Metcash Limited (MG9.F) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. My name is Peter Birtles and I'm the Chair of the Board of Metcash Limited. And on behalf of the Board and the management of Metcash Limited, I extend to you a warm welcome to the company's 2024 Annual General Meeting. Before we commence, I would like to acknowledge the traditional custodians of the lands from which we are all connecting into today's meeting. We are here on the land of the Gadigal people of the Eora Nation and I'd like to pay my respects to elders across country; past, present and emerging. And I extend that respect to Aboriginal and Torres Strait Island peoples here today. As we have a quorum present, I now declare the general meeting open. Firstly, I'd just like to introduce to you your Board of Directors. And I'll start from this slide. We have Doug Jones, who is our Group Chief Executive Officer and Executive Director. Next to Doug is Margie Haseltine and Margie is the Chair of our People, Culture and Nomination Committee and Margie actually retires by rotation under the constitution today, and she is offering herself for reelection at this meeting. Next to Margie is Christine Holman. Christine is the Chair of our Safety and Sustainability Committee and Christine retires as a Director at the conclusion of this meeting. Next to Christine, we have Mark Johnson and Mark is the Chair of our Technology Advisory Working Group. And then we have Murray Jordan and Murray has been a long-standing director of the company, and he will be taking on the role of Chair of our Safety and Sustainability Committee following this meeting. And then we have Helen Nash, who is the Chair of our Audit, Risk and Compliance Committee. And finally, at the end of the table, we have our Chief Legal Risk and Compliance Officer and also importantly, our Company Secretary, Julie Hutton. I'd also like to introduce to you representatives from the management team. And on the front row in front of me here, we have our group Chief Financial Officer, Deepa Sita. I should also acknowledge that we have here today representatives from our auditors, Ernst & Young; and particularly Chris George, who is our signing partner. Mr. George will be available to answer questions that shareholders might have, concerning the conduct of the audit, the preparation and content of the auditor's report, the company's accounting policies and the auditor's independence at the conclusion of the Group CEO's presentation. We welcome and thank Mr. George for his attendance today. Also in attendance, we have the CEOs of our various pillars, being our CEO of Metcash Food, Grant Ramage; our Interim CEO of our Independent Hardware Group, Geoff Harris, our Chief Executive Officer of our ALM business, Kylie Wallbridge and our Chief Executive Officer of the Total Tools business, Richard Murray. We also have a number of other members of our management team. We have Danielle Jenkinson, who is our Group People and Culture Manager. And also -- whom am I missing? Neil. Neil is our new CIO, just recently joined the business. So in terms of the agendas today, we're going to review the company's activities during the year and receive and consider the accounts and reports for the 12 months ended the 30th of April 2024. We'll then consider the 4 resolutions that are outlined in the notice of meeting, which was launched with the ASX and made available to all shareholders on the 12th of August 2024. These resolutions will be put to a vote and using electronic handsets, will be decided by an instant pole. You should hopefully all have been handed one of those handsets and to vote, ensure that your card is inserted into the slot at the top of the handset with the bar code at the bottom and facing towards you. When voting opens, the voting options will appear on the handset screen. So to vote, please press the buttons, not the screen. So when you wish to vote in favor of a resolution, you will press button #1; to vote against your press button #2 or if you wish to abstain from voting, you will press button #3. Your selection and the word received will appear on the screen confirming that your vote has been cast. If you wish to change your mind, simply press the button with the red triangle to cancel your vote, then to choose your new voting option either press the 1, 2 or 3 button. Any appointed proxy who has been given discretion on how to vote should vote in the same manner. Any appointed proxy that has been directed to vote in a certain manner and has no discretionary votes to cast, does not need to vote as those votes will automatically be counted in accordance with those directions. Once the poll is closed, the results will be displayed on the screen showing the combination of votes cast in the room and proxies received before the meeting. If you have any issues with your handset, please obtain assistance from one of the attendants. If you are joining us today online; to ask a written question, select the messaging tab at the top of the Lumi platform. Type your question in the box towards the top of the page and press the arrow symbol to send. A copy of your submitted questions along with any written responses from our meeting team can be viewed by selecting my messages. To ask your question verbally, you can click the Request to Speak button in the broadcast window. The audio questions interface will now display and you'll be prompted to confirm your name and enter the topic of your question, submit your details and select join queue to be connected. If prompted, select allow at the pop up to grant access to your microphone. Please note, while you can submit questions from now on, I will not address them until the relevant time in the meeting. So at this point, I'll now provide my formal address. I'll start off by providing you with an overview of Metcash's performance in the 2024 financial year as well as comment on other matters such as our strategic direction, board and management changes, remuneration and ESG. I'll then invite Doug Jones to talk in more detail about the company's operating performance as well as progress on our key growth initiatives. So firstly, to the year in review. As you may have already read, Metcash again delivered strong results, underpinned by the success of its strategy and the disciplined execution of its initiatives. Operationally, all pillars demonstrated resilience in softer market conditions, successfully leveraging their competitive strategies. In Food, strong earnings growth was delivered in the most value-conscious shopping environment in recent memory, providing further evidence of the shift to a sustainable and resilient business model. In Liquor, the business continued to outperform the market, win share and deliver strong earnings growth. While in Hardware, the business endured a further weakening in external conditions, but has a strong market position and remains ideally positioned for an improvement in activity levels. Talking briefly to the financials. Group revenue increased by 0.7% to $18.2 billion, while group EBIT declined by 0.9% to $496.3 million, with growth in the Food and Liquor earnings being offset by lower earnings in hardware and increased corporate costs. Underlying profit after tax was 8.2% lower at $282.3 million, largely reflecting the more challenging conditions in Hardware, while reported profit after tax was close to flat at $257.2 million. The company's operating cash flow was a standout for the year, increasing by 29.5% to $483 million. This resulted in a cash realization ratio of 102% and a 3-year average cash realization ratio of 90%, which is in line with our guidance for the period. Total dividends for the year were $0.195 per share fully franked, in line with our target payout ratio of 70% of underlying profit after tax. This is a reflection of the company's strong cash flow performance while balancing with the desire to be able to invest in future growth opportunities. Doug will provide more detail on the financial results in his Group CEO report. So I'd like to turn now to strategy. For many years, our strategy has focused on championing successful independence, mainly through strengthening their competitive position in the markets in which they operate. Today, we have a diversified business platform with healthy and strong retail networks, which have helped deliver a 56% increase in earnings since 2020. This is the equivalent of a very pleasing 12% compound