Mirvac Group (MGR) Earnings Call Transcript & Summary

Thanks, Susan. That's a great opening video. Good morning, everyone, and welcome to our Annual General Meeting of Mirvac Limited and the General Meeting of the Mirvac Property Trust, which will be referred to today as the meetings. It's just after 11:00 a.m., and as we have a quorum, I declare the meetings open. My name is John Mulcahy, and I'm the Chairman of the Board of Directors of Mirvac. I would like to begin by acknowledging the Gadigal people, who are the traditional custodians of the land on which we are located here in Sydney today and pay my respects to elders past and present. There are a few matters of procedure that I need to mention. In light of the COVID pandemic and federal and state government health advice and guidelines, we determined that the safest way to hold this year's AGM is as a virtual meeting. While securityholders cannot attend in person, the benefit of a virtual meeting is that it allows all securityholders, regardless of where they live, to participate. We offered securityholders the option of participating today by telephone. However, on this occasion, we had no one register for this, so the meetings will be concluded solely online. I will explain a little later how the technology will help us conduct the meeting and the procedures that will enable securityholders to participate. We acknowledge this is a little different to the usual meeting experience for some of you, and we do appreciate your support and patience. Mirvac staff, together with the share registry, Link Market Services, and technology providers, have worked and are working to ensure that Mirvac provides you with a seamless virtual experience. On your device, you will see a split screen which shows the video stream of the meetings and the presentation slides. Along with the notice of meetings, we have prepared a virtual meeting guide to this AGM to help you. This guide can be found by clicking on the Downloads button on your screen. If you experience any issues with the technology today, you can call the help number, which is located above the webcast screen. If we do experience a major IT disruption and it is necessary to pause the meetings, we will provide updates via the ASX as to when the meetings will resume. Joining me here in Sydney on my right is Michelle Favelle, the Group Company Secretary; and to my left is Susan Lloyd-Hurwitz, Mirvac's CEO and Managing Director. Joining the meeting today via the telephone due either to travel restrictions or social distancing requirements are: Christine Bartlett; Peter Hawkins; Jane Hewitt; Samantha Mostyn; James Millar; Peter Nash; and Rob Sindel. In addition to Susan, our CEO and Managing Director, members from our executive leadership team are either attending here today in person or are online. Jane Reilly, our lead audit partner from our external auditors, PricewaterhouseCoopers, is also here today and is available to answer any specific questions on the audit. On behalf of the Board and management, I would like to take a moment to acknowledge Jane's efforts. In accordance with our auditor rotation policy, Jane was appointed as the lead audit partner from the 2016 financial year, and she has just completed her final year as the lead audit partner for Mirvac. I would like to thank Jane for all her work and support, especially in relation to this year's audit, given the challenges brought on by COVID. Voula Papageorgiou from PricewaterhouseCoopers is replacing Jane as the lead audit partner for financial year '21. Now some guidance on asking questions. Thank you to the securityholders who have submitted questions prior to the meetings. I will answer these questions during discussion time later in the meetings. [Operator Instructions] We do encourage you to please submit questions now to assist us in addressing as many of your questions as possible. [Operator Instructions] When we turn to questions later in the meeting during discussion time, a Mirvac staff member will read out the questions submitted online. It is possible that if we receive a number of questions that are similar, we may answer those questions together. Now this is a meeting for Mirvac securityholders, so questions relating to customer or personal matters will not be put to the meetings. Instead, you will be contacted after the conclusion of the meeting to assist you with your question by one of our staff members. Before we move to the formal matters in the notice of meetings, both Susan Lloyd-Hurwitz and I will address the meetings. It goes without saying that 2020 was an extraordinary year. The summer was characterized by catastrophic bushfires, highlighting the change in climate and its implications for our nation. Then in March, the COVID-19 global pandemic brought our entire society to a standstill. I'm pleased to say our country's efforts to contain the virus have been successful in comparison with most of the rest of the world. There have been some mistakes, and we are by no means out of the woods. But overall, the federal and state governments have, on the whole, protected Australians from the more severe health and economic impacts of the crisis. And I'm proud that Mirvac's response to the pandemic thus far has mirrored the national effort. As a business, we were well prepared. We responded swiftly, thanks to our well-established risk management system. We adapted quickly to the new normal with our embedded flexibility and strong culture, enabling an almost overnight transition to remote working. In the absence of a pandemic playbook, we were guided by our values and our purpose. We acted with our securityholders, people, customers and communities in mind. These decisions stood us in good stead as we navigated the uncertain and changing landscape. Our decisive response and our ability to adapt and maintain productivity despite a global pandemic meant we were able to also maintain our focus on the future. Our ability to capitalize on opportunities, while at the same time navigate the challenges, has advanced our progress towards recovery. So while the virus and its terrible