Metro Performance Glass Limited (MPG.NZ) Earnings Call Transcript & Summary

Kia ora koutou. And on behalf of the whole Metro team, I'd just like to welcome you to the 2024 Metro Performance Glass ASM. Notice of the meeting has been duly given to shareholders and we have the required quorum. I now declare the 2024 Annual Shareholders Meeting officially open. We'll start, as I'm sure you're all usual in these things. We'll start with some housekeeping and some admin, most important health and safety. So I better make sure I get this right or just put my glasses on. So the bathrooms and the fire exits are to the right of the lift that you came up on. If we hear a fire alarm and a request to evacuate, the MUFG staff will come around. So look for anybody with a hard hat or a brightly colored jacket and follow their instructions like on a plane. And I'll be doing this leading by example as well in following their instruction. So they'll help us exit down the stairs and assemble across the road from the building, which is the safe area. Everyone clear on all that. Any questions at all? So not just fire, not just if alarms go, but if anything else crazy happens, we all get out of here as rapidly as possible without trampling on each other. Online access. For those of us who are joining online, welcome also. I think I'm looking at the right camera. So today's meeting is being held by the MUFG corporate markets, which is formerly Link Market Services. You can read the company documents that are associated with the meeting. We'll be putting the slides online. We won't be putting the full transcript of what we say online. We'll try and keep this as informal and not scripted as possible so that there's a bit more information on it. But we will be keeping minutes of the meeting of all the relevant things that are discussed and those will also be posted online shortly after the meeting. Anyone who's online, if you have any issues with the online access, apart from going to the support section, if you can dial 0-800-200-220, and that help support desk and hopefully, they'll answer by the time we finish. So we have a lot to cover today. So we're going to do something. We're going to have hold all the questions until the end of the meeting until we're finished with the addresses and also with the resolutions. By proxy, the resolutions are in effect, PAT will be passed. So we're going to hold questions on everything until the very end. That will hopefully give us a you a chance to hear what we have to say and maybe answer the question that you might have and be as efficient as we can with the meeting so that we can have as much time for question time as we can. So we'll make sure that we answer all the questions that we can within the time. And I said, we'll try not to run out of time and trying to answer all the questions. If we can't answer a question, that's either been e-mailed or that anyone from the floor if we do get to that point, then we will e-mail answers out to any questions that are asked and not answered. So we will, hopefully, my objective is that we get to every question that everyone has. And I don't consider any questions stupid. So we'll do the best we can to answer it. So proxies. At the close of proxy voting on Tuesday, there were 40,324,608 shares, which had been voted by proxy. Fair to say probably overwhelmingly in favor of the resolutions. And as Chair, I intend to vote all the discretionary proxies that we've received in favor of the 4 resolutions that are set out in the notice of meeting. Just 1 question is, are there -- is there anyone present from the media? The reason I ask is so that I know I can't drop any F bonds while I'm talking. So, okay, good. Thank you. I'll be on my best behavior. If you do have any questions, I think it would probably be most efficient if you could wait until after the meeting and we can answer questions, then we can answer whatever questions you might have, either Simon or I will be able to do that. Cool. So just by way of intros, I'm going to -- we'll introduce the Board, and I'm going to ask each one of the Board members to speak in a minute. But firstly, just in terms of what I consider the wider Metro team, we have Troy Florence and Jonathan Kirby from PwC here. We also have Toby Sharpe and Liam Kampen from Bell Gully, which are our auditors and our solicitors. From Metro as part of the management team, we have Tony Candy and Scott Gordon, who are part of the finance team; and Robyn Gibbard, who runs our North Island operation, part of the senior exec team. Also, part of the wider team is Computershare and with [ Dennis Lanson ], who's going to be taking our minutes. So there are -- we have Charles Bolt and Dennis, our Company Secretaries. So we utilize Computershare as our Company Secretary. So what I'd like to do is, just give a -- is because we have resolutions in this meeting for 3 of the new directors that were appointed by casual vacancies. And I think it's also important that kind of like any meeting, you know a little bit more about who we are, why we're talking so you can have a bit of context, and I consider Boards are crucial drivers of success or not. So what I'm going to do is I'm going to ask each of the directors to just give a quick introduction of themselves. So we won't do that at resolution time. And I'm going to start with myself. And then hopefully, you guys -- you will have a better feel for who we are and what we can add. So I hate talking about myself. I'm going to look at some notes on my phone, forgive me. So my background very quickly. I started off life as an equity analyst at a share broking firm. I moved into the institutional dealing desk and I spent a couple of years as an institutional block transactor trader dealer. I spent a few years then as an investment banker in the early days of Morrisons, managers of Infratil. Then I was a co-founder of Pencarrow Private Equity, and I spent the bulk of my -- I guess I'll -- I think of it as my corporate life as in private equity. Before you think -- I'm not wearing a black suite, but it's pretty dark. Before you think that I followed the normal mode of what you might read about the newspapers in terms of private equity, Pencarrow is what I consider a good practitioner of private equity. The firm's philosophy is to partner with management teams to grow businesses, not what you might read in the newspapers, which is to get rid of management teams and cut costs and kill the businesses. So we would -- what I consider good PE. Also, I've made my share of mistakes in private equity, you don't invest money without making mistakes or if you do, you're not taking enough risk. And so I've had to drive turnarounds in the past, so this is reasonably familiar territory for me. And I've been on the board of probably 15 different operating companies in all sorts of different industries, a lot of manufacturing industries. So I've also kept an interest in public markets and probably a good example is in the early 2000s, I took a stake in restaurant brands. Went on the board there. It was a very similar situation. KFC was broken. It was over geared, and it needed a turnaround. And the shares were $0.58, and you can probably see the results of that in the company even today, 15, 10, 15 years later. It's not broken. You may not agree, it's thriving, but it's not $0.58, and it was on the way out when I joined the Board, let's put it, be frank about it. So this Metro place, I guess, to my experience as an investor Director hands on. Why did I join the Board basically because I like a challenge. This is a big challenge to turn this company around and to get it to where it's a healthy listed company. But also from a personal point of view, if we can make Metro successful, then it's good for the planet. Insulated glass is a good thing for the planet. It's also good for our people. I've got kids who've spent time and I live in Wellington. So I've got kids who spent time in Wellington flat and let me tell you it's double and Low E and warm glass is very important to them. So -- and they're not alone, obviously. So that's probably enough about me. I have gone longer than I would like. Essentially, this is a challenge. I'm not a professional director. I'm not here for the money. I'm working probably more than full time on Metro. I'm here for the challenge. As I said, I had an interest in listed companies for a while. I have been watching Metro for a while. And hopefully not arrogantly thought, well, I possibly can help fix this. So luckily, I'm joined by 3 other very capable directors who -- two of whom would like me are new, joined at the end of last year and Julia, who luckily decided to stay with the Board. And I say luckily, because I think as I alluded earlier, getting Metro over the next couple of years into a healthy listed company with share price above penny dreadful is a big job, and it needs a good team. And so we've been very focused on getting the right -- making sure we have the right the team at board level because everything starts at the top. So what I'd like to do, if I can, I'll start with Pramod and I'd just like each one of the directors if that's okay, to just quickly introduce themselves. You probably don't have as much to say, I ramble it on about, my apologies. So I'll start with Pramod, if I can.

Thanks, Shawn. As Shawn said, my name is Pramod. I'm a qualified chartered accountant, graduated in the '80s and spent early -- very early career with Arthur Young, which is now called Ernst & Young. I was with them for some years. Then I went back and thought I reeducate myself and did an MBA to Otago. And since then, I've had a number of corporate roles, mainly in finance directorship roles. And I worked within the dairy industry, the roading and construction industry, been involved with a number of companies that were going through the same sort of thing that we're going through here where there are some challenges and we worked pretty hard to sort out those businesses. Eventually sold them, and the shareholders did very well out of them. In about 2004, I joined an aluminum extrusion and a business in Taranaki, and did the management buyout of the business where I was -- became a major shareholder in the business. A bit of context, that business was, again, in a very difficult situation. It really had -- was seen as having no future. And after we acquired the business, we made into a more value-adding business, moving it away from a commodity type of business. And where everybody had lost faith in that business, we actually turned it around and ran it for 22 years. And 2 years ago, we sold it to an American company and they will take it to the next stage now. And I've been working in an environment with a number of companies that have had a lot of difficult issues to sort out. So I'm quite familiar with what we're doing at Metro and I'm seeing that as very much of a challenge. And again, one of the reasons for being on the Board here is for that challenge. I see Metro as a well-known brand in the New Zealand market. It's just kind of lost its way over the last few years. And I think it needs a good turnaround team, which I think we are. And I'm very, very hopeful that the actions that we are taking would realize some good results for Metro going forward.