annual growth rate. In February this year, we announced major strategic acquisitions in both the Food and Hardware pillars. These included the acquisition of Superior Foods, which was completed in June. This acquisition further strengthens our current Food business and opens up new growth opportunities in the attractive and adjacent food services market. In Hardware, we acquired the Alpine Truss and Bianco Construction Supplies businesses, which will help accelerate our Whole of House strategy and further strengthen our market position. In March, we held a successful and well-attended Investor Day in Melbourne, where we highlighted our strategic focus for the next phase of our growth. This included replicating proven and successful growth strategies across the Metcash Group. We have the platform and the capabilities to deliver this strategy and grow, not only our current businesses, but also any future businesses that we may acquire. I'd like to now turn to the management and Board changes. As I noted last year, Deepa Sita was appointed Group CFO replacing Alistair Bell, who had earlier advised of his intention to retire from the role. Deepa joined us in February this year, and I'd like to thank Alistair, who also kindly agreed to stay on longer than was originally planned to help facilitate Deepa's transition into the role. Unfortunately, Chris Baddock retired from the CEO Liquor role in October last year for health reasons. John Barakat, the Liquor's pillars General Manager of Merchandise and Operations served as interim Liquor CEO until Kylie Wallbridge joined us in March. Kylie has extensive Australian and international experience in the liquor industry, and she has settled extremely well into her new role. We also welcomed Richard Murray to Metcash as our new CEO of Total Tools Holdings at the end of January. This followed an earlier announcement that Paul Dumbrell had decided to step down after more than 5 years in that position. Richard is a highly experienced and respected retail executive with a proven track record across the Australian retail sector. In May, we announced that Annette Welsh will be transitioning from her current CEO role in IHG to a corporate strategy and governance role. After 15 years in senior management roles in IHG, including the last 5 as CEO, Annette decided to retire from that position. Geoff Harris, who is IHG's current General Manager of Merchandise is acting as our interim CEO until the search process for Annette's replacement is completed. On behalf of the Board, I'd like to express our thanks to Chris, Paul and Annette for their contribution and leadership of their pillars and a more widely to the Metcash Group. Last month, we announced that Christine Holman had advised the Board that she would not be standing for reelection this year and will retire from the Board at the conclusion of this meeting. Christine has been the inaugural chair of the recently formed Safety and Sustainability Committee, guiding strong progress made by the company in this area. She also served as a member of the Audit, Risk and Compliance Committee. Christine is a very hard-working and very diligent director. And the Board and I would like to thank her for her service to Metcash. We wish her all the very best for the future. Moving now to remuneration. This year's changes -- this year, changes were made to our remuneration framework to better align it with our strategy and wider market practice. This included increasing the deferred portion of the short-term incentive payments that are available to the Group CEO and CFO, with the Group CFO deferment increasing from 33% to 40% and from 25% to 33% for the Group CFO. These portions will increase to 50% for the CEO and 40% for the CFO in FY '25 and then up to 50% to the CFO in FY '26. We also refined the balanced scorecards for our executives with all executives now sharing group financial and strategic objectives which amounts to 70% of their outcomes to ensure an increased collective focus and accountability on the group-wide objectives. An adjusted EBIT was introduced into our 2024 performance measures for both the short-term incentives and for the ROFE long-term incentive hurdle. This ensures that the Project Horizon and also Mega Distribution Center, significant item costs are included in the calculation for those awards, which reflects the importance of successfully delivering those initiatives. Remuneration outcomes for the year included STI awards, ranging from between 14.6% to 38.1% of the maximum opportunity. While for the long-term incentive, the 2022 financial year grant was tested at the conclusion of 3 years, and vested at 76.7%. The Board intends to continue to review its remuneration practices to ensure that these meet our strategic needs and wider market practice and to ensure that our executive remuneration mix and performance metrics align with our longer-term strategic objectives. Turning now to ESG. I'm very pleased to report that we've continued to make good progress with our ESG plans, which cover the key areas of planet, people and community. Our overall ESG performance was placed in the 89th percentile of our international sector in the Dow Jones Sustainability Index, which is a further improvement on the 87th percentile achieved in the prior year's assessment. We achieved our emissions reduction target for the year for both Scope 1 and Scope 2 emissions, and we remain on track for achieving our longer-term targets. We also made good progress in better understanding our Scope 3 emissions, which is a significant area of focus and forms part of our readiness work, associated with our new Australians sustainability reporting standard that becomes effective for Metcash in financial year 2026. We also achieved our waste diversion target for the year and are on track to achieve our longer-term target of diverting 80% of waste from landfill by 2028. Ensuring the safety of our people remains the highest of priorities at Metcash, and it was pleasing to see the significant safety initiatives introduced in the year reflecting in a 21% improvement in our key performance measure of Total Recordable Injury Frequency Rate, or TRIFR, for short. We will maintain our commitment to further improve our safety performance in the years ahead. We also continued to focus on maintaining our excellent record of pay equity across the Metcash Group. Our gender pay gap was maintained at around 1% and we were again awarded a citation as employer of choice by the Workplace Gender Equality Agency. Workplace engagement and culture continues to be a key focus for us and we achieved a further improvement this year with an engagement survey score of 58%, up from 57% last year. This places us in the 70th percentile of internationally benchmark companies for salaried employees. Our full 2024 sustainability report is now available on our website, should you wish to seek further information concerning our focus and progress in these important areas. Turning now to 2025. The current economic conditions remain challenging and continue to impact consumer confidence. As a result, we expect the shift in consumer behavior to more value conscious choices to remain in 2025. The company's platform of 3 diversified businesses is fundamentally strong and we have the right plans, teams and capabilities in place to deliver future growth as we work through the current economic cycle. We continue to work closely with our suppliers and shoppers to maintain a value offering with a wide range of products at competitive prices and we are encouraged by our retailers' adaptability and ongoing ability to meet shoppers' needs. Metcash's businesses remain sound. Our financial position is strong. Our strategy continues to deliver and the addition of new channels through our recent acquisitions will help us to continue progressing our growth plans. So in closing, I'd like to thank my fellow directors for their support to me and for their commitment and contribution over the year, to the Metcash leadership team and to all our people, our independent retailers and suppliers, I'd like to express my thanks and that of the entire Board for your ongoing support. And to you, our shareholders, I'd like to say a sincere thank you for your ongoing support. Thank you. What I'd like to do now is to pass over to Doug, who will give his presentation, which was released to the ASX before this meeting and is available to review on the Metcash website.

