Lewis Group Limited (LEW) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. It gives me great pleasure to welcome you to the 16th Annual General Meeting of the Members of the Lewis Group, which is being held, as you're all aware, virtually. In terms of Article 19.6.1 of the MOI, I'm chairing the meeting as Chairman of the Board of Directors. More than 3 members are attending the meeting and present -- represent 747,932 shares in the company. I should advise that I'm holding proxies and letters of representation in respect of [ 62,686,012 ] shares. As the necessary quorum is present, I declare the meeting open. In order to ensure that all votes are -- sorry. That mean to be off -- to ensure that all votes cast at this meeting are taken into account, I have determined that the resolutions set out in the notice of the AGM will be taken as a poll. For the purpose of the poll, I nominate Computershare to act as the scrutineers. Once the voting is opened, voting can be performed at any time during the meeting until the voting of the resolutions is closed. Thereafter, the results will be announced at the end of the meeting. Results will be displayed in real time after I have closed the voting. And I will allow the motions to be discussed after they had been put to the meeting, in other words after each resolution. Any shareholder or appointed proxy attending the meeting is eligible to ask questions. Messages can be submitted at any time during the Q&A session up until the session is closed. [Operator Instructions] We can now proceed with the business of the meeting. The notice of the AGM in respect of the meeting has been in your hands for the prescribed period, and I therefore would like to take it as read. Thank you. I'm informed that we have no apologies at this particular point in time, so we can move on to the first item on the agenda. It is the requirement of the Companies Act 2008, as amended, that the directors' report; the external auditor's report; the Audit Committee report; annual financial statements; and the Social, Ethics and Transformation Committee reports be presented at the Annual General Meeting of Shareholders. The directors' report is set out on Pages 13 to 15 of the annual financial statements. The external audit report is set out on Pages 3 to 8. The Audit Committee report is set out on Pages 9 to 12. The social and ethics and transformation report is set out on Pages 34 to 35 of the notice of the AGM. Are there any questions specifically in relation to the Audit Committee report? Okay, if not, the annual financial statements as well as the integrated annual report are available on the company website, and copies are formally tabled at this meeting today. Are there any questions in relation to the annual financial statements? Okay, if not, we can move on. The Social and Ethics and Transformation Committee report, set out on Pages 34 to the notice of the AGM, is formally tabled herewith. Are there any questions or comments in regard to the social, ethics and transformation report? Okay, if not, we can now proceed with matters which require to be voted upon. The ordinary resolution #1 on the agenda, you're asked to consider the election and reelection of nonexecutive directors retiring from the Board and appointed to the Board in terms of the company's MOI. The election of each director will be dealt with on a separate basis. So order resolution #1.1 is in respect of the reelection of Motsepe, who retires by rotation and is eligible and available for reelection. A recommendation of the Nomination Committee, I propose the reelection in terms of ordinary resolution #1.1. A brief description is set out on Page 10 of the notice of the AGM. As the motion has been proposed, would you kindly vote in respect of the proposed reelection in respect of ordinary resolution #1.1? [Voting]

Okay, ordinary resolution #1.2 is in respect of the reelection of Duncan Westcott, who retires by rotation and is eligible and available for reelection. On recommendation of the Nomination Committee, I propose that Duncan be reelected as a director in accordance with ordinary resolution #1.2. A brief description is set out on Page 11 of the notice to the AGM. The motion has been proposed. Would you kindly vote in respect of ordinary resolution #1.2? [Voting]

Thank you. I will now hand over the meeting to the Chairman of the Audit Committee for the next resolution, which is ordinary resolution #1.3.

Okay, thank you, Mr. Chairman. I've been nominated by the Board and the committee to present this and table this resolution as it concerns the reelection of the Chairman himself. And the resolution states that Hilton Saven retires in terms of the memorandum of incorporation, is eligible and available for election. On recommendation of the Nominations Committee, I propose that Hilton Saven be elected as a director in accordance with ordinary resolution 1.3. Again, a brief description of Hilton Saven is set out on Page 10 of the notice to the AGM. Are there any questions or comments on this ordinary resolution? In which case the motion has been proposed, and I would now ask you to please vote in respect of the proposed election of Hilton Saven. [Voting]

Thank you. And I give the baton back to you, Mr. Chairman.