Thanks, Pramod. Julia? If I can introduce Julia.

Yes. So Julia Mayne. I've been on the Board since September 2021. So I won't go too much into my background. Over 30 years in manufacturing and building materials, which, again, you spend a lot of time restructuring turnaround time as well. As of last year, Head of the Audit and Risk Committee. And with the committee, we oversee all of the risk processes, financial reporting and liaising with the auditors. For me personally, I'm obviously passionate about people, championing diversity, safety and well-being on one side. But again, with my background and looking at glass as a fully recycled building material, and I'm really committed to supporting this journey for Metro and consolidating on the Australian improvements and really reestablishing the New Zealand business is really what we're after. Thank you.

Thanks, Julia. Last, but definitely not least, Simon Bennett, who is an Executive Director and effectively managing the business. So I kind of think of them as Managing Director in the business. I'm showing my old school day, old school ways. Simon?

Thanks, Shawn. Yes, it's interesting you sort of said why you got involved. I think I have been reading about Metro in the paper and I saw these shareholder quals last year. And I was called to go on the Board in November of last year and thought that can't be too hard. It's probably a few shareholders that are a bit disgruntled and maybe I can add some value there. So I truly went on the Board in December. Now like the construction industry, I like the part that we play. I like manufacturing. And although Metro has got a bunch of automation, it does have 5 plants full of people. And that's big part of who I am as a people person. I think that's how you drive change. I think that's how you -- I think that's how you can drive successes through people. And so I thought it was pretty cool. I thought, gee, this is going to be pretty neat. I'm going to go to the Metro Board and be a Director. Up until that point, I started my career and really in my early '20s having done a pretty down in duty BCom at Otago University. I went on a graduate program and then I thought that I was better suited working for myself. So I actually started my business, we now is about 22, and there was a food manufacturing business. And that business went through a bunch of federations and are sold there before I was 40 and played back out cracker for a couple of years when the kids were young and then got involved in different businesses, and one of them was actually Fletcher Distribution, did some work inside of there and had really a portfolio of governance interest at that point. And -- but one of those businesses I was asked to get in to and run and I did that, and there was a recruitment business, actually, of all things. And then sold that on to a small listed company and down that path was asked to run that, which I did and ended up on the board of it. And I think I was back to the stage of having a governance portfolio until I was lucky enough to come across Metro really. And I guess 1 thing led to another and earlier this year, we did have a void and a need for a focused board, but also somebody to get in and take the bull by the horns really and see how we could get everybody putting in the right direction and lead a strong business. So Robyn, who is here now, Shawn introduced, she said to me yesterday, so what the hell, how did you -- how does this happen that you end up here and you like just -- this is your thing now. And I got fairy -- I said her, fairy and lucky, like it's pretty neat to be in the spot where we've got, I think, a business with so much potential and so much heart and so much spirit inside it and a strong engine and here I am to be really, one of the team, but amongst this bunch of people who can do great things. So I feel quite privileged to be doing it, which -- it's not to say that it's not easy and there's not a challenge, but I'll get to that when I speak in a moment. So that's more background. Anyway, over to you, Shawn.

As I say, all right. In my private equity days, it used to be me involved in the companies that we were invested in and was just me. And as I said, I'm incredibly lucky to actually have these 3 individuals sitting next to me as part of the Board. So thanks to all of you. So if -- we'll move on to the Chair address before we do, we're going to hold questions till the end, I think, as I said. So -- but online, if you have any questions, you can start entering them in at any point. So if you want to enter any questions online, feel free to put them in, and we'll get to them at the end of the presentations and the resolutions. So as you can see, we're -- from the end of last year, and I took over as Chair in March, so 6 months in. We're largely or mostly a new board. We're certainly a board with a completely new mindset. So we thought things haven't worked. Let's throw it all up in the air and kind of reprioritize. So we have 3 priorities. The governance is one. The fourth 1 there is more just a description. Basically, we have 3 priorities: number one, is fix the balance sheet. And I will go into each one of these priorities in detail in the bulk of the meeting, either Simon or I will cover them. But we just thought if you looked at it -- if I look to the business, and I've been watching it for a while, fix the balance sheet. It's been over geared for a long time. It was #1. Reset the New Zealand business was #2 because clearly the New Zealand business has had some exogenous factors hit it, market and competition. And I think it had certainly lost its way in terms of what was important and what to focus on. And so we really sit down with a blank sheet of paper and said, let's reset the New Zealand business. A lot of great core ingredients, a lot of great people, but just needed to redirect and change some of the leadership sort of objectives and goals. Australia has got good growth opportunities. So #3 priority and these aren't in any particular order, actually, is to exploit the growth opportunities that are there in Australia, and Simon will go into those in more detail. And again, as you say, it's important that boards actually drive a lot in businesses, both bad and good as I'm sure you're all aware. So I just wanted to -- the governance, we've made some changes in terms of the governance. It's a smaller board, cost less, but it's also more efficient and faster. So rather than move fast and break things, what we tend to do is move fast and make contingency plans. So that's kind of our approach. But it does involve less process, more action. There's some nice to have process things that we're not doing at this point in time because it's most important that we focus on those 3 priorities and get those right. And nice to have process, things will definitely bake them in, but it's all about the phasing and the timing of how we do these things. So I want to say Metro's governance is more like a private company but obviously, without abrogating any of our listed responsibilities. So it's more like a private company, but we have thousands of shareholders rather than 2 or 5. Same principles, but on a personal note, my personal view is that too many public companies around the world, not just in New Zealand, focused too much on process, focused too much on governance and kind of lose sight of the important things and move to slowly. So we have a different mindset, and that's the -- I guess, the key points in that. So what we'd like to see come out of this, so we're going to set some criteria for you to judge us by -- judge us by whatever you want, but these are the ones that we see. So the goal is a desirable list of equity investment and that lasts over time. So what does that look like? What are the kind of characteristics of success of that? We have a team that loves coming into work every day or at least doesn't hate it and is challenged by it and actually feels like they're on a bit of a mission rather than just going in and clocking up and collecting their paycheck. Customers say, "Wow, Metro is good. Actually, they weren't so good for a while, but actually Metro is really good. So we end up getting some customer praise rather than customer beefing. Note that, that second flows from the first, very important to note that I think there's no question at all that our most single most important asset and a driver to our success is our people. And so we have a mindset of making sure our people are looked after but also trying to embed some things into the organization and forgive the cliches, but there's an element of truth in every cliche. So we have to earn the right to grow. And let's do things right the first time so that this company is actually built to last and isn't going to just fall over when 1 or 3 of us decide to leave that it actually has -- it has all the things it needs to actually last over a 5-year time period or a 10-year time period. So what that means predictable and growing earnings and paying dividends. It's not -- I think those are probably the most 2 important things from a shareholder point of view. And we have started on this journey, but we're hopefully getting there in this AGM -- or sorry, ASM as part of that, which is that we want to be as frank and open as we can. And so as I say, in this meeting, we'll be hitting you with a lot of information. We're going to give you some forecast at the end of the meeting. We're going to give you a bunch of financial information. So we are going to try and be as open and frank as we can be in the time that we're allowed. The quid pro quo is that, look, we're fresh with a new mindset and fresh -- 3 of us are fresh on the job. And there is an enormous amount of uncertainty and ambiguity out there in general, but certainly around Metro in the industry that it's in. And as I say, we're moving fast on a lot of things. So the conclusions we draw, the forecast we show you, any of the outlook comments or -- and even indeed some of the strategies and plans that we have are open to change -- no, they're likely to change, actually. They are quite likely to actually change. So if you can just take them in the vein that it's given that it's being open, but also we may change what we say, and it may happen fairly quickly. That's just the nature of where we are and the company, the situation that this serves. That's a lot of background, but I hope you see it as relevant to we are on a mission. It's not just business as usual. This requires a lot of change. And so there are a lot of things to kind of talk about with you. So I'd like to just hand over to Simon, who will go into more detail about 2 priorities being resetting the New Zealand business and getting a place to turn around and then the Australian business as well. He'll also cover the normal things that you would hear in an ASM about trading updates and what we're doing plans numbers that will all fit into it, but it's more about what we're doing than anything else. Simon, mic is yours.