Thank you, Peter and good afternoon, everybody. This is a very pleasing and strong set of results that I have the privilege of sharing, having done so in June this year. These are the results for the financial year '24 for the 12 months to April this year. On this first slide, I'd like to make 3 important points. The first is that our strategy is working as designed and has delivered improved resilience and diversification in our portfolio. Food and Liquor businesses delivered superb results once again and they're structurally positioned for enduring growth. The Hardware pillar capitalized on a volatile market to maintain and grow share and both IHG and Total Tools remain ideally positioned to benefit from an improvement in market conditions. Our portfolio is diverse, resilient and performing, and we have a solid platform for growth. Second, this has been a year of excellent execution. The pillars have executed their strategies and initiatives, and this has underpinned great performance in difficult market conditions. Costs have been well managed and we've delivered savings to offset CODB inflation ahead of those committed. It's resulted in excellent cash conversion and that's underpinned by disciplined working capital management. My third point is that you've heard me say before that we'll continue to prioritize volume to keep our flywheel spinning. This is effectively an investment in our retailers and their businesses, in the financial health of their businesses and overall margins, in their operating capabilities and in the quality of their offer and it is paying off. Shoppers continue to find the offer relevant in the face of the most value-conscious environment in recent memory. And this is why we prioritize volume and will continue to do so and is evidence of our flywheel in action. Our strategy has now been executed over a long period. It's resulted, as I've said, in a portfolio and a platform that continues to deliver strong results. And this is another year in that trend and a confirmation of a number of years' work. It's evidenced in those results, as Peter said, a 56% growth in earnings before interest and tax since FY '20, your 12% compound annual growth rate. My point here is that while each business is subject to the market conditions of the sector in which they operate, each has a clear strategy and a structure that underpins the sustained results and these remain in place. As I've said, it's been a difficult environment. Australia and the New Zealand families are doing it tough and so are businesses. They're more value conscious than ever. This manifests in trends like increased sales of private label, deep premiumization in liquor, shopping promotions more, looking for discounts, smaller baskets and more frequent visits and in the case of our building trade customers, buying for shorter order books as visibility to future order and future works is less clear. And both these builder customers and our hardware suppliers are telling us that their experience in accelerating slowdown in activity. And of course, our retailers and members are facing the same challenges. In that context, we're very proud of these results. While we don't control the macro, we've controlled what we can very well. The portfolio results are as one would expect under these conditions. Food and Liquor have delivered an incredible outcome with core sales growth and higher earnings, although they sell products that are essential for everyday living, and might be described as the defensive elements of our portfolio. They are anything but boring and are poised for continued structural growth. Hardware and Tools are more cyclical and will leverage up and down relative to market conditions, as you've seen in the results of all discretionary retailers right now. Certainly, a highlight on this financial overview slide is the operating cash flows of $483 million, up almost 30%, in a 3-year cash realization ratio steady at 90%, slightly ahead of the long-term guidance in the mid-80s, underpinned by a strong second half results. Group underlying earnings before interest and tax of $496.3 million is equivalent to $0.283 per share and on the back of higher finance costs and lower significant items, reported after profit tax of $257.2 million is down less than 1%. As Peter noted, the Board declared a final dividend of $0.085, taking the full year dividend to $0.195 per share fully franked, which is just over 70% of underlying earnings and in line with our policy. Looking at the group results. Sales are up 0.7% and earnings down 0.9%. This reflects the change in portfolio mix, as you would expect, as the contribution to total earnings from the higher-margin Hardware pillar eases slightly. I wanted to provide an update on the strategic acquisitions we made this year. I'm pleased that we've now completed all 3: Bianca and Alpine in March, just before the year-end and Superior on the 3rd of June, which was a month earlier than we anticipated. The slide provides a reminder of the rationale for each and the level of sales, which is significant for our Group. Superior further strengthens our food offer and opens new growth opportunities in the adjacent foodservice market. The acquisitions of Banco and Alpine support IHG's Whole of House strategy and strengthen our market position. Superior did achieve a full earnout and continues to perform well. Sales for the FY '24 year-to-date are up around 9% and the Superior results will be consolidated from the 3rd of June and reported as part of the Food pillar in the future. We remain confident of achieving the targeted synergies for all 3 of these acquisitions. As Peter has noted, we've made excellent progress in ESG this year, and that continue to be focused on our people, the planet and the communities we serve and operate in. As mentioned, the progress has been recognized through an improvement in the Dow Jones Sustainability Index now in the 89th percentile. The diversity, safety and engagement of our people remain important issues for us to continue to focus on. And as you can see, have shown good progress this year. Our efforts to reduce emissions and waste to landfill too, have delivered good progress and we remain on track to achieving our 2030 emissions targets. Our retailers and their stores are at the heart of the communities they serve. And together with them, we're pleased to have provided significant support through meals and financial donations. I wanted to take a moment to provide shareholders with an update and some more detail on this important IT transformation program, Project Horizon. As I've noted before, it's a large and complex program. Its legacy will be in Metcash's ability to grow and develop our business for the next decade. And we're deeply focused on managing the program to deliver a quality outcome while reducing risks and at the same time, managing costs prudently. You've heard me talk about the 4 levers that we balance, quality, risk, cost and time. The least impactful of these is time and we continue to flex this as needed so that we can protect the quality and risk elements. Following our architectural design principles of developing the solution on a Microsoft backbone, combined with the best of breed technologies, while managing cost, risk and quality. We've made the decision to incorporate select elements of our existing pricing engine into the D365 stack. Pricing is a key capability for Metcash Food and Liquor, and our current bespoke solution meets our needs while reducing our technology and transition risks. We're receiving strong support from the Power Enterprise's vendor, NCR and from Microsoft. We're targeting a final completion date for Project Horizon of July 2026 and a total cost of $286 million. I want to provide you with some more information on key phases and risks in the program. Right now, we're deep into the build phase and anticipate completing this phase in January 2025. Unit testing is well underway and full integrated and performance testing will continue to the start of the pilot phase in September 2025, where after deployment, will run until July 2026, with a natural pause for the Christmas and Easter peak trading periods. The risks summarized on the slide include delays in build, quality findings during testing, performance of the solution and delays during pilot and deployment phase. As we move through each phase, the risks will reduce or they'll manifest as issues and potentially cause delays. I will continue to provide updates on the progress through each phase at each reporting event. So for clarity, we're targeting to complete the program at a cost of $286 million in July 2026 and all future updates will be relative to this plan. So to recap and then look ahead, our immediate priorities are bedding down and extracting synergies from our recent acquisitions. Completing and moving the new distribution center in Truganina, and I'm pleased to share that we've almost completed the move and the DC is now open and operational and progressing our core technology programs, including Horizon, as I've spoken about. Turning to the trading update. Sales have continued to grow in the first 4 months of the FY '25 year. Despite the persistence of difficult market conditions, with group sales up a pleasing 6% -- 6.1%, supported by a strong performance from Superior Foods, Food has performed well to start the year, and I'm particularly pleased with the continued volume growth in this pillar. Inflation has continued to moderate, now down to 2%. Superior continues to win new customers and has performed well as we have expected. It's great to see sales growth since May of 8.7%. And as I've noted, we will consolidate these results in our own from the 3rd of June. Liquor has performed exceptionally well, and both IBA and the independents continue to take share of a competitive market, the local differentiated offer and improved quality and competitiveness of the network underpins this retail performance. The slowdown in the building market has accelerated. And while we continue to hold share, we have found the reduced volume putting real pressure on our retail store and trade center results. Total Tools continues to operate in a competitive market. although we have seen some easing of the intense pricing pressure and behavior present at the start of the year. So in conclusion then, we're well positioned, we have clear strategies and initiatives, a solid platform made up of strong capabilities and a diverse portfolio of businesses for future growth and returns through the cycle. I'd like to conclude by echoing the Chairman's thanks, firstly to our Board for their support and encouragement, to my colleagues on the group leadership team for their leadership and hard work, to our more than 11,000 team members for getting up every day and working towards our purpose of championing successful independence, and of course, most importantly, to the thousands of independent retailers who trust us as their business partner every day. Thank you very much.