Thank you, Duncan. We move on to ordinary resolution #2, which is the election of members of the Audit Committee. The election of each member will be dealt with separately, as was the case beforehand. So ordinary resolution #2.1, in which we reelect -- Daphne Motsepe is eligible for election and as a member of the Audit Committee. On recommendation of the Nomination Committee, I propose that Daphne be reelected (sic) [ elected ] as a member of the Audit Committee. A brief prescription is set out on Page 10 of the notice of the AGM. The motion has been proposed. Would you kindly vote in respect of ordinary resolution #2.1? [Voting]

Ordinary resolution #2.2 is in respect of Tapiwa Njikizana, who's for election as a member of the Audit Committee. On recommendation of the Nomination Committee, I propose that Tapiwa be elected as a member of the Audit Committee. A brief description is set out on Page 10 of the notice of the AGM. The motion has been proposed, and I ask you kindly to record you votes in respect of ordinary resolution #2.2. [Voting]

Moving on to ordinary resolution #2.2 -- 2.3, in respect of Duncan Westcott being eligible for reelection as a member of the Audit Committee. A -- on recommendation of the Nominations Committee, I propose that Duncan be elected as a member of the Audit Committee. A brief description of Duncan is set out on Page 11 of the annual report (sic) [ notice of the AGM ]. The motion has been proposed. Would you kindly record your votes in respect of ordinary resolution #2.3? [Voting]

We move on to ordinary resolution #3, which is the approval of the reappointment of the auditors. After due consideration, the Audit Committee has nominated PricewaterhouseCoopers to be reappointed as auditors of the company for the current year to 31 March 2021 and the appointment of Mr. Thinus Hamman as a designated auditor for the ensuing year. I propose that Pricewaterhouse be reappointed as the auditors of the company for the current year to 31 March 2021 and that Mr. Thinus Hamman be appointed as the designated auditor for the ensuing year. The motion has been proposed. Would you kindly record your votes in respect of ordinary resolution #3? [Voting]

We now move on to the nonbinding advisory votes. The first one is in respect of the approval of the company's remuneration policy, which is nonbinding advisory vote #1. The policy is set out on Pages 77 to 84 of the integrated report. I propose the adoption of the nonbinding advisory vote #1. The motion has been proposed. Would you kindly record your votes in respect of nonbinding advisory vote #1? [Voting]

The nonbinding advisory vote #2 is in respect of the implementation of the company's remuneration policy. The company's implementation report is set out on Pages 85 to 92 of the integrated report. I propose the adoption of the nonbinding advisory vote #2. Would you kindly record your votes in respect of nonbinding advisory vote #2? [Voting]

We now move on to the special resolution. A -- the first one, special resolution #1, is in respect of the approval of the fees to be payable to the nonexecutive directors for the period 1st July 2020 until 30 June 2021. The details of this special resolution as well as the reasons for the special resolution are set out on Page 5 of the notice of the AGM. The motion has been proposed. Would you kindly record your votes in respect of special resolution #1? [Voting]

Special resolution #2 is in respect of seeking shareholders' authorization to continue to issue further notes under the domestic medium-term note program from time to time. The details of the special resolution as well as the reasons for the special resolution are set out on Page 5 of the notice of the AGM. I propose the adoption of special resolution #2, as set out in the notice of the AGM, authorizing the continued issuance of notes under the company's domestic medium-term note program. This motion has been proposed, and I ask you to record your votes in respect of special resolution #2. [Voting]

We move on to special resolution #3, which is in respect -- general approval to provide financial assistance to subsidiaries and other related and interrelated entities of the group. The details of this special resolution as well as the reasons for the special resolution are set out on Page 5 of the notice to the AGM. I propose the adoption of special resolution #3, as set out in the notice of the AGM, giving general approval to provide such financial assistance. The motion has been approved, and I ask you now to record your votes in respect of special resolution #3. [Voting]

We now move on to special resolution #4, which gives the directors of the company and its subsidiaries general authority to repurchase the company's shares. The details of the special resolution as well as the reasons therefore are set out on Page 6 to 7 of the notice of the AGM. I propose the adoption of special resolution #4 and in terms of the notice of the AGM whereby the authority to repurchase shares is obtained. The motion has been proposed. Would you please vote in respect of special resolution #4? [Voting]

