businesses, as Alison said, that are unlikely to scale under our ownership and reinvest that capital; number three is balance Infratil's operating cash flow and dividends; and then number four is, as I said, continuing to broaden our shareholder base to support future growth and scale. So let's take each of those in turn. If you can just -- yes, here we go. So CDC and Longroad have been extraordinary performers for Infratil, as everyone here knows. And together, they now represent about half of our portfolio value and have delivered strong earnings growth as well. We remain confident in their continued growth. But as Alison said, the strength is the portfolio, and to maintain that portfolio in balance and to continue to drive returns over the longer term, we need to build the next generation of growth platforms. And we're making good progress on that. One we talk about often in this context is Gurin Energy. That's our Southeast Asian renewable energy development platform. And it's now positioned for material expansion through a project they call Project Vendor, which is a huge solar farm development, about a USD 2 billion to USD 3 billion CapEx project selling power into Singapore. And it's received conditional approval from the Singapore authorities. And more than 90% of the land required for it has already been secured. And while that project is still highly conditional, it's a really high priority project for us. We expect it would require about USD 500 million of equity and create about the same amount in value if that project can be brought to fruition, which for all of us is about $1 a share, right, so really material. We are targeting our final investment decision in late 2025, and financial close in the first half of 2026 at the moment, and that could slip a little bit, but that gives you an idea. But the really big portfolio point here is delivering on scale opportunities like this will allow CDC to maintain its current weight in the portfolio, about 40%, even as it continues to grow. So the strategy is really to grow other businesses rather than necessarily get rid of parts of CDC at this stage. And that will help us address concerns about concentration risk within the portfolio. Looking ahead, we expect to share more detail about Project Vendor at our Annual Investor Day in Sydney and September. And on new opportunities, not yet in the portfolio that we think could be the next CDC Longroad or Gurin for Infratil in the future as well. So look out for that. Priority 2 was to committing to optimizing our use of capital by divesting businesses that are unlikely to scale under our ownership and reinvesting those proceeds into more scalable opportunities. Our goal is to realize $1 billion or more over the next 2 or 3 years from doing just that. For a growth business like Infratil, each investment really needs the potential to scale to $1 billion or more, so $1 a share, over a 3 to 5 period, or that business, that investment is unlikely to be meaningful for you and I as shareholders. So over time, we also expect to shift our portfolio so that a greater share of our operating cash flows come from a smaller number of larger businesses which should have the effect of improving the stability of those cash flows, which tends to be what you get from bigger businesses, but also reducing complexity and simplifying the portfolio for new investors who may want to come on board. As Alison mentioned, the first step in this divestment program was the sale of RetireAustralia announced a couple of weeks ago. This is a quality business, as we've talked about over the years in these forums, but one that has become too small to move the dial for Infratil shareholders. When we first invested, I was surprised with this. $215 million, we invested in December 2014. It was on news. I remember that part. But our market capitalization was $1.6 billion when we invested in that. And now, as I say, we're nearly $12 billion. So even with positive changes we've made to the business, RetireAustralia no longer has the scale to deliver meaningful returns for our shareholders without requiring significant additional capital from us. The sale price reflects an equity value below our carrying value. However, when viewed in the context of our broader portfolio objectives, as I've outlined, we believe this is actually the right step. The expected sale proceeds, which is about AED 300 million, will preserve nearly all the contributed capital when you factor in both the capital invested and the distributions we've received. So in effect, we've got our money back. And I think that's what investing in infrastructure should really look like. Some downside protection, so that even when a business doesn't scale as intended like that one, we can get our money back. Further work towards the $1 billion target is well advanced, and we expect to continue to make further announcements on other divestments before the end of the year. Pillar 3 is balancing operating cash flow at the Infratil level. What we're talking about here is ensuring that the distributions we receive out of our portfolio companies cover both our fixed annual costs and our dividend. Right now, we cover our costs, but not the full dividend, and we want that balance to become sustainable over time. We expect to close that gap over the next 2 or 3 years as CDC and Longroad, in particular, complete their current accelerated build program. So those projects will start paying cash back to their businesses, which should flow up to us. And also as one in New Zealand, free cash flow continues to grow as they finish their elevated CapEx and reinvestment programs internally and expect trading pretty well as well. As I noted earlier, the trading performance of our portfolio overall has been in line with expectations, which will help support that path back to balance as well. And also proceeds from divestments will pay down debt, just less interest, and that will also strengthen our position. So keep an eye on that. I think this long-term sustainability of the dividend is something we're trying to demonstrate through doing that. Final point is broadening our shareholder base to match the scale of the company, but actually we are today and we expect to continue to build. A key milestone in doing that was include -- our inclusion in the ASX 200 index last month, which generate strong interest from new investors and expanded our reach in Australia because for fund managers in Australia, that is your benchmark. So suddenly, they have to take a view on whether they want you, which is a really important step for us. We've always had strong support from retail investors, thankfully, and we hope and expect that to continue. But as Infratil grows and our portfolio becomes more global as well, we expect increased interest from offshore institutional investors that will help strengthen and diversify our shareholder base. And getting that mix right of local and global investors is a priority and actually beneficial from -- for everyone. If we can manage it thoughtfully, it should mean that broader perspectives are being brought on the value of the portfolio. It should improve liquidity, which should make it easier for all investors to adjust their holdings when needed at better pricing, particularly at the scale we're going to be. So to finish, the strategy that we outlined in May is well underway. We're building the next generation of growth platforms. We're divesting smaller assets, simplifying our portfolio and investing into bigger opportunities that will drive future shareholder returns at scale. We're positioning to balance cash flows and dividends, and we're broadening our investor base to support our future growth. The opportunities ahead are significant. And our disciplined capital approach to capital allocation remains as important as ever. Infratil's success, as Alison said, has come from a combination of patience, which we've need a lot of this year, conviction and action, sort of knowing when to stay the course and when to move decisively. The steps we have taken this year and the ones we expect to take ahead are about ensuring we have the right portfolio, the right scale and the right momentum to keep delivering for our shareholders. So I'll finish there. Thank you for your continued support. I look forward to answering your questions during the Q&A section or afterwards and sharing more at our Investor Day in Sydney in September. Now I hand it back to you.