Thanks, Shawn. Shawn, I work as a pretty good team but we never really work our script out, we're going to meetings, and we just free for it and we goes pretty well. But today, I've written some notes and -- because I actually take -- realize it as super important to handle all the notes that I should hope today around the performance of the business and so forth. Particularly, I'm going to say that there's 3 bits to my -- that I pay attention to the past, being really financial year '24 up to that point. The past and the future, and I hope you don't find it too flippant when I say that the past is kind of down, there was kind of like the hospital pass when you've been on the board a few months and then well, you just got to get out front and start leading the business. And I'll break it down into really New Zealand, Australia and then bring it together as a group. And hopefully, you get a sense of where we're at. So I'm not sure that -- it's really well appreciated. But the decline in New Zealand started in the last quarter of '22, and it was the year that was punctuated not only by this post-COVID, sort of sugar rush but also a year that our new competitors presence was beginning to be felt. So I know that's been talked about a little bit in past meetings. But AGG for those of you who are newer to the business, is the glass plant and businesses associated with APL growth. And that's primary die holder and windows system liner. The APL network had, in fact, been Metro's largest customer. And Metro watched on over the years as AGG took many of our customers. So AGG started their plant in March 2020, having signaled that they were going to integrate this glass production into their metal or aluminum network. And really, they built capacity and then they started filling what they consider as their fabricator network. To give you some sort of perspective of scale, by the time they had entered and put their first lines in, they basically added 30% of capacity to the New Zealand double-glaze market. So whilst there was a lot of talk about positive changes because of the new insulation requirements with the arrival of H1, and there was more demand for double glaze, this happened at a time of excess capacity. And likewise, lift to higher-value, Low E products, the Low E coatings on double glaze was to add revenue opportunity, but there's just aggressive pricing in the market because of the extra capacity I guess. And then at the same time, and as you can see there, it's pretty stark this significant market decline. And some people are describing this current construction downturn is really worse than the GFC. So this has started in '22, but it really wasn't felt until the end of that financial year, and the revenue was at $187 million and then it dropped to $160 million in FY '24. So it's about a 15% linear decline. And if you were to draw a line through that trajectory, then you would expect this year to drop to around $137 million. So Metro, we're seeing all that's happening and reduced capacity in New Zealand, closed the Bay of Plenty plant in December '22, and then follow that up with the closure of the Wellington plant earlier this calendar year. But whilst these plants were closed, much of the overhead remained, including occupancy costs. So not enough savings achieved. And to compound this, production and Highbrook struggled with the integration of the plant closures. So when I commenced in my role, our Highbrook DIFOT, which is delivery and full on time, I'm sure you know, despite significant efforts from the team, they were trying to do well, but our DIFOT was sitting at around 60%. So we're trying to fight these competitive pressures hard market and yet really got unsatisfactory delivery -- service delivery. And so the challenge is even more -- so much more significant. So in terms of this market, as I said, you sit on the screen, but lots of commentators are really saying that the downturn is at least 30% down. And obviously, Fletcher Building announced this week, and they are certainly pointing to that number as well. So on my arrival into my desk, there are a bunch of things that were clear. There just wasn't enough cost reduction. We knew the market was falling, but we just couldn't take the cost out quickly enough with -- to match this reduction in revenue. And we're fighting to hold the volume with aggressive discounting. Same time, service delivery, just not good enough, and we're focusing on this now smaller addressable double-glazed market. And I think really, we weren't playing to our strengths. So not really a great spot, pretty tough spot to arrive to, but there was some pricing stuff as well. So New Zealand had 2 really strong and committed gems, Robyn here and Nick Hardy-Jones in South Island, both great people. And they're eager to roll their sleeves up, engage fast on a technical turnaround plan and to help build a strategy. And equally, despite this financial situation and a great deal of change, we've retained significant talent inside of the production area of the business. Not all of them focused well enough, but significant talent. And we hit this bright network, which was kind of just sitting there waiting for us to do something worth it. It had a lot of potential. At the same time, we have this high functioning Australian team led by Steve Hamer. And it was kind of a surprise also that I'll ask Steve as a good operator, been around for 5 years. He hadn't once since his -- since his interview being asked to New Zealand -- to sort of contribute to the New Zealand business. But he had a good amount of knowledge. He had a lifetime of leadership, heavy manufacturing, running turnarounds consulting and it lead a significant turnaround in AGG. Thankfully, it was on the rugby season. And so when I said to him, hey, Steve, give us a hand, join the New Zealand team. He sort of gave me a bit of a wink as he does and say, "no, we'll see. But 2 weeks later, I visited our sites in Sydney and Melbourne. I'm pleased with the leadership team there, Jason McGrath, CFO, then GM of Victoria Angus Wilson and GM New South Wales Vic Moon and many others. And what was clear to me is that we could run a similar turnaround in New Zealand as we've done in Australia. So the following week, Steve joined Robyn and Nick, Dayna Roberts, our HR Director, and me in the turnaround team, and we grabbed Angus from Australia, and he joined us as GM Operations in New Zealand. And the work began basically. So we've built a new strategy, blank piece of paper, and we're now into it. So we're very focused in the New Zealand business from both a sales and production perspective, reduce noise, reduce cost, and we have 100 of us committed to excellence in service delivery. There's quite a noisy graph there. Australia, AGG has had a linear increase in revenue since Steve took the helm. I mean he did and hear it a bit of a shambles was losing money. And he is very methodical, win about reorganizing the business. He's got a super, super strong manufacturing pedigree. And I think I've asked them this is a way this week. But I think it'd be helpful for me to say they now sell what they make rather than make what they sell, had this focus on production first. And with a smaller market share in New Zealand, Steve and his team focused on high service delivery, DIFOT higher than 95%, external reworks less than 1.5%. So with capacity constraints, it was necessary for them to rationalize range in both Victoria and New South Wales. And both planets, lease automation and Highbrook here in Auckland, they run very tight, highly efficient production but a much narrower range of products, largely DGU. So his task has been quite different is to try and build capacity over the last couple of years. The Australian market is not without challenge though, but they fared much better than we have in New Zealand. So last financial year, FY '24, $6.5 million pre-IFRS EBIT in New Zealand dollars before significant items. And look, we're down -- going to be down this year and last year, but then sort of 10% or 15%, which I think in the market is not bad. So are these -- we've got AGG smaller market share. The national standards change in CC in Australia is much like we've had in New Zealand H1, slightly more formulaic and how you decide what the house needs to -- what the house needs for the consent. But to give an example of the impact, it's kind of easier for me to read that than for you, but the green there is kind of -- you can see in the green, the -- that's just double glaze. This is a different color, I think. But the double glaze started out in New South Wales, obviously almost insignificant, single digits. So I think by -- this time a year ago, it was 14%. And that's what's specified by the architect, 14% of double glaze and then it jumps up and you can see that right-hand green line, 35%. So in May, of all the houses specified, 35% was specified to be double glazed and significant increase. So that means that what we produce, which is this double glaze that would now start to buy office. Just in terms of timing, I think it's -- I would like to know the New South Wales change has commenced October '23, and Victoria was delayed until May '24. So we're not seeing any of the benefit of Victoria yet, but New South Wales, we're starting to see it. So we've got heaps of confidence in our ability and that the market opportunity is significant in Australia. And that's encouraged us to look for more capacity. We're in the process of negotiating lease for new premises and to purchase some new plant from a failed processor, which will give us up to 50% more capacity. So when I push those things together as a group, FY '24, as you all know from our results earlier in the year, we delivered $239 million of revenue and pre-IFRS EBIT before abnormals of $4 million. As Shawn obviously pointed out, we've got a problematic balance sheet, which has been the theme for some time, too much debt. Net debt had reduced to $53 million during FY '24. It's now sitting at $57 million. I talked about how important our people are. I mean, we do have some great people, very committed, plenty of skill. My observation so far, they are eager to understand what they need to do to make Metro successful, hungry for direction and want to know what our strategy is. And New Zealand in particular has been pretty tough for people. The commentary around Metro in the state of our business and I call it the newspapers, but around commentary, it's tough. People ask me when mounting the business, hey, Simon, we're going to go broke. Hey, Simon, should I cash up my holiday pay. We're going to see through next year. And that's really the single biggest factor, I think, for all of us sitting here at the front of the room is that to drive success, we've got a look after our people. If we look after our people, the rewards for our customers and our shareholders will come. So people first. Health and safety is super important. We've made great strides, in fact. There's not a leadership meeting that doesn't start with discussion around health and safety, care of our people. And we've had long periods of production with no injuries. Unfortunately, there have been a couple of injuries that outside of the plant that have been of a serious nature, which we don't think is good enough. We don't want anybody to get hit on the job and it's a key focus for us. One injury is one too many. As with the changes that we've got going in the business, we're trying to get rid of kind of the separate head office functions. So health and safety from being sort of a stand-alone thing is actually now integrated into the business units in the areas that we operate. I think we've -- in terms of people, Shawn's talked very much about the people around the table. From my point of view, it's been amazing to have those safe set of hands with Julia running the arc, the really the serious stuff. It's been great to hear Pramod lean on his shoulders, broad shoulders, and he's been thinking much more about the market with me. He's got one customer that he's trying to help me convert, which hasn't done, but hopefully, soon. And Shawn, we're pretty lucky to have somebody that is really up for it to fight the fight, he's fighting hard for it. And his leadership has really enabled management just to get almost with -- to charge into it. He's also, I mean, got a crazy appetite to keep everything going all the time. So whilst we're trying to make this turnaround, we're looking at the bigger structural stuff, industry stuff long term. At the same time, things that perhaps others might think could wait for a year or 2. So for the future, I've talked briefly on the strategy formation. The early part of that was a turnaround plan. We're backed on this plan to ensure that New Zealand could make positive post-IFRS profit contribution at a run rate of $137 million, which was our downside production for the year. Sadly, the tough conditions have fulfilled that revenue production. But despite this dropping turnover and in fact, August, our turnover in New Zealand was sub $12 million, but we've made enough cost and performance changes to suggest that we are hitting this goal of being able to turn a profit at that really low level. And in August, we had a positive EBIT in New Zealand the first since last calendar year. Our cost-out initiatives of trim board fees hit off the staff, fine-tuned our operations, and we exited our Bay of Plenty part lease and move next week. We're just in the process of subleasing some of the Wellington plant premises with PwC guys are here. They have tightened their belt and had a significant reduction in audit fees. And on an annualized basis, this has reduced operating cost by $7 million with a further $3 million overheads and there's more to come. But not just cost-out as an opportunity. In New Zealand, we see an opportunity to grow market share and prosper in the branch network with a new focus and determination. Our DIFOT in August had a record high in July, which was beaten by another high in August. I can easily read that chart more easily the last one are bundled around. But the green line, the top line one is Christchurch, we've had higher delivery performance. But you can see that steep curve from the X there, the blue line as Auckland has moved its DIFOT up into the 90s and towards 100. And our customers are telling us that they can see the changes, they're visible. So surely, not rocket science, but it's been a position to get a fair price for quality product delivered right first time. In AGG, we expect to see growth next year and we need to build capacity for the years ahead. As mentioned earlier, we're adding capacity within the existing sites and exploring new increased capacity for demand expected on the back of the new building code changes. AGG is a very predictable business now on the back of a very methodical and steady leader in the form of Steve Hamer. He's a pretty good -- Shawn, he couldn't be, he's a pretty good roster Steve. He has given me a great deal of assistance. And because he's running such a tight ship, he's been able to come over to help, Robyn and Nick and myself in New Zealand. And it gives me quite a proud and I feel pretty energized and stimulated like the young fellow learning from the kind of the manufacturing master. So I gave the past analogy. Look, it was a difficult path to catch, but now really the team is moving forward. We've got the people and we've got the plan. What's required now is the right platform to continue to move that forward. I'll hand back to Shawn to frame up the capital structure and the plan. But firstly, a big shout out to the team. Those of you online, those have been mentioned on the room here, thanks for the efforts. It really has -- and it's a pleasure to work with you. To our customers, I would say, thanks for your patience, but be ready to be dazzled. To our competitors, we're focused on our journey, not yours. To our shareholders, look, many of you have contacted me already, I've had countless meetings, days and days of meetings with various shareholders. And thanks for your support. We need some help, but I think we can give you a decent return if you give the new team a chance. So thank you very much. I hand back to you, Shawn.

