Perpetual Equity Investment Company Limited (PIC.AX) Earnings Call Transcript & Summary

Good morning. Welcome to Perpetual Equity Investment Company's Annual General Meeting for 2024. My name is Nancy Fox, and it's a pleasure to chair the Board of your company and to chair today's meeting. It is 10:00 a.m. in Sydney. And as I have been advised that a quorum is present, I declare this 2024 Annual General Meeting open. We acknowledge the traditional owners of the land we are present on today, the Gadigal people of the Eora Nation as the custodians of the land, recognizing their connection to land, waters and community. We pay our respects to Australia's first peoples and to their elders, past, present and emerging. We would like to extend our respect to and welcome any Aboriginal or Torres Strait Islander peoples who are joining us today. We also acknowledge the traditional owners of the many lands where our attendees are situated today, both here in Australia and overseas. For ease of reference, I will be referring to Perpetual Equity Investment Company Limited as PIC or the company in today's meeting. I'd like to start by welcoming our shareholders, proxy holders and guests. It is great to see you in person, and we are pleased this hybrid format continues to provide an opportunity for more shareholders participate regardless of their geographic location. I'd like to take this opportunity to introduce to you today those who are present with me today. Seated at the main table, I'm joined by Sylvie Dimarco, our Company Secretary; Michael Clarke, an Independent Non-Executive Director; John Edstein, an Independent Non-Executive Director and Chairman of the Nominations and Corporate Governance Committee; Virginia Malley, an Independent Non-Executive Director and Chair of the Audit and Risk Committee; and Amanda Gillespie, our Executive Director. In the room, we also have Karen Trau, who is in charge of PIC's Investor Relations matter and will be the facilitator for the Q&A for the investment manager update. Karen Hopkins from KPMG, who is the company's auditor, is also here. Karen is available to answer any questions that shareholders may have in relation to the financial year 2024 financial statements and the auditor's independence. Before we move on to the formal part of the AGM, on behalf of the Board, I would like to share with you some of my observations on PIC's activities and performance this year. Following that, I will ask PIC's Portfolio Manager, Vince Pezzullo, to deliver the investment manager update. Vince will be joined by Equities Analyst, Sean Roger. I note that the prepared AGM address and presentation has been released to the market. I would like to start by acknowledging our fellow long-standing shareholders and welcome our new shareholders that joined this year. Thank you all for your support in PIC. We understand the values our shareholders place on income and are proud to have delivered the highest full year dividend of $0.08 per year in FY '24. Turning to the performance of the company. In August, we reported a net profit after tax of $28.6 million. Investment portfolio performance for the 12 months to June 30 was 7.7%, with main contributions coming from the second half of the year as we saw a return to market fundamentals and stronger opportunities presented for value investors. Overall, the PIC portfolio underperformed relative to its benchmark. However, it continues to deliver over the long term. And in line with the company's investment objective, the PIC portfolio returned 10.4% per annum over 5 years, outperforming the benchmark by 3.2% per annum. The Board declared a fully franked final dividend of $0.04 per share, which was consistent with the FY '23 final dividend and FY '24 interim dividend. The total dividend for FY '24 of $0.08 per share was the highest full year dividend paid and equates to an annual dividend yield of 6.5% and gross debt dividend yield of 9.3%. This compares favorably to the trailing 12-month dividend yield of the S&P/ASX 300 Accumulation Index, which was 3.7% as at June 30, 2024. Now during the year, the Board had two specific areas of focus, which I will now touch on. Firstly, our continued management of the company's dividend; and also our agreement and partnership with Perpetual Investment Management Limited, who manage the investment portfolio and day-to-day operations of the company. I will refer to them as PIML going forward. Shareholders that have been with us since we listed and when we first declared a dividend in August 2015, would have benefited from a total of $0.538 per share in dividends, which equates to a total of $183.6 million in dividend payments. Since the market volatility led by COVID-19 in 2020 and noting the challenges the external environment may continue to provide, we focused on prudently managing your capital and building a profit reserve that would position the company well to pay dividends over the long term. Our ability to declare a record fully franked interim dividend of $0.04 per share in February this year reinforce our approach, and it's something we are committed to managing. After the payment of the final dividend, the profit reserve for the company sits at $82.5 million, which provides for 2.7 years dividend coverage, assuming a total dividend of $0.08 per share per annum. The company's franking account balance is $12.7 million and provides for 1 year of fully franked dividend coverage. Notably, this does not include any additional franking credits that may be generated during the year. In December, the company will celebrate 10 years since it was first listed on the ASX. This also means the management agreement currently in place with PIML expires. Accordingly, a key focus for the year was assessing our current and future management agreement to ensure the company remains strongly positioned for the years ahead. This included appointing Deloitte to conduct an independent review of PIML's investment process, its operations and alternative investment managers. I'd like to thank our Independent Non-Executive Directors, John, Virginia and Michael for leading this process. When we move to formal voting later on, I will provide an overview of the process we undertook to conclude that it is in the best interest of the company and shareholders to continue to have PIML manage the portfolio and provide corporate management services. On behalf of the Board, I would like to thank Vince and the team at PIML for their management of the portfolio to deliver returns for our shareholders. Together, we believe the company is well positioned for growth and the delivery of a reliable and long-term stream of fully franked dividends. Please stay informed by visiting the company's website for a range of resources and insights. I also encourage you to continue offering valuable feedback through Karen Trau in Investor Relations. Thank you. Before I hand over to Vince and Sean, I advise that we will be taking questions after the investment manager update. On screen, we are -- sorry, on screen now are instructions on how to submit questions online and over the phone. We also have had several preregistered questions submitted. Only shareholders and proxy holders may ask questions relating to the AGM resolutions, and these will be addressed later in the meeting. If you are present in the room and wish to ask a question, please raise your hand as we have several roving microphones around the room, probably one for everybody. A microphone attendant will be with you as soon as possible, and we'll take your name so they can introduce you prior to asking your question. For those of you attending online, if you're a PIC shareholder, you can ask a question or post a comment online regarding the update. To do so, please follow the steps in the Link portal. For audio questions online, click on Ask a Question then go to web phone on the Link portal, and please follow the steps. [Operator Instructions] You can submit a question at any time during the update. It will be addressed at the end. And I'll now hand over to Vince Pezzullo and Sean.

