Perpetual Limited (PPT) Earnings Call Transcript & Summary

Well, good morning, everyone. I'm Greg Cooper, Chair of Perpetual. It's 10 a.m. And as I've been advised that a quorum is present, I declare this 2025 Annual General Meeting open, and I welcome you all to Perpetual's AGM. We acknowledge the traditional owners of the land we are present on today, the Gadigal people of the Eora Nation as the custodians of this land, recognizing their connection to land, waters and the community. We pay our respect to Australia's first peoples and to their elders past, present and emerging. We'd like to extend our respect to and welcome any Aboriginal or Torres Strait Islander people 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. I would like to welcome our shareholders, proxy holders and guests, both here in person and online. In particular, welcome to any of our new shareholders. I'll say a few words shortly concerning how I propose to run today's hybrid meeting and the procedure for voting and submitting questions. Before I move into some introductions, I'd like to add in the event of an emergency, please listen out for instructions from the hotel and follow the directions of the venue staff. I would also like to take this opportunity to introduce our Board and management team and our auditor. In the room, seated on the main table here, I'm joined by Bern Reilly, our Chief Executive Officer and Managing Director; Sylvie Dimarco, our Company Secretary; Paul Ruiz, a Non-Executive Director; Mona Aboelnaga Kanaan, a Non-Executive Director; Phil Wagstaff, Non-Executive Director; Chris Jones, a Non-Executive Director; and Fiona Trafford-Walker, Non-Executive Director and Chair of the People and Remuneration Committee. I'd particularly like to thank Mona, Phil and Chris for traveling to Australia to be in person for the AGM. I would like to inform you that our senior executives are also here in the room and sitting in the front row and available to answer any of your questions. I'll ask each of the executives to stand up as I introduce them, but they are Chief Financial Officer, Suzanne Evans; Chief Operating Officer, James MacNevin; Corporate Executive -- Chief Executive for Corporate Trust, Richard McCarthy; our Chief Executive of Wealth Management, Mark Smith; Allan Lo Proto, our Chief Risk Officer; and Helen Mediati, our General Counsel. Finally, I'd also like to welcome Cao Toouli from KPMG, who is the company's auditor. This is her first AGM as global lead partner. Cao is available to answer any questions that shareholders may have in relation to the FY '25 financial statements and the auditor's independence, and we'll deal with those questions under the first item of the agenda. In terms of today's business, we have the following items to consider: presentation of the FY '25 financial statements and reports; the reappointment of myself as Non-Executive Director; approval of the FY '25 variable incentive equity grants to the CEO and Managing Director and the adoption of the remuneration report for FY '25. There will also be opportunities to ask questions. Based on the proxy voting positions received in advance of the meeting on the remuneration report, we have not received a second strike and are, therefore, not required to put the conditional spill resolution to this meeting. Further information about each of the items for consideration today is set out in the Notice of Meeting, and I'll take that notice of meeting 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 Chair of the meeting, have been appointed as a shareholder proxy or become their proxy by default, I will vote directed proxies as directed in the proxy appointment, and I'll vote any available undirected proxies in favor of resolutions 1, 2A, 2B and 3. If you are participating as a shareholder and hold proxies, then you would have received an e-mail setting out instructions on how to vote those proxies using the voting mechanism on the platform. I'll now turn to the important formalities for voting and asking questions. Following comments and questions for the voting resolutions, I'll confirm the proxy votes received before the meeting that will appear on the screen in the room and your computer screen. Each resolution before the meeting today is an ordinary resolution and will be passed by a simple majority. Firstly, I'll deal with the important formalities for voting. Voting on each resolution will be conducted by way of a poll. Regi Harbron of MUFG Corporate Market Services Limited is the returning officer for the purposes of the poll. You will have all received a yellow voting card when you registered today, and they will be used to cast your vote. Once counted, the outcome will be announced to the ASX later this afternoon. For voting online, the poll is now open, and you may cast your vote at any time. You may also change your vote at any point until I declare the poll closed. The poll will remain open for 5 minutes after the end of today's meeting. To vote online, follow the steps in the virtual meeting platform. If you experience any difficulties with the virtual meeting online platform or you are unsure how to vote or ask questions, there's a help line number available, which is 1800-990-363 within Australia and which is displayed on the screen. Now the formalities for asking questions. I will introduce each resolution, and there will be an opportunity to ask questions in the room. For shareholders in the room, we'll first take questions from you, then from shareholders using the virtual meeting online platform and then take any questions received via web phone. We will save asking each question until the relevant item of business. If you wish to ask a question, please move to one of the two standing microphones located on either side of the room. Please also provide your full name to the staff member standing there so they can introduce you prior to asking your question. We encourage you to use the microphones at the back. But for any guests who are not able to make it to a microphone, please raise your hand, and we'll get a roving microphone to you as quickly as we can. I would ask in the interest of all shareholders attending that shareholders please only ask one question at a time, keeping it relatively short to allow as many questions as possible and only ask questions which are relevant to the meeting and shareholders as a whole. I'll also not be responding to any questions of a personal nature. For online shareholders, there's an opportunity to ask written questions during the meeting, and this function is also now open. To do so, please follow the steps in the virtual meeting platform. The Company Secretary will read questions to the meeting, and they'll be read in full. Depending on the nature of the question, I'll then respond or designate another Board member or executive to respond. For audio questions online, click on Ask a Question and then click, Go to Website, on the virtual meeting platform and please follow the steps. [Operator Instructions] This completes the formalities. And in a moment, I'll invite our CEO, Bern Reilly, to deliver his address. But before I do that, I'll provide some comments on the FY '25 year and the Board's approach to remuneration, taking into account shareholder and proxy feedback following the first strike last year. In February this year, I had the privilege of being appointed Chair of Perpetual Limited Board. Since then, I've worked closely with my fellow Board members and the Executive Committee to continue resetting the company for the future. Earlier in FY '25, in my role as Deputy Chair, I oversaw the appointment of Bernard Reilly as Chief Executive Officer and Managing Director. Bern commenced in September 2024 with key areas of focus, including reducing costs, delivering operational efficiencies across the