Thank you, Doug. So turning to the formal items of business. Item #1 is the financial report. So we're here to receive and consider the financial report of the company and the report of the directors and auditor for the financial year ended 30th of April 2024. You will note that there is no requirement to vote on the reports. The Company's 2024 Annual Report was sent to shareholders who requested a hard copy and was made available on the company's website and the ASX Market Announcements platform. The 2024 annual report contains the statement of comprehensive income, the statement of financial position, the statements of cash flows and the reports of the directors and the auditor. These reports are now open for discussion. If you are a shareholder or a proxy, attorney or representative of a shareholder and wish to ask a question about the reports or any questions generally about the business, please raise your hand and an attendant will offer you a microphone. When invited, please introduce yourself to the meeting and ask your question. All questions should be directed to me as Chair in the first instance. Our Investor Relations team will also be monitoring the online facility for any questions. An opportunity will be given to shareholders present in person or attending via the online facility to ask questions specific to each resolution to be put to the meeting before voting on that resolution. So if you have a question regarding a specific resolution, please hold that question until the resolution is considered. So please can I ask for any questions. We'll go with Patricia first, I think.

Thank you, Peter. And congratulations on the results for the year. My name is Patricia Beal. I'm representing the Australian Shareholders Association which has been given the proxies for 91 separate shareholders, which shares of over 1.1 million shares. So we had a pleasing increase in the number of proxies and maybe that hopefully indicates an increase in the number of small shareholders on your register. In that context, I'd like to direct interest to the capital raising which occurred to the year and more particularly to the SPP plan, which was originally offered to shareholders and was so strongly taken up that it had to be extended. We would have liked all the applications to have been extended rather than -- rather than not. You've called it initially for $25 million in extra funds from shareholders. And I think you accepted up to about $60 million. But shareholders who applied for the maximum that could be allocated to, were often reduced. And we've talked that, that was a bit discouraging to shareholders in that people who applied through the main capital raising, I know that is -- its purposely designed to get most of the money that you want in a hurry rather than the slower process of calling individual shareholders as to what they would like to contribute, but it is a bit disencouraging to apply for however many you're allowed to apply for and then be knocked back. And we would like to recommended that if that is done again that you might -- pay more attention to the small shareholders as well. And could you specifically answer how the allocation was divided amongst those small shareholders, please?

Yes. Okay. So I might just make a couple of general comments, first of all. And as you mentioned, when you approach an equity raising that's associated with an acquisition, clearly, there's negotiations that are happening with the business that you're purchasing and there's a need to get certainty. So it's important that the majority of the funds are raised in a manner in which you do have certainty that those funds will be raised quickly and you're confident of the outcome because then you can complete the acquisition. And so that's why it's determined that majority funds are raised through a placement. It's worth noting that the placement itself also goes through a process whereby there are applications and then there's a scaling back of those applications. And fortunately, there was a strong level of support. So there's quite a bit of scaling back for those significant shareholders. And as you rightly called out, we also provided the opportunity and we were unsure as to what the level of demand would be from retail shareholders. So the original view was to make a place -- a share purchase plan of $25 million. But based on the interest that we received, we did increase that to $60 million. And effectively then based on the applications that we received, I think it was $153 million worth of interest. So we went from $153 million to $60 million. Now we've got to recognize that the company needs to operate with an efficient balance sheet and an efficient level of equity. So we're not in a position where we're going to over raise actually. And the $60 million was an appropriate number to be raised through the share purchase plan. When we look at the level of scale back that occurred on the placement, and the level of scale back that occurred on the share purchase plan, there was actually a greater level of scale back on the placement. And the calculations that we did showed that other than 0.8% of shareholders, the shareholders -- the retail shareholders were better off under the share purchase plan than they would have been under the equivalent placement. So I think we look at it and go that given the needs of the company, the amount of funds that we had to raise, the majority of retail shareholders actually had a very good opportunity to participate in that deal.

I do have other questions, but...

Yes. [indiscernible].

Thank you Mr. Chairman of the Board. I am [ Natasha ] [indiscernible], shareholder. Are you just taking one question at a time or it depends on the length?

Yes. Let's take one question and then we'll...

Okay. Just talking about the -- your results, look, I am pleased with your results overall. Obviously, as far as sales, Hardware was up, but profits were down, would suggest some squeezing of the margins whilst you've indicated that sales are up at the moment. I was wondering to what degree that's costing us in terms of discounting to get the volume. You talked about your strategy. Can you just elaborate a little bit about how you're balancing that strategy of maintaining the sales volume as well as to the extent possible and the competitive environment, the margins?

