JB Hi-Fi Limited (JBHHY) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to the JB Hi-Fi 2025 Annual General Meeting. My name is Stephen Goddard. I'm Chair of the JB Hi-Fi Group, and I'm your Chair for today's meeting. We have a quorum, and I'm pleased to declare the meeting open. Can everyone hear me there? Do you want just a bit more volume? How does that sound? Do you want my name again? Stephen. As in recent years, we are holding a hybrid AGM, and I'm delighted to be able to extend a warm welcome to our shareholders, proxies and guests who are attending either in person or through our online meeting problem -- platform. Our meeting is being held on the lands of the Wurundjeri people of the Kulin Nation, and I wish to acknowledge them as the traditional custodians. I would also like to pay my respects to their elders, past and present. I would like to introduce my fellow directors: Beth Laughton, Christy Boyce, Sheila Lines, Mark Powell, Geoff Roberts, Melanie Wilson, Richard Uechtritz, and our Executive Director, Nick Wells. Our Company Secretary, Doug Smith, is also in attendance, as is Suzana Vlahovic of Deloitte Touche Tohmatsu. Obviously, as some attendees are attending online, there's a risk of technical difficulties. If this happens, it will be at my discretion whether we continue the meeting or postpone or adjourn. And look, to that point, you may have seen in the news this morning, we are aware of some global problems with Microsoft's Azure software. We understand that there may be -- this may intermittently be affecting Computershare's online system, although it does appear to be up at the moment. Look, noting that there is a quorum of shareholders in the room, and we've had 73% of available votes have already been cast. We will continue with the meeting, and we apologize for any inconvenience that has occurred. The agenda for today's meeting is as follows: procedural issues; summary of items of business and voting opens; Chair's address; group CEO address; further information on each item of business, including hearing from the directors standing for election and reelection; and disclosure of proxy votes already received on each item; questions; voting closes; and close of meeting. The notice of meeting dated 12 September 2025 has been made available to all shareholders, and I'll take it as read. I'll start by briefly setting out how the meeting will work. All shareholders and proxies attending the meeting, whether in person or online, have the ability to ask questions and submit votes. Noting that questions may be submitted at different times by online participants and participants in person, we will answer questions on all items of business later in the meeting. For those attending the meeting online who wish to submit a written question, you may do so at any time during the meeting via the Q&A icon on your screen. Type the question in the text and then press the send button. I will address your question at the relevant time. If you're attending in person or attending online but wish to ask a question verbally, please wait until that time to ask your question. Voting today will be conducted by way of a poll on all items of business, and Computershare will act as the independent returning officer. In order to provide you with enough time to vote, I will shortly open voting for all resolutions. For those attending the meeting online and who are eligible to vote, when the poll opens, a voting icon will be available on your screen. Selecting this icon will bring up a list of resolutions and present you with voting options. To cast your vote, simply select one of those options. There is no need to hit submit as the vote is automatically recorded. Please ensure you cast a vote for all resolutions. You will receive a vote confirmation notification on your screen. To change or cancel your vote, click the link click here to change your vote at any time until the poll is closed. Votes may be changed up until the time that I declare voting is closed. For shareholders, proxies and corporate representatives attending in person, you vote by completing the yellow voting card that was provided to you upon admission. White cards are for visitors only who cannot vote or ask questions today. Shareholders with a green card are not entitled to vote on the items of business. You can vote at any time after voting opens, and I will warn you before I close voting at the end of the meeting. Results of voting will be released to the ASX after the meeting. If you have any difficulties voting or submitting questions, please consult the online meeting guide, which can be accessed within the online platform or on the JB Hi-Fi investors website, if you're attending online, or raise your hand if you're attending in person. The items of business for the meeting are set out in the notice of meeting and are as follows: number one, to receive and consider the financial and other reports for the financial year ended 30 June 2025; number two, to vote on the reelection and election of directors; number three, to adopt the remuneration report; number four, to approve the allocation of restricted shares to the Executive Director. I'll provide more detail on each of these items later in the meeting. I now declare voting open on all items of business. The voting tab will soon appear. Please submit your votes at any time and I'll give you a warning before we close voting. [Voting]