group, which includes what we refer to as our simplification program and improving the performance of our asset management business. The Board is encouraged by the strong progress Bern has made, particularly, he has navigated the business through its strategic shift. From the originally planned stand-alone asset management model and following the termination of the scheme implementation deed with KKR in February 2025 to Perpetual's continued operation as a diversified financial services business. In February 2025, Perpetual announced the termination of the scheme after an independent expert and the Board concluded that the scheme was not in the best interest of shareholders. The decision was made following feedback from the Australian Taxation Office, indicating that the potential tax liability associated with the transaction would be significantly greater than originally anticipated. A flow on from this was that the estimated cash proceeds to our shareholders would have been substantially lower than anticipated. When the Board first recommended the transaction, it did so based on firm advice from its taxation and financial advisers, and we were very disappointed with the ATO's differing view. The Board and management engaged extensively with KKR to explore alternative transactions, but ultimately, the scheme was terminated. While this was clearly not the outcome we had planned for, the process underscored the strength, quality and value of our 3 businesses and our brand. The significant work completed both as part of our 2023 strategic review and in preparation for the proposed transaction and more broadly as part of our strategy to simplify our business has helped position us on a path to a simpler operating model with more focused teams continuing to deliver the high-quality client service and outcomes that Perpetual is known for. Following the termination of the scheme, the Board decided that we would explore the sale of the Wealth Management business, which if it occurs, would allow us to invest more deeply in the asset management and corporate trust businesses. We note the media speculation yesterday, which we responded to via an ASX release, reiterating that we continue to progress the sale of the wealth management business. Reflecting on FY '25, what is evident is that Perpetual demonstrated resilience through a period of corporate uncertainty as well as volatile equity markets. However, as a Board, we acknowledge that there is more work to do to deliver returns and ultimately, growth in our share price. Bern will talk more in detail shortly to the company's financial results. But at a high level, in FY '25, the group reported an underlying profit after tax of $204.1 million, 1% lower than FY '24. We reported a statutory loss after tax of $58.2 million, reflecting noncash impairments of goodwill and customer contracts of $134.6 million, primarily related to the J O Hambro boutique and costs associated with the terminated scheme, proposed sale of Wealth Management and the simplification program. The Board declared an unfranked final dividend of $0.54 per share, bringing total dividends to the year to $1.15 per share, representing a payout ratio of 65% of underlying profit after tax, consistent with the Board's dividend policy to pay between 60% and 90% of UPAT annually. Both the interim and final dividend in FY '25 were unfranked, and our expectation is dividends will remain unfranked in FY '26. The Board continued the dividend reinvestment plan this year, allowing shareholders to reinvest their dividends without any transaction costs. A key initiative of the past 12 months has been the execution of Perpetual simplification program, which was first announced in August 2024 and then expanded in February this year. At its core, the program aims to simplify the business and deliver annualized cost savings of $70 million to $80 million by the end of FY '27. In FY '25, the business delivered $44 million in annualized cost savings ahead of its target of $30 million. This represents disciplined execution and positions the company well to achieve its FY '27 target. Bern will provide further detail on the simplification program in his address. In FY '25, we also announced a refreshed group strategy. The strategy has 3 priorities: Simplify the group, deliver operational excellence and invest for growth. Ultimately, we need to deliver for our customers by continuing to meet their needs in an efficient way and drive growth and improve performance for shareholders. The internal separation of our businesses, which commenced in preparation for the KKR transaction has continued and means each of our 3 businesses are now better positioned under their own leadership, but importantly, with group oversight to drive growth and risk management initiatives in an efficient and sustained way. The Board is fully supportive of this direction and the progress being made in relation to these 3 key priorities. As mentioned earlier, through the year, there have been a number of changes to the Board and the Executive Committee. I was appointed Chair of the Board in February this year following the retirement of former Chair, Tony D' Aloisio, after 8 years on the Board. In October 2024, longstanding nonexecutive directors, Ian Hammond and Nancy Fox, also retired from the Board. On behalf of the Board, I would like to thank Tony and Nancy for their contribution during their time at Perpetual. Following Nancy's retirement, Fiona Trafford-Walker assumed the role of Chair of the People and Remuneration Committee. We also welcomed Paul Ruiz to the Board, who replaced Ian as Chair of the Audit, Risk and Compliance Committee. These changes mean the Board has reduced in size from 8 to 6 nonexecutive directors. The Executive Committee has also been refreshed over the past 12 months with new appointments, including our CEO, Bern Reilly; Chief Financial Officer, Suzanne Evans; Chief Operating Officer, James MacNevin; Chief Risk Officer, Allan Lo Proto; and General Counsel, Helen Mediati. The refreshed Board and executive team are confident in the strategic direction of the company, and we'll continue to focus on simplifying the business and delivering improved returns to shareholders. At last year's AGM, we received a first strike on our FY '24 remuneration report. We acknowledge this outcome reflected shareholder concerns about aspects of our approach to remuneration. Over the past 12 months, we've engaged with a number of major shareholders and proxy advisers to better understand the concerns and how these could be reflected in our remuneration framework and outcomes. Fiona will speak to this in more detail in her address. However, I'd like to acknowledge today's FY '25 remuneration report, proxy voting outcome, which we will share soon under Resolution 3 is a testament to the work done and which continues to listen and respond to our stakeholders. I want to thank our shareholders for your continued support and engagement. We sincerely appreciate the constructive feedback you've shared throughout the year. Your insights play an important role in shaping our decisions and strengthening our governance. We remain committed to maintaining an open and transparent dialogue with our shareholders and continually improving. I also want to acknowledge our people across the group. Their resilience, dedication and commitment to our clients has been exceptional through a year of significant change. I reiterate the Board's view that there is much to do in improving the underlying performance of the business, and this being reflected in the share price. I can assure you that the Board and management continue to work tirelessly in achieving better outcomes for the shareholders. Thank you once again for your engagement and support. And I'll now hand over to Bern for his address.