Yes. And are you referring specifically to Hardware or...

Well, Hardware specifically like the others aren't doing too bad, given the circumstances?

Yes. And I think also recognizing the different market conditions of the different businesses, so they all need to develop appropriate strategies for the market conditions that they're operating in. And as we've highlighted, this is a tougher consumer environment and particularly for the Hardware pillar, not only is it a tough consumer environment, but we've seen significant scaling back in the level of infrastructure investment. So when we look at the number of new builds -- housing new builds, we've seen quite a significant scaling back in that level of activity. So you've had both the trade side of the business with the building market and the consumer side being impacted. Inevitably, in that type of environment, there are pricing pressures that come in, competitive challenges and so on. And we did see, particularly in the Total Tools business, ramping up in pricing competition and we need to protect our position as the strongest player in the market, strong enough for the customer to best value. So we respond and that does have an impact on margins. But I think recognizing that for Hardware, it was both a consumer challenge and also a broader trade and building sector challenge.

So the strategic principles which you're applying is it looking at kind of what the market is demanding and trying to meet the demand?

I think importantly, recognizing that the country needs infrastructure. We need housing, we need infrastructure. So we are in this period of time at the moment where there's been a downturn in activity but that will build. And what we've been doing strategically is trying to position the business recognizing the short-term operational challenges, strategically, we've got to position the business so that it's ready to take advantage as building activity ramps up and as consumer confidence increases. And so that's why we continue to invest in the business with the acquisitions that we made. So the 2 acquisitions in Hardware were in the frame and Truss side of the industry. And what that allows us to do is to broaden our relationships with the builders so that we're able to supply them all the way through the building project. So it's an example of how we continue to invest for future opportunities. So any others? Patricia. Yes, Patricia, you can...

One question on your ESG type activities. And congratulations to your progress on those -- with and various targets being set in the progress. One question arises about your support for the National Plastics Recycling Scheme. And just about what that support entails. Is that just a theory of what you hope to achieve? Or is it in support of something being done about the mountains of soft plastics that are already waiting to be disposed of, hopefully not into landfill.

Yes. Thank you. So I mean Metcash is a supporter and does contribute to what's called the National Plastics Recycling Scheme. And that's a scheme -- that's an industry scheme. It's administered by the Australian Food and Grocery Council. And the intent is to try and cover gaps in the ability of the country to deal with soft plastics. So what is -- the aim of the program is to develop a curbside recycling program so that soft plastics can be collected. They are easily accessible for all households and so the industry is working together to come up with that. Metcash is providing information, providing data to help determine the extent of that solution. And we're making a financial contribution based on the level of our activity. So it is a tangible activity, and it should result in solutions being more readily available for households to recycle their soft plastics.

Thank you. I note that you've mentioned that your IT and finance side of the business has been outsourced. And at the same time, your corporate costs have gone up reasonably significantly. I'm not sure whether or to what extent the two are sort of related. I am sort of a little bit concerned because of my experience, outsourcing the sort of core services often doesn't provide the benefits which you think it does. What was the sort of processes and a bit of detail around that outsourcing process?

Yes. So I'm not totally familiar with when you -- just saying that we're not doing a wholesaling. A wholesale outsourcing of finance or IT activities. So...

Okay. That's sort of what I wanted to clarify, yes, because on Page 10 of your report, you said you've outsourced -- I've just taken a few minor notes, outsource your finance and IT to Tata Consulting Services. I wasn't sure to what extent those facilities have been outsourced and the processes involved in coming to that position.

Yes. Thanks for the question. So as Peter said, no material change in the level of outsourcing. We have a partnership with TCS that is a typical business process outsourcing really around cost optimization, bringing scale to those kind of repetitive programs. The separate question and you asked about corporate costs, really one of the key drivers behind that is the move, a lot more compliance requirements, risk management, cyber, increase in IT costs, particularly as we move to Software as a Service and through the transition from legacy systems to new. So no relationship between the two and certainly no material change in direction as it pertains to outsourcing of IT and finance.

The outsourcing, those were just small specific parts of the business?

Yes.

Yes, that's sort of quite a lot of clarity on [indiscernible] we're outsourcing that?

No. Patricia?

So. Another question on Project Horizon. Which has been extended a number of times and you've given more details in your recent statement, I realize. Is that actually presuming it would increase warehouse efficiencies? And how are you going to assess that to work out how well it is going?

So the program is a big complex program effectively putting in place the technology -- replacing the technology backbone of the whole company covering our Food and Liquor operations. So it's addressing -- putting in place effectively an ERP system for the organization. So it encompasses not only our supply chain operations, but also the financial side of the business, and it's the transaction engine that effectively underpins all of those activities. As Doug said in his update, the way that we are managing that program is considering 4 key elements. There's -- ultimately, the most important element is, is this program going to deliver benefits such as efficiencies for the organization? Is it going to allow us to achieve and underpin the strategies that we've got for the company. We've got to ensure that's the highest priority. Then we've got to manage the risks associated with it because it is a big complex program, and there are risks with it. We've got to manage the costs of the program. And what we've agreed is that the thing that we are most willing to be flexible with, is time. So if this takes us a little bit longer to make sure that we get the right quality and we can manage the risks then that's what we're going to do. And we're continually assessing. The Board has -- at every board meeting, we have a full update on the program. There's a management steering committee and we have external assurance partners who work with us in terms of monitoring this program. So we have both the benefit side, but also managing how well the program is going. Any other questions, [ Natasha ]? No? Yes. Okay. Patricia, any other questions at this stage? Okay. We might address the auditor question at this point?

Okay. Well, basically, we noticed that the auditor is in his fifth year auditing your notes. And hopefully, that will change for next year?

Yes, that's a standard process that there's a retirement up to 5 years. Mr. George has been a really effective and strong auditor for the company. So we're sorry to see him go, but as part of the process, it's appropriate that he steps away after 5 years. And we have a new partner who you will see at this time next year, who's been appointed by EY.

But you're not planning to change the firm doing your audit ever or when?

I'm not saying we won't consider it ever, but I think recognizing what we've just spoke about, which is the Horizon Program. There are significant changes to the financial systems of the business. And as we look at considering -- the appropriate time to consider the potential of a change in audit, we just don't believe that now is the appropriate time for that because having work with someone who really understands the business, really understands our processes, really understands our systems and can work with us through that transition in an efficient and effective way, we think is the best outcome for shareholders. All right. Just any other questions on general business. All right. Steve, any questions?