Good morning, everyone. Thank you for attending today. Today, I thought we'd start off with a brief commentary regarding what we see as conditions in the market. The last 24 hours has been quite interesting, so I'll just [ repeat ] my speech from yesterday. And also then I'll invite Sean up to talk about some of the positions in the portfolio which are quite varied, which is I think the reason you buy the PIC is getting quite a bit of idiosyncratic risk. And then I'll cover off on reviewing performance for the last 12 months, and then we'll do questions later. So the last 24 hours has changed a few things. We are -- I hate to call it an economic paradigm shift, but it is. If the policy agenda from the new government in the U.S. does go through, there are going to be substantial changes in the way things typically will work. I might give you a review of that and how it may change markets and how the portfolio, having a good diversified portfolio can get through that. I think initially, when you look at new economic reality is the new administration is talking about oil independence in the U.S. More importantly, the use of tariffs will be used as a trade tool to do business with the U.S. Being independent gives opportunities to the U.S. This whole issue regarding we've had a shift towards ESG issues, EVs, et cetera, I suspect that might recalibrate back to the center again, and there won't be as great a push there. What does that mean? It means less demand for certain minerals potentially. But for that trade-off, you're going to get way more growth. The new administration is pushing for a higher real GDP number in the U.S. of 3%. You can read, there's plenty of material out there. That is significant given it's the largest economy in the world. It will soak up a lot of resources in general. And when you look at the reindustrialization, which hasn't really occurred yet in the U.S., that's, I think, right in the center of where the policy pitch is, is the reindustrialization of the U.S. So more factories will be not built offshore, they'll be built on mainland U.S. to create jobs over there. So how do you position for that as a portfolio manager? Well, you need to be balancing where you're putting your bets and putting our investments. So we've got a pretty large position in BlueScope Steel, which has a significant position in North America with probably the most profitable, most -- the highest returning steel mill in North America. They've been there for over 24 years. We have positions in some other U.S. industrials in exposed to house-building, et cetera, some energy exposure. There might be a benefit of U.S. gas being kept in the U.S. because they're going to try and use natural gas as more of an energy source rather than an export material. That might put pressure externally on oil prices in the rest of the world because we're not independent. So they're going for a system of energy which is self-dependent and known and a low-cost model, which allows them to invest in other industrial assets, petrochemicals, et cetera. So we're going to see this realignment of growth around the world. They're also talking about significant deregulation in the U.S., where if you look at the last several years, we've been living in a world of regulation, regulation of many different industries, putting rules in place to try and direct money into certain industries. And we've seen the cost of that because you've got a higher cost of living in everything at the moment. So that is a form of -- that's what regulation is meant to do is make the cost higher so that you get switching into other industries and other newer technologies. I suspect that's going to revert a bit. So the U.S. is setting itself up to be a low-cost, high-output economy. Now if I compare that to where we are in Australia, we've got a very fragile energy system, as we all know. It's a bit mixed up. We don't know what the ultimate -- what is the lowest cost hydrocarbon we have in Australia at the moment, and the marginal energy input is gas. And we haven't developed enough gas to be able to feed ourselves, so -- because we export quite a bit out of Queensland, et cetera, and Western Australia. So we're actually exposed to the import price of gas, more importantly. So our energy prices are a lot higher, and that's a disadvantage to Australia. We've got a pretty inflexible labor market now, which it's a high-cost labor market. So that gives us -- these are all feeding into inflation. We've got to -- we will have a higher level of persistent inflation in Australia because we do have these rigidities. So you need to have -- that's where the U.S. is going. They're saying we're going to remove these rigidities and allow the market to work on itself, have less government direction and directed investment and have more of the market do the job itself. The other thing in the U.S. will be definitely a deregulation of the banking system, which will be quite interesting in 10 years' time but it's going to be good in the next 5 years because they're trying to get the U.S. banking system to start lending again, which sort of isn't doing for many other -- for many varied reasons. So this deregulation in one market, I think, eventually will bleed into the rest of the world because you're going to have to basically lower your cost, and the easiest way to lower your cost is to deregulate a bit. So what does it mean for where we are in Australia, and this is important for the portfolio positioning, is that we're going to be a high-cost economy with more embedded inflation in it, which means our rates will probably stay a little bit higher for longer. So for the portfolio, we need to be a little bit more exposed internationally, and we'll go through some of the ideas we have, having companies with really good balance sheets because in a high-rate world, yes, your interest cost is going to be materially higher. So having a really good balance sheet now is really important, not just because of the cost of debt, but also taking advantage of any opportunities when there's accidents in the economy. And an ability to reinvest at a high rate of return, so that can at least grow the business. And then we have found some opportunities in the market where we're taking a medium- to longer-term view. Sean will talk about one of those ideas where we think it's like a generational-type idea, which we think will add significant value to the shareholders. And lastly, inflation will be -- it's difficult to say, but one day, it will be different to the next because what you've got is quite a few paradigm shifting at the same time. So it's going to be very difficult to try and pick a direction. That's why having, again, a lot of balance in the portfolio and a spread of investments across multiple sectors and having the international exposure is really important as well because we can invest up to 30-odd percent offshore, and that gives us a lot of flexibility just to protect the portfolio that we're not locked into resources and banks, which is Australia is half the market here. It gives us a lot of economic exposure and industrial exposure you otherwise wouldn't get. Next slide, please. Okay. Just a quick discussion I sort of touched on the economic issues, but some of the ideas in the portfolio where some have worked in particular, IAG and Healius. Healius was a bit of a drag last year, and it hurt the portfolio particularly the first half of last year. But we entered into a more active engagement with the Board of Healius. We had sent a letter to the Board requesting the removal of both the Chair and the CEO and for there to be a strategic review. Now the reason we asked that for Healius is because they've just done a rights issue -- a placement because their balance sheet wasn't in great shape. They're trying to get ahead of it. We could see Healius is a pathology and radiology provider, sorry, I should tell everyone that. And we could see that in 12 months' time, if GP visitation doesn't lift, there's no indexation of Medicare payments, et cetera, the volumes won't improve as fast as they were supposed to. And GP visitation is like at 80% versus pre-COVID levels. So people are not going to see a doctor because of the amount of co-pays that are occurring, et cetera. It's a cost of living issue. So we could see that in 12 months down the road, even if they did equity raising at that time, they could get in trouble again. So our view was to get active and tell them you're going to do a strategic review and we want you to sell the radiology assets because there are multiple bidders for radiology assets. So that letter went -- the Board reacted favorably actually and quite quickly within a week. The Chair actually stood down, they put in a new CEO, and they announced a strategic review a couple of weeks later. Now the benefit of that is about several weeks ago, they announced the outcome of that strategic review where they sold the radiology assets for $960 million. It will be a net $800-odd million in the bank. So they go from a debt position of about $300 million to a net cash position, right, which is great because they're the #2 operator in pathology in Australia, Healius, but they basically barely make any money out of it. They're very inefficient. It's a collection of assets over a long period of time and more targeted focused management, we believe, who's in place now, we feel, will generate significant benefits out of it, out of having a good balance sheet because that allows them to speed up any restructuring that needs to happen within Healius. And for us, the second largest pathology operator behind Sonic should make some money, we think. So we're involved also in discussions regarding the LTI, so the long-term incentive plan for the management team, which targets sustainable margin improvement, which is what we would expect. And that's the key, okay? They're doing at about $1.1 billion in revenue in pathology, but their market cap is below that. So we see a lot of value there still in Healius, and we're holding on our position. That turned around in the second half from $1.20 and fallen a long way from $2.53 down to -- all the way down to $1.20. We increased our position at the $1.20, participating in the raising, and it's now trading at about $1.60. We doubled down there. And now we're in a position where it's got a great balance sheet, net cash. We expect to see some sort of buyback, and they have buyback or capital return and they have significant amounts of franking credits, a lot of franking credits. So that's going to help us build the franking balance in there as well. Another one was IAG. Again, we've engaged with them. It's a good business, IAG. They had quite a few tailwinds in the fact that when rates were low, that's a headwind to interest rates are low to headwind for insurers because your technical reserves, the policyholder funds, are not earning money when it's sitting in the bank there. When rates go up, you get the benefit of it. You float, earns money all of a sudden. And secondly, we all know that feel, this thing, your insurance policy rates have gone up a lot because of inflation. Inflation repairs, labor inflation, et cetera, it all feeds into that basically the vortex of insurance pricing. And so that's another tailwind behind them. And the management have been focused on generating -- focusing inward rather than IAG has got a bit of a history of buying a few assets, and it's -- we feel it's been suboptimal, what they've delivered on those assets. Now they're a lot more focused inward, which has been great because their earnings are growing significantly. And they've got a great balance sheet as well, which means I think we'll see a lot more capital returns out of IAG. We still hold it. We've reduced the position a little bit because it was 6% to 7% of the portfolio. That's up about 50%, 60% for the last 12 months. So we reduced that, but we still like the idea. Just on the other side, the uncorrelated names. So GWA, you definitely know the product. We don't have to tell you what it is. It's Caroma toilets, yes, there you go. Good product. It was a bit of a -- it's -- Caroma is actually not made in Australia. They're made overseas. So GWA actually has no physical assets in Australia that manufacture these products. They've got R&Ds in Australia, though. They do all the R&D on their products in Australia, but they were a bit of a lost company directionally. And the new management team came in and they've done a fantastic job of working out who the customers are, which is the plumbers. Not you and I, it's the plumbers because you always ask the plumber what should I put here, et cetera, for a bit of advice. And they've actually done a great job putting some tech into the field which connects the plumbers, they can see what's going on. They've also produced a product suite, which is full from very low end to very high end, and they've improved their relationships with distributors like Reece and Tradelink, et cetera. And they're still growing. It was remarkable. The housing market is quite soft, as we know at the moment. Prices aren't, but the housing market is soft. They're able to [ bear with ] grow prices and maintain volumes, which is quite remarkable in the housing sector at the moment. They've got a great balance sheet as well. It's grown about 13x, and it pays a very healthy dividend. So we quite like that. It will give us an opportunity when we think housing will turn because it's very highly operating -- there's a lot of operating leverage in the business. And it's a small cap position, but we've got about 3% of the portfolio, and it pays a pretty good dividend as well. Event is the other one. Event is the cinema area group but it's also the largest hotel owner of rooms and land, hotel land in Australia. It's had a tough time of it. As you know, there was a Hollywood writers' strike. I can't believe I'm talking about this, a Hollywood writers' strike 12 months ago. So all the product to the cinemas stopped. And as you know, there's no -- we're not going to roll out 3 runs of MASH. So you need to have product for those cinemas to work. And we're going through that process right now. You've got the writers are back and products are now coming to the screens, and it's a bums on seat business. You have the people sitting in the cinemas, buying popcorn, et cetera, and all other expensive items. As you all know, if you go to the cinemas now, it's going to cost you $200. But we love it. And it's an event, as the name suggests. But that part of the business is actually improving a lot, and we're starting to see the forward slate for the movie studios improving a lot. And also, we all know the streaming services that exist. All the studios have their own streaming services, and that's cut into the window where they display films. They shrunk that window and put on to their streaming. If they're shrinking the window where there's display at a cinema, that shrinks the revenue opportunity for the cinema groups. Now Disney has announced in the last couple of weeks they're going to extend that window back out again because they're losing a fortune on streaming services. They make more money in display. So that's a tailwind for the cinema group. And on the hospital side -- sorry, not hospital, the hotel side, it's a great business. They have significant land holdings. We think the land value in the book is about $2 billion of land. The market cap is about close to $2 billion, and it's got a great balance sheet as well. So it's highly exposed to consumer activity, but they can actually keep growing the hotel business. They do -- they can do a more asset-heavy hotel where they own the land, develop the site, or they can be a manager of hotel rooms where they do it on behalf of others, which is very asset light, very high returning as well. And that's where they're growing the business. Events growing to that field as well because we've got a great expertise in managing room, networks, et cetera. Sean will talk about Flutter in a moment, but that's the other international one, which Sean is actually responsible for is Howden Group, which is kitchen cabinets in the U.K. We're there for two reasons. Firstly, the culture at Howdens is as good as we've ever seen all through the organization. They're a dominant cabinetmaker in the U.S., the U.K. They're fully -- full stack of assets for manufacturer, et cetera, to distribution. They dominate the U.K. The U.K. has been obviously a very soft patch probably since Brexit, but we're probably coming to the end of that. They've got a great balance sheet. They allocate capital very efficiently. We think it's trading on a reasonable multiple, a fair multiple, we'd like to think, for a high-returning business. It's a very high-returning business. So we'll get paid our dividends on that and returns when you start to see a benefit and a turn in the U.K. economy because a lot of their -- which is more important, a lot of the competitors are closing. So as things are soft, these guys are still investing because they've got such a good model. So that's the sort of business we're looking for is this once founder led, the founder has now moved on. But highly a great culture in a business where they're very focused. They know what they're good at, and that's all they do. They don't try and think do another adjacency, et cetera. That's what they focus on. And again, a great balance sheet, which allows them to take advantage of opportunities when they arise. I'll just talk about some exits. The FDJ, which is a French lottery company we've owned since 2019, I think, since it listed in France, had -- we got great returns out of it. I think we did 100% return and got dividends, not franked, but we've got great dividends out of it over that period. While we exited, they went and made an acquisition, which we think was noncore into more sports betting. We've got a sports betting business called Flutter, but their core competency is French lotteries. They own the license of lotteries in France. Great business. They run it really well, and there's a digitization opportunity in France, where they could -- it's very low penetration of digital tickets. And now we're just starting that, but they had made this acquisition, which we thought was not within the spirit of what they're very good at, right, and it's still unproven. So we exited for that when we had the chance. That's a 0. Goodman, we did -- again, that was -- we all know that Goodman is -- they build industrial sheds, but they're also one of the -- very -- they've got a great opportunity in data centers at the moment. Great management team, best balance sheet in REITs, not really a REIT, but it is in the REIT sector. And we had an opportunity to purchase it at what we've seen as a very fair multiple 18 months ago, like about $17, $18, $19. That's trading at about $36 today. We've got dividends out of it. We don't -- we still like the strategy of what they're doing, but we had other opportunities in the portfolio and in the market where we bought a couple of other REITs, which we thought were trading quite cheaply. So that's the -- hopefully, that shows you how active we will be. And we don't sort of trade things on a daily basis. And when we -- we've got a very tight discipline on valuation. When we think something is expensive, we will trade it. But only if we see a better opportunity, we can jump into it. That's the first part. I might invite Sean up to talk about some of our other ideas. Thanks.