Thank you, Greg. Good morning, everyone, and thank you for joining us. It's a pleasure to address you today as your CEO and Managing Director. FY '25 was a year of meaningful change and progress for Perpetual. Set against a backdrop of corporate uncertainty, volatile equity markets and broader macroeconomic challenges, the group demonstrated resilience and delivered on a number of key strategic and financial priorities. We've taken important steps to reshape the business, simplify our structure and position ourselves for long-term sustainable growth. While there is still more to do, I believe we are on the right path to returning Perpetual to a strong company that delivers improved shareholder returns. Since stepping into the role just over a year ago, we have moved to reshape Perpetual into a simpler, more efficient and client-focused organization. One of the first key steps was implementing a new operating model designed to improve efficiency and accountability by shifting more support functions into each of our 3 businesses, allowing them greater autonomy and control over their performance. It's a foundational change that underpins our refreshed strategy. Through the year, we have made changes to our Executive Committee to streamline our leadership structure and bring in fresh perspectives. And with the new team in place, we have recently launched a new strategy for the group focused on 3 clear priorities: simplify, deliver operational excellence and invest for growth. It's already guiding where we are directing our efforts, and I'll discuss these shortly. A key part of our strategy has been our cost savings or simplification program, which involves streamlining central functions and reallocating resources across the business. Initially targeting $25 million to $35 million in annualized savings by June 2026, we revised that ambition to $70 million to $80 million by June 2027. As reported in our financial year '25 results, we have already achieved $44 million in annualized savings, exceeding our target for the year and putting us well on track to meet our long-term goal. In asset management, we have sharpened our focus on product innovation, launching new offerings and partnerships and refreshed our distribution strategy. We also accelerated initiatives to restore the J O Hambro boutique to its heritage strength, including product rationalization, reinvestment in new capabilities and the appointment of a new CEO in September this year. In corporate trust, we continue to deliver strong performance and deepen client engagement, supported by new digital product offerings. And finally, in wealth management, the business has demonstrated its quality and resilience as we continue to pursue a sale of that business. Turning to the next slide. As mentioned, we've made several changes to our executive leadership team to lead the company through its next phase. In July, we welcomed Suzanne Evans as our new Chief Financial Officer. Suzanne brings deep financial and industry experience to Perpetual and has already made a strong impact in her short time with us. Her focus on disciplined capital management and cost control will be critical as we continue to strengthen our financial position. In November last year, Allan Lo Proto was appointed Chief Risk Officer. Allan has brought a sharp focus to our risk and compliance frameworks, which is essential in today's complex and highly regulated environment. We also welcomed James MacNevin, who joined as Chief Operating Officer, bringing a wealth of operational and investment management experience. And in July, we appointed Helen Mediati as General Counsel, adding strong legal and governance experience to the executive team. These appointments have brought fresh energy and capability to the group while streamlining the executive team. Turning now to our financial results for FY '25. Despite ongoing business uncertainty surrounding the ownership of the Wealth Management business, our teams have shown remarkable resilience and remain focused on delivering for our clients. In FY '25, we delivered total group operating revenue of $1.373 billion, up 3% on the prior year, reflecting growth across all 3 businesses. Underlying profit after tax was $204.1 million, down 1%, impacted by net outflows in asset management, a softer performance in wealth management due to corporate uncertainty and the absence of some one-off benefits that we experienced in FY '24. The Board declared a total dividend of $1.15 per share, representing a payout ratio of 65% of UPAT. Turning to each of our businesses. In asset management, revenue increased 2% to $903.9 million and underlying profit before tax was up -- was at $200.9 million, a similar level to 2024, supported by improvements in equity markets and foreign exchange rates, partially offset by net outflows of $16.2 billion. At last year's AGM, I set out my priorities for asset management, which were implementing a new operating model, executing the simplification program, revitalizing the J O Hambro boutique and shifting from a regional to more international distribution approach with increased frontline presence in key regions such as the U.S. Significant work has been undertaken across all of these priorities. At the same time, we have progressed our product innovation agenda. In June, we entered into a letter of intent with Partners Group, a leader in private markets to explore product development and investment strategy opportunities that combine both public markets and private market assets. Turning to wealth management. Revenue increased 4% to $235.6 million, while UPBT declined 5% to $51.5 million. Despite the corporate uncertainty related to the sale process, the business delivered consistent high-quality client service. This was reflected in a record high Net Promoter Score of 56. We also launched our Advice for Women by Women program and continue our work in the philanthropy area, distributing over $129 million to the charity sector on behalf of our clients. Corporate Trust delivered another strong year with revenue up 9% to $204.2 million and UPBT up 7% to $90.9 million. Growth was supported by all 3 business units: Debt Market Services, Managed Fund Services, and Digital & Markets. The business achieved an NPS of 62, up from 54 and our Digital & Markets segments grew revenue by 18%. We are committed to delivering for our clients. Our group-wide NPS remains strong at 53%, consistent with the prior year, and it reflects the strength of our client relationships and the trust placed in us. In asset management, we launched our first fixed income and credit ETF on the ASX, expanding our product offering and responding to the growing demand for accessible and reliable investment solutions. The active ETF market will be a growth focus for us in the coming years. As mentioned, in wealth management, our Advice for Women by Women initiative was launched in late 2024 and has been very well received. Led by our experienced team of female advisers, the program addresses the comprehensive and distinct financial needs and goals of women through a supportive and inclusive network. In corporate trust, we secured an Australian market license to operate a digital marketplace for wholesale term deposits, a significant step forward in our ambition to digitize and modernize the fixed income market in Australia. Our teams were also recognized across the industry for their performance with some of the awards that you can see here on the slide. A fantastic achievements that highlight the quality products and services that our businesses offer. Moving to the next slide. As I mentioned earlier, we launched a refreshed group strategy as part of our FY '25 results. Our goal is to be a strong financial services group with differentiated businesses that operate with discipline and deliver improved returns for shareholders. To achieve this, we have 3 strategic priorities, which I mentioned earlier: simplify, deliver operational excellence and invest for growth. We've already made meaningful progress in each of these areas. If I start with simplify, simplify means removing complexity to drive greater autonomy and accountability. Through the year, we embedded a new operating model for each of our 3 businesses to operate more as an end-to-end business while retaining group oversight. This shift has helped us already exceed our FY '25 cost savings target, as we mentioned previously. We've also made meaningful progress on our balance sheet. In FY '25, we reduced gross debt from $840.3 million at 31 December 2024 to $738.5 million, which is below our 30 June target, and we are committed to further reducing it over the coming year. And we continue to pursue the sale of qealth management, which, if sold, would simplify our business further. Finally, we are exploring opportunities to expand outsourcing and offshoring across the group to unlock further efficiencies. Turning to operational excellence. We are focused on maintaining strong client engagement by delivering high-quality products and services that meet evolving client needs. We are embedding cost and capital discipline across the group with clear financial targets and performance measures in place for each business. Importantly, we aim to retain our leadership position in key markets by deepening client relationships, driving service innovation and ensuring our investment offerings remain true to label and differentiated. And lastly, investing for growth. We are reinvesting in areas where we believe we can deliver sustainable growth. This includes measured investment in new products and capabilities that diversify our revenue streams and strengthen our market position. We are committed to invest in digital and AI capabilities within corporate trust and asset management as well as expanding into growth areas such as active ETFs. As our clients' needs evolve, so too will our product and capability set, ensuring that we remain competitive, relevant and well positioned for growth. This refreshed strategy is already guiding our decision-making and shaping the way that we operate. It's grounded in discipline, focused on execution and designed to deliver sustainable value for our shareholders. Importantly, we are already seeing some positive results. Turning to the quarterly results for the first quarter of FY '26 that we announced to the ASX earlier this week. Each of our businesses reported growth in assets under management, assets under administration and assets under advice. In asset management, we saw an uplift of 2% in our assets under management to $232 billion due to strong equity markets, along with a moderation of net outflows relative to the last few quarters. With Barrow Hanley, a standout for the quarter, attracting new client monies into its global strategies. Our corporate trust business delivered another quarter of steady growth in funds under administration, continuing its role as a strong market participant in Debt Market Securitization, Managed Fund Services, and Digital & Markets. Wealth management demonstrated its resilience with funds under advice up 2% as a result of positive market movements and net inflows. Looking ahead, we have a clear set of priorities that build on the momentum that we've established this year. We will continue to execute on our strategy to create a leaner, more efficient business structure. This includes pursuing the sale of the wealth management business. We are committed to delivering the best outcome for shareholders, and we'll continue to assess options through that lens. As mentioned earlier, we continue to strengthen our balance sheet, supported by the cost reduction program and broader capital management disciplines. Delivering on our cost reduction commitments remains a top priority. Having exceeded our FY '25 target, we are now more than halfway through the simplification program and are confident in our ability to deliver the full $70 million to $80 million in annualized savings by June 2027. In FY '26, we will be transforming our finance systems, simplifying back-office operations and continuing to rightsize functions across the group. In asset management, we will continue to invest in new products and capabilities in a measured way to support growth, diversification and improve client outcomes. And in corporate trust, we will continue to support the business in retaining its market leadership position while investing to expand capabilities where opportunities arise. To close, we have made strong progress in reshaping Perpetual into a more focused, efficient client-led organization. I'd like to echo Greg's thanks to our shareholders for your continued support and engagement. I also want to recognize every person across our business, many of whom have worked tirelessly through continued change and remain dedicated to serving our clients and our business. While there's more to do with a refreshed strategy, strong leadership team and a clear set of priorities, we are well positioned to deliver improved performance and long-term value for shareholders. Thank you, and I'll now hand back to Greg.