Thank you, Jason. So there's now an opportunity for discussion of the annual report for the year ending 31 March 2025. And I'm first going to take questions or comments from those of you in the room, and then we'll go to questions which might be submitted online. Where a question relates to one of our businesses, I might call on the director or management rep present to provide a response. For the questions submitted online, management will collate the questions. And if there are multiple questions on the same topic, we might aggregate them. So if you wish to comment or raise a question in the room, would you also just mind waiting for a microphone to be brought to you and then clearly state your name. So let's go to questions in the room.

Yes, we have one. Over here, Sharon. Rose is there. So competition who can get the microphone there first.

My name's [indiscernible]. I was just wondering what your megawatt breakeven point is on your portfolio -- across the portfolio. And I wonder if you could say a bit more about establishing a international shareholder mix.

I might hand the -- meg of what 1?

Do you mind explaining what do you mean by megawatt?

For our data center business or our...

You're on a...

Oh, yes. And not including return on capital?

And return on...

Return on capital. Yes, I can -- I can go there. It's a little bit different in different markets, but I mean the U.S. is our biggest market. So shall I talk about the U.S. maybe?

Yes.

Yes, we do. It's quite different in different markets. But to say -- so I can have it go out in Asia as well, which is probably different again. The unsubsidized LCOE, levelized cost of energy, in the U.S. for our solar projects is, I think, roughly in the 60s, 65 would be a pretty normal U.S. levelized cost of energy with a sort of 8% to 10% return on equity, I think, is roughly where you can kind of break even. You would be writing the subsidies in the U.S. worth about $20 thing. So actually, the unsubsidized will be closer to 80%, sorry, post-subsidy, you're in 60s, you'd be 80 sort of dollars to get to an unsubsidized LCOE broadly across the state. It's so different, right? Maine, there's no sun; California, there's a lot. So just to give you a feel for it. In Southeast Asia, capacity factors are a bit lower because of the basically smog, but your CapEx costs are so much cheaper. So solar panel is about half the price in Southeast Asia compared to the U.S. And that is, by far and away, your largest capital cost. So there, I would expect LCOE, your breakeven point, probably on an unsubsidized basis to be closer to $50, $60 level, I would guess roughly in U.S. dollar terms. And I don't -- the Europe would probably be somewhere in between. You've got higher labor costs for cheaper panels. So I don't know if that gives you kind of what you need or whether you have a follow-up to that, anything you were thinking of.

Gas pricing?

Yes, gas is about 90 -- 80, 90. So you're still a little bit cheaper than gas depending on the input gas costs at any given time, but you are a lot faster in the U.S. with solar. So the question really is, on an unsubsidized basis, so when all the tax credits running out in Longroad, is it all going to be taken by gas? Or is solar going to have a future role is essentially, I think, what you were wondering yes. And so the current view would be that unsubsidized solar will be a little bit cheaper than gas but it will be -- it's quite a lot faster. So you can build sort of 500 to 800 megawatts of solar in about 18 months, for a gas turbine actually 3 to 5 years. So I think the view in the market would be they'll both be a part of the solution in an unsubsidized world. And I can't remember the second question, so yes.

Our international investor mix.

Yes, our international investor mix.l You could talk about it.

[indiscernible]

Yes. How about I've just pulled up some [indiscernible] and then I might hand over to Jason because we're certainly getting a lot of inbound interest subsequent to our inclusion in the ASX 200 index, which has been fantastic. Suddenly, it is on international investors' radar. But if -- and I'm sure many of you have been long-term shareholders of Infratil, which has been fantastic. Over time, say, if I compare the last 2 years, we have seen a reduction in the percentage of retail in New Zealand shareholders. That's come down from about 44% to 39%. So still predominantly the largest group of investors is New Zealand Retail, which is fantastic because New Zealand retail is usually very supportive and sticky. We've got institutional investors here in New Zealand, and they have come down a little bit from, say, I've got 29% to 27%, but still a strong growth. And then the interest outside of New Zealand has been our offshore institutional investors, and we've sort of seen them grow from 24% to 30%. And some of that movement took place when we raised our $1.2 billion in -- when was it? March last year, I forget -- which was a time where we saw some newer investors join the shareholder base. But Jason, you might like to -- you've been doing a lot of traveling to understanding to meet many more investors.

When we used to do that offshore marketing 2 years ago, the constant issue was liquidity. And so their ability to sell their stock if they bought it quickly. And because we weren't in a number of indices, it was quite low. And then from the meetings I did in the U.S. last week and earlier in the year, our inclusion in the ASX 200 has increased. Our liquidity market level would be up 5x from what it used to be per day. And so now that isn't a barrier. And so we're kind of in this transition really where we have a number by number of offshore investors. We have a lot more than we used to, but they're all still sitting at a kind of a small shareholding watching to then be convinced to come in, but that's facilitated by this index inclusion that I talked about because that means your liquidity is up. So there's -- we're never satisfied at Infratil about many things, right? And this is another one where we hope to go from those little kernels of a start with this index inclusion to growing basically sort of 1, 3 or 4 of them at scale to make a meaningful difference to the shape of your register over time. So that's something you can continue to ask us about it as a strategic priority for us.

Great. Thank you. Do we have any other questions in the room? Yes, we have one at the back, right.

Corrine, shareholder. Did I hear you say that the value of all your portfolio is $12 billion?

That's our market capitalization today, yes.

But that's not net of data such?

Yes, yes, that's net of data.

It's net of data. Okay. But your recent divestments, you have sold off and just getting your money back?

That was just RetireAustralia, which is a subscale one exactly.

So on Page 115 of your report, I see that the management fees have gone from $214 million in '24 to $456 million in 2025. Can you explain that, please?