Thanks, Vince, and good morning, everyone. So as Vince mentioned, I'm going to run through a couple of positions, and they are 2 very different businesses. But hopefully, it shows, I guess, how the process works and that we kind of look at all different opportunities within the portfolio. The first stock I'll talk about is Flutter. Flutter is a global leading -- the global leader in online sports betting and iGaming with #1 market share positions in the 3 really key markets globally of the U.S. with their business called FanDuel; the U.K. where they've got 3 brands, Paddy Power, Sky Bet and Betfair; and here in Australia, where they've got a business called Sportsbet, which many of you may be familiar with. The PIC first invested in Flutter in 2019. It's been a long-term holding in the fund. And I just thought I'd give a bit of background as to why we first invested because I think it's quite a good example of how we identify international opportunities through our research on ASX-listed companies. We had research and owned at various times, Tabcorp, the Australian business. And through researching Tabcorp in the industry, what we found was that year after year, Sportsbet would continue to take market share, irrespective of what the competitors were doing. They had more innovative products, they were more generous to their customers, and they had really smart marketing strategies, which the customers really liked. What we also found was the culture within your Sportsbet organization was really impressive. And that led to us to go over to the U.K. and meet with the management team of the parent company, which was Paddy Power at the time and now Flutter. And what we saw is that culture permeated throughout the whole organization globally. And it was almost a purely digital business, so it had nice structural tailwinds of people who used to bet in TAB outlets, they would now bet digitally. So it was well placed for that and the valuation was attractive. So again, we made that first investment in 2019, and it's been in the portfolio since then, and it's been a strong performer over the last 5 years. It's still a large position in the portfolio today. And the obvious question is, I guess, after that share price performance, why is it still such a large holding, and I'll run through the reasons for that now. The reason, I guess, why we really like Flutter is it's proven over a long period of time, and it's got a great track record of taking market share. We expect that to continue because of sustainable competitive advantages. What those competitive advantages are, first and foremost, is their global scale, scale as the leader and decades of experience in sports betting means that they can in-house price all of the markets that they're offering for their customers. And what this means is that they can be more accurate in pricing the odds, which means they get better returns themselves. But it also means that they can offer a wider spread of markets to the punters. So if it's a game of NRL, they can offer more markets to their competitors, which makes it a better offer for the customer. The second key advantage that Flutter is while they do have a centralized risk and trading model, they leave the product innovation to the local teams around the globe. And what that means is you've got a number of teams globally who are all trying to come up with new innovative products. And if something comes out that works really well, that can then be shared with the other businesses. So a good example of this is the Sportsbet, the Australian business, about 5 or 6 years ago came up with a product called Same Game Multi, where you can put a few different leagues on the same games. And that product has transformed the Australian business. They then shared that with their U.S. business, FanDuel, which was at an earlier stage of its maturity, and it's called Same Game Parlay over there. But that's become the foundation of that FanDuel business, and it's made part of the reason why it's been so successful today. The third reason why we really like it is its balance sheet and the management's willingness to invest. They've shown, over time, that they're happy to invest really hard upfront in customer acquisition more than their competitors, which can impact short-term profitability, but it really builds out the long-term value for the business. They've also shown they're willing to invest in loss-making businesses in new and emerging regions. So for example, they bought a business called Junglee in India, which today is not making much money in profit, but it could be a really valuable asset over time. So again, that balance sheet and willingness to invest sets them apart from their competitors. And if you combine those three things together, what you get is you've got a business which has got a better product than their competitors. They're more generous in what they offer to their competitors, and they're ultimately able to generate better margins for the business and for shareholders over time. The second reason why we like Flutter and why we're particularly excited at the moment is that business in the U.S. called FanDuel, which we think is a very valuable asset and a very exciting opportunity. FanDuel is the dominant market leader, and I'll touch on this on the next slide. But the U.S. market has only really kicked off for 5 or 6 years ago, and it's already the largest market in the world. And Flutter has recently come out with an estimate that they expected at maturity, it's going to be a $70 billion revenue market, which is obviously the largest market in the world by some way. I guess the final reason to bring it back of why Flutter, again, is still in the portfolio is we think that Flutter has a very long runway for earnings growth. The underlying markets that they operate in are mostly growing. You've got continued opportunities for them to take share in most of those markets. And FanDuel, the U.S. business, has just reached the point where it's moving from being loss-making into profitability. And as that profitability scales as the business matures, we expect it will underpin very strong earnings growth for the overall business over the next few years. I'll just turn to the next slide. I just wanted to dive into FanDuel quickly: one, because it is such an important part of the valuation; but two, it's a really good case study, I guess, of FanDuel's -- sorry, Flutter's competitive advantage playing out. The U.S. market for sports betting only started in 2018. There was a federal restriction on the states legalizing sports bet that got repealed in that year. And what that's led to is states progressively rolling out from that point. Naturally, given the size of the opportunity in the U.S. market, you had all the global players there at the starting line, and they're all willing to invest significant amounts of capital because they wanted to win this market. Despite that, what you saw and you can see this in the blue line on the chart on the left is the FanDuel business, Flutter's business quickly moved to the #1 market share position and has only strengthened that position over time to now have 46% of the market. So for us, with a market that basically was starting with all the players there, FanDuel has very quickly asserted its dominance. The other thing I just wanted to touch on with FanDuel is for us, FanDuel has been core to the valuation of the investment thesis for the last few years. But it hasn't really been apparent in Flutter's financials because the business has been loss-making up until 2023 as the company was investing in acquiring lots of customers. That's now changed with the business moving into profitability last year. And as you can see with some of these forecasts that the company has put out, it's got very, very strong revenue growth expected over the next few years, and the earnings contribution is very material. What's really attractive for us is that $2.4 billion of EBITDA they're forecasting in 2027, they still expect the overall market to double again in size from that out to maturity. So for us, it's going to be very, very meaningful for the business in a few years' time in terms of earnings, but there's a long runway of growth beyond that. And for us, as we look around the world globally, different opportunities, there aren't many businesses of this scale that are growing at the rate they are. So to have that as part of the core asset within Flutter, we think, is highly attractive. I'll just turn to the next slide. I guess just to bring it all together for Flutter, the group, we think that the financial outlook for the business is compelling. Flutter recently gave some targets for the overall group for 2027 at a recent Investor Day that we attended in New York. And as you can see, these are growth numbers per year out to 2027, and we think they're highly attractive. The one for us that's the most important is the free cash flow number. That 36% growth per year for the next few years means that the free cash flow this year of $1 billion will turn into $2.5 billion of free cash flow by 2027. And that's really powerful for the group because it means that they can start returning capital to shareholders after years of investment. They've already announced a $5 billion buyback they expect to complete over the next few years, and we see scope for that to be more behind that. In terms of valuation, the stock is trading on the consensus estimates for 2027, which those targets point to of about 15x P/E which for us, for a business that, again, is growing at these sorts of rates, has a long runway of growth beyond those years and is the global leader in a digital industry for us, that's highly compelling. I want to just quickly touch on they did recently move their listing from the U.K. over to the U.S., which for us is a really good move. It increases the liquidity in the name, but we also expect that it will be included in the S&P 500 Index in the short to medium term, which should be a positive catalyst for the company. Just moving on to the second stock, which is a very different company, and hopefully, one that most of you are familiar with their product, but it's Cobram Estate olive oils. Cobram is a vertically integrated grower and marketer of olive oil in Australia and in the U.S. They dominate the Australian industry, produce about 70% of all olive oil that's produced in Australia comes from Cobram farms. And that's off about 7,000 hectares of owned farmland. They also have processing facilities that they own, and they distribute all the oil they grow in Australia through 2 premium brands that they own, being Cobram Estate and Red Island, which together have about almost 40% market share of the total value of olive oils sold through supermarkets in Australia. They've also got a growing U.S. business. They've now got 1,000 hectares of olive oil -- sorry, 1,000 hectares of olive groves in the U.S. They own a processing facility and have got a brand in Cobram that they use to distribute through the supermarkets in the U.S. Look, we think Cobram is an Australian success story that's flying under the radar at the moment. We think it's at the point now where it's going to become a bit more front of mind for investors as the business is starting to really grow. One thing we really like about the business is that it's founder led. One of the co-founders, Rob McGavin, is still the Chair. And he and the co-CEOs together still own 20% of the company. And I think Cobram is a good example of some of the benefits and the qualities we'd like to see in founder-led companies, where the company is very consistently invested in its infrastructure and its brand over a long period of time, which has led to the company being in, I guess, the strong market position that it is today. The company has strong asset backing. So again, it owns all its groves and its processing facilities, which means that it's got a net asset value of about $1.50 per share versus the current share price of about $1.90, but that asset value ascribes no value to the brands, which is so powerful for them to generate strong returns from their oil. The other thing that we think is really unique about Cobram in the Australian market is it's an agricultural company that's been able to build premium brands through which to sell their product. There aren't many companies -- lots have tried, but not many have succeeded in successfully building brands. And that's quite powerful, one, because the brands allow you to generate more value from your product than selling on to the commodity market. But in terms of the brands themselves, Cobram is competing with international competitors that you'll see on the supermarket shelves that buy third-party oil off the spot market. And being vertically integrated means that Cobram, one, has a lower cost of production than their competitors; but two, means that they've got greater control over the quality of the oil that goes into their end product. In terms of, I guess, why now for Cobram and what's exciting today, if I just jump to the next slide. There's two, I guess, the two different parts of regions of the business, both of which we think are an inflection point. So the Australian business, again, been around for a long period of time. But the last 5 years has been characterized by the company investing quite a significant amount of capital in growing the size of the groves, expanding and also expanding the processing capacity to be able to deal with that growth. And what this means is because olive groves take about 8 years to reach maturity from when they're planted, from where we stand today, Cobram is going to get about 80% more oil over the next 6 to 7 years as those groves mature. And that extra volume is very powerful for margins and for earnings because you've got a largely fixed cost base. And as that extra oil comes through, it's coming through at higher margins. The other thing is now, obviously, with that investment rolling off, it means that the free cash flow generated out of the Australian business should start to really inflect over the next few years. The other side of the business, again, which we think is really exciting is the U.S. which, again, Cobram has been in the U.S. for about 10 years, but it's only really started to get some real traction over the past few years. We've got 1,000 hectares of groves, and those groves pleasingly are showing very similar yields to what the Australian businesses is spinning off of maturity. And the other thing is the brand is now starting to show some real traction in the market as well. So it's the Cobram brand is distributed in over 18,000 supermarkets in the U.S. It's now the #8 overall oil brand in the U.S. and the #2 locally grown Californian olive oil brand. So again, it's really starting to show some traction. The company is investing quite heavily in continuing to expand that business. And for us, given that we're seeing some really positive signs and they're willing to continue to invest in a market that's multiples the size of Australia, we're quite excited by the U.S. opportunity and think that it could be as big as Australia over time. And at the moment, the U.S. has only just started earning a profit for the company. But for us, we think that it's going to become a bit more front of mind for investors as those profitability does start to scale over the next few years. I guess just wrapping it up for Cobram. For us, it's a business that's founder led, very well run. It's got strong asset backing with all the assets it owns. And we think that the free cash flow that's going to start coming out of the Australian business will enable them to continue to ramp up investment in the U.S. and also start to pay higher dividends back to shareholders in Australia. So that's all for me. I'll hand it back to Vince, but hopefully that's given you some good insight into a couple of positions in the portfolio.