We now move to my Chair's address. The financial year ended 30 June 2025 was another strong year for JB Hi-Fi and its subsidiaries, as we built on the momentum of the previous year with the group staying focused on its core proposition of driving great value and delivering consistently high levels of customer service to resonate with our customers. We are thankful to our over 16,000 team members across Australia and New Zealand, whose support and commitment ensure the ongoing success of the business. Our motivated, passionate, knowledgeable and highly trained staff continue to be our most important asset. As previously announced, Group Chief Executive, Terry Smart, retired from the group on the 3rd of October 2025 and has been succeeded by Nick Wells. We would like to recognize and thank Terry for his significant contribution to the group made over many years since joining in 2000. Since his reappointment as Group CEO in 2021, the group has seen significant growth in sales and profit and its share price rise to record levels. We wish him all the best for the future. The Board was delighted in having a candidate of the caliber of Nick within our ranks, and we look forward to him applying his considerable talents to the role and putting his own stamp on the group while continuing with the current strategy. We would also like to recognize and thank Beth Laughton, who will retire from the Board today. Beth has made a significant contribution to the group's success over the past 14 years, particularly in her role as Chair of the Audit and Risk Committee. Thank you, Beth. Geoff Roberts will take over from Beth as Chair of the group's Audit and Risk Management Committee. We're also delighted to welcome Sheila Lines to the Board following her appointment as a Non-Executive Director on 15 August 2025. Sheila has also joined the group's Audit and Risk Management Committee. Sheila brings both retail experience, financial acumen and her skills will complement those of our existing directors, and the Board is very much looking forward to working with her. Turning to the group's operating model. Our group comprises three iconic retail brands: JB Hi-Fi with a focus on technology and consumer electronics; The Good Guys with a focus on home appliances and consumer electronics; and e&s with a focus on premium home appliances and bathroom products. The value proposition for each brand centers around ranging the best brands at low prices, supported by exceptional customer service across our store network, our online and over the phone channels and through our commercial business. The multi-branded retail approach continues to be underpinned by four key competitive advantages being scale and diversification, a low-cost operating model, multichannel capability, and people and culture. An integral part of the group's ongoing strategy is to encourage innovation and diversification in our product range, merchandise formats, advertising, supply chain, property locations and our online offer in a controlled and responsible manner to ensure we remain current and relevant to our customers. We have a culture of embracing change, which is seen as a natural part of the business, and this approach provides opportunities to increase revenue, margin and productivity. The group's FY '25 sustainability report, which can be found on the group's investor website, outlines our commitment to having a positive impact on our people, our community and our environment. As set out in the report, we are committed to supporting our people and ensuring a safe, inclusive and respective workplace while always looking for ways to provide our team members with flexibility and opportunities to grow and develop; making a positive impact in our communities in which our team members live and work and working with our supply partners to protect and further human rights; and minimizing the impact that our operations may have on the natural environment and proactively reducing our waste and emissions. In closing, the Board remains focused on building long-term shareholder value. Since JB Hi-Fi listed in October 2003, the share price compound annual growth rate is 21.1% compared to 4.7% on the ASX 200 Index over this period to 28 October 2025. The earnings per share compound annual growth rate is 17.9% and the ordinary dividend per share fully franked compound annual growth rate is 18.9%. More recently, over the last 5 years, the JB Hi-Fi share price compound annual growth rate is 17.9% at 28 October 2025 compared to 8.3% on the ASX 200 Index. The earnings per share compound annual growth rate is 10%. The ordinary dividend per share fully franked compound annual growth rate is 7.8%, and the group has returned an additional $196.8 million in special dividends to shareholders. I would like to take this opportunity to thank my fellow directors, the executive team and our store warehouse and support teams for their unwavering commitment to the ongoing prosperity of your company and its shareholders. I now invite Nick to address the meeting on the group's operations.

Thank you, Stephen, and good morning, ladies and gentlemen. First, I would like to acknowledge the confidence that Stephen and the Board have shown in me in appointing me Group CEO. And I'd also like to acknowledge Terry. I'm fortunate to have worked with him for many years and thank him for his outstanding leadership. I'm excited to take on the group CEO role, having been part of this great business for more than 16 years and believe that in JB Hi-Fi, The Good Guys and e&s. We have three of Australia's most loved, respected and successful retail brands, overseen by an incredibly experienced and talented team, some are here today. Our businesses are in great shape and are well positioned to maximize the opportunities ahead of them. Retailing is a dynamic and exciting industry, and JB Hi-Fi, The Good Guys and e&s are market leaders in their respective sectors. As we've said before, the core of our proposition has always been and will always remain our unwavering focus on our customers who continue to turn to us for their technology and home appliance needs, and our over 16,000 team members who across Australia and New Zealand continue to respond and adapt to meet these needs. As Stephen highlighted, we are committed to having a positive impact on our people, our community and our environment. In our FY '25 sustainability report, we outlined the progress made in our key areas of focus, which included 40% of the group's energy now coming from renewable sources and a 32% decrease in Scope 1 and 2 emissions from our FY '20 baseline year, as we continue to work towards net zero direct Scope 1 and 2 emissions by 2030. Continued investment in our teams with 1,333 leaders completing a leadership development course and 129 managers completing the women in leadership training program. Recycling 9,632 tonnes of e-waste collected through recycling kiosks in JB Hi-Fi and The Good Guys stores, and scrap metal from appliances collected from customers' homes. Launch of a waste diversion target as we work towards achieving 80% waste diversion by 2030. And workplace giving donations totaling $4.6 million in FY '25 and $44 million since inception. We are pleased with the progress we are making on our sustainability plan and commitments and importantly, are receiving an overwhelmingly positive response from our team members. Now turning to our FY '25 results. FY '25 was another strong year for the group with total sales up 10% to $10.55 billion. EBIT up 7.3% to $694.1 million. NPAT up 5.4% to $462.4 million, and earnings per share up 5.4% to $4.23 per share. On an underlying basis, excluding the one-off $13.7 million expense in FY '25 relating to the resolution of the ACCC proceedings against The Good Guys, EBIT was up 9.4% to $707.8 million. NPAT was up 8.5% to $476.1 million, and EPS was up 8.5% to $4.355 per share. The total dividend for FY '25 was $2.75 per share, up 5.4% and representing 65% of NPAT. In addition to the total ordinary dividend, the group declared and paid a special dividend of $1.00 per share fully franked or $109.3 million and announced an increase of the dividend payout ratio from 65% to a range of 70% to 80% of NPAT from FY '26. The group's balance sheet continued to be strong with low financial and operating leverage and closing net cash of $284.1 million at 30 June 2025. Now turning to FY '26. The group will remain focused on the following key areas. Number one, retail execution. In a competitive retail environment, our strong retail execution remains essential. We will continue to actively demonstrate and improve value to our customers, especially during key sales events such as Black Friday and Boxing Day. We will keep our operating model simple and efficient, focusing on the metrics that matter, driving operational improvements and reinvesting those efficiencies into customer-facing roles while enhancing customer engagement and evolving our in-store experience. Number two is multichannel. We'll continue to strengthen our multichannel capability by leveraging our significant online traffic and expanding our marketplace offer. Our membership programs will remain a focus, delivering personalization at scale and enhancing our sales channels. At the same time, we will ensure consistent customer experiences across all touch points and stay connected with shoppers however their shopping journeys evolve. Third, brand reach. We will continue to expand our store network across the group. In FY '26, we will open three new JB Hi-Fi New Zealand stores, one new e&s store, and five new JB Hi-Fi Australia stores. We'll also close one JB Hi-Fi Australia store and complete two major store relocations in The Good Guys. Our commercial businesses will continue to grow as we expand our customer base and strengthen our position across the market. And lastly, supply chain. Our investment in building and maintaining a fit-for-purpose supply chain network is ongoing. We will continue to focus on delivering best-in-class delivery options for our customers across all of our channels, optimizing inventory flow to ensure strong stock availability, particularly during peak trading periods and improving the flow of bulky products. Now turning to recent trading. The group has today provided a sales update for the period 1 July 2025 to 30 September 2025, Q1 FY '26. Total sales growth for JB Hi-Fi Australia was 6% with comparable sales growth of 5%. Total sales growth for JB Hi-Fi New Zealand was 39.3% with comparable sales growth of 24.3%. Total sales growth for The Good Guys was 2.5% with comparable sales growth of 2.4%. And total sales growth for e&s was 4.1% with comparable sales growth of 0.7%. Our Q1 FY '26 sales are in line with the group's expectations as we enter the important Q2 trading period. In closing, we remain committed to offering great value and exceptional customer service to maximize our brand sales opportunities. As always, our team's unwavering focus on our customer, combined with our ability to adapt and innovate will ensure our brands remain the destination for shoppers into the future. I look forward to another exciting and successful year in FY '26. Thank you.