consequences continue to spread throughout the world, we are in the rare and fortunate position to be able to start taking positive steps towards recovery, both at a national level and within our Mirvac business. Maintaining a strong balance sheet and earnings profile was a priority for the Board during the pandemic, and the group took several important steps to provide sufficient capacity to manage the impacts of COVID-19. The Board and executive leadership team elected to take a voluntary 20% reduction in fixed remuneration and fees from the 1st of April to the 30th of June 2020, while most of the rest of the organization also took a 10% decrease in hours. Notwithstanding the strong financial and nonfinancial performance prior to COVID-19, no financial year '20 short-term incentive tool was funded. We reduced operational costs and discretionary spend, and we deferred nonessential capital expenditure. We made the difficult but correct decision to reduce the final dividend for financial year '20 to $0.03 per security. This enabled the group to safeguard cash in the face of ongoing uncertainty. We increased debt facilities by $810 million, with terms of 3 to 4.5 years. The maturity date of some existing facilities were extended for a further 12 months into financial year '22. These actions increased group liquidity to over $1.4 billion, with only $200 million in debt maturities due prior to February 2022. No sector was untouched by the crisis, and the impacts of the pandemic were felt across the group, impacting our financial performance during financial year '20. But thanks to the individual and collective efforts of our CEO and Managing Director, Susan Lloyd-Hurwitz, and the executive leadership team, together with the wider Mirvac family, the group remained resilient and its economic stability was safeguarded. The group's financial year '20 financial metrics are solid despite the highly challenging conditions. They are also a testament to the strong balance sheet, with which we ended the crisis, and the agility and resilience the team showed in responding to it. While statutory profit was down 45% to $558 million, at an operating level, our profit was down just 5% to $602 million, representing $0.1503 per staple security. The group's operating cash flow was $455 million. At 30 June, gearing was 22.8%, which is at the lower end of our 20% to 30% target range. And the weighted average debt maturity was 6.7 years, along with a very diversified and well-spread debt maturity profile. Despite the challenges ahead and yet unknown impacts of the pandemic, it is this robust financial position that gives me confidence Mirvac can recover quickly and continue to deliver for our securityholders. As I've repeatedly said, numbers are important, but at Mirvac, we look beyond financial performance as a true measure of success. Throughout the crisis, I was immensely proud to see individuals and teams across the business embracing our values, putting people first and genuinely being a force for good in the way they responded to the impact of the pandemic. Our people pulled together to collectively and diligently work through a highly complex and rapidly changing environment to deliver on our promises. We cared for each other. We checked in on our teams and other members of our Mirvac family. We also cared for our tenants, our retailers and other partners as they face restrictions and closures. And we cared for our customers and worked to strengthen our communities using our innovation capability to find new ways to provide relief and support. This is the true Mirvac difference and for me, what continues to set Mirvac apart. As we move into financial year '21, we remain focused on getting on with the job in hand. Our people have embraced a new normal, seeing challenges as opportunities to innovate, and setting up systems and processes to enable us to operate more effectively in a COVID-19 environment. During the first quarter, we took a number of important steps to ensure our business remains well placed to respond to our customers' changing needs and to continue to generate value for our securityholders. This included the creation of a new commercial property division, consolidating the award-winning capabilities of our office, industrial, retail and build-to-rent teams, to be led by Campbell Hanan as Head of Commercial Property. We have also created a dedicated commercial and mixed-use development team under the leadership of Simon Healey as General Manager and mixed-use development within the portfolio of Brett Draffen as Chief Investment Officer. These structural changes will enable us to enhance our already considerable mixed-use development capability and continue to cater to the challenging -- changing lifestyles of our customers and communities, while unlocking synergies and efficiencies across our operations. These structural changes did coincide with the departure of Susan MacDonald, our Head of Retail; and Shane Gannon, our Chief Financial Officer, who will be leaving Mirvac in the coming months. Susan and Shane have been with Mirvac for 10 and 7 years, respectively. They have been instrumental to our success in transforming Mirvac into the urban powerhouse it is today. We are immensely grateful for their contributions, particularly in refining Mirvac's strategy and position to set us up for the next exciting phase of our journey. Both Susan and Shane will be deeply missed by the whole Mirvac team, and we wish them all the best in their future endeavors. A recruitment process for a new CFO is well underway, and we expect to make an announcement by the end of the year. In September, we welcomed a new Board member, Rob Sindel. And in line with our Board renewal process, this year, Peter Hawkins will retire from the Mirvac Board and relevant committees. Peter has made a significant contribution to the Board and in particular, as Chair of the Human Resources Committee. He joined the Board in January 2006 and became the Chair of the Human Resources Committee in April of the same year. He has been a strong advocate for good governance, including improving our