I'll take that question. So the management agreement has been in place for about 30 years, and it is very complicated. So we totally understand that it is -- it takes quite a lot of effort to understand the different parts to it. But Infratil pays our external manager, Morrison, a fee based on our market cap plus debt to manage our assets. And generally, that fee, I think, is about 0.8%and costs Infratil about $100 million. Then if Morrison performs and chooses to invest in fantastic sectors or companies, there is an opportunity for the manager to earn performance fees outside of New Zealand. So performance incentive fees are only paid on non-New Zealand assets. And if there is a return above our 12% hurdle, then Morrison will be paid 20% of that and 80% of that value goes to shareholders. Now we did have a large uptick in the independent valuation of CDC last year, and that came through from an independent valuation, and that was one of the key drivers of the large fee, which you have mentioned. So about $350 million is attributable to the performance fee, which we pay Morrison, and that is because the value of CDC has changed so markedly. The only thing I would say is that, that number goes through our accounts. However, we do pay that fee over a 3-year period. So we pay 1/3 straight after the financial year, we'll pay a 1/3 a year later and 1/3 2 years later. And if the value of the portfolio goes down through that time, that fee is adjusted. Does that help?

A little bit. Theoretically, though, the value is what you're holding at the moment with this independent. But those -- that asset that you divested at just getting your money back, will that be reflected back in their fees? Because I mean this has gone over double. These fees have doubled. I mean if they doubled again next year, it would be $800 million. I mean, there has to be some sort of a cap. Surely, there's a cap.

Well, I mean it's an interesting question for shareholders. Do you want your returns to be kept? I want Morrison to produce fantastic performance. But your point about is it going to be -- will the sale of RetireAustralia be reflected in the fee to Morrison? It is. And in our press release, we said that yes, we have made a 0 return over the life of holding RetireAustralia. But in the past, we have paid some performance fees to Morrison, and there is going to be -- we call it a negative incentive fee of $21 million, which will be offset next year against that annual fee.

I'll be very interested to see what they I get next. Thank you.

Yes. Thank you. Any more questions in the room? If not, we might yes -- sorry, we have.

I'd be interested to hear your views on how you see the revenue growth derived from CDC and AI, which is what's underneath it all for data centers. Yes, I use AI every day, but I pay hardly anything to use it. And Gemini and ChatGPT and all these things have very low fees, incredible performance, a wonderful product, but I just struggle to see where the money is going to be for the operators in that space and how the data centers will continue to make so much. And will companies like Microsoft just be able to charge a whole lot more for AI when you can get access to it today for the same fees that have been the case in the past.

So Jason is on the CDC Board. I may ask that question of him because I'm sure that's something that the CDC Board has discussed at length.

Yes, it's a great question. And just because the mic got there late, if you didn't hear online, it was a question about what's the economic sustainability of the revenue growth that CDC is getting and expects to be from AI over time given that a lot of these products are -- the free ones are quite good, and the ones you're paying not a lot more are exceptional. I think it's just a big question for your Microsoft stock as for your data center stocks. Our approach at Infratil with CDC for a long period of time is to prioritize customers with the highest credit quality for the longest term contract you can get our hands on. So traditional sort of contract that we would sign with one of those large counterparties would be 15 years long. So in that -- in a typical payback period for a data center on these projects is 6 to 8 years. So -- and we hope to continue that kind of structure in the future. If we can, then I think we're in a pretty good position, right? So we'll have all our money back. We'll have made a pretty good return. And all these things -- and Greg's focus is on building these data centers that will be able to be upgraded relatively cheaply for whatever the new technology is in the future. Can you see a world where they just stopped doing AI? I think so. They're going to have to be in the game, right? But could growth rates slow? Yes, I think so. And now our approach really is to make sure our data centers are the best place to get the renewals at that time for the capital that we've put in place. But the key really is to not sell that capacity on 5-year contracts or 3-year contracts. If the longest contract you can get is the way to create the best sustainable value for us is infrastructure investors. And your view on the sustainability of it will be just as good as mine, but I think it's definitely a question. For Infratil, that's our approach.

Okay. Any more questions? We have one down here. The microphone's coming.

Coming from the New Zealand Shareholders Association, but also a shareholder in my own right. Thank you for the very succinct in presentations. I have 2 questions. One is a retail investor in New Zealand. I wonder, and I see the growth in the international investors. What are the chances of having imputation credits again for New Zealand shareholders?

It's a very good question and what we discuss at length. And we are not generating sufficient imputation credits to be able to impute our dividend. And theoretically, one might say, well, therefore, why would you pay a dividend? Because financial theories is that probably doesn't make the best sense. However, when we've spoken to our retail shareholders and even our institutional shareholders, they still like the discipline of every tool paying a dividend, but we certainly note that it is probably unlikely to be fully imputed in the near-term future.

Sorry about that. My second question is really related to the structure of Infratil as an investment company with I think now that you've got rid of RetireAustralia, there might be 14 significant companies. And I guess I'm interested to know what the relationship is between the auditors of those companies with the lead auditor for Infratil.

Great. Look, I might hand this question over to Anne Urlwin, who's the Chair of our Audit and Risk Committee and might like to give us a little bit of color of how KPMG, who is the auditor for Infratil, operates with our portfolio company auditors. Sometimes they are also KPMG, sometimes they are different parties.

Yes, thank you, and thank you very much for the question. And we do actually have KPMG here in the room as well. But -- so KPMG as Infratil, the holding company's auditors have been imposed since about 2004. And under that contractual arrangement, of course, they are required to rotate the lead partners every 5 years. So that does happen. But the audit of the Infratil as a holding company is actually quite a small part of the overall audit. KPMG are not the auditors of every portfolio company, but where they are, the auditors, in some cases, they've only become the auditors in more recent years. So that's a relationship that does seem to work well. I think it does generate some efficiencies in terms of KPMG being able to provide the sign-off on the Infratil accounts where they can get that sign-off from the portfolio audit firms as well. But we do, as an Audit and Risk Committee, of course, turn our mind to the performance of KPMG each year to their independence and to their fee structures. But the -- as I say, the holding company audit being the Infratil audit is actually quite a small component of the overall audit fee paid right across the group.