Chairman, there are. The first question is from Stephen Mayne, and he asked, did any of the 5 main proxy advisers; ACSI, Ownership Matters, CGI Glass Lewis, ISS and the ASA recommends a vote against any of today's resolutions. And if so, what reasons did they give?

So we have reports from 5 proxy advisers. And we did have ISS recommended a vote against the Remuneration Report and the vote of the resolution for the issue of performance rights to the CEO and Executive Director. There are a number of reasons that were put forward by ISS to support their recommendation. The company did generate a report in response to the rationale put forward by ISS because we actually found that there were a number of factual inaccuracies in ISS' rationale and we've had subsequent conversations with a number of shareholders who have been advised by ISS and on the basis of the information that we provided, those shareholders are voting in favor of the Company's resolutions.

There's a question from [indiscernible], 69 Holdings Proprietary Limited. Notwithstanding current broad trends to value consciousness, what priority does building enterprise-grade data insight and procurement capability with Project Horizon to service local stores to nimbly enhance their product range to meet changing customer preferences?

Yes, I might ask Doug to respond to that one.

Thank you for the question. I hope I've understood it correctly. I think it goes to the value of data analytics and insights in serving small local independent businesses. One of the core propositions that Metcash brings to its retail partners is the ability to provide them with scaled capabilities and services that are otherwise not available to single-store owners or small business owners. The ability to aggregate the data and draw insights from that data presented back to retailers in a way that's practically meaningful and actionable is why -- one of the reasons they rely on us and so certainly, Project's Horizon, if you look at the slide, you'll see that data and analytics is a core element of that program. And so I think the short answer to the question is, yes, it is very important and it is a core objective of that program.

There's another question from Stephen Mayne and it's quite a lengthy one. So bear with me. Australia is currently in the midst of an unprecedented deluge of takeovers that has contributed to listed entities on the ASX falling by 8% since June '22, including 19 straight months of declines. Last month alone, there were no new listings and 28 delistings. There have already been more than 20 major takeovers above $200 million completed so far this calendar year with another dozen deals announced and in the works. Why are public markets not valuing ASX-listed companies, like ours, more highly and what are we doing to avoid being gobbled up like so many other companies, does the chair agree this is a problem for the nation?

I think we can focus on our valuation -- sorry, our performance. And ultimately, our valuation will reflect our performance. The market determines the value that they put on the shares, but it's for us to deliver performance, and that's having a coherent and appropriate strategy and then delivering on that strategy, and that's our focus.

No more questions.

Thank you. Okay. So we'll now move to the next items of business for which we will commence using the electronic handsets. If you've not already done so, please insert your card into the slot at the top of the handset with the bar code at the bottom and facing towards you. As I said before, when voting opens, the voting options will appear on the handset. And once again, that's to vote for the resolution, you press button 1; to vote against, press button 2; or if you wish to abstain from voting, press button 3. Your selection and the word received will appear on the screen confirming that your vote has been cast. If you wish to change your mind, please simply select a new option by pressing 1, 2 or 3. If you have any issues with your handset, please obtain assistance from one of the attendants. There will be time for shareholders to ask questions about each resolution in the interest of time and to give fair opportunities to all shareholders, we would ask that you endeavor to keep your questions as succinct as possible. I may, in the interest of time, limit an individual questions to a maximum of 2. So Resolution #2 is the reelection of Margaret Haseltine. Shareholders are requested to consider the reelection of Margaret Haseltine as a Director of the company -- sorry, I can't call you, Margaret. Margie. So formal here. You're Margie to us. Under the company's constitution, Margie retires by rotation at the conclusion of the meeting, and being eligible, offers herself for reelection. Margie's profile is outlined in the explanatory memorandum contained in the Notice of Meeting and also in the annual report. Margie joined the Board in May 2021 and is the Chair of the People Culture and Nomination Committee and also a member of the Technology Advisory Working Group. The Board has concluded that Margie is an independent nonexecutive director and unanimously supports her reelection. I invite Margie to address the meeting in connection with this resolution. Margie?

Thanks, Peter. I far prefer Margie. I was only ever Margaret when I was in trouble. So thanks, Peter. And I'd just like to say welcome to everybody, but also it's my great pleasure to offer myself for reelection as an independent Non-Executive Director of your company. I recognize this role is not only a privilege and honor but it is a sincere responsibility and today, I just want to share with you a little bit about my skills and my experience, any expertise and what I bring to the Board today and what I hopefully can bring and continue to bring to the Board, if I'm reelected today. I won't -- Peter has obviously said I'm obviously the Chair of the Rem and People Committee and also the new newly formed Technology Committee. But from my background, and I'm sure you've all read it, but I've had more than 30 years of experience across supply chain, end-to-end procurement and logistics. A huge amount of customer interface and retail. I was with Mars Incorporated for 20 years. I worked across packed food and snack and for my last 5 years at Mars, I was the CEO of the Mars food business with a full P&L responsibility. I'm currently on other boards and I take all my responsibilities very, very seriously. And I think the diversity of being, and I will state not over-boarded, I've been asked that question, and I step off as Chair of Bapcor Board in -- on October '16. These roles help me understand the issues that arise in other industries as well as more broadly to see how governance and risk are dealt with across a broad range of businesses. I think this is particularly important as we go into -- as we're talking about things like ESG, cyber, risk, all companies are different and all companies bring a different lens and how you can share that level of learnings and expertise across. So if reelected today, I look forward to continuing to work with management and towards a strong and sustainable business supporting independent businesses long into the future. And probably the most important thing is continuing to grow value for our shareholders. So thank you. I'll stop there. I may as well stand here in case there's any questions. Peter, is that the script? Or are you going to...

So I'll open the floor to any questions.

Thank you. It's not actually specifically for you, Margie. It's considering the composition of Board and particularly as Christine standing down, I just want to emphasize that -- there is a need to maintain diversity on board, not just gender diversity but other forms of diversity since you're on the Nominations Committee, ask you to bear that in mind that the Board should be reflective of the community in general.

They could fully recognize that and we put that into our succession planning.

Any other questions? No. Steve, are there any questions from online?