understanding of our investors' perspective around our remuneration framework. Peter's energy, dedication and commitment to Mirvac has been invaluable and has helped steer the group to the successful position it holds today. It has been a personal pleasure working with Peter, and on behalf of the Board and management of Mirvac, I thank Peter for his support to Mirvac over the years. We wish him all the very best in his future endeavors. As you would have seen, we have 5 resolutions that the Board is asking you to consider today. The most discussed resolution involves proposed amendments to the MPT constitution. These changes update the language of the constitution, remove outdated provisions and update it to reflect proposed changes in tax law and align with current market practices. There is one change that is described in the explanatory notes that I wish to highlight, dealing with the distribution provided by Mirvac. I would urge you to read those notes. But in summary, under the existing constitution, the distribution for MPT is taxable income or net operating income or any amount between those 2 amounts. Proposed changes by federal government to capital gains tax laws that are detailed in the explanatory notes mean it may be problematic to pay the intended distribution amount to shareholders. Under the proposed constitutional amendments, the distributable amount will simply be determined by the Board, with the continued requirement to act in the best interest of securityholders. Crucially, and I want to especially highlight this, this change does not change our group distribution policy, which remains at up to 80% of group operating earnings. The Board and I fully support these changes. On behalf of the Board, I would like to close by thanking all of our employees for their continued hard work and valued contributions. It is impossible to predict the length, nature and effects of the ongoing pandemic, but we are well placed as a business and indeed as a nation to learn from this experience and to capitalize on the opportunities that emerge from it. I have seen that Mirvac is working together towards a new normal. My thanks go to our CEO and Managing Director, Susan Lloyd-Hurwitz, and the executive leadership team. We have created a company driven by purpose, with the values and flexibility to enable our people to adapt to a new normal and continue to thrive. To my fellow Board members, for their care, commitment and clear thinking, and to you, our securityholders, for your continued support, thank you. I will now ask our CEO and Managing Director, Susan Lloyd-Hurwitz, to address the meetings. Thank you, Susan.

Thank you, John. Good morning, everyone, and thank you for joining us today. I too would like to acknowledge the Gadigal people of the Eora nation and pay my respects to elders past and present. FY '20 was a year of 2 halves. The first half saw business as usual. Our transformational urban strategy and diversified model as well as our reputation for quality and operational excellence continued to generate strong returns for the group. From the third quarter, the world as we knew it, changed. The outbreak of COVID-19 caused a severe health threat and economic shock to the world. Nowhere has this been more apparent in Australia than in Victoria. Our Victorian friends and colleagues have faced immense challenges over the past 8 months, and I want to take a moment to extend my personal gratitude for how they have endured. Their extended lockdown was one of the strictest we have seen anywhere in the world, and I know firsthand, through working with our Melbourne team, the great personal sacrifices they have made to help bring this virus under control. I am in awe of the strength and resilience shown by the Melbourne team throughout this period. This slide shows one of the best examples of what our Melbourne team was able to achieve despite the restrictions and safety measures in place. Olderfleet is a 58,000 square meter state-of-the-art office tower and new Victorian headquarters for Deloitte. The completion of this innovative and sustainable building in the midst of the pandemic is testament to the incredible commitment and ingenuity of the delivery team and our partners. So on behalf of the Board and the ELT, I want to thank our Melbourne employees for your positivity, productivity, unwavering sense of community and continued focus on delivering for our customers. 8 months on, it seems that Australia has been relatively successful in containing the more severe health impacts of the pandemic and is looking to -- forward towards economic recovery. And while Victoria was the most severely impacted by the crisis, it was by no means the only place we saw the Mirvac team respond with strength and resilience. Another team thoroughly deserving of a special mention is our HSE team. They've worked incredibly hard throughout the year to put safety and hygiene measures in place across our offices, industrial assets, construction sites, sales suites and retail centers, helping them to remain operational wherever possible. They responded quickly to changes in guidelines and have been at the forefront of defining best practice in the creation and management of COVID-safe environments, protecting our people, tenants and customers. Strength, resilience and commitment to our purpose, Reimagine Urban Life, have helped us to deliver on our promises this year. We have continued to shape the future of Australia's cities and urban areas with the completion of 6 new flagship urban assets despite the highly challenging operating environment. At the same time as navigating the pandemic, we continued to capture opportunities and generate value through our unique asset creation capability, helping to build towards recovery. Our office business now holds approximately $7.3 billion in assets under management, and we continued to enhance its quality during the financial year. We delivered 2 landmark workplace precincts: The Foundry at South Eveleigh, Sydney; and Olderfleet, 477 Collins Street, Melbourne, new headquarters for the Commonwealth Bank of Australia and Deloitte, respectively. These buildings were completed safely due to strict health and safety measures in place on our construction sites. We were also very proud to receive yet another award for EY Centre, 200 George Street. 