Thanks, Sean. That was excellent. I might talk about performance. Okay. The last 12 months, while 16.9% is impressive, unfortunately, the market -- or fortunately, the market did about 21.5%. Look, we're quite a fundamental investor. We stick to our discipline regarding valuations. When we don't see a lot of value on offer, we will -- we prefer to put money in cash and wait for an opportunity to come back. This occurred in 2018, 2019. We weren't performing particularly well. Fortunately, unfortunately, COVID occurred where we had very high cash levels in the strategy and allowed us to -- everything went on sale during COVID. So we're able to buy a huge amount of new companies in the portfolio at materially discounted prices, and it set up the portfolio performance for the next 3 or 4 years. Now I'm not saying that I'm waiting for these things to happen all the time because we've got to invest on behalf of the investors and get a return. But the last 12 months was characterized by some two sort of different forces. You've got the U.S., U.S. growing a lot stronger and China having a bit of a hiccup in growth. And people went for safety in that sort of environment. We sort of went for safety in cash. We sort of missed some of the banks rally. We were quite neutral to banks up until about midway through the second half of the year, so March. But then the valuations are getting stretched. Fortunately, unfortunately enough, they kept going. We put that money into cash and we sort of lagged the market because of it. But as I stand today, I actually like the idea of what's happening in the last 24 hours because it is throwing up quite a bit of volatility. And things are looking interesting again. So valuation spreads are starting to show up again in the market. So we are looking at a few new ideas where we think, if they get to the levels we want, that gives us enough of a margin of safety. And I have all those other factors that Sean talked about: good management, good balance sheet, very important; and that they're at a level where the upside is materially larger than the downside in the equity. We'll always take those investments on. Next slide, please. So this is a chart because we've got 1 or 2 questions on the line, I thought I might talk about this. That light blue line represents the PIC's performance since inception. Now that is the portfolio performance with dividend -- reinvested dividends, okay? It's done about 2.5x the market. Now remember, Perpetual is a quality and value manager. We're more of a value manager. We focus on quality as well because that's one of the most important things. When you can get quality at a reasonable price, you'll always -- we'll always buy it. And we've been able to beat the dotted line, which is the value index, the ASX Value Index, handily beaten that, and we've actually beaten the ASX 300 as well Accumulation Index. So even though we're a quality and value manager, we're going to beat the general market and over the long run, I agree, it's over the long run. But that's what we're here for. When we started the PIC, recall, we've designed it for self-made super investors. We wanted to deliver them very, very effective dividend growth with franking attached, always fully franked. And then we're always focused on that. And to that point, when I look at the returns delivered over the last 10 years, there's been 100% return -- 102% return with 31% of that return coming from growth and 70% -- 71% coming from dividends. And those dividends are fully franked. So we're on message or how we design the PIC is that this is how we're going to deliver the returns to the investors. We won't change that because people get into the PIC for that reason alone. We don't change what's on the outside of the tin because we feel different. It's going to continue to do that. And we feel like now we'll have fits and starts in performance. But over the long run, we always feel that we will add value because we're fundamental in nature. We don't chase fads. We tend to focus on a few key factors that we're looking for in a business, and we're patient. We'll always be patient when we allocate capital because we want to avoid the big drawdowns and take advantage of the upside when the market gets a bit nervous. Next slide. This reflects a bit more the portfolio, where the portfolio actually is. Now remember, the PIC is always going to have a bit more of a mid-cap focus in the market. We're not going to really be in the top 50 parts of the market because you mostly can do that yourself. You can buy the 4 banks, you can buy a couple of resource companies and you pretty much cover the top 50. We're always going to be hunting around like Cobram, which is actually a small cap. We're hunting around there sometimes for those ideas or a Flutter offshore or a GWA, things that you may not have the time to do work on, we'll do that work. We'll find an edge where we think the market is missing something. So we'll always be in the mid-section, S&P ASX Mids, we're slightly overweight and small 200, ASX 200, ASX 300. That's where we're always going to be hunting around because that's where most of the mispricing typically will be because there's less coverage. People tend to react a lot more aggressively when they don't like something. That always provides us with an opportunity. That's the last slide. Next slide, please. That is the last slide. That's our section over. We'll hand over to Nancy, and I think questions.

Thanks, Vince and Sean. And if you haven't changed your brand of olive oil, you heard it here first, right? I got to go home check my cupboard. Sean, you missed your calling. I think you're a good salesman. Thank you. We'll now answer any questions received from shareholders or interested parties on the investment manager update. Sorry? A reminder that any questions related to the AGM resolutions will be addressed later in the meeting. I'll invite Karen Trau to the front of the room. The order in which we will answer questions will be preregistered questions first, followed by questions in the room, then questions online and then finally, questions over the phone. Whilst preregistered questions are being answered, I request that those present in the room wishing to ask a question, raise your hand and provide your name to the microphone attendant. So Karen, we've received several preregistered questions. So I'm going to handle them first, if it's okay. Are there any...

Yes, Chairman. The first question is from Peter [ Severtson ]. I would like the directors to describe the changes in any circumstances that may affect PIC with the proposed Perpetual Limited sale of Perpetual Wealth and Corporate Trust divisions.

Thanks, Peter, for the question. I don't know if you're in the room. Thank you. And ask me a follow-up, if you'd like. But just to explain what Perpetual Limited is doing separate from PIC. Perpetual Limited has 3 businesses. It has an Asset Management business, which is where PIML resides. It has a Wealth Management business and our Corporate Trust business. So after a strategic review, the Wealth Management and the Corporate Trust business basically ended up with an offer from KKR to purchase it. But the Asset Management business that we deal with through PIML will not change. So no changes in the investment team. The Board itself monitors it at every meeting. But as it stands now, there will be no change whatsoever. So it should have no effect. We will let you know. And there might be a timing effect, which I will tell you right upfront. The name of this company is Perpetual Equity Investment Company. And over the course of the next year or 2 as Perpetual Limited goes through its change, we'll have to look at what we do about the name, but that will be in close concert with Vince and the team to see where it makes sense. Did you have any other questions on that, Peter?

Only if the sale of the company is reversed, what's the plan B?

Yes. To be honest, Peter, you have to ask the Chairman of Perpetual Limited that, okay?

Okay.

Because as chairing Perpetual Equity, right now, if they don't go forward with that sale, since there are no changes to our Asset Management business, I don't believe there'll be any changes for PIC. But that's a Perpetual Limited question. But at this point today, we see no changes. And in fact, if anything, the entire company will be an asset management company, Perpetual Limited, and it will -- the plan is for it to be debt free. So if anything, you'll have a stronger asset management company. And I'm speaking with my PIC hat on. Thank you. Karen, second question.