Chairman, there is. Stephen Mayne, who does ask about over boarding. Just based on the notice of meeting, Margie Haseltine appears to be over boarding as Chair of Bapcor, a Director of 3 other listed companies, 2 substantial unlisted companies, including [indiscernible] and 2 not-for-profits -- as a Bapcor shareholder, I have been concerned with some of the governance and performance issues at that company in recent years sharing your period as Chair. [indiscernible] professional directors, could Margie comment as to why the problems at Bapcor [indiscernible] over boarding shouldn't have led to a retirement at this AGM? Also do the nomination committee talk to Margie about the Bapcor issues before recommending her reelection today.?

Yes. So I think that it's not appropriate for Margie to talk about Bapcor issues at the Metcash AGM, and this is a Metcash meeting. So I think that the important element here is that when the Board considers Margie coming for reelection, we did have a discussion around Margie's performance, and we had a consideration of Margie's commitments. And as Margie has just mentioned, she has taken the decision that she's stepping down from the Board of Bapcor. So in October, so we're a few weeks away from that change, and that's a significant reduction in Margie's commitment. So in the light of that, we were very comfortable, and I think it's important to recognize that as all members of the Board are making a full and diligent contribution to Metcash, Margie certainly does that. She is incredibly well prepared for every meeting and makes a significant contribution not only in meetings, but outside of meetings as well. So that's why the Board were very comfortable supporting her reelection.

No more questions.

So I'll now formally move the motion that Ms. Margaret Haseltine be reelected as a Director of the company. I now put the motion to a poll and open the poll. Please cast your vote using the electronic handsets now. To vote for the resolution to reelect Ms. Haseltine, please press 1; to vote against, press 2 or if you wish to abstain, press 3. [Voting]

Okay. I can see on the monitor in front of me that we're getting close. We can see -- just a few more coming in. Several more to come in. I'll just give a few more seconds. Okay. I now declare the voting closed. And the result should, as if by magic, appear on the screen. Congratulations, Margie, you can see that the vote has been carried. And Margie is reelected as a director of the company. Congratulations. So moving to Resolution 3, which is the resolution to adopt the remuneration report. The remuneration report forms part of the director's report of the company for the financial year, which is set out on Pages 50 to 66 of the 2024 Annual Report. Please note that the vote on this resolution is advisory only and does not bind the directors or the company. The resolution is now open for discussion.

It's Patricia Beal, again. Firstly, there's 2 points I'd like to raise about the LTI. The STI, we are happy that the rewards for that scheme have been split in, partially held back for a year because we do feel that, that is an appropriate way of just getting the STI. For the long-term incentives, we made the remark last year that we hoped you would consider paying that over 4 or even more years rather than the 3 years. And we have 2 qualms about the method of assessing the rems this year with the introduction of a gateway for which there has been board disagreement. And this tends to persuade readers that there may be some doubts about how reasonable versus how generous the numbers are, and we have much less information than the Board has, I guess, about that, but it's still a matter of a little concern. We are much more concerned about the so-called long-term incentives being delivered over only 3 years. And the ASA, Australian Shareholders' Association policy certainly is that it'd be 4 or 5 years to assess more fully the long-term effects of whatever the CEO and other executives are doing and to reward them in that way. And specifically, this year, we noticed there is a component of the assessment program that relies upon this 5-year strategic plan. And if you're assessing something over 3 years only that isn't going to be fully enacted for 5 years, it seems a bit difficult without a very good crystal ball, I would have thought and much better to spread the rewards over those 5 years.

Yes. Okay. Thank you. So there's a number of items in there. So I might actually just start with the final point. So the reference in our explanatory note was that we used the 5-year plan as one of the sources of information in determining the appropriate targets for the long-term incentives. The 5-year plan includes assessment of the financial performance for each of the 5 years in that 5-year plan. And so within that, we're able to look at what the expectation is over the first 3 years. And so that's the information that's been used in terms of determining the target over those 3 years. So it's the 3-year numbers from the 5-year plan. So it's a different thing. And in terms of working towards delivering the 5 years, where do we need to be after 3 years. So we're very comfortable that, that's consistent with the 5 years. In terms of different perspectives. I mean, I think it's a healthy thing that we have different views and different perspectives on the Board. We've introduced an additional measure this year. So as a company, it's unusual to have 3 elements to the way in which an LTI is assessed. So we've introduced a gateway, and that's reflective of a switch in our measures as we've switched from a focus on return on funds employed to affect us on the earnings growth. And that switch was based on feedback that we received from shareholders that we wanted to see a greater focus and greater accountability and measurements of our executive team on delivering earnings growth. So we introduced the EPS growth targets as a reflection of that feedback that we've received from shareholders. But what we didn't want to do was to move away from maintaining a focus on ensuring that we deliver appropriate return on funds employed or return on capital. The company has roughly a cost of capital. So in terms of the expected returns of roughly around 10%. And we've set the hurdle or the gateway delivering a return of 17.5%. So that's significantly higher than the company's cost of capital. As we discuss that as a Board, we have different perspectives. The majority of the Board felt that given that was a gateway, we needed to set it the level of 17.5%. As we've noticed in the notice of meeting, Christine had a perspective that, that should be in line with a higher number, different view, and we respect that view, but the majority of the Board felt the 17.5% was the appropriate number. And we've discussed that with many of our shareholders, and as we'll see, we've had strong support for that position. So we're comfortable with that. In terms of the potential to consider the LTI over a longer period, just recognize and thank you. We've had that discussion in previous years. As we've noted, we are going to do a further review. And I think as you've also recognized, the company has continued to evolve its remuneration practices each year. We've made some changes each year. And we'll continue to consider what are the appropriate practices and we take your feedback into account, and we'll consider that going forward.

You've largely answered my question, it's been covered by Patricia. But I just want to reiterate the point, I think I raised it last year as well that most companies are moving to at least 4 years. So I'm more in favor of looking at LTIs over a full year period, that I understand, as you said that you are reviewing and you will consider that.

We will consider it. And now that Margie has been reelected, it gives us something to do.

I was looking for something to do.

Any other questions? Steve?

No.

Any other further questions?

No.