So where would we find the information about the other auditors?

Some of it will be in the annual report, but of course, not all of it because we're only dealing because the annual report will only include where we have consolidated in those financial entities and to Infratil's accounts. And there are some investments that we have that are not consolidated in.

Perhaps just one more point of clarity is that we also use independent valuers to value our portfolio companies as that independent valuation is often a key component of the incentive fee. And those independent valuers come from an approved panel, which is approved by the Audit and Risk Committee, and their term is only for 3 years. So we do get very good rotation in the independent valuers. Any further questions in the room? Yes, we have one here.

David Lee, shareholder. Per my reading of it, data centers, at least in the U.S. running NVIDIA chips, have greatly increased energy consumption, simply due to the capacity of the chips. And as the whole market expands, there could well be a limitation on the data centers from electricity supply. Given that your 2 biggest investments are data centers and electricity, do you have a strategy or see a need to protect your data center electricity supply by building your own generating facilities?

Okay. I can answer that. I do think so. So we're mainly in Australia, right, for data centers. And I think the environment there will require you to -- we should be ready in case it happens to be adding new electrons for new data centers over the next, I don't know, 2- to 5-year period in Australia, I think that could become requirement. So luckily, we know a lot about adding renewable energy and energy within Morrison and Infratil. And that's one of the kind of capabilities that CDC will be working to build internally over that time period. We've got time. The team has done quite well investing in access to power for the big campuses we've got across Sydney and Melbourne, sort of 1.5 gigawatts all added up. So I'm not so worried about that, but we do expect it to grow. And we do believe some sustainable long-term versions of these data center businesses should be finding ways to add electrons to the system to continue to grow in the future. Just as important, actually in data centers is water usage and transitioning to technology that doesn't use water. Luckily, for us in CDC, it's already done that. So we've done half the sustainable job, but I think you're exactly right, thinking again, 3 to 5 years on data centers.

Thank you, Jason. Any more questions in the room?

I'm a shareholder. My question is who are the clients of CDC? And my buddies would -- let's say if they get used to using our data centers, what you have 10 years they decide, okay, there is so much a contract cost, let us also build a data center, and then we lose our business again. So it's about stickiness of the sales. We don't want our sales to go, how to protect ourselves.

So CDC is quite focused on the 4 large Western hyperscalers and the ecosystem around them and government customers. So we have about 120, 130 customers. So it's actually quite a tight offering. What's the stickiness of the customers? So in the government set of customers, our proposition is our high security and resiliency, which is higher than anyone else's across our entire portfolio. We're basically built for those customers to meet their requirements. So it's hard for them to move. Also, once they're in your data center, this is common for all data center businesses around the world, they start interconnecting with each other directly within the building, which makes it again, more problematic for them to move. So as long as we continue to serve those customers very well in the future, basically built the business for them, then we feel quite confident that will continue to be a good place for them to use in the future. Certainly, that's our intention. There is a group -- a bunch of the hyperscale work, so a bunch of Amazons or whatever, who are servicing those customers. And the legal requirements in Australia are such that if you want to service those customers, you need to be in the same environment as them. So that kind of part of revenue, if you like, should be as sticky, as your word as the first part. And then we are really competing for general AI growth as you put it, and other general cloud workloads. For those, I think that is going to be a more competitive environment. And what we watch as a management team and when we're thinking about our investment in CDC is who's building speculatively and in Australia. Is any of that happening? Are you going to be in a situation where the market is oversupplied? Because if you were, then there's room for your customers to be stolen but through some sort of price competition. And we don't see that happening in Australia because the growth is strong and the capital cost of building one of these things are so high that it's quite a great person to go build a data center and hope you're going to win a customer of someone in 2030 or something like that. But that's the key metric really to watch. I think these contracts are 15 years long. So this is a 15-year away problem. But you would want to be careful that there wasn't a big oversupply happening in the market that would put yourself under kind of re-leasing competition in the future. That's the way we think about it. But we're quite fortunate with the very long lease terms that CDC has managed to achieve so far. And with that core base of customers that we've basically specialized at serving that the stickiness of our customers has been very high. Greg says we've never lost a customer. Actually, we did lose one rank once back in 1994. I think he hunted them down and got them again. But so -- but we've got very, very little turnover so far -- touch wood.

Great. One more question, and then -- at the back of the room, and then we might move to questions online to let them have a chance, and we can always come back.

Yes, Michael Trough, shareholder. A clarification. I was under the impression that these data centers suck up water resources and cause decertification. And I just heard you say that there's a technology, which means you can bypass that whole problem? Is that what you're telling us?

Yes, that's right. So there are 2 ways to cool your data centers using water. One is to evaporate the water, and through that evaporation, achieve the cooling effect. That is -- doesn't use as much power, obviously, because we're using the evaporation effect, but you do use water. We don't have those data centers. So -- but a lot are built that way. Our data centers, we chill the water using air conditioners basically, and it runs around a loop through a heat exchanger. So it will go through the data hall, heat up, go on to the roof, go through the chillers and then just goes round around. So you use water once when you fill up your pipe and you're head of tanks, and then you're just using the same water going around, around in a closed loop as is a closed loop. So yes, we don't use any water once they're filled up, but doesn't evaporate, which is the issue with some data centers. Yes. But it uses more power. So you use, I don't know, 10% to 15% more power, rechilling it rather than at evaporating. So there's a bit of a trade-off. Yes.

Great. Lots of interest in CDC, which makes very good sense. So we're going to move to some questions online, and we have Mark Flesher reading out some of the questions for us. Mark? Okay.

We have a question from shareholder, Ali Price. It might be one for Ross. What is the total [indiscernible]

To that question?