Chairman, the second question is from [ Stephen McCarthy ]. I have been very happy with PIC's returns. If Perpetual merges or is taken over, what impact could this have on PIC?

This is basically along the same lines, I think. But the important thing is that the investment management company, PIML, will not change. We'll have the same team managing the funds. So as far as we're concerned, there's no change. I don't know, Vince, if there's anything else you wanted to add to that, but it's business as usual for your division.

Nothing is going to change for us. Next day is no different to the day previous. So we're still managing the money in exactly the same way in a fashion that we have for the last 40 years. That won't change.

Thank you.

Chairman, the next question is from [ Philip Short ]. How can PIC offer shareholders opportunities outside DRP to increase their shareholding off-market and without incurring additional brokerage fees?

So [ Philip ], the Board looks at this at every meeting. We look at capital raisings. We look at opportunities for private placements, for options. And you might recall, in 2018, we raised $101 million, and that was an entitlement general offer. And then in 2021, we raised an additional $30 million with a share purchase plan. At this point, we don't think the conditions are really appropriate because of the spread between the NTA and the share price, but we're monitoring that and doing everything we can to close that gap.

Chairman, the next question is from [ Gary Fellow-Smith ]. Thank you, Mr. Pezzullo, for you and your team's management of the fund since inception. Can you give us your thoughts on why the fund's unit price has not advanced as much as some people might have expected?

Okay. I think I might have briefly touched on it before. Given the nature of the way we've generated our returns, we have returned nearly 70% of the fund back to the company, back to the investors in line with our view was it was designed to deliver tax effective returns back to the investors. And as I said, if you just participate in the DRP and just reinvest it back in the company, you saw the light blue line there, that's what you would have got if you didn't just back the dividend. So we're not going to change the way we do that. Like I'd like to have a lot more growth, absolutely. But we do things a certain way, and we play the long game in the way we invest.

Chairman, the next questions are regarding the investment portfolio. So I will direct these to Vince and Sean. We have a question from [ Warrick Blackmer ], who has asked two questions. The first I will direct to Sean. Flutter, why do we still hold it?

Hopefully, I've answered that in the presentation before. But I think just to recap, the FanDuel asset, the U.S. business, for us, is the real reason that we still own it and why we're excited about the future. And that's because over the past few years, the business has been growing and creating a lot of value through acquiring customers. It hasn't transferred that into profitability for Flutter as it's been in that investment phase. We're now at the point where that's starting to inflect higher and FanDuel's value will start to come through the Flutter financials, which, one, means that the earnings growth for the overall company is -- takes a big step up. But two, it means that the cash flow potential to come out of the business also takes a big step up. And with that comes the ability for capital returns in buybacks, the ability for the company to continue to make value accretive M&A. So for us, the FanDuel business and where that's heading is one key reason. And two, just globally, the company continues to do a really good job and is operating in a growing market. So we think the valuation still remains attractive for a business that's got a lot of growth ahead of it.

Thank you, Sean. The second part of Warrick's question is for Vince. Has the manager assessed the gold space for opportunities?

Gold, we have been in gold for the last 12 months. We own some Newmont and Gold Road in the last 12 months, but we have exited both those positions a couple of weeks ago. Yes, look, we like the gold space, particularly if it's an Australian domiciled gold company because the Aussie gold price is materially higher, as you can imagine, with Aussie dollar costs. And it is hard because this is an issue for all mining companies, costs are going up more than inflation in mining. So you need those -- you can imagine the operating leverage when if the gold price starts falling, your costs are not falling. And then you've got mine plans, et cetera, which affect the costs as well. So for us, gold, it was a fertile ground last year when the market was not expecting much, particularly out of global growth and that inflation was maybe a little bit defeated. That's reversed. And so we've been able to exit those positions quite profitably.

Thank you, Vince. The next question is from David Palace. Please provide an update as to if you hold Star City shares and your views for the future?

We used to own Star. We exited that position. I want to talk through the process with Star. So as at December last year, Star had net cash of $171 million, which there wasn't a balance sheet problem in the business. Obviously, there's quite a few issues regarding the revenue environment for Star because they're under quite a bit of control by the regulator. But I want to remind you that the asset base is material. There are significant assets inside the business, which outside of -- the balance sheet was fine. Outside of that, there's significant value on offer. It was materially -- the value of the business is materially higher than the market cap is implying even with some of the issues that they're trying to work through. Fast forward to June this year, the net cash was down to [ 31 ], but still net cash they had in the business. And we're still reasonably relaxed with the balance sheet issue, and there's -- it's that they weren't going to breach any of our filters. We've got 4 quality filters. One of them is balance sheet. Now what happened was in the last 2 weeks, there's been a quarterly update, which the company has returned back to quarterly reporting, is that the revenue is the issue in the business at the moment in that they can cut costs, which the company has come out and announced $100 million in savings, et cetera, in the business. But the issue for us is we won't own a company that will not be profitable over the long run. So you can dip into unprofitability for a year because it can happen as long as the return to profitability pretty quickly. Now what we did, we assess the -- what they updated the market with a lot of information and data and more new disclosures. And our assessment was that I think they're going to struggle to be profitable for more than 1 year. So for us, it is a hard and fast rule. When things -- we feel like things are going to breach our quality filters, we'll exit immediately. We won't wait around. It's happened once before in the past with a company. It does happen occasionally. But once that new information was in front of us, we felt that the revenue position for the business was a lot tougher than we expected given the new information. So we exited and cleared the position.

Thank you, Vince. The next question is from Dennis White. Could you comment on the reasons for having BHP as the largest holding in the portfolio?

We were -- we had no BHP at one stage through the year. But again, we have a fundamental and disciplined valuation process and BHP just got cheap enough when it fell to $36, $37 from $48, $49, trading on about 10x earnings. We like what they've done inside the business, BHP, like they've got a lot more copper exposure than they've ever had. In a couple of years' time, we feel that copper within BHP might be up to 40% of EBITDA. They are predominantly an iron ore business and they've exited a lot of their thermal assets. We do have thermal in the portfolio somewhere else though. But they've exited a lot of those businesses to be a lot more focused on iron ore, copper for the future and potash that they're developing the Jansen mine in Canada, which is obviously an agricultural product. So they've realigned the portfolio. And I think that copper advantage will be a lot better and be reflected in the market price in several years' time when they develop some of the assets they've got. So again, it's down to if it's cheap enough, we'll always look at it, has a good balance sheet as well, free cash generative. So they could finance any mine development as well, which is very important rather than having to go with some of the smaller miners, you'll always go use equity to fund it, which is not the best business model for us.

Thank you, Vince. There are no further preregistered questions, Chairman.

Thanks, Karen. We'll now take questions in the room. Please.

Chairman, I'd like to introduce Mr. [ Ray Pedley ].

Thank you. I'm not sure who I need to address this question to. But it's been mentioned today by our portfolio people of overseas shares. Now they put a very convincing argument for what Flutter and Howden, I think it was as to why we need to be in them. But I've got children that live in the States. And yesterday, we were going to send money to them. I looked at the rate in the morning, it was quite reasonable. When it became obvious that the Republicans were going to get up, it tanked. Now my question is -- and I have -- as a personal investor, I have not dabbled in overseas shares because you might pick a winner, but that's all canceled out by exchange loss, or you might pick a loser and you've got an exchange gain. Now what happens here? The gains that we might be picking up from these shares that we've been told about might be canceled out?

I feel your pain. I had the same experience yesterday sending money to my sister. So Vince, do you want to talk about how you hedge the portfolio?

Yes. So what we do is we take a policy of fully hedging the currency exposure. So we hedge it completely. So you pay a little bit for that, that insurance policy, but that means you get exposed fully to the equity movement. And so that's -- we've been doing that for a while. I agree. I've got no currency expertise like most people. So I'd rather be the shareholders are exposed to the equity and the idea we've generated, not exogenous factors, which might affect the return.

So when you buy...

We hedge immediately. Yes.

When the dividend comes your way, you hedge...

We sweep the cash, bring it back, same. And also, it's relative because the portfolio position could change relative to the rest of those exposures, right? So your hedge will exist and value changes around. So we monitor that every day.

Another question.

Chairman, I would like to introduce [ Anne ].

I have a question on Flutter, so either Sean or Vince. What sort of exposure have they got to regulatory risk? In Australia, there's a push to stop online gambling advertising. Maybe offshore that regulatory risk has gone down in the last 24 hours. But probably more importantly, what is the company doing itself to make sure they deliver gambling responsibly?

Great question. Look, I think as I start with these sorts of businesses, especially sports betting and iGaming, regulatory risk and the risk of tax increases over time is something that you walk into an investment and having that front of mind. So that's something that we expect and you see that over time as markets mature, you get more regulatory, I guess, scrutiny and also higher taxes over time. Now for Flutter, we factor that into our valuation of forecast. But for us, that's where being the global scale leader just from a taxation perspective, in particular, has real advantages. What happens is as taxations increase and I guess, regulatory requirements increase, the cost of doing business for operators goes up as they need to meet those. And naturally, in that environment, the smaller operators find it harder to be able to, I guess, absorb those costs. And that's where the scale of then you tend to see market share consolidate towards larger players over time in the mature regulatory markets like we've got in Australia and like we see in the United Kingdom. So the fact that the business is now very well diversified globally also reduces the risk of any one market regulatory change having a material impact on the company, which is one positive. In terms of what the company is doing, they've been -- this is something that we've continued to test over time, but they've been at the forefront globally from a responsible gambling perspective of not just waiting for regulatory changes and doing what they need to, but getting ahead of them. So whether it's been credit card bans in the U.K., they went ahead of time. There's just been a big regulatory shift in the U.K. over the past 18 months. And Flutter again, moved ahead of the requirements to introduce things like maximum deposit levels and also reducing the stakes and the amount of maximum bet on those slot turnover. So for us, we see enough evidence both in terms of what the company says, but also what they do in terms of being at the forefront of that responsible gambling and from a regulatory risk perspective for the business and the investment, one, the diversification provides some buffer; two, their scale as a leader globally also provides a little bit of buffer, but it's something that's front of mind.