Thanks, Nick. Turning back to the items of business. Item 1 relates to the receipt and consideration of the financial and other reports for the financial year ended 30 June 2025. The company's annual report, which includes the financial report, directors' report and auditor's report as well as the company's corporate governance statement has been made available to shareholders. No formal resolution will be put to the meeting on this item, and I'll take the reports as read. Shareholders and proxies may ask questions in relation to the reports later in the meeting. Item 2 on the agenda relates to the reelection of Mark Powell and me as directors and the election of Sheila Lines as a Director. As I am one of the directors standing, I will hand the chair over to my colleague, Beth Laughton, at this point.

Good morning, everyone. Can you hear me? Thank you. Thank you, Stephen. Item 2a relates to the reelection of Stephen Goddard. Stephen was appointed to the Board in August 2016 and became Chair of the Board on the 1st of July 2020. Stephen is also the Chair of the company's Remuneration and Nominations Committee and was a member of the Audit and Risk Management Committee until the 30th of June 2020. Stephen has more than 30 years' retail experience, having held senior executive positions with some of Australia's best-known retailers. These include as Finance Director and Operations Director of David Jones, Founding Managing Director of Officeworks and various senior management roles with Myer. Stephen has previously -- was previously a Non-Executive Director and Chair of the Audit and Risk Management Committees of Accent Group, Nick Scali Limited and GWA Limited. The Board considers Stephen to be an Independent Director. I will now ask Stephen to say a few words.

Thanks, Beth. I've worked in many different areas in a number of retail businesses over 30 years, which has given me a good sense of the competitive environment in which we operate and what a retail business needs to do well to be successful. As Beth said, I was on the Board of David Jones for nearly 10 years as Finance Director and along with my other public company Board experience, I feel this equips me well for my role as Chair of the company. I have great respect for the business and its achievements over a long period and the high quality of its management team led by Nick; Dave, our CFO; Doug, our Company Secretary; Cameron Trainor, the Head of JB, who's in the back row and many, many others. So I look forward to supporting the company as it grows and prospers.

Thank you, Stephen. Shareholders and proxies may ask questions in relation to this item later in the meeting and can vote at any time before voting closes. The proxy votes received in advance of the meeting on this resolution should be shown on the screen. There we are. I'll now hand the chair back to Stephen.

Thanks, Beth. Item 2b relates to the reelection of Mark Powell. Mark was appointed to the Board in March 2017, having been an adviser to the Board of The Good Guys for 18 months prior to its acquisition by the company. He is currently a member of the Remuneration and Nominations Committee and was a member of the Audit and Risk Management Committee from 2017 to 2023. Mark has over 30 years executive experience in retail, logistics and wholesale distribution in the U.K., Spain, North America, Australia and New Zealand. This includes being U.K. Logistics Operations Director for Tesco PLC, running Walmart Canada's logistics operations, and as CEO of the Warehouse Stationery retail chain in New Zealand. Mark also spent 5 years as Group CEO for the Warehouse Group, a New Zealand listed retail group, which includes technology and appliances retailer, Noel Leeming. Mark is currently a Non-Executive Director and Lead Independent Director of Bapcor Limited, a Non-Executive Director of My Food Bag Group Limited, and Chair of its Nomination and Remuneration Committee, and a Non-Executive Director of Stihl Pty Limited. Mark was previously a Non-Executive Director of Kiwi Property Group and Chair of its ESG Committee, and a Non-Executive Director and member of the Strategy and Audit, Compliance and Risk Committees of 7-Eleven Australia. The Board considers Mark to be an Independent Director, and I'll hand over to Mark to say a few words.