200 George was completed in 2015 and has since won over 20 awards. This year, the building was named as Best Sustainable Development for an Existing Building by the Property Council at its 2020 Innovation and Excellence Awards, having won the best sustainable development for a new building in 2019. Going into the pandemic, the quality of our portfolio stood us in good stead. It's well positioned for resilience, with low CapEx, limited vacancy, minimal exposure to small tenants, long WALE and a low level of lease expiry in FY '21. And with this, we are well positioned to weather the pandemic. This has been evident in our rent collection rate throughout the pandemic, which reached 93% for the office portfolio during the first quarter of FY '21. We provide assistance where and when it is needed and remain committed to creating safe and productive working environments for our customers. The pandemic has undeniably impacted the future of the office, with more people working from home than ever before. But while the pandemic has shown us that remote working can be productive, it's also underlying the importance of the physical office for coming together to learn, to collaborate and to develop Mirvac's culture. Steadily, more and more people are returning into the workplace, and we have been listening intently to what our customers are saying about how their workspaces need to support their business strategy into the future. As an asset creator and long-term owner, we believe we're in a unique position to continue to co-create next-generation office buildings that support the changing needs of a post-COVID-19 workforce. We've got a very significant pipeline of future projects under control in Sydney, Melbourne and Brisbane, which we are progressing. As one of the few beneficiaries of the pandemic, e-commerce and online retail sales continued to drive demand for world-class fulfillment and distribution facilities. We can respond to this demand with our $1.2 billion industrial development pipeline focused on Sydney. Our industrial portfolio has remained resilient, with a rent collection rate of 95% for the first quarter of FY '21. As a result of years of strong advocacy and partnership with government, the team secured development approval for our future industrial estate at Auburn, Sydney. And we also achieved the rezoning of our Kemps Creek and Badgerys Creek sites, which were both fast-tracked in the New South Wales' Planning System Acceleration Program. Our retail centers are supported by solid market fundamentals in their locations, dense populations with low unemployment, high incomes and strong population growth. During the first half of FY '20, we made significant headway in tailoring the offering at our centers towards progressive digitally enabled retailers as well as more resilient and experiential categories. We delivered new dining precincts at Toombul, Brisbane and Moonee Ponds Central, Melbourne. However, traditional retail was among the sectors hardest hit by the pandemic. As a result of the restrictions in place over the last 8 months, our retail portfolio saw a sharp reduction in both foot traffic and sales performance. The focus of our team shifted to supporting our retail partners and creating COVID-safe environments in our retail centers as they reopened. Our award-winning in-house innovation capability was evident in the range of innovative ways our retail team found to support vulnerable community members and those hardest hit by the impacts of COVID-19. Encouragingly, there's strong evidence that where there is confidence the virus is contained, retailers reopen and shoppers do return to centers in increasing numbers. At the end of the first quarter of FY '21, 93% of our retail partners had reopened, with an average rent collection rate of 64% for the quarter. We've remained focused on progressing our build-to-rent offering. In September, we opened our first building designed and delivered exclusively for renters, LIV Indigo at Sydney Olympic Park. It's seen strong demand since launch, with over 30% of the 315 apartments now leased. Customer feedback has been extremely positive, valuing the offering which includes paying no bond, painting your wall, hanging a picture on it, bringing your pet, on-site maintenance, community curation and security of tenure. One customer wrote in an online review, "If you have experienced the pain of renting, this place will amaze and delight you. This is renting like no other place." We have 3 additional build-to-rent projects in planning stages in Melbourne, 1 in Brisbane, where we have been selected by the Queensland government to take part in its build-to-rent pilot program. LIV Newstead in Brisbane will deliver a new housing model, which will see the government subsidize affordable rental apartments in order to improve housing diversity in the state. We're confident that these pioneering projects will showcase the significant benefits of the build-to-rent model for customers, government and investors. It also demonstrates the opportunity to address affordable housing. In our Residential business, we continue to build on our legacy of creating sustainable, connected urban environments. The Eastbourne in Melbourne, St. Leonards Square, Verde at Pavilions and Marrick & Co, each in Sydney, were all delivered during FY '20. As the landscape became more challenging following the outbreak of the pandemic, the team focused on maintaining construction momentum while maintaining safety measures. They continued to deliver for our customers with private appointments and virtual tours. Demonstrating the team's agility and exceptional level of customer service, our Residential team settled 2,563 lots in FY '20, including a record 1,130 apartments. This momentum has continued into FY '21, with 483 lot settlements and over 660 exchanges during the first quarter. We progressed restocking our Residential