Thank you, Bern. Now to the formal business. The presentation of the FY '25 financial statements is the first item of business. So it's to receive and consider those financial statements, the reports of the directors and of the auditor for the financial year ended 30 June 2025. I now formally table the financial report, the directors' report and the auditor's report for the financial year ended 30 June 2025. There is no voting on this item, but shareholders will have an opportunity to ask questions and make comments on this item. The way I intend to handle this section of the meeting is as follows: I'll invite questions from shareholders in the room. I'll answer any written questions that we receive online during the meeting. Please use the online question box to ask a question, and then I'll move to answer any questions over the web phone. As I previously mentioned, Cao Toouli, our audit partner from KPMG, is available to answer any questions in relation to their work. So let's open it up to questions.

No questions from the floor. Any written questions? Okay. There were no written questions also in advance of the meeting. Sylvie, do we have any online questions?

There are no online questions.

Last call for questions in the room. Sorry, sir, could I just ask you to maybe go to the microphone just so everyone else can hear better if that's -- or we can bring a microphone to you if you prefer.

Our income has gone down over 50% in 7 years. When you consider inflation, it's 70% in 7 years. I just asked how much of the CEO's income gone down in 7 years?

Well, our CEO, as you'll appreciate, is relatively new to the business. So Bern only joined the business in September of last year.

But how much is it since 7 years ago, his income?

He wasn't in the business 7 years ago.

Well, how much were the CEO's income 7 years ago?

I don't have that figure off the top of my head. But if one looked at the awards given to the previous CEO because of the share price performance, quite a number of their shares and performance rights would not have vested, and therefore, they didn't receive any awards in respect of any hurdle share rights. But I don't have the exact figures, I'm sorry, from a 7-year period. Sorry, can we have the microphone back?

