Pro Medicus Limited (PME) Earnings Call Transcript & Summary

Well, good morning, everybody. It's wonderful to see so many of you here to join us today for this annual meeting. On behalf of my fellow directors, I would like to welcome you to this AGM of Pro Medicus Limited, and thank you all for taking the time to be with us today. For those of you who don't know me, my name is Peter Kempen, and I'm the Chairman of the Board and will be Chairman of this meeting. We are meeting in Hawthorn, a suburb of Melbourne. I know you all know that, but the people online may not. And I'd like to acknowledge the traditional owners of the land, the Wurundjeri people of the Kulin Nation. As indicated in the Notice of Meeting, this AGM will be a hybrid meeting with physical attendance here at Leonda and online through the Link Market Services facility. I'm delighted that many shareholders have decided to join us today in person, and I would like to welcome all shareholders to the meeting. There will be several opportunities to ask questions and to vote during the course of the meeting either in person or online, and I'll go through the process later in the meeting. I'd now like to acknowledge my fellow directors: Deena Shiff, nonexecutive Director and Chair of the People and Culture Committee; Ms. Alice Williams, Nonexecutive Director and Chair of the Audit and Risk Committee; Dr. Sam Hupert, Joint Founder and CEO and Executive Director; Mr. Anthony Hall, Joint Founder and Executive Director; Mr. Tony Glenning, Nonexecutive Director; Dr. Leigh Farrell, Nonexecutive Director; all of whom are here today and sitting either in the front row or obviously, on stage. We're also accompanied by Mr. Clayton Hatch, the Chief Financial Officer; and Ms. Danny English, our recently appointed Company Secretary. Also joining us today is Mr. Tony Morse with Ernst & Young, the company's auditors, who is available to answer questions in relation to the financial statements and the report to shareholders. And that probably includes any other question I can't answer. This will be Tony's last meeting, and I will have more to say about Tony towards the end of the meeting. It is very important to mention the following key personnel, who, in addition to the executive directors, have provided excellent leadership during the last financial year: Malte Westerhoff, General Manager, Europe and Global Technology -- sorry, Global Chief Technology Officer; Sean Lambright, Global Head of Sales; Teresa Gschwind, Global Head of Consumer Service; Danny Tauber, General Manager, Australia; Brad Levin, General Manager, North America and Global Head of Marketing; Sharni Redenbach, Director of People and Culture; and Nick Peace, Chief Strategy Officer. Each of these individuals is depicted on Page 9 of the annual report. I'd also like to acknowledge the considerable contribution of Clayton Hatch, our CFO, who is also part of the global leadership team. Before we move into the meeting proper, I'd just like to acknowledge the passing of Mrs. Ronda Hall, Anthony's mother, on the 8th of April this year. Ronda was a formidable and with forthright views, which she didn't hesitate to express. She was a strong supporter and shareholder of the company and enjoyed asking the difficult questions, I think mainly to keep the Chairman -- put the Chairman through his paces. It was a pleasure to know and interact with Ronda, and she will be sorely missed from our AGMs. And it will be now up to David and Anthony to keep asking those difficult questions. But we do miss Ronda greatly. I'd also wish to acknowledge the passing of Deena's mother in June of this year, and the Board has expressed its condolences to both our directors for their respective loss. Before we deal with the formal business of the meeting, I will provide my report to you, which will be followed by a report from Dr. Sam Hupert, the CEO. As I mentioned earlier, there will be opportunities to ask questions during the course of the meeting and following the formal business. So to the Chairman's report. An overview. The company has enjoyed another very successful year, both from an operational and a financial point of view. The last 3 years of our strategic plan saw revenue and profit after tax more than double, whilst the company continued to invest in the business to ensure its sustainability. The success of the company in the markets that we serve has been due to the quality of the management team; the passion, enthusiasm and dedication of all our staff; the flexibility of our leading-edge technology; and the robustness of our business model. Your company is fortunate indeed to have a group of highly skilled professionals led by Dr. Hupert and the management team, who are dedicated to meeting our clients' needs and as a consequence, that of their patients. The majority of our staff have been with the company for many years and the core management team for well over a decade. Employee turnover for the year was extremely low at 2.9%. The company continued to deliver the highest level of service to our existing clients, while at the same time securing a number of significant new contracts and also renewing several existing relationships for further terms. The company also implemented a number of large-scale installations with some of our new clients. As a consequence, the company has continued to deliver long-term, profitable and sustainable financial