All right. So I'll now formally move the motion that the remuneration report be adopted. I now put the motion to a poll and open the poll. Using the handsets, please cast your vote now. To vote for the resolution, please press 1; to vote against, please press 2 or if you wish to abstain, press 3. [Voting]

I'll give it a few more seconds. I'll now declare the voting closed. And again, the results should appear on the screen. I declare the motion carried and the remuneration report has been adopted. Turning to Resolution 4, which is to approve the grant of performance rights to Mr. Jones, the Group CEO and Executive Director. Shareholder approval is sought to grant performance rights to Mr. Jones for his FY '25 long-term incentive award. If shareholders approve the grant to Mr. Jones, he will be granted 469,948 performance rights. This number has been determined by dividing Mr. Jones' LTI opportunity which is $1,837,500 by $3.91, which is the volume weighted average price of the company's shares traded on the ASX over the 20 -- 20 trading days ended 30th of April 2024, which was the last trading date before the start of the company's 2025 financial year. Mr. Jones' LTI opportunity is 105% of its total employment cost. The award will be subject to 2 performance conditions that will be tested over a 3-year performance period running from the 1st of May 2024 to the 30th of April 2027. Half of the performance rights will be subject to an absolute total shareholder return hurdle. The remaining half of the performance rights will be subject to an adjusted earnings per share hurdle with a return on funds employed gate opener. Further details about the awards of these performance rights to Mr. Jones and each of the performance conditions is set out in the explanatory memorandum accompanying the notice of meeting. The resolution is now open for discussion. Again, all questions should be directed to me as Chair in the first instance. Any questions in regard to this resolution. Mr. Ashe, are there any questions?

There are 2 questions from Stephen Mayne. The first one is in relation to comments in the notice of meeting in relation to Christine Holman arguments concerning the LTI. He asked if, Chairman, you could comment on why her arguments did not prevail? And were they in the best interest of shareholders?

So as I mentioned, I mean, I think we had a good healthy discussion. And in relation to the few elements of difference; the EPS hurdles, the boards have settled on a range of 3.5% to 8%. Ms. Holman had a view that we should just see that set at a range of 4% to 8.5%, so 0.5% difference at all points in the scale. What I'd note there is that the actual target was based on the 5-year plan, it was based on market expectations for Metcash performance. It was based on projections that we've sourced in terms of future market growth. And the Board's target -- maximum target was quite a stretch above the 5-year plan, quite a stretch ahead of management's target. So the balance of the Board felt that we had set the targets at an appropriate level. When we quantify the difference on the scale, the actual financial difference is about $76,000 per year, which is not a material amount. So I think we're broadly in the same place there. As I mentioned earlier, the ROFE difference -- the Board, I explained how the board arrived at its 17.5%. And some of them had a view that, that should be set more in line with the group's financial plan, which was around 20%. We had a different perspective as to the role of the gate. And again, the balance of the Board felt that it was appropriate to set a gate that allowed management to deliver -- to have flexibility to deliver initiatives to generate earnings per share growth that was over and above what was in the 5-year plan. And so to set a ROFE gate that was the same as in the 5-year plan was a little bit inconsistent. So we had a different perspective on that and management review is we want to encourage management to deliver strong earnings growth and give them the flexibility to be able to do that.

One more question from Stephen Mayne. Could the CEO summarize his last LTI grants as to whether they have vested or lapsed. Also has he ever sold any ordinary shares in the company or bought any on market without relying on an incentive scheme to build his equity position?

Well, I'm not sure that Doug would be in a position to recount that information off the top of his head. So I think that's something that we couldn't take unnoticed. So I think the information is available in terms of, I think, as we highlighted, just over 70% of the LTIs vested for the FY '22 scheme. So we presented that information in today's report. And I think that's the only one that Mr. Jones has been participating in. So yes -- okay. So the details are in the appendix 3 wise. So there's -- the information is there. All right. So I now formally put the motion that the grant of 469,948 performance rights to the group CEO, Mr. Doug Jones be approved. I put the motion to a poll and open the poll. Please use the handsets to cast your vote now. Again, press 1 to vote for, press 2 to vote against or press 3 to abstain. [Voting]

Just give a few more seconds. Okay. I declare the voting closed, and the result will appear on the screen. I declare the motion to grant performance rights to Mr. Jones carried. Turning to our final resolution, which is a special resolution to approve the giving of financial assistance under Section 260B of the Corporations Act. This resolution is proposed in order to enable the company to comply with the group debt financing arrangements by allowing certain companies within the company that have been -- within the group that have been recently acquired, including the Total Tools and Superior Food Services Group of companies to become guarantors under those debt financing arrangements. Briefly, by becoming guarantors of the debt financing arrangements, these companies are then regarded as having provided financial assistance to the Metcash Group. And given that the Metcash Group recently bought those companies, it's perceived that they're providing financial assistance to Metcash Group to acquire shares in themselves or their respective holding companies. And the Corporations Act requires such financial assistance to be approved by the shareholders of the company giving the assistance and the shareholders of any listed holding company of those companies. So it's quite a complex legal situation. But effectively, what's involved here is Metcash has bought some companies as part of a typical standard arrangement when companies become part of the group. They enter into what's called the Deed of Cross Guarantee. It's something that we have in place for our bankers. It also means that the company's accounts can be presented all collectively. So it's an efficient approach, but by those companies entering into the Deed of Cross Guarantee, providing a guarantee is effectively giving a financial assistance. And so under the Corporations law, if a company that's been acquired is giving financial assistance to the company that's bought it, you need this approval by shareholders to do that. So that's the nature of this resolution. The resolution is a special resolution, which means that this resolution requires at least 75% of votes cast to be cast in favor for the resolution to be passed. The resolution is now open for discussion. No question. Are there any questions from Mr. Mayne?

Yes, Peter, there is. Stephen. Thanks you for offering the hybrid AGM and I would like to ask if we will be offering hybrid again next year. And he also asked whether we would provide a webcast and a transcript on our website.

So I mean, certainly, in terms of the approach that we're adopting, I think this will be an approach that's worked. So I think we'll carry on -- in terms of the scripts, what's our normal approach there?

Yes.

Yes, that will be on the website. Okay. Thank you. So confirming yes. Thank you. Any other questions?

No.

No. Okay. I'll now formally move that the motion to this resolution be approved. I put the motion to a poll and open the poll. Using the handsets, please cast your vote now. To vote for the resolution, please press 1; to vote against, press 2 or if you wish to abstain, press 3. [Voting]

I see all the votes have come in. So I'll now declare the voting closed. The results will appear on the screen. And as more than 75% of votes were cast in favor of the resolution, I declare the motion carried. Thank you. So as this concludes the formal business of the meeting. Thank you for your attendance today. Thank you for your questions and thanks for your ongoing support of Metcash. I declare the meeting closed. You will find some bags in the foyer with some products from our private brands from across the Group, and we invite you to take one of your bags with you on your way out. Thank you.