I'd like to show you that. That's our income, down, down, down. I'll show everybody in case you hadn't looked it up.

I appreciate that, sir, but as...

Dividends over 7 years. And you want to give them a $2 million bonus.

So as we've said, Mr. Reilly is relatively new to the business. And the Board, in fact, our Chair of the People and Remuneration Committee will address Bern's remuneration and our remuneration framework shortly.

But how can you offer him a $2 million bonus if he hasn't shown any performance?

Actually, can I leave that one until when Fiona gets up to speak because our view is that the KMP within the business have been rewarded appropriately for the time that they've been with the business.

No, I'm not happy. Thank you.

Okay. Thank you. Do we have any other questions from the floor? Nothing via the web phone. Operator, do we have any questions on the phone?

There are no questions from the phones.

Thank you. Well, thank you. It appears that there are no further questions on this item of business.

We'll now move to the resolutions which require voting. For each resolution, we will show you the proxies received prior to the meeting. The final number of votes, including the votes cast through the virtual meeting platform from today will be collated after the meeting and released to the ASX. I wish to confirm that I'm holding open proxies in my capacity as Chair, and it's my intention to vote all available undirected proxies in favor of all resolutions with the exception of Resolution 4, the conditional spill resolution, which is not required to be put to the meeting, but which I would have voted against had it been put to the meeting. The next item of business is to consider my reelection. I'll therefore hand the meeting over to Fiona Trafford-Walker as Chair of the People and Remuneration Committee to introduce the first resolution.

Thank you, Greg. The next item of business is the reappointment of Greg Cooper. Greg was appointed as a Director of Perpetual in September 2019 and last stood for reappointment at the 2022 Annual General Meeting. In accordance with the company's constitution, he will retire as a Director of the company today and stands for reappointment. Greg was appointed Chair of Perpetual in February 2025, and he is also Chair of Perpetual's Nominations Committee. With more than 30 years of global investment industry experience in the U.K., Asia and Australia, Greg brings strong financial services and strategic expertise to the Perpetual Board. He has a deep understanding of international funds management, predominantly gained during his executive career at Schroders Australia, where he was the Chief Executive Officer from 2006 to 2018. His nonexecutive career has encompassed roles in the superannuation, banking and technology sectors, highlighting the breadth and depth of his experience. The Board considers Greg to be an independent director. The directors, with Greg abstaining, unanimously support the reappointment of Greg Cooper to the Board and recommends that shareholders vote in favor of Resolution 1. On behalf of the Board, the Chair of the AGM intends to vote all available proxies in favor of Resolution 1. I'll now invite Greg to say a few words.

Thanks, Fiona. Firstly, I want to thank my fellow Board members and you, our shareholders, for the opportunity to serve on the Perpetual Board, which I've been part of since 2019. It was an honor to be appointed Chairman in February this year. And together with my fellow Board members and management, I'm optimistic about Perpetual's future. I appreciate there is information in the notice of meeting that highlights my background and corporate experience, but I wanted to take this opportunity to provide some additional context as to why I'm seeking reappointment. With Perpetual being a truly global diversified business, I believe the depth and breadth of my experience across financial services and technology will be important as we continue to focus on delivering improved performance across all of our businesses, but in particular, our asset management business. I'm very conscious of the disappointing share price shareholder experience over the last few years, and over the past financial year, I've overseen material changes to the executive leadership team as well as a new strategy and operating model for the group. Having led the global search process for the appointment of CEO, Bernard Reilly, I've developed a strong working relationship with him along with the refreshed leadership team. Given the transformational change in Perpetual over the past year, which is ultimately aimed at delivering improved returns for our shareholders over time, I believe it's an important moment to solidify these working relationships and continue to guide the leadership team in taking the business forward. And I'm excited about the opportunity to continue serving on the Perpetual Board. Thank you.

Thank you, Greg. I now invite shareholders in the room who would like to ask a question on this item of business to walk over to one of the 2 standing microphones at the back of the room or we can bring a microphone to you if you wish. Do we have any questions in the room? All right. I'll now respond to any online questions. Sylvie, are there any questions online?

There are no online questions.

Thank you. Operator, do we have any participants on the web phone wishing to ask any questions?

There are no questions from the phones at this time.

Okay. Thank you. It appears there are no further questions on this item of business. The proxies received are as displayed on the screen. Thank you. Please cast your vote now if you haven't already done so by selecting for, against or abstain for Resolution 1 on your voting card or through the virtual meeting platform. I'll now hand turning the meeting back to Greg.

Thanks, Fiona. Resolution 2(a) is in relation to the grant of share rights to the CEO and Managing Director. Further information on the grant of share rights to Bern has been provided in the explanatory notes to the Notice of Meeting. The Board unanimously supports this resolution. I'll now invite any shareholders in the room who'd like to ask a question on this item of business to walk to one of the 2 microphones at the back of the room. Go ahead, Mr. Wicks. I'll now respond while Mr. Wicks is gathering his question to any online questions. Sylvie, are there any online questions?

There are no online questions.

Operator, do we have any participants on the phone wishing to ask questions?

There are no questions from the phones at this time.

Thank you. Go ahead, Mr. Wicks.

I cannot support this candidate. Obviously, you've been here since 2019. That's when the rot has started. It's gone down since 2019.

Thank you, Mr. Wicks. This is actually in relation to Resolution 2(a), which is the approval of the variable incentive grants to the CEO.

Well, it doesn't deserve it.

Okay. That's noted. Thank you, Mr. Wicks. There's no further questions? Okay. It appears there are no further questions on this item of business. The proxies received are as displayed on the screen. Thank you. Please cast your vote now if you haven't already done so by selecting either for, against or abstain for Resolution 2(a) on your voting card or through the virtual meeting platform. We'll now move to Resolution 2(b) in relation to the approval of performance rights to the CEO, Bernard Reilly. Further information on the grant of performance rights to Bern has been approved that provided in the explanatory notes to the Notice of Meeting. The Board unanimously supports this resolution. I'll invite any shareholders in the room who would like to ask a question on this item of business to now walk to one of the microphones. Mr. Wicks?