Thanks, Mark. Thanks, Alison. So over the full 11.5 years that we have owned RetireAustralia, the total negative fee, once we do the final calculations, will be about $90 million. So that includes the $21 million that Alison mentioned for this year. And of that, $66 million would be offset against fees that would have otherwise been paid to Morrison.

Great. Thank you. Mark, do we have any more questions online?

There are no further questions.

Great. Okay. So how about we have -- are there any questions? We'll come back to that. I was worried we're going to have like 20 questions online. So any questions in the room before we go to our formal resolutions. One down the back. Okay. Lucky last.

Can you tell me what percentage of Infratil is owned by Morrison?

Yes. I think it is -- and I'll get my Company Secretary to check this, but it's about 5.5% when we collate all of the interest that Morrison has, for example, all of the key executives and any sort of Morrison Holdings. But Brendan, is there...

[indiscernible] So 3.7% [indiscernible]

Right. So the manager, I'm sure you can't hear that, but it was 3.7 is the holding of the manager, Morrison. But when you include related parties, that number increases to 5.5%.

Just one other question. If the Board desired, could they change the manager?

Yes, we could. And that is also set in the management agreement. We would have to give 5 years notice to the manager. And so it is always better to resolve any differences of opinion between ourselves rather than to sort of increase that level of uncertainty. And we have made some adjustments with the manager. For example, this last year, we both agreed that it made good sense to take the $4 million of annual costs out of the fees that were paid to Morrison even though technically under the management agreement, they were due to the manager. Also, at the end of FY 2023, we made some adjustments so that we could offset different buckets in the management agreement, again, because we thought that just made best sense for shareholders. Okay. So if there are no more questions or comments, we're going to move to the formal part of the meeting.

My fellow directors and I intend to vote all discretionary proxies that we have received and which we are permitted to cast a vote in favor of the resolutions as set out in your notice of meeting. And for those of you in the room, you should have received your voting card when you registered, but please put your hand up if you need someone to come and assist you and give you a card. Each resolution set out in the notice of meeting is to be considered as an ordinary resolution and must be approved by a simple majority of eligible votes cast by shareholders. So the first set of resolutions for shareholders to consider is the reelection of directors. The listing rules require that directors must not hold office past the third annual meeting follow the director's appointment or 3 years, whichever is longer. And accordingly, Kirsty Mactaggart, Andrew Clark and myself retire, and being eligible, offer ourselves for reelection. So I'm going to hand over to Kirsty Mactaggart to chair the meeting for the resolution regarding my reelection.

Thank you, Chair. The first resolution is the reelection of Alison Gerry as a director. The Board unanimously supports her reelection. Alison's credentials are outlined in the notice of meeting. I would now like to address -- I invite Alison to address the meeting. Thank you, Alison.

So I'm putting myself forward for reelection on the basis that I can make a positive contribution to Infratil. I feel I have the relevant skills, appropriate experience and importantly, the capacity to help Infratil achieve its many goals and objectives. I joined the Infratil Board in 2014, and for the first 8 years, I chaired the Audit and Risk Committee. And then since 2022, I have been Chair of the Board. In my executive career, I've worked in finance, treasury and risk roles for more than 20 years. And under our Board skills matrix, my strengths are in investing, corporate governance and financial expertise. For the last 18 years, I've been really fortunate to have had a career in governance in New Zealand with many high-performing New Zealand companies, such as Kiwi Bank, Wellington Airport in Spark, many which are highly relevant when I consider Infratil's diverse portfolio. And currently, I'm a Director of New Zealand and the ANZ Banking Group. Having broad governance experience gives me a deep understanding of how companies can make a positive difference, delivering great outcomes for shareholders, stakeholders and our people. As Chair, I'm committed to ensuring that we maintain a highly capable Board with diverse skills and perspectives, and this culture of thoughtful challenge has served us very well and will be essential as we navigate future opportunities and risks. So I humbly seek your support for my reelection. I'm up for the challenges ahead, and I'm committed to working hard on your behalf. [Foreign Language].

Thank you, Alison. And I propose that Alison Gerry be reelected as a director of the company. Are there any matters for discussion or questions concerning the motion relating to Alison's reelection? Mark, can I check if there are any questions online, please?

There are no questions online. Thank you.

Thank you. Please mark your voting cards in the way you wish to vote by ticking for, against or abstain next to resolution 1 on the voting card. Thank you. I'll now hand back to Alison to continue to chair the meeting. Thanks.

Thanks, Kirsty. A little bit of up and down because now we're up to resolution 2, which is the reelection of Kirsty Mactaggart as a director. The Board unanimously supports Kirsty's reelection whose credentials are outlined in the notice of meeting. And now I'd like to invite Kirsty to address the meeting.

Thank you, Chair. Good afternoon. I am Kirsty Mactaggart. Thank you to everybody for attending in person and online and for considering me for reelection to the Infratil Board today. I joined the Board back in March 2019. And it's been a privilege to have served 2 full terms, and I would be honored with your support to serve you for a further 3 years. I am a member of all the Board committees, and I also chair the Management Engagement Committee. Before joining the Infratil Board, I had over 25 years of global financial experience as a Managing Director at Citibank and as a Head of Capital Markets at Fidelity. And I was also based in London, Hong Kong and Singapore. Prior to that, I was a chartered accountant with KPMG in Scotland. I've been living full-time in New Zealand since 2018. I believe my finance background and market experience as both a banker and as an investor are highly relevant to support and govern Infratil's continued growth. My experience at Fidelity, one of the world's largest investors, helps me to review our existing portfolio and future strategy to continue to deliver outperformance to our growing and diverse shareholder base. I also use my experience as a banking professional at Citibank to review the many transactions that are presented to the Board, to ask the right questions of the manager, to ensure any new investments at the right portfolio fit are thoroughly diligence, appropriately structured and fairly priced prior to being approved, and if not, declined by the Board. My experiences all supported my role as a chair of the MEC to ensure that shareholders are getting the best performance from our manager, Morrison. This committee is quite unique to Infratil as a result of having an external manager. The MEC meets formally a minimum of 4 times a year, often more. The agenda varies, but it always covers Infratil's priority and resourcing from Morrison and checks for any conflicts with any other Morrison clients. I am confident Infratil is in an excellent position with ongoing support from you, our shareholders, our Chair and our Board and the manager to continue to deliver on our targeted 11% to 15% return. I believe I have the right skills, experience network and importantly, focus and commitment to add value to your Board, and would be honored with your support to continue to work hard as an independent director to protect and generate value for you. Thank you.