results by delivering on the milestones outlined in the company's previous strategic plan. The group continues to invest in our best-of-breed suite of innovative products to maintain market leadership, which we believe is fundamental to your company's success. We continue to enhance our product offering through research collaboration agreements with some of our major clients, including development of AI algorithms and next-generation products for enterprise imaging. We also continue to invest in our management and staff, which is growing in line with our strategic objectives. New contract wins. During fiscal 2023, the company announced 7 new contract wins in North America. We also renewed one major contract with an existing client for a period of 7 years at increased fees per transaction. Details of all of these are included in the annual report. Since 1 July '23, the company signed 4 new contracts with combined contract revenue of AUD 200 million. These are: a 7-year contract with Memorial Sloan Kettering Cancer Center, one of the world's most respected comprehensive cancer centers, for $24 million; a 10-year contract with Baylor Scott & White, the largest not-for-profit health care system in Texas. The contract is the company's largest to date with a value of AUD 140 million; an 8-year contract with South Shore Health for $16 million. South Shore Health is the largest independent health system in Southern Massachusetts. And last week, we announced an 8-year contract with Oregon Health & Science University for $20 million. All of these contracts are not reflected in our current results but will add significantly to our future revenues and hopefully, our future profitability. Despite the number of recently announced new contracts, new opportunities continue to present themselves and as a result, our pipeline remains strong. In Australia, our RIS product continues to be the market leader with revenue increasing due to the continued rollout to additional sites with some of our key clients during the period. Financial results for the year. Fiscal '23 was another record year for the company with revenue increasing by 33.6% to $124 million and net profit after tax increasing by 36.5% to $60 million -- $60.6 million. The company continued to be cash flow positive with retained cash and liquid investments increasing from $90 million to $121.5 million after paying increased dividends. The Board anticipates fiscal '24, the current year, will be another very successful year. The budget for the current financial year has been determined, recognizing anticipated strong growth from both existing and new clients. And I'm pleased to advise that the results to date are ahead of budget on a constant currency basis and further ahead with the impact of a lower Australian dollar relative to the U.S. dollar. We anticipate that the second half of the financial year will be stronger than the first half, as is traditionally the case. Surplus cash and M&A. As I indicated earlier, our cash and other financial instruments have continued to grow during the year. These funds are maintained to allow the company to continue to invest in the development of our product suite, including AI, to meet our dividend applications and to take advantage of acquisition opportunities that might arise. The Board has considered a small number of acquisition opportunities during the year. But to date, none have met our criteria. In the current circumstances surrounding the technology sector, the Board is starting to see valuations coming down, such that an increasing number of opportunities may well meet our criteria. Dividend policy. The Board is pleased to increase the dividend payments for the financial year to $0.30 per share fully franked. This represents an increase of 36% over the previous year and a payout ratio of approximately 50%. The dividends were funded from the company's internally generated cash flow. The Board anticipates that future dividends will continue to be fully franked. The Board will continue to determine an appropriate level of dividends, having regard to the profitability of the business, its need for ongoing investment and the necessity to retain sufficient funds to pursue other growth opportunities. Strategic plan. As I mentioned at last year's AGM, the company has adopted a new strategic plan for fiscal '24 through fiscal '26, which sets out our objectives and our strategies for those 3 years. The Board and management have set aggressive growth targets in keeping with the company's current and future potential. We are in the process of progressively implementing our plans to achieve our next growth phase. And I assure all shareholders that we are all committed to achieving further successful outcomes as envisaged within our plan. In closing, on your behalf, I again like to thank all of our dedicated staff in Australia, North America and Europe for their contribution to the company during what has been another very successful year. I'd also like to thank my fellow directors who have also worked tirelessly and diligently to ensure that the company reaches its ultimate goals. It's okay. I'll just finish -- we'll now -- that completes my report, and I'd now like to hand over to Dr. Sam Hupert to give you an overview of the performance of the company over the last year and provide you with an update on the company's current activities. So over to you, Sam.