There is no way, I can support this motion.

Thank you, sir. It's noted.

In fact, I strongly speak against it.

Okay. Do you have a question at all, Mr. Wicks you'd like to ask?

Well, how can you deserve it?

I think that's been covered off in the Notice of Meeting. And as we've already responded to in the previous questions, Mr. Wicks. I'll now respond to any online questions. Sylvie, are there any questions?

There are no online questions, Chair.

Operator, do we have any participants on the phone wishing to ask questions?

There are no questions from the phones at this time.

Thank you. It appears there are no further questions on this item of business. The proxies received are as displayed on the screen. Thank you. Please cast your vote now if you haven't already done so by selecting either for, against or abstain for resolution 2(b) on your voting card or through the virtual meeting online platform. The next item of business is the advisory resolution to adopt the remuneration report. In accordance with Section 250R of the Corporations Act 2001, the vote on Resolution 3 would be advisory only and does not bind the directors or the company. I will invite Fiona as the Chair of the People and Remuneration Committee, to address the meeting.

Thank you, Greg. Hi, everyone. I'd also like to extend my welcome to you all in person and online to the Perpetual FY '25 AGM. I'm now going to take some time to talk through Perpetual's remuneration approach for FY '25. Firstly, I want to acknowledge the concerns our shareholders have with Perpetual's financial performance and to assure you, as Greg and Bern have done, that the Board, together with management, is 100% focused on implementing changes that we believe will drive long-term value creation for shareholders. At the 2024 AGM, Perpetual received an 88% strike against its remuneration report, a significant strike and a humbling experience for the Board. I want to assure you that we took that feedback very seriously and have followed through on the commitments made to you at the last AGM with regards to reviewing our remuneration framework and practices and how they are implemented. We undertook a comprehensive consultation process with shareholders and proxy advisers to inform our review. We listened carefully to that feedback for which we thank you. Our review determined that the remuneration framework was appropriate, but that we needed to improve the practices and the application of the framework. The feedback helped us shape a number of meaningful changes to our remuneration practices in FY '25. I'm now going to spend a little bit of time going through some of those key feedback points and those that could be of most relevance to you as -- and interest to you as shareholders. I know there are some of you here today that haven't voted on the rem report, and I'm really happy to have any additional questions, obviously. Firstly, the move to net profit after tax or NPAT from underlying profit after tax or UPAT, as the primary performance scorecard measure was one of the most notable changes of the group short-term incentive scorecard this year. In plain English, that means we now assess management on the total earnings of the business, including one-off or significant items that would typically be excluded from UPAT. It was a challenging year to implement that change because the expectation for NPAT in FY '25 was negative due to planned one-off costs such as those related to the implementation of the KKR transaction, integration of Pendal and the simplification program. The actual NPAT for the year was a loss of $58.2 million, which was less negative than the $61.5 million loss we expected, but clearly still negative. The composition of the actual loss for the financial year included things we didn't know about at the start of the financial year, such as significant items related to the noncash impairments in the J O Hambro business and the KKR termination -- sorry, the terminated KKR transaction. Equally, some of the significant items we thought we would experience at the start of the year did not materialize, and there were also some unexpected positive significant items. So as you can see, it was a challenging year to manage that. So while NPAT was the primary measure of financial performance in the group scorecard, the Board felt it would be prudent also to cross-check that against the UPAT results versus original expectations given the variability in those significant items. In FY '25, we delivered UPAT of $204.1 million, which was 5.8% above our expectations, demonstrating solid underlying performance of the business. This supported the achievement of the financial section of the group scorecard. Secondly, in response to the feedback from last year, where strategic review-related retention payments were awarded in December 2023 to key management personnel, or KMP, the Board did not award any retention payments to KMP in FY '25. Thirdly, we adjusted the remuneration mix for new KMP and executives to put greater emphasis on performance and alignment with shareholders. We increased Bernard Reilly's overall remuneration as CEO because he took on a significantly different role to the one that he was originally appointed for, which was to lead the stand-alone asset management business after the KKR transaction. Bern is now leading the Perpetual Group as a whole, given that transaction did not proceed. That increase was entirely incentive-based. I'd also note that Bern's overall package remains lower than that of the previous CEO that we benchmarked that change and the increase in hurdled long-term incentives is entirely at risk and subject to what we believe are rigorous absolute total return shareholder -- sorry, total shareholder return hurdles. I'll now talk about the decisions regarding CEO remuneration in FY '25. Some shareholders will think it's out of alignment with the financial performance of the group for the year. So I wanted to provide some detail on how the Board approached that decision this year. In relation to Bern's incentive payments, the Board considered the following: Significant changes to the executive team commenced in September 2024 with the appointment of Bern as the new group CEO. At the end of June 2025, we had appointed or would announce we would appoint a new CFO, CRO and COO. Bern as the new CEO, was only in the role for 10 months of the year and in the Board's view, should not be held accountable for the decisions of prior management. In those 10 months, Bern implemented and oversaw the following: a strategic pivot and refreshed group strategy when it became clear that the sale to KKR would not proceed. The implementation of a more decentralized and streamlined group operating model to enable and ensure much more accountability, the pursuit of the sale of wealth management, key changes to strengthen our asset management business and the implementation of a cost savings program and delivery of $44 million in annualized cost savings over FY '25, above our target of $30 million for the year and on track to deliver a total of $70 million to $80 million before tax by the end of FY '27. At the divisional level, corporate trust continued its strong performance. Asset management delivered stable profit and wealth management remained resilient in the face of ongoing corporate uncertainty. The organization also delivered robust investment performance across the majority of the investment strategies and a Net Promoter Score of plus 53. Bern's overall assessment is a weighted combination of the outcome of the group scorecard, the asset management scorecard because he was CEO of that business during the year and his own individual priorities. In the Board's opinion, all of these warranted a 95% of target allocation for Bern as they are all focused on putting in place strong foundations for improved shareholder returns. On average, current and former KMP achieved 90%, which is slightly below target and 52% of their maximum incentive opportunity. Before I close, I'm noting that voting does remain open on the remuneration report resolution this year, I want to briefly comment on the results we've seen so far. As I've outlined, the Board has undertaken a comprehensive review and in engaging with key stakeholders and listening to their concerns, and we're pleased to see that this approach has resonated with many. This means we anticipate that we will avoid a second strike. However, I also want to acknowledge that there are shareholders that have not supported the rem report. And to those shareholders, someone in the room, I'm very happy to engage with you further to understand your concerns and to continue to get your feedback so we can continue to refine our approach in the future. Another thank you. I also want to thank the shareholders for their feedback and support over what has been a critical year for Perpetual. I want to especially thank our people in all of our global locations. They are the ones who come to work every day, look after their clients and do great work. It's been an ongoing period of change for many of them, and they've shown great resilience and commitment. So thank you all. I want to thank Bern and the management team for their commitment, resilience, their ability to be flexible and continually look for the best path through what has been some complicated challenges. Thank you also to my fellow Board members for their support and guidance. On behalf of the Board, I'd like to thank Paul Chasemore. Paul is in the front here. Paul is our Chief People Officer. He's been a key support for me in the last 12 months. And as part of the streamlining of the organization, leaves his role tomorrow. As I said, he's been an invaluable source of knowledge, history and support, and I wish Paul the best for the future. In closing, I hope that I have given you as shareholders some comfort about the remuneration decisions that we took, but also given you confidence that we are committed to a fair, transparent and performance-driven remuneration framework that supports Perpetual's strategic goals and long-term success. We understand that shareholders want to see this reflected in the higher share price. We're very aligned on that, and we're committed to achieving it. Thank you for your candid feedback and for your ongoing support.