Brilliant. Thanks, Simon, and thanks for sneaking the kind words and without me seeing them in the draft. I would have taken that out. So Simon has expanded on 2 of the 3 priorities. And so the next priority or the third priority, which is just is fix the balance sheet. I won't belabor this, as Simon said, I think -- is Metro has been over geared for at least several years and over gearing is never sustainable in a high fixed cost cyclical industry. My experience is that it makes the -- it stresses the organization, causes it to lose focus on the core things, makes it accident-prone and just get itself into a vicious cycle. The numbers are -- and the debt is not just entries into a bank's account or a balance sheet. It actually has a big impact on the business every day, day in, day out. For instance, the Australian management that Simon was talking about, they are a top team. They're probably over specced for running the business they're running. And for the last 18 months, their whole job is basically to earn as much cash as possible to make sure that we're still making bank payments and paying off debt. And that's not conducive to long-term success. So what we're trying to do is fix the balance sheet so that the business can actually focus on the key things that it needs to be focused on and not how much debt it has in trying to pay back banks and earn as much cash as possible. When I first joined the Board, my personal view is that the sale of 100% of AGG was a mistake, was the wrong strategy. That's a simple rule, but you don't sell your stars, you fix your dogs. That's what I kind of live by, it's worked for me in the past in my private equity days, and so there's no real difference here. So one of the first things we did was to basically see how much -- I guess, what kind of price we could extract out of the potential buyers. But in the end, it really never was going to be enough. And the price that was offered was actually not a bad price. I mean, on any metric, it looked like it's actually -- it was actually an okay price, but we chose to turn it down because it's just not the right strategic decision. And a couple that were 3 years later down the track, you would have ended up with a much smaller company, reliant solely on New Zealand, which is higher risk, and they would have ripped the growth outlook away from the business that is Australia. Plus, as Simon was saying, there's some fantastic people in Australia that we've been able to marry out with our fantastic people in New Zealand and start to get 1 plus 1 equals 3. The things they did in Australia very applicable here. Nothing is one for one, obviously, but with not much modification. So we would have lost a valuable management resource. So as has been publicly said, the plan is to have an equity capital raise so that we can extend our loans, give us 3 years that we need -- the runway that we need to actually turn the New Zealand business around in a sustainable way. And anything less than 2 to 3 years is too fast. It won't happen. So it is a hard job. It will take a bit of time. But as Simon said, so far, in my experience, and I've invested my way into turnaround situations. That's me making stuff up in an investment decision and then having to turn the business around. The green shoots that are coming out from the things that Simon and Robyn and the team and Nick and the team are doing, have the fact that they're already showing up is faster than I've ever experienced. So certainly, it's a really good piece of evidence that they're on the right path. So the current solution, again, I won't go through to this is that Cowes Bay Group, a large family office based in Australia have agreed to -- so we've signed up a term sheet with Cowes Bay. That's not a nonbinding indicative offer. The term sheets are actually binding. They're conditional. So they're conditional on confirmatory due diligence and full documentation, but it's not a nonbinding or indicative deal. It's actually 18 pages of the probably 80 or so that are going to be required to fully document the deal, but it's the 18 pages of the absolute key items that quite often people end up arguing over once they've signed NBIO. And I don't know, maybe it's a good discipline. Maybe people don't -- it's nonbinding, so I'm not going to focus too hard on it. So we went at a slightly different approach was to get a binding with conditional term sheet. So we argue over all the hard stuff early and get all the hard stuff and hard decisions in our negotiations out of the way as early as we can, all the deal killers from Cowes Bay point of view out of the way as early as we can. So the detail has been outlined in our previous announcements, but essentially Cowes Bay will refinance our bank debt. And we plan to have a capital raise pretty much immediately thereafter of $10 million to $15 million, which will be deeply discounted. This goes back a little bit, but I've -- in another company, I've overseen probably 8 discounted rights issues. This will have an oversubscription facility. We will treat all shareholders equally in the whole process. That's one of the key principles of how we need to go forward. CB, the Cowes Bay have agreed to -- or committed to take up their entitlement under the term sheet. And they've expressed their interest in acquiring up to 19.9%, potentially taking more. So no deal is done until it's done. No deal is done until your bank rings you and says, the funds have been entered and they have cleared. And I treat this transaction is exactly the same as that. Now notwithstanding the fact that we're signed up to a binding but conditional term sheet. As I say, it's not done until it's done. So -- but everything is moving according to a normal complex deal, and we anticipate having everything wrapped up within the next 3-or-so weeks with a capital raise within -- in the next 4 weeks with the actual offer documents, the intention is offer documents mailed out in 4 weeks' time. That's the current plan, which is the same as what we expressed in our latest announcement on that. I would -- as I say, it's not done until it's done, but it's entered the high probability levels of chances of success and actually happening. So not done until it's done, but it's feeling good, feeling like the right like it should. So we're going to -- I've got a slide next, which goes through some forecast for FY '25, FY '26. And it shows basically -- so what we've tried to do is we try to forecast based on the current market conditions, so the market being tough, continuing on through that forecast period out to FY '26. So we're not assuming in these forecasts, any recovery in the market. I'm using the word forecast forgive me. I'm shortcutting. So my legal team will tell me that, and Simon is quite rightly pointed out, forecasts are a loaded word. This is a scenario at this point. And -- but we anticipate -- we still have some work to do, but we anticipate that the forecast that come out in the offer documents won't be widely different from these numbers that we're going to give you and that we're going to put up on in a second. So I'll expand forecast from my -- if I don't, please hear scenarios. So basically, it reflects the priorities that we've got, which is that the New Zealand turnaround, the green shoots that are happening continue and that AGG basically maintains its strong profitability at this point and invest in growth, and that could be either by way of what I call a cheap greenfield operation, where we try and find a low-cost premise with low-cost plant and equipment or it could be buying some existing plan. And we have a couple of options that we're starting to explore now. And some of them -- one of which may happen fairly quickly. So we are actively looking at setting the platform for the growth in Australia. I'm going to -- I had a feeling that these numbers would be [ resolved ]. This basically is a long table of numbers. I'm not sure if you all can read it. My eyes are so bad, now I can't read that. But essentially, what we're trying to do here is give you again a scenario of a look forward in terms of what the numbers look like going forward in terms of FY '25 and '26. You'll see that FY '26 is showing a strong recovery in EBIT pre-IFRS and EBITDA pre-IFRS. I come from a private company background. We use pre-IFRS. Look, I understand that that's not the appropriate or IFRS mandated way to look at the world, but I find it -- I have always found it and much easier to understand the business and a more realistic reflection of it. The banks use it, private companies use it, investment bankers use it, share market analysts use it. Pretty much the only people that don't use it are -- our accounts and statutory body. So forgive the focus on that. I focus on pre-IFRS EBIT, not EBITDA because that the depreciation part, there's no too ferry coming along that's going to replace our gear. So EBITDA is a nice proxy potentially for cash flow in the short term, but it's not an ongoing measure of the profitability of the business. EBIT is a measure of the profitability of the business. And then, of course, net NPAT, which is reported profit, which is also in there. But fair to say that this based on a flat market, i.e., no recovery, shows a strong turnaround, mostly reflecting New Zealand and is actually costing some money is coming out from the AGG growth that we're anticipating. But you can see in there that EBIT pre-IFRS for the group for the year '26 has risen to $12.5 million. I'm not saying that's the [indiscernible] end all numbers or profitability. But it's a lot better than the trajectory that's gotten us to where we are right now. FY '27, so we intend at this point. I'm sticking my neck in a noose, forgive me directors, but we intend to also release, let's call them forecast for the moment for FY '27 as well in the offer docs. So hopefully, we'll be giving a full picture for the outlook of the business that also starts to capture some of the growth that we're going to be investing in AGG and going out to FY '27 covers that. The rest of these numbers, we've tried to talk to people in the market, equity analysts, some of our shareholders, to try and get a feel for what kind of information that they need to properly assess the business and to properly model it. So a lot of the figures in there, we've tried to put together with that in mind so that we can start to get anyone savvy who looks at it financially sophisticated can actually model our business and develop their own forecast. Something that isn't normally done, I don't think in public company environment, but I'm a big fan of, as I said earlier, showing more detail because that lets you as shareholders and investors decide whether you think it's a good idea or not rather than trust the number I happen to pluck out of the sky and say, this is what you should be relying on. So there is some guesswork. I just want to flag there's some guesswork in some of the earlier numbers, not guesswork, but there's some -- to try and make everything so it all stays on the same line. We've allocated some costs in various places. So there is some intuitive estimation work that goes on in the 2017 and 2021 years in particular. But just trying to give you a historical feel as well as the scenarios moving forward. So there's a 2017 year, which I kind of use as a proxy for a -- this is what the business is potentially capable of. Landscape has changed, things have changed. But at least this is the sort of thing that this business has actually done in the past. So -- that's -- again, you'll be able to go through this, the numbers in more detail. I've already talked probably way too much anyway. So I won't go through any more of the actual numbers themselves. So what I'd like to do is now is we'll move on to the resolutions. And I'm going to ask Julia to chair the meeting through the 4 resolutions. The first resolution is dealing with the auditors. Julia is the Chair of the ARC. So that's appropriate. The second one is my reelection. So I've imposed and Julia has briefly accepted that she will handle the 4 resolutions as Chair of the meeting.