Thank you, Kirsty. So I now propose that Kirsty Mactaggart be reelected as a director of Infratil. Are there measures or discussion or questions concerning this motion? Mark, can I check if there are any questions online.

There are no questions online, Chair.

Great. Thank you. So please mark your voting cards in the way you wish to vote by marking for, against or abstain next to resolution 2 on the voting card. So resolution 3 is for the reelection of Andrew Clark as a director. The Board unanimously supports Andrew's reelection. His credentials are outlined in the notice of meeting, and I'd like to now invite Andrew to address the meeting.

Thank you, Alison. [Foreign Language] and good afternoon, everyone. It's been a privilege to serve you as an independent director and as a member of the Audit and Risk Committee for the past 3 years. I remain as passionate about Infratil's prospects as I did when I joined in 2022. I feel my broad industry experience and portfolio and business strategy and relevant geographies is a helpful addition to the Board. I spent over 30 years working at the Boston Consulting Group, which is a global strategy consultancy, working for 15 years in New Zealand and Australia, including as CEO, and for 15 years in Asia, including 8 years in Indonesia and 7 years in Singapore. My extensive network of contacts in Asia and in Australia are helpful, I think, for Infratil in the context of us having investments in those geographies. I now live in Melbourne, but I'm proud Kiwi despite any inadvertent twang I may have picked up along the way. I remain optimistic about Infratil's outlook and growth options, as you can see from my enthusiasm for Infratil shares. And I will continue to dedicate my time and passion and all the investment of my time needed to contribute to Infratil in the future. And so I humbly request your support to reelect me as an independent director to serve you for the next 3 years. Thank you for your support.

Thank you, Andrew. I now propose that Andrew Clark be reelected as a director of Infratil. Are there matters for discussion or questions concerning this motion? Mark, are there any questions submitted online?

There are no questions.

Great. Thank you. So please mark your voting cards in the way you wish to vote by ticking for, against or abstain next to resolution 3 on the voting card. Resolution 4. Resolution 4 is to provide the Board with the option to pay all or part of the third installment of the FY 2024 annual incentive fee, which could be payable in May 2026 by issuing shares to Morrison instead of paying cash. Resolution 4 is not seeking shareholder approval to pay the fee. The fee, if payable, is an existing obligation under the management agreement. But what the resolution deals with is how Infratil pays the fee. So at present, if the fees become payable, they can only be paid in cash. If resolution 4 is passed, the Board will also have the option to pay some or all of the fee using Infratil shares if the Board chooses to do so. And if the Board does choose to do that, the price at which the shares are going to be issued is 98% of the average market price at that time. Now we don't know today if the Board would decide to use that option to pay the fee by having Infratil issue shares. That is a decision that the Board will need to make at that time based on what is the best interest of Infratil and its shareholders, having regards to market conditions and Infratil's circumstances at that time. Are there any questions for discussion or questions concerning the motion? Yes, I think we have 2 perhaps.

David Lee, shareholder. You said that the share price struck would be 98% of the average, but you didn't say an average over what time period?

Sure. I think it's...

5 day...

5 day ESOP. Yes.

Okay. And my real question is, what is the benefit, the upside and downside, to Infratil, to its shareholders in paying either way?

Yes. So we have paid some of the fee to Morrison over the last 31 years. Only -- we've only used this option, I think, 3 times. And when we make that decision, so it's generally because we have better opportunities for the cash. So it may be that we have some investment opportunities at CDC or any of our portfolio entities that we would like to invest in. And we think that is better use of our money rather than using our money to pay Morrison. But at the same time, we take into account where is the share price trading. For example, what is the discount to NAV? We also look at market conditions. We look at our own balance sheet and cash reserves. And another consideration is what level of shareholder does Morrison have at the moment. So there's a number of factors that we take into account. But generally, it relates to better uses of that money. And we had another question here.

Lawrie Wright, shareholder. I don't understand how this process works. So if you decided to pay Morrison in shares instead of cash, does that dilute the value of our shares?

Yes, there is a small dilution element involved because we don't neutralize that issue of shares. But it is -- last week, we calculated it -- and Kirsty, was it...

It was less...

Less than 1%. It was like 0.54%. So we think, again, that is a factor to consider, but we don't think it makes a meaningful difference to every other shareholder. Yes. We have one at the back of the room, Sharon.

So you've done this 2 or 3 times before?

Yes.

And what percentages on those occasions? And how much in dollar value was given in shares?

So last year -- I suppose I should have mentioned is that -- with Kirsty as chair of Management Engagement Committee, with Paul Newfield, who is the CEO of Morrison. And we also asked him what's his capacity or what's Morrison's capacity to absorb those shares because we don't want him to turn around and sell them. Like to me, that's not in any shareholders' best interests. So he commits a level of shares that he will keep for the next 12 months. But last year, we also -- this is why we have Resolution 4 and 5. They limit the amount of shares, which we can issue to Morrison. So last year, we had approval from shareholders to pay up to 86 million of the fee in scrip. And we decided to issue 80 million. So we used almost the full capacity.

[indiscernible] 56 million from 2025. Theoretically, what could happen with that fee?

So I think we will have calculated and we're just going to get one of the team here to calculate that. If we pass, for example, resolution 4 and resolution 5, that theoretically gives us an ability -- Andrew or Brendan, it might be. I think it is close to -- I think it's close to -- we have to calculate that. I think...

It's in the notice.