Good morning, everybody, both here in person and those watching virtually. And thank you, Peter. Always a technical hitch when you're a computer company. Thanks very much. As most of you know, we are a health care IT company specializing in enterprise imaging. We have -- and work in 3 jurisdictions: Melbourne, which is our corporate office and where we develop the RIS product under Anthony's guidance and Danny Tauber, our manager here; Berlin, where we do the R&D and support for Visage globally; and San Diego or the U.S., which is now our largest jurisdiction in terms of staff numbers. It's about 85%, 90% of our revenue and growing. The 2 products. The RIS, as Peter mentioned, it has been the mainstay of our business up until we bought Visage in 2009. We now do over 60% of the local market, and we do have some clients in Canada. The Visage 7 product is the product we sell in the U.S. It's a global product, not regionalized as is the RIS. And I'll tell you a little bit more about that and some of the recent successes we've had with it. As Peter mentioned, 2003 (sic) [ 2023 ] was our biggest year-to-date. Transaction revenue, which is the bulk of our revenue for the last 10 years, increased 44.2%. We won a number of new contracts; renewed the University of Florida contract, a key academic on the East Coast. We completed 8 implementations. RSNA 2002 (sic) [ 2022 ] was our busiest to date, and we hope to eclipse that next week when 3 of us head off for RSNA '23. And we made good progress with other ologies and AI that I'll talk a little bit more about. The financial results. You would have seen the results released there in the annual report. I think it's fair to say all of our key financial metrics headed in the right direction: increased revenue; increased profit; increased retained earnings; and for shareholders, increased dividends. We still remain debt free. So we're in an interesting mix. I'd describe us as a hybrid: growth in terms of the front end, very conservative financially in terms of the back end. In terms of our revenue split, I won't go into each of the divisions. It's the pink one that is growing the most. That's the transaction revenue that's recurring, growing year-on-year as each new client sits on top of the existing base. The blue is also recurring. It is the more traditional service contracts we had, older contracts where people used to buy licenses and now buy ongoing service. So the vast majority of our revenue is recurring. And with future sales, which we'll talk about, it's a lot more predictable year-on-year. Again, some of the highlights for the previous year. These are some of the sales, a mixture of regional and academic, the academic being University of Washington. That's in Seattle. So a good mix in '23. The main thing is it was underpinned by this operational model that we talk so much about. It is Software as a Service. We now use it for the RIS here in Australia. And the important thing is it has inherent upside in every contract because we ask our clients to commit to a minimum number of exams, on top of which, anything they do above that, we charge for as well. So the minimums are a floor. There isn't a ceiling. So if they increase by 20%, which some of them do, we get that upside inherently. It's highly scalable. We don't have any CapEx. We don't sell hardware. Cloud fees are, again, handled by the clients. So the value of all the contracts that we announced are not only at minimums, but that's software revenue and service revenue to us and I think that's important. And the other thing is, as you will have seen, our margins continue to increase. We thought during COVID when they jumped up a bit, that would be temporary. Certain things -- certain expenses like conferences, travel, those things didn't occur during COVID. And we thought they'd drop back a bit after COVID, but they've been climbing steadily since then from the mid-50s to now 67.2% on an EBIT level. Who are our clients? We often get asked. We cut across large sections of the North American market. They're not divided neatly into areas, but there are some key sort of categories. One is called academic medical centers, or ACMs, names you would know like Mayo Clinic, Mass General, Yale, Duke, where there's a university, a teaching hospital, a medical school and then hospitals that then dovetail off that. So we now service 9 out of the top 20. They used to be listed off in ranking order until this year where, for some reason, the listing is alphabetical. But Mayo is always still #1 and as you know, a cornerstone client of ours. The other market is called the IDN, or integrated delivery network. Pretty much large hospitals, usually regional, sometimes multistate. The difference between them and the academic medical centers is they don't have a university. They don't have a medical school and a training program. But they're still quite large and very sophisticated. So the market used to think, "Oh, you just do academic medical centers. You've got 9 out of 20. You've got 11 to go. That's the end of the road." But IDNs are actually bigger. They're a bigger section of the market. They're distributed all over the U.S. and from incredibly large, large, medium large and small. So they cut across all different sort of categories. We won a number in previous years: Novant, Inova, Allina, that supplemented IDNs that we had. Our first big sale in the U.S. was an IDN in Sutter Health. But we have since won 7 IDNs in the last 20 months, and I'll talk a little bit more about that. A lot of them are what we call full stack. That's our 3 product offerings, taking all 3. They're all cloud-based, and we've created a significant network effect in this market as well as the academic market. The RIS, as Peter mentioned and I mentioned before, it was our cornerstone product. It is regionalized to Australia. We now do the top 2 biggest radiology companies. They are still growing and taking parts of the RIS. So whilst America is the growth engine, Australia shouldn't be forgotten because it's still very profitable and still growing, and we are the undisputed leader in this market. So what makes Visage so special? I get asked that by pretty much every fund manager, every investment analyst. We are a replacement market. Everybody has a digital system already. They have to. So when we come in, we're actually replacing a competitor system. So why buy us? Firstly, it's speed. We're incredibly quick. It's a totally different technology. We can visualize even the largest datasets on demand, sub-1 second, which no one else can do. The second is functionality. Radiology used to be largely 2D. Bones, chest x-ray, CT were