Thanks, Shawn. We'll now move on to the matters requiring resolution, which are outlined in the notice of meeting. If any shareholders have any questions on these resolutions, please submit these online or save them for the end of the meeting, and we'll address all the questions then together. Voting instructions. Just a reminder, shareholders joining remotely will be out to cast their vote using the electronic voting card received when online registration is validated. To vote, you will need to click the Get Voting Card within the meeting platform. You'll be asked to enter your shareholder or proxy number to validate. Please then mark your voting card in the way you wish to vote by clicking on for, against or abstain on the voting card. Once you have made your selection, please click submit vote on the bottom of the card to lodge your vote. And please refer to the virtual meeting online guide or use the helpline specified if you require assistance. For shareholders in the room, MUFG corporate markets will collect the voting cards at the conclusion of the formal business. Voting will remain open until 5 minutes after the conclusion of the meeting and the results of the vote will be announced via the NZX. Each resolution set out in the notice of meeting is to be considered an ordinary resolution and as such, must be approved by a simple majority of the votes cast by shareholders entitled to vote and voting on the resolution. The outcome of proxy votes will be displayed for your information on all the resolutions. So yes, going to the first resolution, which is the auditor's remuneration. So Resolution 1 proposes that the Board be authorized to fix the fees and expenses of PwC as auditor for the ensuing year. Please vote by selecting for, against or abstain for resolution on the voting card. [Voting]

So I'll now move to the resolutions for director elections. So Resolution 2 proposes that Shawn Beck be elected as a Director of the company. Now just noting that the listing rules require that any person who is appointed as a director by the Board shall retire from office at the next Annual Shareholders' Meeting, but shall be eligible for election at that meeting. So Shawn Beck as appointed to the Board during this year and -- was appointed to the Board during this year and accordingly, is standing for election by shareholders. The Board has confirmed that Shawn is standing as an independent director. And here's a brief background by way of background. Shawn was appointed as a Director in November 2023 and was elected as Chairman of the Board on the 6th of March 2024. We did give some background previously, where we all spoke a little bit to give our background, so I won't review that now. But just to say that the Board recommends Shawn to you as a Director of Metro Performance Glass and unanimously supports his election. Shawn has already spoken and will not address the meeting currently. I now put to vote the ordinary resolution that Shawn Beck be elected as a Director of the company. Please vote by selecting for, against or abstain for the resolution on the voting card. [Voting]

Okay. We'll move similarly to Resolution 3, which proposes that Pramod Khatri be elected as a Director of the company. The Board has confirmed that Pramod is standing as an independent director. And the Board recommends Pramod to you as a Director of Metro Performance Glass Limited and unanimously supports his election. I now put to the vote the ordinary resolution that Pramod Khatri be elected as a Director of the company. Please vote by selecting for, against or abstain for the resolution on the voting card. You had a question. Yes?

I know you said the questions were going to be later, but as far as the resolutions are concerned since we're voting on them, that there's some questions that might be wanting to ask in respect of these resolutions.

Okay. Let's play it the way you want to play it.

All right. Didn't you make reference the fact the auditors' fees would be lower next year than this year that you'd screw them down. Is that your word?

I think it was Simon referenced that in here, not quite, but yes, yes, he did reference that. Yes.

So does that mean that their actual fees will be less than the current year?

Yes, they will be.

Just so that we had an indication.

That's okay. Okay. And then we'll move now through to Resolution 4 that Simon Bennett be elected as a Director of the company. The Board has confirmed that Simon is standing as a non-independent director. The Board recommends Simon to you as a Director of Metro Performance Glass Limited and unanimously supports his election. I now put to the vote the ordinary resolution that Simon Bennett be elected as a Director of the company. Please vote by selecting for, against or abstain for the resolution on your voting card. [Voting]

Okay. Thank you. that completes all of our resolutions. I'll now -- we'll now move on to the questions and items, and I'll hand back to Shawn.

Thanks for your patience, and thanks for letting us talk for a really long time without asking any questions. So what we're going to -- what we'd like to do is open questions to the floor, and we'll bring in questions online. Yes. Well, let's open the questions from the floor, and then we'll bring the online questions and Simon is being sent them as we speak. Questions? If you could -- so just in terms of -- if you can just state your name -- wait for the microphone to get to you, state your name and if you can, your shareholder number. So do we have any questions from anyone?

My name is Rudy. I'm a shareholder. Now I just noticed that because of substantial shareholders of 25%. Have they asked to be on the Board at all? [indiscernible] took a tie at BCC.