Thank you, Stephen. And yes, it's a privilege to be here today. Stephen summarized a lot of my executive career there, which I think enables me to bring that to this role. As a retail CEO across multiple retail sectors, general merchandise, apparel, technology, office products and outdoor sports equipment. It gives me a wide range of retail experience. And I've been able and privileged to see the inside of some of the world's best retailers such as Tesco and Walmart. And with that, I also have a deep supply chain logistics background as well. I've been a Non-Executive Director now for 10 years. When I first came on this Board, I wouldn't have considered myself experienced. I do consider myself an experienced director now. I've been able to serve on the Board of property companies that retail property -- own retail property. I've been able to serve on the Board of other retailers such as 7-Eleven and on pure-play online businesses as well. And also on some challenging businesses, both in the not-for-profit space as well. And sometimes it's in those challenging ones you learn the most. So I would now consider myself an experienced director, which I wouldn't, as I said, I wouldn't have done in 2017 when I first came on this Board. So it's a privilege to put myself forward, and it will be a privilege to serve on this Board again, which is an outstanding Board but also an outstanding executive team. And I don't mean to embarrass Nick, who picks up the mantle, but also Terry, Richard, you before him and the team under them, we've got -- as you said, we've got Cam here today. Having seen the inside of some of the world's best retailers, these guys are up there with the best, if not better than them. And so it's a privilege to be able to support them as they move forward.

Thanks, Mark. Shareholders and proxies may ask questions in relation to this item later in the meeting and can vote at any time before I declare voting closed. The proxy vote received in advance of the meeting on this resolution are as follows. Item 2c relates to the election of Sheila Lines. Sheila was appointed to the Board with effect from 15 August 2025 and also joined the company's Audit and Risk Management Committee at that time. Sheila is a chartered accountant with over 28 years' experience as a CFO, CEO and Director across multiple industries, including retail, media, telecoms and technology with over 20 years of these being in public companies in Australia and overseas. Sheila's experience includes roles as CFO and Company Secretary of Nick Scali Limited, as CFO of oOh!media Limited, Cabcharge Australia and Bpay, and also as Chief Executive Officer of Bermuda-based KeyTech Limited. Sheila is a member of Chartered Accountants Australia and New Zealand and holds a Bachelor of Laws with honors from the University College in London. Prior to her appointment, the company conducted appropriate checks into Sheila's background and experience, and those checks revealed no information of concern. The Board considers Sheila to be an Independent Director, and I'll now hand over to her to say a few words.

Thank you, Stephen. I'm excited to join JB with its iconic brands, impressive management team and strong organizational culture. As Stephen outlined, I bring to the role a professional qualification as a chartered accountant and nearly 3 decades of executive experience across a wide range of industries and most recently in retail. I'm looking forward to working with the team at JB Hi-Fi to continue to grow stakeholder value, and I confirm that I have the time to commit to the affairs of the business as a director. Thank you.

Thanks, Sheila. Shareholders and proxies may ask questions in relation to this item later in the meeting and can vote at any time before I declare voting closed. The proxy votes received in advance of the meeting on this resolution are as follows. Item 3 relates to the adoption of the remuneration report, which is contained within the company's annual report. Further information, including information regarding voting on this resolution and the 2 strikes rule is set out in the notice of meeting. Please note that a vote on this resolution is advisory only and does not bind the directors or the company. Again, I will take the report as read. Shareholders and proxies may ask questions in relation to the report later in the meeting can vote at any time before I declare voting closed. The proxy votes received in advance of the meeting on this resolution are as follows. Item 4 relates to the allocation of restricted shares to the Executive Director, Nick Wells. Further information, including the terms of the allocation and the associated KPIs is set out in the explanatory notes in the notice of meeting. I'll take that information as read. Shareholders and proxies may ask questions in relation to this item later in the meeting and can vote at any time before I declare voting closed. The proxy votes received in advance of the meeting on Item 4 are as follows. We'll now take questions from shareholders. Questions submitted online in writing will be read out by our Company Secretary. To ask a question verbally online, please follow the instructions shown below the broadcast window on the online platform. Our Company Secretary will say your name and then direct you to ask your question. If you have questions from the floor, please raise your hand and wait for the microphone to arrive before stating your name or organization and asking your questions. Questions will be answered by the relevant director or executive or by Suzana Vlahovic from our auditors. While time constraints may prevent us from answering the questions, we'll do our best to address all the concerns that you have and questions during the meeting. After the questions, I'll close voting. So let's go to questions from the floor, I think, first. Chris.

Good morning, Mr. Chairman, Board, ladies and gentlemen. My name -- I'll introduce myself. My name is Chris Lob. I'm representing the Australian Shareholders' Association this morning. Thank you for the opportunity to come along. Just in terms of that, I'm representing 109 shareholders with over 120,000 shares. I know some of our members are in the room this morning. I had a couple of questions just to put to you. The first was in relation to New Zealand. Those sales figures that you've just released this morning, maybe Mark is in a better position to comment on those, but they are knockout figures. I'm not overfamiliar. I don't know if they're coming off a low base, but that would be one question. And the second would be in relation to your external audit arrangements. We noted through your annual report that your current auditor firm has been in the position since the floating, which goes back over 20 years now. It's a policy of the ASA that we believe that after a 10-year period, a competitive tender should be held. And I would just be interested in your comments, Mr. Chairman in relation to that.

Thanks, Chris. And look, we always respect and enjoy our dialogue with the Australian Shareholders' Association. It's good to meet you as the new representative. We had a meeting recently, and I just mentioned Mike Robey, who's sitting next to you, who's been the representative previously. So good to see you, Mike. A couple of questions. Firstly, I'll get Nick to just talk a little bit about New Zealand. But in principle, we feel there's a significant opportunity. We've had to rebuild the business, and we've had to grow it and expand it. And I think the signs are very encouraging from what we've seen. But Nick, why don't you talk a little bit about New Zealand?