Thanks, Fiona. I'll now invite shareholders in the room who would like to ask a question on this item of business. If you'd like to move to one of the microphones. Mr. Wicks.

I go to the shareholders. I've been over my last 10 of my portfolio, 8 of those 10, the increase in profit was due to inflation not to the performance of the company, and yet they still get performance bonuses. So check your own when you go home, how many of the CEOs are getting bonuses for inflation and not for the performance of the company. Thank you, shareholders.

Thank you, Mr. Wicks. I'd just add a couple of comments and also just in response to the comments you made earlier. So I take the point about the performance of the company in the last 7 years. Perpetual has had a pretty difficult time. Since 2018, it's been a period of ongoing change in the business. You might recall, we had a CEO from 2018 to September 2024 when Bern took over. And Bern has been new in the role and has been tasked with basically resetting, refocusing and all the things he talked about, streamlining, putting the company on a much better footing for the future. I think when I look at the alignment, so I think you do see alignment. I think if I look at the way the incentive structure works, it's structured in such a way that if the share price doesn't perform, incentives don't vest. And if I look at the incentives to the previous CEO, many of those didn't vest. So there was no -- the alignment system worked, if you like, the reward framework worked. But none of that takes away from the fact that the share price is not where it should be, and we're really aware that that's what the shareholders experience and need to see. Hopefully, you've heard today from Bern and Greg and me, and you can obviously speak to any of the people up here about what we're doing. We're working pretty tirelessly to put the company on the strongest footing possible. But in order to attract and retain the best leadership team, you have to kind of reset for their rem. So we can't say to Bern, well, you have to take accountability for something someone else did. He would not have -- probably not have taken the job. So we had to set or reset, if you like. But as I said, his rem is lower than the previous CEO. It's a lot more aligned around incentives. So he will do well when the share price rises when you do well as well.

Or should the $2 million wait till he performs...

Some of it...

Beforehand...

Some of it -- yes. So some of it is allocated now for based on what he did in the last 10 months. And some of it -- most of it actually will be when the share price rises. So it's a system which allocates shares, share rights, and he will have to wait to get those and for those to be monetized for him over time when the share price rises. If the share price doesn't rise, then many of those won't vest and he won't get those.

I'm happy to...

And dividends...

Beg your pardon?

Shouldn't it wait till the dividends rise?

Well, I think it's...

Dividends are a function of the underlying performance of the business. And if the business does well, I'm happy to explain to you after the meeting, Mr. Wicks, if you like, how the share price is reflected in Mr. Reilly's remuneration and...

Dividends...

Well, if the business does well and the share price rises, then dividends would follow.

Yes, yes. I think also just another measure of alignment. So the trading window for the directors and including Bern has been closed. So it's not been possible for many of us to buy shares for quite some time. It was open for a very short time earlier this year, and Bern bought $100,000 worth of shares with after-tax money. So he's not waiting for his incentives to vest to be aligned with you. He's already putting after-tax money in to buy Perpetual shares.

Can you put that up on the screen please, so everybody can see what I'm talking about.

I'm afraid, we...

I'm not sure -- we can't...

Over the last seven years...

I think in the back of the annual report, it lists out where the dividends are, Mr. Wicks so investors can refer to that.

Maybe we can chat afterwards. But I think the absolute total shareholder return includes dividends. So Bern is aligned around the total shareholder return, and that will dictate whether he gets his incentives vesting or not. But I'm happy to chat to you after the meeting, if you'd like, but we -- I totally understand your frustration.

Are there any other questions in the room? I'll now respond to any online questions. Sylvie, do we have any questions?