No. There's been no request for Board seats from any of the major shareholders. The only one is included in the heads -- in the term sheets Cowes Bay that they would have a right to appoint a director. They also -- we've also set it up because at this point, they're not exactly sure how they want -- what they want to do if they want to appoint a director or not under the term sheet. So they also have an observer right. So short answer, no, at this point.

I'm also a shareholder. You talked about being people oriented and people are very important to the company. Now I wonder how are you going to go about doing that. I know one of the best companies in New Zealand for relating to the staff as Mainfreight. They have a great record of talking to people. But to me, it's having -- caring their people means you're talking -- finding out that when somebody working there has a new child or some sort of thing happening, would your people be going? Would you have social events and would you have -- what would you be doing?

It's a good question. And I think that one of the challenges of business is when you're trying to save money as you cut a bunch of cost. We decided this week that the teams will run the normal Christmas get togethers, which are different in the regions to -- and different to Akamai where we have big plant, but we'll expect everybody to get together and [indiscernible] and have something to wait and share a few laughs, pretty low key. But yes, we do like people to get together.

I understand the Mainfreight, they have most of the workers, they ask them to be salespeople for the company, and I hope that your company would do that. All the people on the front line will sort of become salespeople for the company and go to the neighbors, drop a card or talk.

Thank you for the question and the comment. Yes. I mean, I'd probably in the interest of time, didn't expand enough into the people. But it's pretty tough that we've had a lot of long serving people in the business. Robin, 27 years, believe it or not, she's not yet 50, nearly, but. And I think it's tough when you work in a business and you've got a lot of passion and you care a lot about it. And certainly, the Metro is a business where people are wearing their Metro T-shirts on the weekend, and they're proud of the name and the business. And so they're certainly salespeople for us. And I think that it hasn't been an easy time and probably a bunch of the situation we're in is certainly not our production people's fault or our salespeople's fault. I mean, I think that we've got leadership has got to take that on the chin, governance has got to take that on the chin, say, hey, we got to a spot, which was -- which we shouldn't have been in. But I think that -- I don't take it for granted, but I think people are getting their tails up a little bit again and are our salespeople for sure.

[indiscernible] I'm a shareholder. Several questions, if I have. The first one you're talking about raising $10 million to $15 million by way of capital. That seems to me quite a small amount. The sort of in step 1 that you might be having another capital raise a bit further down that you've already -- shall we say, planning for?

Do you want to answer that? And then you can go on to your next one. Yes. So the $10 million to $15 million should be enough. We're not planning another capital raise in the future. When you get a chance to look at the scenario analysis, you'll see that the bank debt starts to come down quite strongly, particularly as the New Zealand turnaround starts to kick in. And the business is not cash flow negative anyway, so it's not like the debt is going up. And so the debt comes down. So the debt gets into a manageable position fairly quickly because of the turnaround. The second thing is that the key thing is that the refinance transactions that we had under the term sheets in Cowes Bay, give us the time to actually turn the business around and it gives us time for those operating cash flows to start to flow through. So no, the $10 million to $15 million isn't a large capital raise, but those 2 key things mean that we think it's enough. As I say, there are no plans to have another capital raise in the near future.

Another question. You're talking about using 2017 as a base year and going forward from there. Don't you think that perhaps the events that we've had since then, I mean, with COVID and all the rest, that these are pretty unusual and you're not liable to be striking them in the future. And therefore, the 2017 might not be appropriate?

It's -- I'm sorry, I misspoke. It's not the base for the scenario. Look, it's just a year that we -- I plucked out as 2017 as a year that is worth looking at. Nothing more than that. Just as a year, it's a past year that doesn't have COVID in it. And it's -- yes, as I said, many changes that have happened, but that was -- the business was capable of those sort of numbers. And I'm not saying it will get there quickly. It's not the base. It's not a target. It's just -- as I say, it's a set of numbers that have color in the canvas if you're a numbers person.

Another question. As far as the Australian business is concerned, do you see yourself as a company seeking to expand the operations in Australia quite a bit together with sales over there?

Yes. Yes, there's a good growth -- there's a very good growth opportunity in Australia that we definitely want to capitalize.

And you're talking about possibly selling part of that company off?

No. No, that's not under any of the current plans. We've got contingency plans about as long as my forearm. And that's -- that would be a -- in a contingency plan list that if plans A through F don't happen, then that's always an option to potentially sell a minority stake in AGG, but that's definitely not on the current plans. We believe in that business. We believe that the management team can deliver on the growth prospects. So wherever possible, we want to retain that business 100% of it.

A final question. If I could just refer to the auditor's report at the bottom of Page 45, they're actually saying that they feel that material uncertainty exists to be looking at the company as a going concern basis. Do you think that what you have presented today is liable to influence them after they've said that they've got no reason to modify their attitude. In other words, that they no longer feel that, that they would consider that the prospects are good for the company?

I don't know the answer because we haven't asked the question, and we won't ask that question until we start the preparation work for next year's audit. I would hope that -- they don't have enough information to comment either because we haven't given them the information, so they won't be able to tell you anything. But the objective would be, well, an outcome should be that the material uncertainty is removed at this time next year for this -- the next annual account. Whether it is or it isn't, it's hard for me to know. I'd have to sit down and probably talk to Julian and think about it a little bit more, but that's certainly the objective. I think when you raise the -- when we have the capital raised and if the refinance or something similar happens then the material uncertainties largely should go away. But I'm not going to ask -- it's not a question you can ask kind of halfheartedly and the auditors can answer it halfheartedly. It has to -- you have to prepare all the information required to answer that question. And there's 2 -- sorry, there's too -- we're too far away from it so to do that now or even in the next few months.

Do you feel confident you might be able to?

Sure. Yes. No, sorry, I thought I was expressing as much confidence as I can, yes. No, as I said, if the question is, do I feel this is a going concern in terms of their materials, are there any other hidden things in my mind about that? No, there's not. We have -- the crux of it is that we have a -- there is a solid business there when I look at the group. We have supportive banks, and we have a plan to fix the balance sheet and the business. And so that's all we can do, and that gives me confidence that, yes, it will be achieved. I wouldn't be here unless I thought we had confidence -- unless there was confidence that we could turn this around and get it out of that kind of stuff like material uncertainties.

Richard Flower, shareholder. Two questions about the new capital raise. Simon said he'd been talking to major shareholders. I wonder if you could give us a feel of how they thought about the cash issue. And also, I'm a bit confused about the refinancing by Cowes. Is that -- are they guaranteeing the loans to the banks? Or are they paying them off or what?

Just quick on that one, I can quickly answer that one and I'll let Simon to answer the first one. But no, they are going to -- they will become the company's 95% lender. So as a family office, the family offices can be quite flexible in how -- in the kind of investments that they make. And they have, as an organization, ex-bankers, and ex-equity investors in other places. So they are a lender to businesses, like a secured lender like what we're talking about in a normal lending-type facility, but that's relaxed and longer term. But they also take more, I call it, hairy forms of debt, like more subordinated-type debt and different pieces, and they're an equity investor. So they're capable and they've been invested across kind of the whole financing of a company. And from a family office point of view, that makes sense.

So we can be given the terms of those -- of the lending and the documentation, interest rates, this type of thing?

So the only changes to the documentation will be that it will be of a different structure of loans. And -- so I'm not -- I don't know exactly to what level we'd be disclosing the exact terms of the actual facility, because there is confidentiality involved in it. And I'm not sure how much we'll err towards disclosure, where possible, but I'm not exactly sure how much we will in terms of the exact terms. But it's -- it will be a 3-year facility. So that's playing a runway, and it will be structured in such a way that we have enough headroom that there's always the possibility of the world ending. But it's that kind of thing that would require -- that would have to happen for us to be in a similar situation like with the normal banks with Cowes Bay. So it's -- I use the word relaxed. It's more relaxed. It's more suitable. Our banks have been very supportive. They're good people, and they've been very clear, and we've been hopefully -- we've been open with them. We have a very good relationship with them. I say, they're very supportive, but they don't have as much patience or as longer-term horizon as somebody like Cowes Bay, it's a private company, private family office. So it's more relaxed. It's -- and we're very specific in the words we use, and we're very careful in the words we use, which is that we think that Cowes Bay refinancing and the terms at which it will be -- will give us the headroom and the time to turn the business around.

Banks must be very happy.

Hard to tell with banks sometimes, right. I think so. They should be. You're right.