pipeline, with new sites at Riverlands, the Western Sydney University Campus, Artarmon Road and Waterloo Metro Quarter, all in Sydney, and Wantirna South in Melbourne. We secured development approval for 505 George Street and rezoning approval for 55 Coonara Avenue, both in Sydney. In Brisbane, we commenced construction at Tulloch Green, the second stage of Ascot Green, and secured development approval for the next stage of the transformative Waterfront Newstead community. In Perth, we celebrated topping out at the final stage of Compass Latitude Leighton Beach and launched the affordability experiment, demonstrating our commitment to addressing the issue of housing affordability and sustainability. I'm also pleased to report that we've made excellent progress on Mirvac Next, our program designed to transform the way we work, and enhance the group's digital capability. Our Chief Digital Officer, William Payne, joined us just before the pandemic struck. And together with his leadership team, he's already begun to deliver a range of digital platforms, processes and products such as Yardi and Anaplan, which will see us work more closely with customers in a more fluid, digital-centric world. Mirvac Next will reimagine the way we work as Mirvac and impact almost every part of the business. The pandemic has clearly had a devastating impact on the world. But as Australia builds towards recovery, there are several lessons we've learned as a company that I believe will make Mirvac stronger. First, we learned the true power of innovation. The pandemic presented challenges for our customers and communities. But as always, our people saw these challenges as opportunities to deploy our innovation capability to help those in need. Mirvac was recently named the Most Innovative Company in the Property, Construction and Transport sectors by AFR Boss for the second year running. Fast Company's Most Innovative Companies List 2020 ranked Mirvac the seventh most innovative urban development and real estate company in the world. And our urban farm concept, Cultivate, took out the Best Project Innovation category at the 2020 PCA Innovation and Excellence Awards. This award-winning capability is now embedded across our business and enables us to stay ahead of emerging trends and drive change in a way that provides solutions for our customers and communities. While we're on the topic of awards, Mirvac has received no fewer than 22 industry awards across the business in 2020 to date. You can see some of the highlights on this slide. I won't go through them all, but there is one that really stood out for me. Designed and constructed by Mirvac, Harcrest in Victoria was named Best Masterplanned Community by the PCA in its 2020 awards. Complete with 6.5 hectares of public space, including parks, wetlands, playgrounds, community gardens, an orchard, lake and its own shopping center, Harcrest is today a thriving neighborhood catering to the needs of its own residents and those of surrounding suburbs. The success at Harcrest shows the benefits of prioritizing amenity when developing strong, sustainable communities. It not only leaves a positive legacy for future generations, but also creates a blueprint for other masterplanned communities to follow. The second lesson from the pandemic, we saw governments working together with the industry in a way that's never happened before. We welcomed the opportunity to work closely with politicians and policymakers at all levels, striving together to limit the spread of the virus and the damage to the economy. I'm really encouraged by this partnership approach and optimistic it will continue to everyone's benefit. And the third lesson, the events of this year have left me optimistic, that if we can take collective action to contain the spread of the virus, we're also capable of changing our behavior to reduce the impacts of climate change. 2019 was Australia's hottest year-end record, and the recent bushfires demonstrated the devastating effects climate change can bring. Responding to the impacts of climate change remains an important focus for us, and we continue to take strong and decisive action to reduce our impact on the planet. We signed a new energy agreement to supply the majority of Mirvac's office and retail centers in New South Wales, ACT and Victoria, with 100% renewable electricity, that reduced our carbon footprint by 60% as at the 1st of January this year. And this is going to reduce even further as we continue to work with energy suppliers on similar agreements in Queensland and Western Australia. We also became the first Australian property group to join RE100, an international group of companies committed to 100% renewable power, demonstrating our intent to continue to reduce our emissions. And we announced our plan to send zero waste to landfill by 2030, under which we set near-term targets to halve our development waste and purchase more recycled content. Of course, our sustainability strategy, This Changes Everything, looks beyond climate change and natural resources to include a range of social sustainability targets. Finding ways to build strong bonds in our communities and promote social inclusion are important areas of focus for the whole Mirvac team. We're delighted to have delivered over $9 million worth of community investment in FY '20 and plan to direct $100 million to social procurement, leveraging our considerable purchasing power. We'll continue to dedicate time and resources to play our part in minimizing our environmental footprint as well as making a positive contribution to our communities. While this year's extraordinary events have shaken the world, they have also proven the resilience of our business, the strength of our culture and the commitment of our team to make a positive difference in people's lives. On behalf of our executive leadership, I would like to extend my gratitude to the Board for their expertise and guidance, and to everyone in the wider Mirvac team for their passion and energy. And thank you also to our securityholders for your ongoing support. Thank you, and I'll hand back to John.