Thank you. Please.

Chairman, I'd like to introduce Mr. Brian Pergis.

I've got a question about 2 stocks in the portfolio. The first one is for Ramsay Health Care. You might remember at last year's meeting, I mentioned that Mr. [indiscernible] had said it was a stock that you could short. It's substantially fallen by about 20%. So I thought that's interesting. So I had a look at it myself. And I noticed the Chairman used to run a telco. And there's a new CEO, a senior executive from Woolworths. The business operates hospitals overseas like in Europe and here. So I looked at that, and I just thought this doesn't make any sense. So my question would be, is this as low it's going to go or...

You want a guarantee on that, okay? You're not very good guarantee.

Because you said -- there you said that you were in discussions with the company. So if you could just sort of fill me in on what you think?

Sure. Ramsay is obviously a very old business. Obviously, started out predominantly as an Australian hospital -- or started in mental health actually and then moved into general care. And they did a great job because they made a couple of great acquisitions early in the history of the company where they took advantage of a really -- a bit of a cottage industry and brought in standards regarding care, et cetera, and really professionalized what they did, and they became a leader. And when you look at Ramsay's Australian business, it is a collection of regionalized monopolies. Those hospitals are very -- in the regions they are, they dominate in a sense of the quality of quick care, they attract patients, they attract great doctors to come to those facilities. So that's their core competency. Around 2014, they went offshore and bought in the U.K. Again, the NHS is a similar medical system to ours, and they do have a private system as well. And I think that they close -- they are getting return on capital on those assets. But movements into the -- they moved into France, sorry, bought General De Sante, which is a listed -- they own 53-odd percent of a listed French business, hospital business, and it's pretty much 100% private and private care. We're not a fan of that. We think that's capital sitting in that French market, which could be used in the domestic market, et cetera. And they've made an acquisition called Elysium, which is, again, mental care, health care in the U.K. 18 months ago, 2 years ago. We're of the view that the business is probably a lot more complex than it should be, and that they should probably exit 1 or 2 of these markets. The company has discussed exiting France, but they want to get full value for it. These assets, I feel they could deliver a lot of value back to the shareholders because if they can get their equity back out, Ramsay has about $1.9 billion of debt. It's not a lot given they've got about $6 billion worth of property on the balance sheet, and they generate about $1 billion of EBITDA, so they could fund and service it. But that equity stake alone is almost equivalent to the debt they have, they could cancel all their debt. Now that's all moving pieces on the table around. The issue is we feel there's a need to be an improvement in discipline in the business. I think David Thode is actually quite a good operator, personally, the Chairman. I actually think he's a bit of a big brain thinker. He's very detailed. I think he will bring a lot of discipline. The first thing he did as Chairman is he lifted with the management, engagement with the management to lift the required rate of return on any investment, which is only 10%, which is too low for a business like that because it's long lead times. You build a hospital, it's going to take years. And by the time you get there, the returns may be very different because your assumptions are off the market a bit. So I think David is probably the type of person that could actually get the business moving in the right direction. Natalie Davis, who is the new CEO, came from Woolworths. We've met with her. We think she's very capable. She's just going through the business at the moment. I think anyone that comes in and looks at that business and looks at the collection of assets will -- there's a logical conclusion as to where the business should go after that, where the business should move towards, which is a simpler business. And we will continue to actively engage with the Chair and the Board. There's a lot to go. Active engagement does take time. It usually takes about 2 years. We are from the first engagement to start to get a bit of movement. And then IAG is a perfect example where 18 months ago, we started engaging the Board regarding capital allocation, et cetera, you've got to improve it, et cetera. And then it takes a bit of time, but then the returns -- IAG is 70% return in an 8-month period, but it does take time. So we've engaged initially. It's not a big position in the pick. It's like an entry position. Again, we're trying to look for signs of -- certain signs within the business that they're moving in the right direction. We're not going to bet the farm get. But is it going to be lower? Of course, it can. But it can also go a lot higher. We think the valuation is materially higher than where it's trading. I'll put it that way.

The second one is Select Harvests.

Perfect. I've got the right here.

So the story seems -- look, I actually hold some. So -- for a few years. So the story seems to be that the California crop is either good or bad. The demand from India and China is either good or bad. And the Australian weather is either good or bad. So the planets never seem to align. And then I was actually ahead a few months ago, and then they do a big rights issue. I didn't take part in that. And the share price is now below what the issue was. And I'm just thinking this is a company that's probably never going to give you any return. Is that sort of a reasonable assumption?

Sean, could go on the particulars there, and might follow up later. Thanks for the question, by the way.

Yes. Look, I think your initial points there around the volatility describes it and agricultural stock like Select perfectly, I think, especially over the last 4 or 5 years. It's been frustrating for us. I think the initial attraction, and it still remains, I guess, our view is that with so much of the global supply coming out of California. What happens to supply out of that region is very, very important for the almond commodity price, which is what is the main driver for Select Harvest who exports all of the almonds we grow. Now in California, there's issues with water availability and there's new regulation that's come in about 6 or 7 years ago that's progressively being implemented that restricts how much the farmers in certain regions can pull water out of the ground, so through bores. And that's been with historically droughts in California, they've been able to use bores into the ground to take water out and keep the trees alive. Now for us, our view was that regulation over time was going to start impacting supply and you would have a lower supply dynamic out of California. And given that globally, there are ups and downs in terms of demand from certain regions, but globally, demand for almonds has been growing. There's been different uses with almond milk coming along. And given it's, I guess, on the healthier side as a nut, as diets have shifted that way, there's been, I guess, an upswing in demand from that perspective. So for us, we've had a view that there would be upward pressure on the almond price over a sustained period. It didn't play through for the first few years we owned it. But what we're seeing, I guess, what we've seen over the last 12 months is because of these water regulations, but also because the almond price has been depressed for some time, the California growers have not been making an adequate return. And that can only go for so long before these almond orchards start getting pulled out of the ground and we've started to see that. Our net acreage growth in California was positive for decades. Up until last year, it was the first year that net acreage turned negative. And given if almond prices spike tomorrow and someone plants an almond orchard, it can take 7 years for that to be fully productive. It paints quite a nice picture that you can have elevated prices for a period without a supply response. So that was our view, and we feel that it's starting to play out. Unfortunately, as you said, there's been some issues with the company domestically with the crop being a little bit lighter than what they expected, and there were some issues with some supply chain logistics, which meant that they weren't able to take full advantage of some of these higher prices with the almond price going up and they needed to raise some money to take a little bit of the top of the debt on the balance sheet. So I'd say we share your frustration. It felt like the things were heading in the right direction and the internal issues kind of took it away. But I think standing back at the end of the day, if you look at the dynamics of the almond industry globally, you're starting to see the signs that, that supply is coming out of California. And for us, that suggests that the almond price will continue to appreciate and Select down here with their orchids should be very well placed to take advantage of that. But it's agriculture and things can move around. So I think that's why we take that into account when sizing the position in the portfolio.

And to your point, we completely agree. I think the manager has done a terrible job firstly in the capital -- on managing their capital base. To that point, we sent a letter directly to them about that point issue, in particular, at the start of the year. So covering off on other alternatives they can do rather than just do a straight equity raising. So we're quite, I'll say, upset when they did that the raise because we thought that should be the last alternative. So to say that we're engaging with them directly on a pretty frequent basis would be an understatement. We want to get a return as well. Yes.

Karen, are there any other questions online?

We have received questions online.

Excuse me. Were there any other questions in the room? Did I miss somebody? No. Sorry, please.

The first question online is from Ian. Vince and Board, are you happy that the current portfolio structure with a 30% limit on overseas investment is the best risk considered structure for shareholders to generate capital return and bank dividends?

We lifted that in the first -- like during COVID actually, the first month.

We lifted the amount of international share.

Yes. I think we said, look, this is the time to do it because everything was on sale. And we did, and we actually went straight to 30%, I believe, at that time in 2020. And it served us well because we're able to spread the type of investors to get access to for the first time in a major way when everything was on sale. And I said that year set up our returns for the next 3 years. So whether we lift it, it's a constant discussion about -- we can generate franking credits two ways, a fully franked dividend being paid from the investee companies we have or when we sell a position where we've got a capital gain, obviously, we'll book -- we'll pay tax on that position. So we generate our own franking credit. That means we can sell an international position and generate a franking credit from trading. We don't want to trade too much. But as I said, we're disciplined about the way we look at things. And when it gets expensive, we will take that profit. If we go more offshore, it might make it a little bit harder to generate some franking credits. I think at this stage, I'm comfortable with 30%. It gives us the best of both worlds. The other 70% of the portfolio will always pay. And I look at our portfolio today, the domestic businesses have significant franking credit balances that they can pay out. And I think we're going to get some of that at some of our positions in the next 18 months. And then the international side gives us an aspect of Australia is, I wouldn't say a high growth -- a low-growth market, but it's not extremely high growing. We can get that from offshore. That gives us that ability to try and compound the NTA and grow that going forward. Sorry, can I just add -- and we're always considering it, though. It's -- we're not line in the sand, don't think about it. We think about it. I always ask for it and then the Board can consider it and see if it benefits the shareholders.

You beat me to it. I was going to say at the end of the day, we're very focused as a Board in making sure you get a fully franked dividend. So in taking on that exposure to offshore, it's something that we're always talking to Vince about how we're managing that to get there. Next, Karen.