New Zealand, as Stephen said, we've been investing in New Zealand for the last few years. We have been underrepresented in that market, but we know the brand does resonate well there. So we've been rolling out stores. If you go back a number of years, we're at 14 stores. We're now at mid-20 stores. That is -- that's definitely helping with that total sales growth at 39%. But what's really pleasing for us is the comparable store sales growth. So we're opening new stores, but our existing stores are growing strongly. I'll call it too early because it's still -- we still got plenty of work to do in New Zealand, but I think we're starting to see that point where our investment is starting to resonate. Our offer is resonating with our customers. We're starting to get that recognition in the market, and that is coming through in our sales figures. We would say we're definitely outperforming the market. It's still -- it's not an easy market in New Zealand. So that is largely market share driven.

Thanks, Nick. And look, with audit firms, I mean, 2 schools of thought, I guess, one is that you should change audit firms. I mean the regulations within this country, I think, reflect our view, which is, every 5 years, the partner must change. It's an independent partner who hasn't been involved in the business. In this case, Suzana has now been with us for 2 years, signing off our accounts. When a new partner joins, you get a completely fresh approach. You get a completely set of -- new set of eyes and you get an independent perspective on the business without the disruption of necessarily changing firms. We think that works well. We've got a good relationship with Deloitte. It's pretty frank and open, to be honest. We think we get good value, could always be a little better, but that will put the fee discussion to one side. Suzana has got a good team working for, for us. So look, we haven't, and that's the reason, as I say, two schools of thought, but we respect your opinion on that, Chris. Sorry, second back row there. Do you want to come to the microphone?

Good morning, Mr. Chairman and other executives there, ladies and gentlemen, John Joyce is my name. I'm a long-time shareholder of JB Hi-Fi. Thank you very much for all the cash flow and the growth that I had over that time. In the press recently, we noticed that there's problems with some people with the situation in direct e-commerce with China and so on. And it's brought several apparel dealers undone it seems and so on. Is there any comment on whether that's affecting us in any way?

Sure. Thanks, John. It's good to see here as well. Look, we are a branded organization. We sell branded product largely. So I think what you're seeing is a lot of private label comparison competition in the market. We've always had a lot of competition in the electrical market from entrants such as Amazon and the like. So we will take any competition head on and do our best to fight for our customers and offer them the best possible value we can.

Good. So our growth is still continuing according to the statement there.

Well, we put out...

We're relaxed for going that matter.

We put out a trading update this morning. I'd might get Nick to just talk a little bit about that. We think the sales figures are pretty solid.

Yes, you can see the momentum there continuing through the quarter. Obviously, we're entering an important period now with the Q2 promotional period, but we're come in with some good momentum. We've got some really strong promotions planned. We're in a good stock position. We're optimistic about the next quarter.

Thank you, John.

Mr. Chairman, Greg Hoffman, proxy holder. I've got 2 questions. I'll just shoot for the first one, maybe for Nick, but I'll ask it through you. E&S, how is it going sort of roughly a bit more than 12 months on? Any new ideas emerged, strategic options that are emerging that weren't on the table last year? Just any comment around that business?

Happy to hand that straight to Nick.

Yes. It's going well. From our perspective, E&S is only a small business today, but we do have good growth ambitions for that business. The last 12 months, we've been really just focused on trying to get the foundations right and set that business up for future success. It is -- when you see that slide before, it is positioned in that premium home appliance and bathroom space. So it's very complementary to our existing brands. We've just recently -- in terms of developments, we took a store in Hobart. So we've gone into Tasmania for the first time, in it's very early days, but showing promising signs. And we just -- we've got a bit more work to do on those systems and processes and people. And then once we get that right, we'll start to look to roll out that brand more broadly.

And this one for you, Mr. Chairman. Regarding mix incentive package, that was quite the no vote there through the proxies. Did you get any feedback? Where did those no votes come from? Was it one proxy adviser? What feedback did they give? Whatever you can share with us would be helpful.

Sure, happy to. So as you know, we have the VIP. We have this discussion every year. The VIP is a little different for us because we're a trading business. So we set the next year's target for the team as a challenging, but achievable target, and they run from the 1st of July hard to get those results. And I think that's been really important in our capacity to get results continually year-on-year over time, but it doesn't have a long-term assessment, but it works for retention because if the team gets their targets in 1 year, they get a cash bonus, but the 75% of shares are allocated across years 2, 3 and 4. So the team need to be with us over that period. So it actually provides incentives to perform quickly and urgently in that financial year, but also gives them a sense of what they need to do to retain those shares, which has actually been with our company. So we've had a really good lack of turnover, if you like, we've been able to retain our people. Now having said that, it doesn't fit the mold of what all proxy advisers look for. One in particular, has said, look, we understand it's fit for purpose and has recommended a for the rem report, in fact, for a number of years now. But as an acknowledgment that it doesn't fit their mold, I said, please vote against the shares. So that's one proxy adviser. We've been at 75% now for, I think, several years. So it's sort of where we've landed. And I think we're acknowledged that we're a little different where it's fit for purpose. We're unusual, but it works for us, and we appreciate the flexibility that shareholders have shown in supporting that vote at least more than 50%.

Yes. Okay. Can I just say that -- I mean with regard to that, you're saying you're taking -- you realize it's an exceptional choice to the status quo. I'm sure the proxy advisers aren't going to listen to me, but just for the Board from an appreciative shareholder. This company's performance and culture and corporate governance is exceptional. And so therefore, the proxy advisers, in my view, exceptional in a good way. And so anything that this company is doing that's out of the ordinary and exceptional should perhaps be a case study for other companies rather than be criticized and drag you back to what is status quo. This is an exceptional company and exceptional companies do things differently than the status quo. So my wholehearted support and the results seem to be on the Board as far as anyone who's looked at this company since its inception.