Thank you, Susan, for that comprehensive report on the year and Mirvac's outlook. I'll now commence the formal business of the meetings. A copy of the notice of meetings has been distributed, and I will take it as read. I would now like to explain the order of this part of the meetings. Firstly, I will explain the voting procedure. I will then open the poll on all resolutions at the same time. This gives you the choice to cast your votes at any time throughout the meeting. Secondly, I will describe each of the resolutions being put forward today and the reasons for seeking the approvals. We will then consider the questions from you, our securityholders, in relation to all the resolutions. Once that has been concluded, I will ask you to cast your votes, if you haven't already done so, and bring the meetings to a close. All resolutions to be considered at the meetings will be decided by poll. Securityholders and proxyholders can vote on the resolutions by selecting -- getting a voting card button at the bottom of your screen. Once you have registered, your voting card will appear with all of the resolutions to be voted on at today's meeting. Please click the For, Against or Abstain button next to each resolution in your electronic voting card and then click Submit Vote. For assistance with voting online, please check the virtual meeting guide or call the number on the top of your screen. For proxyholders, if your proxy appointment does not direct you on how to vote on any item of business, you may cast any open votes you have available. Instructions given to you by the securityholder will automatically be cast as directed when the votes are counted after the meetings. Polls will remain open for all resolutions until the conclusion of today's meetings. As the Chairman of the meetings, any proxies given to me in relation to any items of business will be voted in favor of each resolution, unless specifically directed otherwise. The number of valid direct votes as well as the proxy votes received prior to today's meetings will be displayed on your screen for each resolution after discussion time later in the meetings and before I close the polls on the resolutions. As counting of the votes will occur after the close of the meetings today, the results for each resolution will be declared and released to the ASX later today and published on our website. That covers the procedure for voting on each resolution. So I will now move on to the formal business of today's meetings. The items of business to be considered today are now displayed on your screen. Link Market Services has agreed to act as returning officer to conduct the poll and count the votes. I'll now open the polls on resolutions requiring a vote and cast all proxies that I hold as Chairman. You may now cast your vote on any or all of the resolutions, or you may wait until after the open discussion later in the meetings to cast your vote. If you do wish to leave the meeting early, please ensure you have submitted your votes. The first item of business is the receipt and consideration of the financial report, directors' report and auditor's report for Mirvac Limited and its consolidated entities for the year ended 30 June 2020. These reports were contained in the Mirvac Group 2020 Annual Report, which was released in August and is available on Mirvac's website. Hard copies were sent to those securityholders that specifically requested them. I'll just show you the hard copy of the annual report. I will take these reports as read and now formally table the financial report, the directors' report and the auditor's report for Mirvac Limited and its consolidated entities for the year ended 30 June 2020. While there is no resolution for this item, securityholders and proxyholders are welcome to ask questions on these reports to management and Mirvac's operations generally as well as on the audit. I now invite questions on this item. Questions will be read aloud during the open discussion time later in the meetings. Item 2 contains 2 separate resolutions for the reelection of 2 directors and 1 separate resolution for the election of a director. And we will hear from those directors shortly. Moving straight into that area, we move to item 2.1, which is for the reelection of Christine Bartlett as a director of Mirvac Limited. The resolution for this item 2.1 is shown on your screen. Christine was appointed a Non-Executive Director of Mirvac in December 2014 and is a member of the Audit, Risk and Compliance Committee and the Human Resources Committee. She is an experienced Chief Executive Officer and senior executive, with extensive line management experience gained through roles with IBM, Jones Lang LaSalle and National Australia Bank Limited. Her executive career has included Australian, regional and global responsibilities based in Australia, the U.S.A. and Japan. Christine brings a commercial perspective, especially in the areas of financial discipline, identifying risk, complex project management, execution of strategy, fostering innovation and taking advantage of new emerging technologies. Christine is currently a director of Reliance Worldwide Corporation Limited and Sigma Healthcare Limited. The Board highly values Christine's experience and contribution to the Board over the last 6 years and unanimously supports her reelection to the Board. Christine will now address the meeting in the next video.

Good morning, everyone. It's been an absolute privilege to serve on the Mirvac Board since November 2014. The reasons I put myself forward for reelection are, firstly, I have to confess, I love property. I first got exposed to commercial property at Jones Lang LaSalle, and it got under my skin and into my blood. There is nothing quite like the satisfaction of seeing a project from concept to reality, especially when they're Mirvac projects that make you proud due to their quality, placemaking and leaving a positive legacy for the community. Secondly, in Mirvac, under Sue's leadership, I found a company where my personal values align closely to the company's values, whether that is testing our decisions to ensure that we are doing the right thing for our customers, investors, suppliers and employees, where the question is genuine, not just being paid lip service to, or the deep commitment at Mirvac to sustainability through This Changes Everything. The values are embedded into Mirvac's culture and permeate the entire organization. You can almost feel it when you walk in the door. So what do I think I can bring to the Board going forward? I certainly believe I'm a better Mirvac director today than when I first joined the Board. The corporate knowledge I have developed over the last 6 years is invaluable. We have benefited enormously from the experience John Mulcahy, Peter Hawkins and James Millar developed from going through the GFC. The lessons learned from the GFC have been extremely helpful in dealing with the current pandemic. I look forward to bringing my corporate knowledge to future discussions. My executive career was predominantly business-to-business focus, delivering technology, property and financial services. Since 2015, I've been a full-time Non-Exec Director in the listed, unlisted government and not-for-profit sectors. I bring line management, operations, technology and complex project management experience developed as a CEO and executive. There's the old line that the job would be easy if it wasn't for the people. The roles I have had taught me the lessons about bringing your people with you on the journey. As a leader, I have been accountable for developing the strategy, testing it, getting buy-in and implementing along with the associated change management. I believe these experiences are very relevant to Mirvac. Lastly, my experience in governance, risk and occupational health and safety, which are issues that are constantly under discussion around the Board table. Finding ourselves in a global pandemic has made us recognize the value of identifying risks and mitigants well ahead of dealing with them. Risk has been brought to line for me at Mirvac, where death in construction is a real possibility, and we are responsible to ensure the right systems and processes are in place to prevent that from happening. Looking forward, I am excited about Mirvac's future. What differentiates Mirvac for me and gives me confidence in our future is our people, our culture and our ability to create value through quality developments. I have thoroughly enjoyed the last 6 years working with the Mirvac Board and management and look forward, with your support, to continuing. Thank you.