It's in the notice of meeting. Okay. We're just finding that we have set out those amounts in the notice of meeting. But given that last year's fee, the FY 2025 fee calculated was a very large number. It could be that we issue that theoretically, we have a large number, which we theoretically could pay to Morrison in scrip. But again, whether the Board would decide to do that depends on how much capacity Morrison has to accept those shares and not sell them. And also what does Infratil's balance sheet look like. But I think we might circle back and just add up those numbers in the notice of meeting.

So could we hit those numbers on due course?

Well, apparently, it's in the notice of meeting under resolution 4 and 5.

146 million in total.

146 million in total Is the number.

And this could happen year-on-year-on-year at diluting a shareholding...

By a very small portion, yes, that is correct. 140. We could -- under the -- if these resolutions 4 and 5 are passed, the Board would have the ability to pay up to 145 million of any fee owing to Morrison in scrip instead of cash.

And the total shares -- I mean, the total money paid to Morrison last year was $400 million?

Remember that's the -- that was the calculation of the fee, but it was actually paid over 3 years. So there's a slight difference between what was paid in total versus what was reported in the annual account because we report the full fee that is calculated, but then we split that into 3 tranches. So Anne, do you want to add anything on that?

Yes, in the notice of meeting, we've got there the [ thirds fourth, ] as Alison has talked about, because it is payable over 3 years. So in terms of the FY '25 annual incentive fee, it could be 3 installments of $115 million. And in terms of the FY '24 pay installment, it's $29.7 million. So that's where the $140 million is coming from, but that is the maximum that the Board could determine to pay in scrip.

For that $400 million that is paid out, how much time would Morrison put into the business compared with, say, the Board?

Yes. And that's something that is discussed in-depth at our Management Engagement Committee, which Kirsty chairs. And I might just pass to Kirsty to perhaps just give you some color on how we get comfortable that we are getting value for the fees that are payable to Morrison because that is a chief consideration of that committee.

Sure. I'd probably start by saying that Morrison has grown alongside Infratil. So when I joined, it really was just New Zealand, and I think we had a Sydney office. We now have the 2 offices in New Zealand with the Wellington HQ and an Auckland office; Sydney office; Singapore office; London office; and New York office. And Morrison now have over 200 employees. We take resources from Morrison, both at the Infratil level for company support. So we've added a lot of resource to the finance function, the treasury function, Investor Relations function, the sustainability function, for example. So that's one side for Morrison. We also have resource dedicated they call the asset management teams at each individual company. And then we have further resource that's drumming up new ideas what's going to be next. So we have deep research. Now not all the 200 employees at Morrison will work for Infratil, but we have a huge number of people working for Infratil within the Morrison team, very few of which shareholders probably see. So we've had a lot of resource added certainly in my tenure over the last 6 years on resource from Morrison, but it's something that's top of the list at the MEC every time we meet is to make sure we've got enough resource and skills dedicated to Infratil.

And perhaps one more point just to bring us all back is that, I agree, you can get very caught up in the dollar values of fees. And I think I've said at previous AGMs. I like the fact we're paying large fees because that means we are having outsized performance. But from a shareholder perspective, our target returns to shareholders, our benchmark is at between 11% and 15% after all fees and after taxes. So total return to shareholders after all of these fees are paid. And we have been very proud to have beaten that benchmark for the 10-year benchmark, which is a rolling benchmark, which we are targeting. And I think over the life of Infratil, we're also well above that 11% to 15% range. So when we consider fees, we do make sure that it is in the scheme of meeting our target returns. Any more questions for this resolution?

Yes. So first of all, I would like to highlight one thing that I can see that for the other 3 resolutions, against were less than 3%; here, the against is 10%. So there is a bit of a concern, which is visible. So now I have basically 2 questions. First question is why are we giving Morrison only 5 -- ESOP only based on 5 days? Because those 5 days, market pace can be certainly low because of micro things. So why aren't we putting it for a longer period, like last 6 month average price? And when you say that Morrison has given us a commitment, so why don't we ask them to have some lock-in period that whatever the shares they will buy, they will have to hold it for 5 years. Why I think there's a bit of a -- so this doesn't look like an inside information, but this looks like an insider anticipation. So as a retail investor, I have only annual report. And I see that my net asset value is 16 and stock price running at 12, so I see that information only once in a year. Let's say, if you put it in a quarter, I get only 4 times in a year, the chance to see what is the difference between the book value and a market price. But Morrison -- since Morrison is putting their employees and since Morrison works with the Infratil, they have a bit of an anticipation of what can happen with the company's growth. So I see there is a real advantage that Morrison has over a retail investor and even other fund investors. Don't you think so?

The Infratil Board makes the decision whether we think it makes sense to pay part of that fee to Morrison in scrips. So Morrison has very little to do with that conversation, except for saying how much they can accept and not sell for a 12-month period. In actual reality, we haven't seen Morrison ever be a seller. So we don't have an agreement with them that they have to hold for 5 years, but we certainly haven't seen any selling from Morrison. In terms of the 5-day period, that is prescriptive and has been set in the management agreement since 1994. So I think that is what we have to live with. But we also make sure that when we make that agreement to pay Morrison, if that's what the decision is from the Infratil Board, it's also to make sure we don't have any inside information. So if we had any inside information, we would definitely be forced to pay that fee in cash.

My second question is, I think Kirsty said that Morrison has around 200 people working for us, and around like the main expertises like treasury, finance, risk, but those are not the things that are invented in the last 20 years. These are like 300 years old concepts. So these -- so if my first impression was Morrison was helping us by having some data centers expertise like how AI works, something that nobody knows in the world. But if treasury, risk, finance, everybody knows since the last 500 years. So why should they give an ESOP on that? We can -- we should be paying them more cash than ESOP. What do you think so.

There's a lot of aspects of Morrison that we probably haven't articulated as well as we could have. For example, the biggest skill they bring is finding fantastic ideas to invest in, and that demonstration of what are the pipelines of new ideas is something we're probably going to highlight at our Investor Day. Jason, any comments on whether you think you're getting enough support from Morrison for your role as Chief Executive?