Look, I really appreciate those comments. Thank you. Sometimes the Board feels we need to make decisions that are not easy, but are in the best interest of the company and the shareholders, and you rely on us to do that into the future. And then when we meet with proxy advisers, when we meet with the ASA, we just explain what we do. And by and large, we get a pretty good hearing, but I take your comments and really appreciate them seeing. Thanks very much. Other questions from the floor?

Chairman and Board, I've been a JB customer since it was a single shop in the center way. My question is, where are you seeing the competitive risks coming forward over the next 12 to 18 months, given you're probably the market leader in the places you play? But when you're the market leader, somebody is going to be trying to hunt you down.

I always have. So thanks for being a shopper since 1974. Nick, do you want to talk to that?

Yes. It's no different to what we've talked about over the last year. We operate in a competitive category. We sell branded product that you can buy at multiple different retailers. And so just making sure that we stay very focused on our customer, making sure we stay very focused on providing value, having stock in store in range, exceptional customer service. That's what we just keep -- stay focused on doing, and that will help us compete in what is a competitive environment. I wouldn't say there's any sort of new or emerging risks that are different to what we've encountered previously.

Thanks, Nick. And look, all I'd add from the Board's perspective is that it is a people business. We need the best management team and the best team within our stores. And our role, we feel is to give the management team the capacity and the resources to get the job done to look after our people, and that's what we're trying to do. So thank you for your question and for shopping.

Daniel Cost, shareholder for a number of years. I'm a Jaded millennial with short attention span. I love technology. When I walk into a JB Hi-Fi store, my expectation is to maybe see some new piece of technology that wows or amazes me that I might think about after I go home and maybe think about buying -- coming back to purchase. It's been a few years since I've actually walked into a JB Hi-Fi store and seen something that genuinely amazed me and wasn't just something that I've seen for years on end. So although your sales figures are really great, I worry that I might be the canary in the coal mine. So how would you appeal to someone like me, who is like a very -- probably a very tough kind of demographic who might be looking for something new and exciting that I might have seen on tech YouTube or something, and I might be excited to see it in a store.

Okay. Daniel, thank you for your question. We're always refreshing our stores. We're relying on innovation from our suppliers. I'll get Nick to add a little bit to this. And of course, with what's going to happen with AI in the PC market and everywhere else, I think there's plenty of scope, but why don't you talk a bit more?

Yes. We're really optimistic on the product innovation cycle. Like to Stephen's point, AI PCs, and I appreciate it may not be for everyone at this point, but AI in devices, I think, is a really interesting dynamic that's going to come out over the next few years. If you've been in stores recently, some products like wearable products that are coming, the Meta glasses, the Ray-Ban Meta Glasses, the Oakley Meta Glasses. We're selling the Oura Rings now, that monitor your health. There's a lot of new product that's just coming now that we think over the next few years, will continue to evolve and hopefully excite you in a JB Hi-Fi store.

Okay. So let me think for a moment. So in the Hi-Fi space, if I look on like, say, Tech YouTube, the things are Hi-Fi enthusiasts are excited about, it's not really things like sound bars. I already have a turn table. Sound bars are more for people who hate technology rather than like technology. I personally probably like to see brands like Miranda's and Nakamichi and things like that. I won't comment on the AI Windows 11 PCs. It's interesting to note that the market share for Windows 11 has actually fallen since they dropped support for Windows 10. But I'd like to ask you what do you think might be some emerging trends which are not necessarily popular in stores yet, which you might be looking at going forward in the future years?

We take your point on audio, and we are looking at our audio range and whether we can trial some expanded ranging in some particular audio stores. But I would say that the benefit of the JB model is the breadth of the product that we sell. Not everything needs to be brand new in a particular year because we sell across so many different categories that there is always something that is new. And it may not be in audio this year, it may be in a different category, but there is always a new product. In terms of the evolution, it's just -- it's again, what we talked about, like I think the wearable space, I think, is a really interesting space. If you look at what Meta is doing in that space in terms of what they think will evolve, how those glasses, for example. And whether you believe it or not, their ambition for those glasses taking over from what you would ordinarily do on a PC or on a mobile phone, I think over the coming years, that will be really interesting to see how that evolves.

Do you have any other things that you might be quietly looking at, which consumers might not necessarily be ready?

Always. We are always looking, always looking.

Thanks, Daniel. And our team visit regularly. So we heard from them yesterday that they've been visiting all the major players on the West Coast of America in the last couple of weeks. Any other questions from the floor?

Alex, a shareholder of JB Hi-Fi. Very much enjoy your products. JB Hi-Fi dominates the sectors that it plays in currently, obviously, Australia. There's really only a small amount of growth that you can get out of New Zealand being a smaller market. So really, where is the growth that's going to drive the share price in the future for this company? Overseas, I'm not really sure. I mean you're looking at adjacencies with The Good Guys and the E&S. So where is the growth going to come that's really going to drive the share price for obviously the company and all the shareholders present?

Yes. Good question. Thank you for that. When you say where is the growth, I suspect you're talking about store growth because that's a traditional mechanism for retailers to grow. You start with a model. And frankly, JB Hi-Fi did that from its inception as a public company in 2003 for a number of years. We've had limited store growth, although we've got several stores that we are -- have opened recently that have been successful. So there are gaps in the market for us to grow. But look, the opportunity for us is immense in terms of our product range in our categories in which we trade. So not that long ago, we were a record shop. We had changed. And if you look at the ability for us to bring innovative product that Nick's talked about into our business, we think we can get real productivity growth through our stores by having better product, by servicing better than our competition. And I think we've got enormous opportunities just within our current footprint. Of course, New Zealand is an opportunity for us, and you've seen the growth we're getting there. E&S, Nick's talked about. We've got lots of other things we're doing in commercial, so JB business and commercial is an avenue for growing into that SME market as well. And of course, behind closed doors, we're doing lots of thinking about what we might do, but you would expect us to do things that are sensible and related to our customer and our business. And if we do that, we feel we can offer really significant growth over the medium to longer term. Thank you. Maybe we should take one from the -- Sorry, please.