Thanks, Christine. The next item is for the reelection of Samantha Mostyn as a director of Mirvac Limited. The resolution for item 2.2 is shown on your screen. Sam was appointed a Non-Executive Director of Mirvac in March 2015. She is a member of the Human Resources Committee and Nominations Committee. She has significant experience in the Australian corporate sector, both in executive and nonexecutive capacities, in particular, in the areas of human resources, corporate and government affairs, sustainability management and diversity. She has held senior executive positions, including Group Executive Culture and Reputation at IAG, and Global Head of HR and Culture at Cable & Wireless in London. Sam is currently a corporate adviser, Director of Boards of Transurban Holdings Limited, GO Foundation, Sydney Swans, Alberts Group and Chair of an Australian APRA-regulated Citibank Subsidiary Board. She was also appointed as President of the Chief Executive Women this month. The Board values Sam's deep experience and contribution to the Board over the last 5 years and unanimously supports her reelection to the Board. So Sam will now address the meeting in the next video.

Thank you, John, and good morning to everyone joining us this morning. It is with both a sense of responsibility and pride that I offer myself for reelection to the Mirvac Board today. It has been a privilege to serve on your Board since 2015, and I believe I continue to have the right skills and time commitment to offer myself for reelection today. It has been a privilege to serve on your Board, particularly under the leadership of John Mulcahy and to be watching at close hand, the great leadership of Sue Lloyd-Hurwitz and her team. When I joined the Board in 2015, it was part of a plan to further diversify the skills and attributes of the directors of the company under John's leadership. And I believe what I've witnessed alongside my colleagues during that time is the great benefit of a diverse group of people who respectfully engage with each other to ensure that we come up with the best decisions as governors of the company to ensure the long-term sustainability of everything we do. My history has been largely in the corporate world, although I have many other interests and bring a lot of diversity to the role here at Mirvac. But I spent many years as an executive before I joined the ranks of nonexecutive directorships across the country. I have a really strong belief that it is your directors that you turn to, to be stewards of businesses, to be considerate of the governance and long-term issues and to ensure that chief executives and their teams are able to get on and do the job they do with the right support and the right risk management around that. I believe that has been the case here at Mirvac. I think we have the right balance of the governance from the Board, the stewardship from the Board that supports the great focus that Sue has brought to us, to make sure that purpose, values, sustainability, care for our stakeholders and an absolute commitment to authentic leadership, which has defined this company and will continue to define it into the future. Alongside my colleagues on the Board, I believe I bring my own set of skills, but also a deep conviction about what we need to do to ensure the future of this great company for you as shareholders and for the broader stakeholders who rely on us. So with your support, I would like to continue to serve on the Board, bring those skills to bear on this great company and ensure that we continue to meet the expectations of you, our shareholders, our customers, the great people of Mirvac and everyone who actually prospers if Mirvac prospers. Thank you very much for your support this morning.

Thanks, Sam. The next resolution is for the election of Rob Sindel as a director of Mirvac Limited. The resolution for item 2.3 is shown on your screen. Rob was appointed to the Board in September 2020 and is a member of the Human Resources Committee. Rob has 30 years of experience in the construction industry, both in Australia and the United Kingdom as well as experience operating in high-risk industries. Most recently, he had held roles in senior executive management and leadership in the building industry supply chain, manufacturing, sales and marketing and business-to-business environments and strategic management. Rob is currently the Chair of Orora Limited and a Non-Executive Director of Boral Limited. The Board values the contribution that Rob has made to the Board during his short time and unanimously supports his election to the Mirvac Board. So Rob will now address the meeting in his video.

Good morning. I'm delighted to have the opportunity today to present myself for election to the Mirvac Board. Mirvac is a world-class property company, with a proud history, developing and building great places to live and work. Over nearly 50 years, Mirvac has built a brand that our people and our customers are proud to be part of. Since my appointment in September, I've witnessed the dedication and commitment of Mirvac people. Their commitment to quality, drive for innovation and desire to improve the customer experience is evident throughout the organization. Personally, I've had a long executive career in construction and building materials, most recently as the CEO of CSR Limited. My international experience has included sales, manufacturing, supply chain and organizational change. If elected today, I look forward to working with Susan and the Mirvac leadership team as they continue to drive the successful growth of the company. I also look forward to visiting our many sites and projects and meeting the Mirvac team members to develop a deeper understanding of the company and its culture. As a director, I can also promise you my full commitment and independence and will continue to work diligently to create value for shareholders.