The next question is from Vivian Tolliday. The Perpetual brand is invaluable, priceless. How much weight, if any, does the negotiating group, the PIC Board, carry in the negotiations to retain the brand name? In all honesty, I would question my shareholding if the Perpetual brand is not retained as I suspect many others will.

Was that Vivian?

Yes.

Vivian, we agree 100% with you about the Perpetual brand. It is invaluable. But at the end of the day, what we want the name to represent is the people who are managing your money, right? So is Perpetual Investment Management Limited, people aren't going to change. Perpetual Limited has made arrangements to use that name in other ways in the Wealth Management business and in the Corporate Trust business. That's still under negotiation with the acquirer. So what I'd like to say is if we have to change the name, it will reflect these people and the 138 years of Perpetual history, if you will. At this point, we don't know. As you're probably aware, we've -- it's in the notice of motion. We've been renegotiating the investment management agreement, and that will come up for a vote later. In there, there's a section that discusses when the asset management business reaches a landing with Perpetual Limited and the acquirer of those businesses, then we have a mechanism to work through with them if there's a reason for a name change and how to do that. I don't know, John, is there anything -- John handled the negotiations as he's an independent director. Is there anything else on the brand section that you would want to add to that?

No. I think you covered it. We track where PIM is going.

Yes. And so -- and we've got a mechanism there to negotiate it at that time. But at the end of the day, the most important thing is that we reflect who's managing the funds, right? And I'm as heartbroken as you are, Vivian, about the name. But I don't know what the timing will be on that. We'll have to -- we'll alert you and we'll have to let the ASX know if we're thinking about doing anything in that regard, but that's still open to negotiation at Perpetual.

There are no further questions online, Chairman.

Okay. There are no further questions in the room. I'm sorry. I'm sorry, sir.

Brian Allison, shareholder. My apologies, I was late to the meeting. This time of year, there's too many meetings. I came from another one. But -- so I didn't see the presentation, but the last time I attended one of these AGMs, you were very interested in a2 Milk. And I just wonder what the situation is there?

I might hand to Sean on that one. Do you want to have a crack at? Because you're the former analyst.

Yes. No, absolutely. Look, I think a2, I can't remember exactly where the share price 12 months ago, but operationally, the company has had quite a good 12 months. It continues to take market share of both the local competitors in China and also with their infant formula products and also the other international competitors. It is -- they are operating in a challenging environment, though, where due to the demographics in China, the birth rate has been declining over a period of time and we took a particular dive during the COVID period, and that's meant that the industry volumes have come under pressure, and we knew that and expected that. But the company has done a really good job continuing to build out the business and take market share. There's been a little bit of uncertainty more recently around what they're going to do with the cash on their balance sheet. We've got a very, very strong balance sheet, about $850 million worth of cash and no debt. It looks like they're going to spend some of that money to buy some manufacturing capability themselves, which we think is a really smart move. We will de-risk the and give them access to some more products, some more licenses that they can sell more products into China. So for us, I think operationally, going quite well. The management team is doing what we wanted and what we expected, and we think that the valuation still looks quite attractive given they've got so much cash on the balance sheet.

Yes. Many years ago, they did sort of hint that they might pay a dividend at some stage, but they never seem to get around to it.

Yes. Again, without knowing how much of that cash balance that they're going to spend, they have been quite clear that any surplus capital over and above that, that they spend -- that they will look to give back to shareholders. And logically, they've got quite a large franking account balance in Australia. It's a New Zealand company, but quite a large franking balance. We would hope that any dividends they pay will be fully franked and fingers crossed that in the next 12 months, but we just don't know.

Okay. Thanks, Sean. It appears there are no more questions. So thank you very much, Vince and Sean. And I'm going to now move on to the formal business of the AGM. Thank you, Karen.

The virtual meeting online guide was lodged with the ASX and is published on PIC's website. It outlines the steps to enable shareholders to participate in the meeting. In terms of the business that we need to consider, we have 6. The first is the financial and statutory reports for the financial year ended June 30, 2024. The second is the reelection of Amanda Gillespie, also known as Amanda Apted, as an Executive Director; the reelection of Virginia Malley as an Independent Non-Executive Director; an advisory note on the adoption of the remuneration report for FY '24; the renewal of the proportional takeover provisions in the company's constitution; and entry into a new management agreement with Perpetual Investment Management Limited. The item of business relating to the FY '24 financial and statutory reports is not for voting, but for tabling and discussion. Further information about each of the items for consideration today is set out in the notice of the meeting you would have received. I'll take that as read. As described in the notice of meeting, proxy appointments were able to be lodged up to 48 hours before the meeting, where I, as Chairman of the meeting, have been appointed as a shareholder's proxy or become their proxy by default, then I will vote directed proxies as directed in the proxy appointment, and I will vote any available undirected proxies in favor of each resolution. If you are a proxy holder, then you would have received an e-mail setting out instructions for you on how to vote those proxies using the voting mechanism on the online platform. If you have not yet registered to vote, please do so now. How to vote? I will now outline the procedures for voting for the shareholders in the room. We will be voting by a poll and not a show of hands. Reggie Harbin of Link Market Services is the returning officer for the purpose of the poll. If you will all have received a yellow voting card when you registered today, they will be used to cast your vote. The poll is now open. You may cast your vote at any time during the meeting now that the poll is open. You may also change your vote at any point unless I declare the poll closed. The poll will remain open until 5 minutes after the end of today's meeting. To vote online, please follow the steps in the Link portal, noting that you cannot cast a vote over the phone. If you experience any difficulties in the online platform or you're unsure how to vote or ask questions, there's a help line number available within Australia, and it's on the top of the web page. Subject to any applicable voting restrictions, the Board recommends that shareholders vote in favor of each item. The voting restrictions for the resolutions are included in the notice of meeting. The results of the voting will be known shortly after the AGM and advised to the ASX and posted on our website. I will introduce each resolution. There will be an opportunity to ask a question in the room or post written comments or questions. If you're present in the room and wish to ask a question, raise your hand. We'll have several roving mics around the room. For those of you attending online, if you're a picture shareholder, you can ask a question, post a comment online regarding the update. To do so, please follow the steps in the Link portal. [Operator Instructions] The Company Secretary will read comments and questions to the meeting. The questions will be read out verbatim. I will then respond or designate someone to respond to questions. Following comments and questions, I will confirm the proxy votes received before the meeting. These will appear on the screen in the room and your computer screen beside the video feed. All resolutions before the meeting today, except for resolution 4, are an ordinary resolution and will be passed by a simple majority. Resolution 4 is the renewal of the proportional takeover provisions of the company's constitution. It's a special resolution and to pass, 75% of the votes cast by shareholders entitled to vote on the resolution must be in favor. We will first take questions from shareholders in the room, then shareholders using the online platform and then take questions received over the phone. The first item of business is the presentation of the financial and statutory reports. The accounts were circulated as part of the annual report published on PIC's website on the day we announced our full year results, i.e., August 26, 2024. I now formally table the financial report, the directors' report and the auditor's report for the financial year ended June 30, 2024. There's no voting on the item but shareholders have an opportunity to ask questions and make comments on the item using the online platform. As I've previously mentioned, Karen Hopkins and Danny Peng from KPMG are also available to answer shareholder questions on the conduct of the audit, the auditor's report, the company's accounting policy or the independence of the auditor. All questions to the auditor should, in the first instance, be addressed to me as Chairman. And if appropriate, I will ask Karen to address the question. Please note, we will focus specifically on the remuneration report later in the meeting, and we will be taking questions on that and the other specific items of business when we come to them. I note that I have no written questions for the auditor received in advance of the AGM. I'll now invite shareholders in the room who would like to ask a question on this item of business to raise their hand. It appears we have no questions. Sylvie, do we have any written questions received?

Chairman, there are no questions online.

Do we have any on the phone? Link says no. No questions on the phone, I think. So there are no questions on this item of business. Now moving to the formal part of the meeting. For each resolution, we will show you the proxies received prior to the meeting. The final number of votes, including the votes cast in person and through the online platform voting from today will be collated after the meeting and released to the ASX. I wish to confirm that I am holding open proxies in my capacity as Chairman. It is my intention to vote all available undirected proxies in favor of all 5 resolutions. Resolution 1, that Amanda Apted who retires in accordance with clause 15.6 of the company's constitution and being eligible for reelection, be reelected as an Executive Director of the company for a term of 3 years. The first resolution today is to consider the election of Amanda as an Executive Director. Amanda was appointed to the Board on May 13, 2021, and being eligible, now stands for reelection. Details of Amanda's career are set out in your explanatory notes accompanying the notice of meeting. The Board, with Amanda abstaining, strongly supports Amanda's reelection. I ask Amanda to provide a few comments with respect to her background and current commitments outside PIC.

Thanks, Nancy. Good morning, everyone, and it's great to be with you today, and I'm incredibly appreciative of the opportunity to stand for reelection to the PIC Board. As Nancy mentioned, I'm Chief Executive of Perpetual's Asset Management business in Australia, including the investment capabilities offered by PIML, which, as you know, is the manager of PIC. I joined the Board in May 2021 as an Executive Director. And as an Executive Director, PIC does not pay me for my role on the Board. By way of background, I have more than 2 decades of investment management industry experience. My career includes roles in both global equities and asset allocation as well as roles in investment consulting and managed funds research. Most recently, prior to joining Perpetual, I was CEO of Lonsec, where I had overall responsibility for investment research and ratings. I had the benefit of assessing many investment managers through that career, and there were only a few I would have ever chosen to work for, Perpetual being one of them. It made my decision to join in 2018 a very easy one and the past 6.5 years have only reinforced that view. I have led Perpetual's Australian Asset Management business since 2020. My responsibilities include the Australian equities, credit and fixed income and multi-asset investment capabilities in Australia, and I'm also a Director of the PIML Board. I'm really proud to lead the team, which supports the PIC Board and PIC investors. I feel very privileged to have been a director on this Board and to serve the company and you as shareholders. Thank you for your consideration of my reelection.