My name is Fred and mine is more a comment actually. I've been a customer of JB Hi-Fi from the time it started operating out of his backyard. And over the years, I've spent a lot of money there. So I thought on principle, I should own shares. Anyway to get back...

Happy with both, by the way.

I'm sorry.

We're happy if you do both.

Absolutely. Well, I felt I bought so much of it. I already own half the company. Anyway, my comment is to congratulate the Board on the service that you have in the environment that you've created, give us good service. I had the occasion a few weeks ago to go to the DFO JB Hi-Fi. I wanted a particular product. And while it was on display, they didn't have any in stock. However, they didn't abandon me. They guided me across to The Good Guys. And sure enough, I got it there. And the reason I'm saying this is because there was a gentleman of Indian origin, and he gave me the most wonderful service you could ever get. And I came in with a wonderful product at a very good price. So I want to congratulate you guys on the environment you've created for good service.

We really appreciate those comments. Thank you. Anything from the floor? Maybe -- we've got some questions online, Doug?

Thanks, Stephen. Yes, a question from Stephen Mayne. Thank you to Beth Laughton for 14 years of service on the Board. It is always helpful for investors to have access to some exit perspectives from retiring independent directors. In her final contribution as a JB Hi-Fi Director, could Beth please comment on what she regards as the best 3 decisions made during her time on the Board? And does she have any regrets?

How long do I have, Stephen?

You've got as long as you like, Beth.

Stephen, thank you for your question. I think that's a good question because, obviously, as I come to the end of my term, which is today, I have thought long and hard about the experience that I've had. Firstly, just about -- a little bit about me, which might put this in perspective. I'm a 40-year chartered accountant. Even my husband says, you're just a chartered accountant. So that means I'm a bit boring, and I'm very serious. I have a bit of a sense of humor, but I take life quite seriously, and I'm quite conservative. So my experience on this Board has been to ask questions at the right time and to respond and consider the questions -- the answers to those questions. I should say I've had a 20-year experience also as a nonexecutive director. So I think my base signal is pretty good. This experience that I've had on this Board, I have had the most utmost respect for the management team, my fellow directors. I think if you -- the 3 most significant things, I think, and one would be succession planning and the transition over that time between Terry Smart to Richard Murray, to buying The Good Guys and Terry Smart coming back to help us position The Good Guys to where it is now. So that's more than double the earnings. Bringing Terry back in when Richard left as the CEO and then now having the opportunity to encourage and support Nick in his journey through the CFO role into the Chief Operating role and then as now our new CEO. And I have utmost confidence in his ability to continue to grow the business. The acquisition strategy that we've had with, firstly, The Good Guys and the way the team focused on getting, first off, securing that opportunity and then ensuring that we get The Good Guys in the best possible shape has been outstanding. E&S is another example of the diligence and the approach that we've taken to make a determination around investing in a business with the major share -- sorry, the shareholder. Rob is an exceptional person, and that business is going to provide all sort of wonderful opportunities. The other thing I would just want to comment on is the culture of the organization. A number of times I have heard various parts of the management team never, never, never say the market is tough. The economy is tough. We have nothing that we can do to respond. It has always been a whole list of opportunities to drive the business, to support the team, to empower the people on the floor and to grow that online sales business. So I've never heard we can't do anything. So that's an absolute positive. I have never seen or heard that anywhere else in my experience. The other thing that is a constant is let's get back to basics, good quality retailing. And so I have learnt so much about what good quality retailing looks like. So whenever things start to go a little bit around the edges, the theme is let's get back to basics, let's gets back to customer service, quality product in store, systems process and ongoing business improvement. So summary, this has been an amazing experience for me. I've learned a huge amount, and I'm very, very comfortable that the business is in great shape for the future.

Thanks, Beth. Well spoken, I'll answer the second half of the question. The only regret is on our behalf that we'll miss Beth's sense of humor in the boardroom and everything else about it, too. Doug, other questions?

Thanks, Stephen. Another question from Stephen Mayne. What constraints are there on Terry Smart in terms of joining other listed retailers? His predecessor, Richard Murray, has been highly promiscuous, taking roles at Premier Investments, Metcash and now Sigma. Could Nick please detail his plans in terms of remaining in touch with the 3 previous JB Hi-Fi CEOs, all of whom have been highly successful and contributed enormously to our remarkable success? Please do everything you can to keep them all in attend.

Thanks, Stephen. That's -- they're nice comments. Look, in terms of noncompeters, we talked a little bit about our incentive plan, which has shares in years 2, 3 and 4. So that's a strong incentive for any person who leaves the organization to behave respectfully. We do have a noncompete. You saw that with Richard Murray, he left us, and people said, he's going to pinch any of the team, and none joined Richard because of those circumstances. So I don't see any issues going forward. We wish Terry all the best. Terry is beyond reproach. He's a very fine executive and a very fine person. So clearly, we'll keep in touch with him and look forward to whatever happens in the future with him.

Thanks, Stephen. Another question from Stephen Mayne. Whilst it is great you're offering a hybrid AGM with both online voting, and questions, you are still deficient in 4 areas in terms of AGM best practice. The annual report was released too late on the same day as the notice of meeting. It should be out in August with the full year results. You're not following the agenda, instead dealing with questions in one job lot. This takes away focus from key individual items. You also failed to disclose the proxy position to the ASX along with the formal addresses to allow for a more fully informed AGM debate. Have there been any protest votes? Finally, will you get with the disclosure program? And release headcount voting data in the poll results like with the scheme of arrangement to make public retail shareholder sentiment and stimulate higher levels of retail voting, which has crashed to below 3% since the move away from paper. If the likes of Suncorp, Myer Stockland and Tabcorp can do all these things, why can't JB Hi-Fi?