Thank you, Chair. There's a question from Rita Mazalevskis. Her question is, Mr. Lo Proto transferred to Boston and is Head of Business Management and Strategy Asset Management, Americas. He became Chief Risk Officer on 1 January 2025, alongside his U.S. role. He is responsible for leading the global Legal, Audit, Risk, Compliance, Company Secretary and Sustainability at Perpetual. As we have seen even with the regulator ASIC, if the remit is too big, they become ineffective and inefficient. The question is, how does the Board think it is acceptable for one person to cover this entire remit let alone from another country?

It's not really a remuneration question. I can pick it up, in the next item, if you want, Fiona or...

Well, I'm happy to take it. I mean I think the short answer is Allan is coming back in July 2026. The long answer is it's been incredibly valuable to have him based in the U.S. because that's where a lot of our businesses are, and he will return with great relationships and understanding of those businesses, and that will continue. He also -- it's obviously not just Allan. He has a team that works with him. So I don't think that's not something that concerned me anyway.

Any other online questions?

There are no online questions.

Operator, do we have any participants on the web phone wishing to ask questions?

There are no questions from the phones at this time.

Thank you. It appears there are no further questions on this item of business. The proxies received are as displayed on the screen. Thank you. And please cast your vote now if you haven't already done so by selecting either for, against or abstain for Resolution 3 on your voting card or through the virtual meeting platform. Shareholders, based on proxy voting positions that were displayed for Resolution 3, it's clear that more than 75% of the votes cast on Item 3 will be in favor of the remuneration report. This means that the company has not received a second strike against the remuneration report. And as a result, shareholders are not required to vote on Resolution 4, the conditional spill resolution. Resolution 4 will therefore not be put to the meeting. I'll now take any questions received on any other business brought before the meeting. Are there any further questions from shareholders in the room? Sylvie, have we got any further online questions?

Yes, Chair. The first question is from Rita Mazalevskis. Chair, yesterday, the AFR reported it's been 150 days that Perpetual has strung along Oaktree Capital Management backed AZ Next Generation Advisory for its purchase and Perpetual continues to say -- continues to pursue the sale of its wealth management business, which, in fact, you said this morning, it's reported Oaktree is fed up and seriously weighing withdrawing from the process. And as at yesterday afternoon, few were holding out hope of a deal. The question is, Chair, can you and Perpetual be honest and tell shareholders what is going on?

Yes, we are being very honest with our shareholders about what's going on. Maybe what I'd add, I'm not going to respond to any particular elements of media speculation. All I would say is to shareholders is just be very careful what you do read in the media, quite often what's reported is invariably not an accurate position of what's really going on. What I would say is, as Mr. Reilly commented right at the start when we announced the sale of the wealth management business is we were doing that in such a way as to achieve the best possible result and outcome we could for our shareholders and our clients. As a Board, we continue to do that and work in that regard. As we noted in our ASX release last night, we're continuing to discuss the sale and progress the sale of the wealth management business with other parties.

Thank you, Chair. There's another question from Rita Mazalevskis, in the annual report on Page 81 under expenses, it says total expenses for wealth management in FY '25 were $184.1 million, including a one-off legal expense. Chair, what was the legal expense for and how much was it?

I don't think I can comment specifically on the individual legal expenses, I'm afraid.

Chair, the next question is from Rita Mazalevskis. What were the total outflows across the business for FY '25? And can you remind shareholders what they were for 2024? The question is, Chair, I would like to propose an independent external investigation be undertaken into the business over the last few years regarding damaging business decisions, particularly when Mr. Rob Adams, then CEO, was here and where industry and shareholder concern was ignored and Perpetual proceeded with business purchases, which now represents significant outflows. Could I meet with you to discuss this initiative?

Bern, do you want to comment on the individual flow numbers, if you have them to hand for FY '25 and '24?

Across the business. So I mean, we reported $16.2 billion in outflow across all of the asset management business. A large part of that was the J O Hambro business in the U.K. represented a majority of that. In addition to that, we saw outflows actually from a number of our offshore boutiques. And there's a variety of reasons why they occur. Some of them occured because of strategic changes in the market. So you have clients moving from active to passive. And so we're an active manager, and so you see a shift from that. You see clients making asset allocation decisions. They move from U.S. equities to global equities or vice versa when you see a move from that. And some of it is related to performance where some -- majority -- as Fiona mentioned, the majority of our strategies have outperformed, but not all of our strategies have outperformed, and at times, when you underperform, clients will terminate your mandate. So you see it along from some of those areas as well.

And I'd add that our financial results are independently audited by our auditors, KPMG as well already. Any other questions?

Yes, Chair. There's a question from Rita Mazalevskis. In the annual report, Page 73 under key business risks one of these risks is the business resilience, operational and fraud, which can be caused through risk arising from inadequate, failed or disrupted processes, systems or people due to internal or external events. The question is, has Perpetual reported any instances of fraud across any of its businesses worldwide? And if so, when and what for?

There's nothing in terms of fraud that we can advise or report on across any of our businesses in FY '25.

Thank you, Chair. There are no further questions online.

Thanks, Sylvie. I'll now ask the operator to advise if there are any further questions from shareholders on the phone.

At this time, there are no questions from the phone.

Thank you, operator. I'll now ask that you ensure that you complete your voting -- one more online, sorry.

It's again from Rita Mazalevskis regarding general business. Did Perpetual report any executive under BEAR? And has the Board reported any executive under the enhanced Financial Accountability Regime, which replaced BEAR?

No. All right. I'll now ask you to ensure you complete your voting for each resolution other than resolution 4. MUFG 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 number available through the platform. Voting on all polls will close 5 minutes after I close this meeting. After the polls have closed, I'll ask the returning officer to count the votes. The results of the poll will be announced by the ASX this afternoon and will be made available on the AGM section of Perpetual's website. There being no other business, I declare the 2025 AGM of Perpetual Limited closed, and thank you for participating and for your ongoing support. May I invite you to join the directors for some refreshments outside, which will be served shortly. Thank you.