Yes, definitely. I mean I think Kirsty was talking about the expertise that's been added in her time as the business has scaled. But clearly, Morrison's core capability is identifying good investments and then building differentiated capability around long-term themes, which have been data centers in our case. We're probably one of the earliest managers in the world to invest in data centers and infrastructure, and we're experiencing the benefit of that as Infratil shareholders over the last 10 years, certainly in the last 5, in particular, where the growth has accelerated. It's been the same in renewables. Morrison started investing in renewable energy 30 years ago, right, with Manawa, very long-term theme. There will be very few managers around the world that have been investing in renewable energy for 30 years. And the amount of the depth of capability we have in that, I think, is incredibly differentiating for us as Infratil shareholders. And then the power of the platform, and this is what Kirsty is referring to, is finding the next thing right beyond data centers and renewables. Infratil had 0 data centers 10 years ago, and now it's our biggest asset. And you could actually go back through our 30-year history, and you'll see that cycle repeat. So part of what we should be taking into account of the shareholders as is are we investing enough in finding the next thing beyond that to keep this going for another 30 years, I think, which is partly what Kirsty is talking about as well. And if you've got 200 people and all they do is invest in infrastructure, I think you're giving yourself the best shot of doing that.

Great. Yes, at the back.

The $145 million fee is paid in shares. Any idea what Infratil's shareholding will be in -- sorry, Morrison's shareholding will be in Infratil? What...

It would be still very small, like below -- it's 3.7 at the moment. And I imagine it would be...

Less than 1%.

Like less than 1%. Yes, it's like how many -- we've got, yes, 12 billion of say, market cap, and we would be issuing 145 million, so it's a very small portion. There's lots of zeros in that.

But feel free to vote as you would like to. So I think we will move to the voting cards. And so if you can please mark your voting cards in the way you wish to vote by ticking for, against or abstain next to resolution 4 on the voting card. So let's move to Resolution 5. Resolution 5, very similar to resolution 4, and it is to provide the Board with the option to pay all or part of the second installment of the FY '25 annual incentive fee, which also could be payable in May 2026 by issuing shares to Morrison instead of paying cash. So again, this isn't asking shareholders to approve the payment. It is an existing obligation if the fee is payable under the management agreement. But what the resolution deals with is how Infratil will pay that fee. So similarly, we don't know today if the Board would exercise the option to pay the fee by having Infratil issue shares. That is the decision that the Board will need to make at that time. So this is a similar resolution. But are there any matters for discussion or questions regarding this motion? And perhaps we go to online because I'm not sure, Mark, if we had any online for resolution 4 and 5.

Actually, we had one question on resolution 4 from Tim Hunter, which was why are the shares issued at a discount.

Yes. Thank you. So the shares are issued at 98% of market value because that aligns with the dividend reinvestment scheme for all shareholders, which is also at a 2% discount. So they are both aligned. And that also is in the management agreement. So any other questions in the room on resolution 5. Yes?

So now here, we are actually giving option, scrip option. So how will we decide the option price for the investor -- how -- what was the strike price for the Morrison?

Yes. It's actually not an option. It's like a choice. It's a choice to be able to pay any payable fee to Morrison either through issuing shares or by paying cash. So there aren't any like equity options involved, if that's what you referred to.

Then I'm sorry. I think I understood the question wrongly.

So any other questions relating to resolution 5? Mark, are there any questions on resolution 5 online.

There are no questions. Thank you.

Great. So if you could please mark your voting cards in the way you wish to vote by ticking for, against or abstain next to resolution 5 on the voting card.

Resolution 6. Resolution 6 is to increase the maximum aggregate remuneration pool available for payment to all nonexecutive directors for each financial year commencing on or after the 1st of April 2025 by 121,500 from 1,525,500 to 1,647,000 per annum plus GST or VAT as appropriate. Are there any questions for the Board concerning this motion? Mark, can I check if there are any questions online?

There are no questions.

Okay. Thank you. If you could mark your voting cards in the way you wish to vote by ticking for, against or abstain next to resolution 5 on your voting card -- or that should be resolution 6. So final one, resolution 7, the auditor remuneration. So the final resolution for shareholders to consider is the remuneration of the Infratil's auditor, KPMG. KPMG are automatically reappointed as auditors under the Companies Act. However, the meeting is required to authorize directors to set the audit fee, and I now propose that directors are authorized to fix the remuneration of the auditor. Are there any questions for the Board concerning this motion? Yes?

How long has KPMG been auditors?

Yes. KPMG have been an auditor of Infratil for -- since 2004. However, I think we referred to the relationship with Infratil and other auditors that are involved in the process in an earlier question. And it is something that shareholders raise with us. Why don't you, for example, rotate auditors. And it is quite challenging in New Zealand because we also use PwC for all of our global tax advice. So in effect, if we were going to put the audit out to the market, we will probably only have 2 parties to choose from. And I'm sure they're both fantastic choices, but there is risk involved in changing auditors. And when we look at the risk, we probably think that our process around appointing independent valuers, which is linked to how we pay incentive fees, is possibly more risky than having KPMG as the long-term auditors of Infratil. I'd also note that the partner involved in the audit at Infratil who works for KPMG is rotated every 5 years. And even though they're the same firm, it often brings fresh thinking, different ways of doing things. So we do, in effect, have every 5 years, another look at how we engage with our auditors. Mark, can I check if there are any questions online?

There are no questions, Alison.

Okay. Thank you. And please mark your voting cards in the way you wish to vote by ticking for, against or abstain next to resolution 7 on your voting card. And ladies and gentlemen, our registry, MUFG, will now move through the room with ballot boxes to collect your voting cards. So that concludes the business of the meeting. Thank you so much for your attendance and interest and your great questions. We will be announcing the results of the poll and closing the meeting through the market later today or tomorrow. [Foreign Language]