Thanks, Stephen. In terms of the annual report, when we release our results in the middle of August, so that's some time ago, you get just about everything. The only thing I think that's added to the formal yellow document you see in the Chairman's letter, the CEO's letter and some shareholder information at the end. So I'm not sure that's material. We'll take on board questions on timing on that, but I don't think that's material. In terms of questions, it's just impractical to have questions throughout this session. We allow plenty of time. You can ask about everything. I don't think it's helpful to say you can only ask about the rem report. And then for online people who missed that come back and then we say, you can't ask about the rem report because that was a little earlier in the meeting. So it's just not practical for a hybrid meeting. In terms of proxies, we're just following what's required by the ASX. So we released them during the meeting. And shareholders, the same thing. We don't release shareholder voting by numbers because that's not required. We're a simple company. We follow what the ASX tells us to do, and we believe we have our governance pretty well in place. Doug, anymore?

Thanks, Steve. Another question from Stephen Mayne. After closing at $113.52 last night, the share price went down to $105.09 this morning after investors responded to the sales update. This is not a great look for the departing CEO, who only left 27 days ago, but our stock was arguably priced to perfection, and we all remember the 2003 IPO price was just $1. That said, are the Chair and CEO surprised by today's drop in the share price? And what specific data point in the sales update do they believe triggered it?

Thanks, Stephen. Look, we don't look at the share price day by day. We look to run our business, get the results. And over time, things will happen that are in the best interest of shareholders. Sometimes it pops up, sometimes it pops down. We don't control that. What we can control is how we go to market with our performance. Nick talked to you about the sales result. It's pretty solid, to be honest, and in line with what we thought. So we're very happy with how things are going. Any more from Stephen?

Let's have a question from someone else from Jeff Rogers. And Jeff says, there's a new store in my regional center of one that I believe is just opened. I haven't entered it yet. Well done for bringing JB Hi-Fi to South Gippsland, a growing region with the only competitor, Harvey Norman, having a good but not as good location for many years is regional areas and ongoing growth strategy.

Yes. I think, I talked to that earlier, we see that as an opportunity. Wonthaggi, Cameron gave us a review of yesterday. It started with a bang. So that's good news for us. Do you want to talk about any other regional?

Yes. Look, regionals is a strategy for us. We historically struggled to get to those smaller catchments. But as our range has got broader, as tech has got more important in people's life, we can get to what our smaller catchments now. And so we opened Warnerboo, we opened Wonthaggi, Mt Barker in South Australia, Albany in WA, and they're all going well. So we'll continue to look for regional opportunities.

Okay. Any more?

Another question from Stephen Mayne. Now that CEO succession has been completed, could Chair, Stephen Goddard, please comment on his chair succession plan? Stephen first joined the Board in 2016 and became Chairman in July 2020. Is he planning to serve as Chair for a full 3-year term until 2028? Is this his last term?

Look, all I'd say is I just got voted in. So I'm looking forward to the future. So maybe we'll deal with that in a year or 2's time. I'm not going anywhere. So thanks. Any other questions, Doug?

Yes, we have another question from Jeff Rogers. Has the resale of Telstra Internet services been successful to date? Jess as his own experience could have been better.

Okay. Do you want to handle that?

Yes. Telstra is a really important partner for us. It has been very successful in mobile phone and Internet services, and we'll continue to support Telstra as a partner, and they'll continue to support us. So no -- sorry, if it hasn't -- if your experience wasn't as great as it should have been, but overall, it has been very successful.

Thank you. Another question from Stephen Mayne. You have covered the 15% proxy protest vote against the rem report and the 24% against the CEO's LTI grant, but there was also a modest 5% proxy protest vote against the Chair's reelection compared with less than 2% with the other directors. What was the issue with the Chair's reelection? Did a proxy adviser recommend against? And is it a 10-year issue?

95% are right. But no, look, a couple of shareholders advised us that if they have an issue with the rem report, they will vote against the Chair of the Rem Committee, which I am. We've had letters from others, some -- one from overseas actually, who said, in line with your comments about audit, they feel that if we don't change our auditor, they'll vote against the Chair as well. So there's a little bit of these things going on. 95% is pretty good. So I'm okay with that as long as you all are. So thank you.

No more questions online. Thanks, Stephen.

Okay. Any more from the floor? Yes, please.

Just one more. I don't want to know the name of the company, but is JB Hi-Fi looking around for any more acquisitions?

We are continually looking at growth opportunities. So we look at everything, to be honest. So we've got in Nick's old team, now Dave's team. We've got people who scour the market. It's easy to buy something. It's not as easy to buy something that's going to be really good for the business over the longer term. So when you see The Good Guys, that was a great acquisition. E&S, we think will be a terrific acquisition over time as well. But you've got to be out there looking, you've got to be judicious in what you actually do and make sure that it's forever. So that's what we're doing. Any others? Okay. Thank you, ladies and gentlemen. If you haven't voted already, please cast your votes now. A reminder for those that are attending the meeting online, you can vote by selecting the voting icon. For those attending in person, if you can hold up your yellow card, and we'll collect them. [Voting]

Okay. Please raise your hand if it hasn't been collected. We're all good. I think online, I've given plenty of notice. So thanks, everyone. Voting is now closed. The voting results from the meeting will be released to the ASX later today. On behalf of the Board, I'd like to thank you for participating in today's AGM. I now declare the meeting closed, and I invite you to join the directors of the company for refreshments in the next room. Thanks, everyone.