Thanks very much, Rob. I'll now invite questions on the reelection and election of directors. Questions will be read aloud during the open discussion time later in the meetings. You may cast your vote on the reelection and election of director resolutions now or you can wait until after the open discussion later in the meetings to cast your vote. I note that all proxy votes applicable to the Chairman of the meetings for the reelection and election of directors vest in the Chairman of the meetings and not with me, and any undirected proxies given to me as Chairman will be voted in favor of these items, unless specifically directed otherwise. The next item is agenda item 3 regarding the adoption of the remuneration report for the year ended 30 June 2020. The resolution is now shown on your screen. The remuneration report is contained within the directors' report in the Mirvac Group 2020 Annual Report, which is available on Mirvac's website. I will take the remuneration report as read. Further details about the resolution were also contained in the explanatory notes that accompanied the notice of meeting. While legislation requires the vote on this item to be advisory only and therefore nonbinding, the Board will take the outcome into account when considering the remuneration policy for executives and nonexecutive directors in the future. The adoption of the remuneration report is unanimously recommended by all members of the Board. I will now invite questions on this item. Again, questions will be read aloud during the open discussion time later in the meetings. I would like to advise that Mirvac will disregard certain votes as stated in the voting exclusion statement relating to this resolution and the resolution for item 4, the next item of the agenda, as set out in the notice of meetings. You may cast your vote on this resolution now or wait until after the open discussion later in the meetings to cast your vote. I now move to agenda item 4, which relates to the approval of the participation by the CEO and Managing Director in the Mirvac Group long-term performance plan. This resolution is being put to securityholders for the purpose of approving the participation by the CEO and Managing Director, Susan Lloyd-Hurwitz, in the group's long-term performance plan. Susan is the only director eligible to participate in the plan. Nonexecutive directors are not eligible to participate. The resolution for item 4 is now shown on your screen. The Board believes that the offer of performance rights under the group's long-term performance plan is an important part of the CEO and Managing Director's overall remuneration package. The performance rights are designed to align the CEO's interest with that of securityholders to provide a long-term incentive to pursue the growth and success of Mirvac that in turn generates value for Mirvac securityholders. The participation of Susan in the long-term performance plan is unanimously recommended by all members of the Board, excluding Susan, who did not vote in respect of her participation in the plan. I now invite questions on this item, and questions will be read aloud during the open discussion time later in the meetings. You may cast your votes on this resolution now or wait until after the open discussion to cast your vote. I now move to the final resolution, which is a special resolution to amend the Mirvac Property Trust constitution. I did outline this item earlier during the meetings. The details on this resolution are contained in the explanatory notes that accompanied the notice of the meetings. So I will therefore take that information as read. I'll hold up a copy of the proposed constitution here in front of me. I table a copy of the proposed constitution in mark-up, which is available under the Downloads button on your screen. The special resolution is shown on your screen. As I mentioned previously, the proposed amendments to the constitution are unanimously recommended by all members of the Board. I now invite questions on this item. Again, questions will be read aloud during the open discussion time later in the meetings. As this item is a special resolution, it will be passed if at least 75% of the votes cast by or on behalf of securityholders entitled to vote on the resolution are in favor of the resolution. You may cast your vote on this special resolution now or wait until after the open discussion. This now brings us to the end of the explanation of the resolutions being put to today's meeting. It is now time to consider questions from you, our securityholders. We have received some questions prior to this meeting that I would like now to address. All of the questions received relating to the business of the meetings concern the timing of the reactivation of the dividend reinvestment plan. As securityholders, you may recall, following the assessment of the group's financial position, the Board suspended the DRP in 2014 until further notice. The Board continues to maintain a watching brief over this matter, and if and when the Board determines that the DRP is to apply for future distributions, it will make an announcement to the ASX at the relevant time. Now are there any online questions or comments in relation to any of the resolutions being put to today's meeting?

Yes, we do have some online questions, which I'll proceed to read for you. The first question is from the Australian Shareholders' Association, Sonja Davie. Sonja's asked, Mirvac has experienced a 43% drop in operating profit. Which business sectors were most affected and how? And what are you currently doing to turn this around?

Hi, Sonja. Thank you very much for your participation today, and you and I have met a number of occasions and I think I've answered most of these questions, but very happy to answer them publicly as well. So look, the COVID period has been a difficult period for all businesses, and all parts of our business have been impacted. I think retail was particularly impacted. And as you point out, we had a 43% drop in statutory profit. But really, that was a function of revaluations in the prior period being very high. We only had a 5% drop in operating profit, and so that -- the business did respond very well to the COVID. You have heard through the presentation that we are very much focused on returning to as normal as possible, very much listening to our customers, and I have to say I'm very confident that the innovation processes and the hard work of Susan, the ELT and the Mirvac team has got us well placed to continue to perform on behalf of our shareholders and unitholders.

Thank you, Chair. Our next question is also from the Australian Shareholders' Association. There has been a drop in remuneration across the board in FY '20, with plans to largely return to normal levels in FY '21. How can you be sure that the recovery is sufficiently sustainable and strong to justify a return to more normal levels of remuneration? What will you do about remuneration if TSR stays negative on an annual basis?