Thank you, Amanda. There were no written questions received regarding this resolution. I'll now invite any shareholders in the room to ask any questions. No. Do we have any online questions, Sylvia?

No Chairman.

Do we have any questions on the phone?

There are no questions on the phone line at this time.

Thank you very much. It appears there are no further questions on this item of business. The proxies received prior to the meeting on Resolution 1 are now displayed on the screen and on the online platform. To vote on the resolution, please cast your vote now if you haven't already done so by selecting either for, against or abstain for resolution 1 on your voting card or through the online platform. [Voting]

Okay. I think they would have finished voting. I'll move on to Resolution 2, that Ms. Virginia Malley, who ceases to hold office in accordance with clause 15.5 of the company constitution and ASX Listing Rule 14.4 and who is invited by the Board of Directors of the company to stand for reelection, be reelected as an Independent Non-Executive Director of the company for a term of 1 year. The second resolution on today's agenda is to consider the reelection of Virginia Malley as an Independent Non-Executive Director for a term of 1 year. Virginia was first appointed to the Board on August 25, 2014, has been invited by the Board to stand for reelection. Virginia is the Chair of PIC's Audit and Risk Committee and a member of PIC's Nomination and Corporate Governance Committee. Details of Virginia's career are set out in the explanatory notes accompanying the notice of meeting. The Board, with Virginia abstaining, strongly supports Virginia's reelection. I ask Virginia to provide a few comments with respect to her background and current commitments outside PIC. Thank you, Virginia.

Ladies and gentlemen, fellow shareholders and my colleagues on the Board, I stand before you today and respectfully seek your support for my reelection as a director of the company. By way of background, I've worked in the industry for approximately 30-plus years and principally in risk management and governance roles for a number of blue-chip investment management companies, obviously, including Perpetual Superannuation and Perpetual Equity Investment Company Limited. Over the last decade, I have had the privilege of serving you via my Board role. And during that time, we have navigated the challenges of listing on the ASX, the challenges of the COVID market crash and recovery and the constant volatility of share markets on the sturdiness of our value-based investment style. We are fortunate that notwithstanding those external pressures, PIC has a decade on, outperformed its performance benchmark, delivered 2 fully franked dividends every year since late 2015 and has delivered resilient value to its shareholders. During this time, I have been committed to establishing and maintaining the Board's high standards of governance and risk, strategic oversight, shareholder engagement and a productive commercial relationship with our investment partner, Perpetual Investment Management Limited. As PIC ventures into its second decade, I can provide the stable oversight and commitment for the next year that will enable PIC to bed down enhanced commercial arrangements with Perpetual Investment Management Limited. I also offer continuity and stability in corporate governance knowledge as the Board continues to evolve and enhance its oversight and refreshes its membership. As a member of the Board, I've advocated for high transparency in what and how we communicate to our shareholders, and we'll continue to do that should I be reelected. I'm excited about the opportunities that lie ahead for PIC as the domestic and global economies become more dynamic and note the significance of having a Board committed to a time-tested, robust, true to mandate disciplined value investment style. Thank you for your trust and consideration. I look forward to the opportunity to continue serving you and Perpetual Equity Investment Company Limited. Thank you.

Thank you, Virginia. There are no questions regarding this resolution received in advance of the AGM. Do I have any questions in the room for Virginia? No. Do we have any written questions received online or during the meeting?

Chairman, no, there are no questions.

Do I have any questions on the phone?

There are no questions on the phone line at this time.

Okay. So it appears there are no further questions on this item. The proxies received prior to the meeting on resolution 2 are now displayed on the screen and on the online platform. We now vote on the resolution. Please cast your vote now if you haven't already done so by selecting either for, against or abstain for resolution 2 on your voting card or through the online platform. [Voting]

Okay. Moving on to Resolution 3, that the rem report as set out in the annual report be adopted in accordance with Section 250R of the Corporations Act. The remuneration report forms part of the directors' report and is included in the company's annual report for the financial year ending June 30, 2024. As you will note, the remuneration report contains the remuneration paid to PIC's directors who are the key management personnel. The company has no paid employees. And accordingly, the 2024 remuneration report is simple and brief. There were no written questions regarding this resolution received in advance of the AGM. I'll now invite shareholders in the room if they have any questions on the remuneration report. No. Thank you very much. Sylvie, do we have any calls on whatever, questions online or through the Internet.

No, there are no questions online.

And do we have any questions on the phone?

There are no questions on the phone line at this time.

Thank you. It appears there are no further questions on this item of business. The proxies received prior to the meeting of resolution 3 are now displayed on the screen and on the online platform. Time to cast your vote. If you haven't already done so, select for, against or abstain for resolution 3 on your voting card or through the online platform. [Voting]

Moving to Resolution 4, which is displayed on the screen. The next item of business is the renewal of the proportional takeover provisions in the company's constitution. This is a special resolution and requires at least 75% of the votes cast by members to be in favor. The proportional takeover provisions were last refreshed at the company's 2021 AGM. Under the Corporations Act, shareholder approval of the proportional takeover provisions lasts for 3 years and will lapse if not renewed by special resolution. As at the date of this meeting, I can confirm that the Board is not aware of any proposal by a person to acquire or increase a substantial interest in the company. Further information on the proportional takeover provisions has been provided in the explanatory memorandum and the notes to the notice of meeting. The Board unanimously supports this resolution. There were no written questions regarding this resolution received in advance of the AGM. Do any shareholders in the room have any questions? Thank you. Any online questions, Sylvie?

No Chairman.

Do we have anybody on the phone who wishes to raise a question?

There are no questions on the phone line at this time.

Thank you. It appears there are no further questions on this item of business. The proxies received prior to the meeting on resolution 4 are displayed on the screen and on the online platform. It's now time to vote for resolution 4. You can vote for, against or abstain on your voting card or through the online platform. [Voting]

Now moving to a more meaty resolution right now. Resolution 5. This is our approval to enter into a new management agreement with Perpetual Investment Management Limited. The resolution wording is on the screen. For ease of reference, I will be referring to Perpetual Investment Management Limited as PIML or the manager for this resolution. The next item of business is the proposed entry into a new management agreement with PIML. PIC's existing management agreement with PIML was established at the time of the company's inception in 2014 and has been in place for 10 years. PIC does not have any employees. PIML provides both investment management services and corporate management services under the existing management agreement. With the management agreement coming to an end on December 11, 2024, the independent nonexecutive directors of the company led a process to determine the most appropriate arrangements for the company in the future. Given our association with Perpetual Limited and PIML, I and Executive Director, Amanda Gillespie, excluded ourselves from the process. The process included an independent review by Deloitte, which included a review of PIML's investment structures and investment processes, the existing management agreement, fees and alternative investment managers, the appointment of an external consultant to assist the independent nonexecutive directors with the Deloitte report and negotiations between PIC and PIML. And lastly, consideration of industry practice, including the FSC standard for investment management agreements, ASX Listing Rules and guidance notes. The independent nonexecutive directors concluded that it is in the best interest of the company and PIC's shareholders to continue to have investment management services and corporate management services provided by PIML, and as a result, have negotiated a new management agreement with PIML for which we are seeking shareholder approval today. The notice of meeting that was provided to shareholders provides a summary of the key terms of the new management agreement and also outlines comparison of key provisions between the existing management agreement and the new management agreement. The notice of meeting and new management agreement were also provided to the ASX who did not require any amendments to the new management agreement. I am pleased to advise that we have been able to negotiate several terms, which are more favorable to the company than the existing management agreement. This includes: one, fees with a drop in the threshold required to achieve a lower management fee and an additional threshold added; two, a term with a longer notice period and automatic 5-year extensions after the initial term; three, a termination payment with a maximum 18-month payment of fees where the agreement is terminated in the second 5-year term with no termination payment for termination by the company after this. The Board, myself and Amanda Gillespie abstaining, unanimously recommend that shareholders vote in favor of resolution 5. There were no written questions regarding the resolution received in advance of the AGM. I'll now invite shareholders in the room who would like to ask a question on this item to raise their hand. Thank you very much. I'll now respond to online questions. Sylvie, do we have any written questions during the meeting?

No, Chairman, there are no questions online.

Do we have any questions on the phone that somebody would like to ask?

There are no questions on the phone line at this time.

Thank you very much. The proxies received prior to the meeting and resolution 5 are now displayed on the screen and on the online platform. Thank you very much. Time to cast your vote. If you haven't already done so, select for, against or abstain for the resolution on your voting card or through the online platform. [Voting]

I think we're done with the voting for today. I'll now take questions received on any other business brought before the meeting. For fairness to all present, I ask that you limit your questions to two questions or comments at a time. I will now invite shareholders in the room who would like to ask a question to raise their hand. You're standing between us and a cup of tea, right? Thank you. There are no questions. Do I have any questions online?

No, Chairman. There are no questions.

Do I have any questions on the phone?

There are no questions on the phone line at this time.

Thank you very much. I now ask you to ensure that you complete your voting for each resolution. Link's staff will now come around and collect your voting cards to be placed in the ballot boxes. For the shareholders online, if you're uncertain about any of the voting procedures, please use the help line available through the platform. Voting on all resolutions will close 5 minutes after I close this meeting. The results of the poll will be announced via the ASX after this meeting and will be made available on the AGM section of PIC's website. I think there's a few more up here for the Board on the ballots, too. Okay. If you haven't voted yet, I think you have 5 minutes. There being no other business, I declare this meeting closed. Thank you for your ongoing support and your attendance today. I invite those present with us in person today to join the directors and members from the management for some refreshments, which will be served just outside the entrance to this room. Thank you very much.