I know we did -- just to maybe sweep up the last part of that question is that we did -- when we updated the market, we did allude to the fact that the terms are materially unchanged. So in fact, the ratio against -- the margin against BKBM and stuff, same one. So it's not like we've gone to some guys and going to pay double. So -- but to the first question, how were the major shareholders we spoke to? I mean, actually, the conversation came down to two things really. One, how quickly can you turn around the business; and two, how much time will the banks give you? And so the facilities were up for renewal on October 25th this year. And so when we're talking and these conversations started in early January, actually, they say, well, we don't think you've got your hands around the business. We don't think you know where it's at. We don't think you know what you're doing is kind of the first part. And we talked a lot about that, and I think got some confidence that we're going to roll our sleeves up and we were committed to some cost out and some into addressing the challenges. But then the next question comes, you've got nearly $60 million of bank debt, how patient are the bank? And we couldn't have done a capital raise without commitment for a decent term of financing and I don't think that we would have -- while the banks -- it would have been hard to get -- it's not 2 and a bit years or 2.5 years, it's 3 years till the end of October, 3 years out. And that was the thing that was most important. And I think that when we -- when I circle back and talk to some of them -- some of the larger shareholders when I say, hey, we've got this bank finance sorted out. They were starting to nod and so I think they were positive discussions. And with -- you can -- I mean, it's not beautiful, but the -- if you look at our run rate from April, we lost NZD 1.4 million -- NZD 1.44 million in April and -- EBIT. And it's pretty ugly, right? And -- but that trajectory is we've almost -- we've come from there to I described what happened in August, it was NZD 60 million profit. And so we -- the cost outs are working. The hard market, we're getting some better pricing. We're getting some labor cost out, getting better organized. It wasn't like anyone was asleep at the wheel, but closing these 2 plants and then we've got the [indiscernible] plant dealing with these different customers, different types of products at times, it wasn't that easy. So we just started to get a little bit better. So the need of that is, I would say that the major shareholders are nodding now that I talk to.

My name is Derek Harris, I'm a shareholder. Just a question that I do ask with more out of interest, if anything, and that's just how much skin in the game have the directors got? Are directors actual shareholders in the business?

So I think Julia is a shareholder in the business. Simon, Pramod and I aren't and that's deliberate at this point in time because going through a major capital raise, especially when you're going through an equity capital raise. We feel it's not -- it's better for us to stay independent for the moment and not try and become shareholders. There are only certain windows when one can become -- a director can become a shareholder. And so what we've done is we've -- park is probably a strong word, but we've -- that is an agenda item that once we get the capital raise, once we get the refinancing the capital raise out of the way, then we're going to sit down and as a project, so how do we address the question that you're not the first person has asked that question, how do we align shareholders and Board and management. And it's not just Board, it actually -- the more alignment -- I come from private equity. So I've seen the benefits of an ownership mentality in the people, in the business and in the team and in the management. It's very powerful. So I have an innate tendency towards equity ownership or at least some form of similar type of remuneration for Board management team. It's just -- it's not something that we felt was appropriate pre-equity capital raise while we're issuing shares. So it's a project that we're going to address once the balance sheet is fixed.

I thought it was interesting. And I raised the question because I looked at the original Board charter, which I think was probably put up, it was online. I looked at it about a month ago, and I see it's disappeared now and being replaced with another document. The document that's in place now has no -- the original document made a comment about director shareholding and a preference for shareholders and for directors to be shareholders with a new document makes no mention of it. So that's why I raised the question.

Okay. I'll [indiscernible] that's an oversight on my part. I didn't make sure that, that didn't carry on. And again, that's not something -- that's just inadvertent leave out. I think it is something that we are focused on. It's just not today.

Yes. I've got a couple of questions, if you don't mind. Other question is [indiscernible] on the room and that directors' fees. I'm assuming that we're still operating under the fees that were put up by John Golder back in 2016, which was the subject of a pretty scathing report by the late Brian Gayner. But interestingly, there's been no mention of directors' fees. And I just wonder whether there is anything formal in place?

In terms of reductions? Is that the...

No, I'm not asking for reductions. All I'm interested to know is what the quantum is. Look, let me be very clear. I'm not here to suggest that the directors need to take a cut like the auditors have. I'm suggesting that shareholders need to ratify directors' fees and all fairness to shareholders, there needs to be a number on the table.

So I don't know what our directors' fee cap is.

[indiscernible] 8 directors at the time. Now I can't see 8 around the top table.

Look, I can't comment on how many directors it was assuming. I mean I can assure -- I can guarantee you we're nowhere near the $610,000 a year.

Sure, it's going to be subject of the discussion at some stage. I would suggest and for the fairness of the directors, a figure need to be on the table, perhaps for the next annual general meeting.

Good. That's good. We'll note that down, and that is the appropriate time to bring it back up again at the next AGM.

Yes. So it is disclosed. I mean the Chair gets $160,000 per annum with no committee fees and the nonexecs receive $80,000 per annum and the Chair of the Audit and Risk receives an extra $20,000 and other members of committees receive an extra $5,000. Now the Audit and Risk Julia has waived their $20,000 extra and Pramod and I don't get any extra for extra committee. So the quantum in total on a per annum basis is $160,000, $80,000, $80,000, $80,000 for director fees.

So you're saying to me that the $621,000 is now off the table?

Well, we're not going to be spending that.

No, but I think you need to give some clarity around it. The fact that I've gone searching for it and can't find a quantum to bring it suggests that -- and I'm not saying I'm an expert, but I do know that 1 and 1 make 2.

No, no, no. Point taken. Point taken.

I'm unsure still as to the capital raising and the willingness of major shareholders to participate. And I -- we all understand that the $10 million to $15 million that you're looking to bring into the company is pretty crucial. Without it, it's not a happy price. And we don't want that to continue. And I do agree with the previous question, is $10 million to $15 million enough. Look, I've got a bit of a background in the property business as well, and I know how tough things are out there. And while you can look at what the economists are saying, read all the stats that you like, there's a lot of blood on the floor and there's going to be a lot of blood on the floor for the next 12 to 18 months. It's not going to be easy. And I just don't want you -- I'd rather you overcook the situation now than undercooked it.

Look, I take on board your point. I have sympathy with the view. But there's also -- there are also a number of shareholders that have communicated that a capital raise is hard for them right now as well. And so -- this is one of those ones where there are a plethora of people who are unhappy with $10 million to $15 million, and there will be a plethora who would be unhappy with $20 million to $25 million. And so it's just a balance. We had to strike. And -- we air towards prudence. You've got a pretty risk-averse board. And we think $10 million to $15 million is actually the right number. It's probably going to be more like $15 million. So just the current thinking at the moment is it's more like $15 million than $10 million. So just to flesh out the answer to you. It's more likely to be a $15 million than a count for $10 million.

Last question. I was a little bit confused with the stated policy of closing branches down on one hand. And then on the next breath saying, the branch network is a real benefit to us. And I think one of the branches you've closed down, I think, is in [indiscernible] that part of the country, which has probably got the fastest growing housing and industrial commercial market at the moment.

Yes. So the probably maybe terminology problem from my part. So we closed a plant, but we've got a branch there. So we closed the [indiscernible] plant. So we used to produce glass there. And -- but we were holding the cost of a big factory warehouse. We've moved the gear out. We've now moved into a smaller branch where we can still have our trucks and our people and customers can come, but I agree. But yes, we've closed 2 plants, but we're not closing branches, if that makes sense. Branches where we sell from, plants where we produce from.

So the manufacturing is coming back to Auckland?

Correct. Yes. That's correct.

Thank you. Should we hit some of the online questions?

Well, quite a few. I'm going to put some to you. First one is a same question again, Barry Lindsay, just asking about directors owning shares. With all of what we've got going on was 100% clear, like we had no trading window. I'd certainly bought some shares that I could have and we couldn't. Next question, what is MPG's current market share in DGU in New Zealand? I'd say late 30s, 40%, maybe. Next question, your -- yes. It's a question around material uncertainty almost identical questions. I think that's been answered. MPG have turned down an offer for the Australian business, and this is from George. It won't be my son, George, turned down an offer for the Australian business and spent resource assessing the offer and presumably, value of the Australian business, given the rejection of the offer, what is the value of an offer that wouldn't be rejected? I was going to say. I mean, I think that the -- there's another question about how much we -- what the offer was as well. But to sell the Australian business, you have to know what the value of the business you're keeping is. And when Metro in New Zealand is not performing well. I mean how much debt would you want in New Zealand? $10 million, $5 million, $20 million and unless you've got that answer, you can't really say regardless of whether you get a fair price for Australia, whether you should sell it or not. And -- but we know we're going to get growth in Australia. So -- and we're at the bottom of the cycle. So look, I don't know if there was the right price, probably, no.