We now move on to ordinary resolution #4, which is in respect of authorizing each and every director of the company to do all such things and to sign such documents that may be necessary or incidental to the implementation of the resolutions that are passed at this meeting. I propose the adoption of ordinary resolution #4, as set out in the notice to the Annual General Meeting, giving the required authority to the directors to implement resolutions that we pass at this meeting. The motion has been proposed. Will you please vote in respect of ordinary resolution #4? [Voting]

As all the voting on the resolutions put before the meeting has been closed, the results of the poll will be made available and displayed on the screen. Can I, before we put the results on the screen, ask if there are any questions of a general nature that any shareholders would like to pose? Okay, if there are no questions -- am I correct, [ Andres ]?

That is correct, [ Chair ].

Okay. If you would be so kindly as to -- sorry. We do have one now, from [ Neil Gran ]: Do you expect to publish interim results around 20th of November as this was the case last year? Please comment on how trading conditions are currently and your outlook for the key year-end trading period. I'm going to pass that on to our CEO. Johan, if you wouldn't mind just making a comment on that.

Yes. Thank you, [ Chairman ]. And thank you for your question, [ Neil ]. You're absolutely right in saying that we will be publishing our results on the 25th of November, [ Neil ]. And just maybe to comment on the trends that we have seen since we've reported results: We're happy to share with you that the sales momentum actually carried as strongly through the months of June, July, August and September. And we can also report that the sales increase numbers that we reported to the market for quarter 1 -- and maybe just to backtrack. We basically shared with the market that sales increased by 22% for June. A very strong July followed with merchandise sales increase of 17%. And what we can share today is that the sales trends that then continued through August, September -- through August, September and October is very similar or even slightly stronger than what we've seen for the month of July. On the collection front, [ Neil ], we're happy to share with you that the collection trends that we've seen in June and July have also carried through in the 3 months following that. And we are quite satisfied with where we are at from a trading perspective at this point in time. So although we believe that things will become tougher in months to come, we are really pleased with our trading results since we opened our doors again for full trading from June onwards.

Thank you, Johan. Are there any other questions? Okay, if there are no other questions, can I ask the scrutineers, if you would just show the results of the -- of all the voting.

The results will come up momentarily, [ Chair ].

No problem. Thank you for that.

[ Chair ], we do have a new question that's come through.

Okay, would you put the question up? Yes, okay, so from [ Neil ] again: Have you made further share repurchases since the last SENS? Johan, you can confirm. I'm not aware that we have...

Yes. We have been successful in terms of acquiring roughly a further 500,000 shares after the last SENS that we have issued...

Afterwards, yes.

And maybe just to give an update then. So the total shares that we have repurchased under the current mandate in play settled at 3.2 million shares, which is 4.1% of the shares in issue at the point when we actually started this buyback program. And so I think it's also important to note that this entire program actually kicked off during October 2016, and over this 4-year period, we've now been successful in repurchasing and canceling close to 13 million shares. I hope that, that answered your question, [ Neil ].

So Johan, just to clarify: The -- those 500,000 were bought subsequent to our last SENS announcement.

That's correct, yes.

Thank you. Okay, are there any further questions anybody would like to pose? Okay, if not, thank you. Could we just put the results of the voting? Okay, thank you. So I don't propose to go through all the voting in actual fact, but we can see the -- sorry. I'm just going to -- okay, is that all the voting in actual fact that we have on the screen...

[ Correct, Chairman ]. That's correct.

Okay, okay, thank you very much. So as we can see, the voting is as such as appears on the screen. I'll leave it there for a few minutes for people just to have a look at the actual results itself.

Sorry, [ Chair, Neil ] has another question that came through.

Yes, no problem. Okay, "Are you still able to buy now? Or do you have to wait until next results?"

No, no. We actually went through the necessary steps to enable us to continue with our buyback process, so as [ things speak ], we are in the market and we are still buying back shares.

Okay, any other questions anybody would like to ask? Okay, if there's no further business, I'd like to declare the meeting closed. And thank you all for attending. Thank you very much.

Thank you.