No. I think -- look, it's -- I find it dangerous to engage in hypotheticals in these kind of situations, because you can kind of draw your own view, but then that snacks in the reality of the world and what people actually want to pay. The -- so yes, I don't have a price that I think we would sell because we were engaged, you're going to engage a lot of work to try and do that. But because strategically, it just doesn't make sense for the reasons we outlined. So -- and as far as the actual value that the last kind of offer from the previous buyers, we have a very tight -- they have a very tight confidentiality agreement with us and we're still negotiating. The number was fluid. It was moving around. There was no one particular number where we decided. It just -- it wasn't -- again, as a strategic hold, the number would have had to have been almost in the silly kind of category for us to say, we think it's a good idea to sell it. I know that's different from the previous Board's view, which was to sell AGG. This is just -- this is a -- we just have a different view. Time will tell.

This is an easy one. I might give it to you, Shawn. There was an offer on the table for the company from Vulcan Steel Founder, Peter Wells and veteran investor Peter Masfen for approximately $0.18 per share, and that offer was emphatically rejected. Now you give away 27.8 million new ordinary shares in Metro at $0.07 per share, massively diluting existing shareholders. So we rejected an offer of $0.18 and now sell 13% of the company for $1.9 million. You don't even consult shareholders. Can you explain the brilliant logic of these actions from Kevin Summers.

Kevin. That's brilliant. Look, very convoluted series of events. So I'll give you that. Look, I wasn't on the Board at the time, it was a completely different -- almost completely different Board that received the indications of interest at $0.18 a share. Look, with hindsight, sure, it looks foolish to have rejected it. However, I'm not going to say, I wasn't there at the time. I didn't have the information available at the time to make the decision. I don't know what that information was to make that decision. And so I'm not going to criticize it. Sure. I'll obviously observe that with hindsight, it looks silly. So unfortunately, that's the past Board's decision, and you'd have to ask them as to why it was rejected. I'm sure that they had good reason to have rejected it. But again, I don't know -- and I'm not going to judge it by hindsight. I think that's a mug's game myself. The placement of $0.07 is reflective of the current situation and the current environment that the company is in. Things have changed since July of 2023. And so I think $0.07 a share for a placement in the current situation, I think Cowes Bay representatives are probably listening. And so forgive me, but I think that's a pretty good price they're paying actually.

With regard to Cowes, it would be useful to know this is from George again, George Bennett. With regard to Cowes -- it's not George Bennett. With regard to Cowes, it would be useful to know the covenants is because they have shown an interest in equity investment, they potentially would have greater interest to trigger covenant breach and receivership.

So as an equity investor, they're putting cold hard money into the equity. So they won't be interested in triggering a receivership, because they just be burning the amount of money they put into the placement and into the rights issue. So -- and I don't know, it seems like there's a common kind of urban legend out there that bankers or people can do loan-to-own type company in receivership and then buy it out cheaply themselves. The -- A, that's not the way Cowes Bay operate, and that's not -- they're an investor in going concern businesses. They're not a vulture. And secondly, that's not actually how the legal world and how insolvency works. So this is very much they're lending the business money as part of a total investment package that they're making in the business, which includes equity. So I think if they wanted to -- if they were of the kind of people who wanted to try and go into colloquially known as loan to own. They wouldn't have put their hands up for any of that -- certainly not a few million dollars worth of equity that would be just -- that's illogical. So a whole lot of reasons. That's not the situation. It won't be covenant based. So it won't be a covenant-based structure. I can't go any further. So I've -- I can't really go any further because it is, as I say, confidential between us and Cowes Bay, but it's not going to be a quarterly covenant like normal bank lending. We won't have that feature to it. Does that answer your question?

A couple of quick ones for me, probably, one, did Cowes Bay approach Metro vice versa and Cowes Bay approached us. Probably more of an observation, but from somebody, I've been a shareholder sometime for some years now, MPG's costing us money. I hope you turn things around. My comment is more an observation than a question. But before the company can begin to claim excellence, it must get it's -- the quality of it's product up scratch. I've upgraded my home to low E-Max, double glazing and quite frankly, the quality is awful. And I've hit at other people who have had the same. We've got your name, Neil, and we will follow up on that. But I don't really talk about it, but it is quality and service that I'm talking about improving on and then the team's focused on both that. We want a lower remake percentage internally and externally lower reworks. And the stuff happening already. We have the plants in [indiscernible] that lighting has been upgraded from like 160 to 500. So the visible scratch is much easier to see, but they are certainly in our remit as well as on time but high quality. This one's for me also because of my comment on the nodding that says if the major shareholders are nodding them, why have Peter Masfen and Wells from Vulcan just sold approximately half of the holdings each. I wonder who has purchased -- just purchased approximately 25% of the company was at Cowes Bay Group who purchased their shares rhetorical question. And if it was them, are they making a play for the company? I read the announcement for the last few days. So I can clarify that. What was posted on NZX yesterday was that Masfen and Wells had broken their association agreement. So -- because they were associated for the takeover offer, then both sets of shares were countered together. So 10 and 15. So jointly, they had 25. Now they are not associated . So they are just separately 10 and 15. And so that's not the case. My read on why they've done that possibly? And with the cap raise coming, maybe they think that it's -- if they want to increase, they couldn't do that if they're associated because they're above 20, I may be wrong. But I don't think there's anything untowards on that and certainly almost sold. Maybe last one, Shawn, easy one, $15 million cap raise. Does this include over subscriptions?

Yes. So the capital raise, we'll raise it before cost will raise $17 million, because of the placement of the $2 million placement to Cowes Bay is on top of the $15 million, sorry. So it's -- any final questions?

So let's say this company has going concern issue. So if -- I don't know anything about this company, because I haven't gone through the annual report. So if everything turns out right, then what should be the peer that you are targeting in the industry? Is there any company in the industry which is doing good that you would like to be that type?

There probably is. But to be honest, I haven't -- I've been so focused on sorting this out, I haven't really paid attention to other companies. So no, I don't know, is there any peers that we would emulate to try and -- that are listed that we would say, hey, that's what we are trying to emulate.

But nothing new to us.

I mean even in building blocks now.

It's very hard to compare one building or construction company to a glass business. So -- and there isn't any other list of glass company in Australasia, I believe. So it's very hard to make a comparison.

So let's say, this is a New Zealand and Australia-based company, the majority of revenues are coming from that. Suppose there is any big trouble in the U.S. and China, will this company get impacted by any way on the revenue side or expense side?

Geopolitical stuff. Yes. Well, I mean we're seeing it at the moment. I mean, probably just for shipping, Red Sea is difficult. But we think that our glass coming out of India, Indonesia, we think it's -- we think that's a reasonably resilient supply chain actually.

And there's nothing else that we are pretty much an Australasian business that's contained inside Australasia.

There's still a float glass plant in Australia, which we source from and the AGG business. But there's been a bunch written about that. It's probably likely to close down in the next few years that won't worry us particularly because we will just import. So no, I don't think so. But Trump, who knows what happens with Trump. Terrific guy.

No, that's perfect. I love landing on Trump. It's brilliant. Okay. Are there any final questions? Okay. Thank you again for your patience. And again, like I said, letting us talk a lot. So in conclusion, hopefully, you'll agree that Metro's journey of redemption has begun at least. And it seems -- feels like it's off to a pretty strong start. There's a ton of work to do, like a ton of work to do. And there's still a lot of risk floating around. We think we've got our eyes on all the risks, and we're on top of them. But it's a funny old world. So we're always prepared for anything that kind of hit us out of the blue as well. But it's not actually rocket science. So I think improving the New Zealand business is just a lot of basics. And yes, hopefully, you'll also see that you've got a committed and capable team of people actually executing on everything that we're doing. So thanks for your support in our short -- in some of our short time so far, and we look forward to transforming Metro into desirable list of investment. And last thought is I always take an opportunity to just thank our people. And Nick, if you're watching or anyone else that's watching online and the team here hopefully, if you take nothing else away from this that the people in our business were important for sure, but the people in our business are going to be the ones that deliver shareholder returns. And we're here just to kind of make the focus happen. But the commitment that you're seeing -- that you see here, hopefully, you see some of is definitely shared in the team and the people below the Board. So I think, a, thanks and b, where we, as directors and as shareholders are lucky that we have the people we do have. Because as I said, this is a hard one. but it's got the right people. And to me, that's 80% of the game. So I think all that I'm left to do is to thank you again for joining us and to close the meeting, and I believe we'll -- yes, we'll be collecting those. I believe on your way out, I see there's a ballot box there. And I think there's some tea and bickies in some form outside. So thank you again, everyone.