single slices. But now and now, it's more what we call volume-based or 3D or multiplanar. And so we already have all that functionality inherently built into the product, all the fancy things that radiologists now need to use day by day. So you don't need multiple products. It's all in one. And then scalability, because we're literally dealing with petabytes of data. In some of our bigger clients, they literally process petabytes. So you have to be incredibly scalable to handle that load, and I think we're #1 in all 3 areas. We talk about data explosion. It continues since last year that files are getting bigger. I won't go through all of the list, but the interesting thing is at the bottom. It's breast imaging that always is the first department to crack. Whenever there's a problem anywhere, it is always breast imaging that's the first. And we've even had potential clients come and say, "Our breast imaging department is coming to a standstill. Can you just put this in as an emergency measure until we can get the contract going?" because really, when it stops, it stops badly. And breast imaging is roughly 20% -- 15% to 20% of the volume of a hospital department because of breast screening. So it is very, very important, and it is our canary in the coal mine when it comes to clients that will be coming to RFP. So what is the difference with our technology? Many of you would have seen this slide. Scanners take the pictures. They create a file, say, MRI, CT, ultrasound, plain film, et cetera. That file then gets compressed and sent down the network. A workstation that's heavily configured unpacks it and does all the manipulation and enhancement locally. So that workstation has to have a lot of RAM, has to have a lot of disk and it will often have a few gigabytes of software loaded onto it with a lot of dependencies. What we do is something totally different, and no one's been able to replicate it as far as we know. We take the files, send it to a central server. And in near real time, we do all the rendering, 3D modeling, et cetera, and we stream the pixels. So we actually never move the file, which is so important in terms of the speed and also very important when you get to cloud because egress, coming in and out, has quite a material cost. And these files are big. So our competitors are at a disadvantage purely by the technology and how it impacts cloud costs. So this is the ultimate model for us: streaming platform, cloud-based, radiology products as part of it. Everything hangs off it, as you see: the open archive, the research service, the other modalities. It's one central stack, and everything interacts with it; whereas everybody else has multiple stacks. So this is far more scalable, far more manageable. And this is the platform where we are, obviously, enhancing our product sets going forward. Just a few moments on the recent 4 sales. We've come out of the blocks very, very quickly this year, which is great. Memorial Sloan Kettering, as Peter mentioned, is one of the top 2 cancer centers in the U.S., if not the world, based on the Upper East Side of New York. 7-year, $24 million deal, that will be implemented at the beginning of calendar year FY 2024. Definitely one of the academic medical centers or Tier 1 academics. But again, very specialized purely in cancer, both adult and pediatric. Baylor Scott & White. As I say, everything is always bigger in Texas, and they keep telling me and I think they're right. This is a large -- it's a hybrid. It has the Baylor medical school, which is highly regarded in the state, but it is a large, multi-city IDN. Again, full stack, which is great. We're seeing a lot more of this. So the contract values are higher. It's a 10-year deal. So they wanted to commit for a long time. As you've noticed, a lot of our deals, 6, 7 and 8. This is the first 10-year one. Rollout to commence, again, in calendar year 2024. And as I said, it's a big one, and it certainly set us up in that bigger end of town throughout not only Texas, but the rest of the U.S. South Shore dovetailed off some of the work we've done at Mass General Brigham. Some of the doctors moved between the 2 institutions. It's south of -- right down south in Massachusetts. Again, a good midsized IDN, cloud-based, full stack that will be going early in FY -- early in calendar 2024 as well. And then just last week, this one's been a while in the making, it's a preeminent academic medical center in Oregon. It's very, very highly regarded for its radiology training program. Most of us wouldn't have heard of it, but the Americans certainly have. Again, full stack and cloud, going later in the year in calendar year 2024. One thing I will mention with all of these, we will receive -- you never know. It could be our next business. Thanks very much. Just to mention, we won't really see any revenue from these contracts in this financial year. We will see a material step up as we roll into financial year '25, these come on board. Some of them will have a full 12 months. We're hopeful that Baylor will get between 6 and 9 months. So that will be material. But then following years, they will have a significant impact. So as Peter mentioned, when you look at our sales in the first 5 months, $200 million, and they're at minimums. In other words, a client will tell us how many tests they do the previous year. They will commit to roughly 80% of that on what they call a take-or-pay, and that's the number. So this is the 80% number of what they will be doing. So we are very conservative. The $200 million is at minimums. So there is significant upside in all of these deals. The other thing is it's spread across multiple markets. Just I think it proves that we can work across a large range of market segments and sizes. So they talk about TAM, or total addressable market. We believe that somewhere around 80% of the U.S. is addressable by us. And they do 650 million exams every year, and we're currently around 7%. So we have huge runway ahead of us, and we're confident that the product can work equally well, and does work equally well, in all these markets. The pipeline. We often always get asked about the pipeline. Yes, these were all in the pipeline on the 1st of July and have since dropped to contract, which is great. We have had increased inbound. So a number of these opportunities have been replaced. We have noticed in the last 18 to 24 months an uptick in the number of inbound RFPs we are receiving, and the main [indiscernible] setting off the beginning of the season starts next week in Chicago with RSNA. So we are hopeful to even increase the pipeline or the opportunity for the pipeline even further as we -- as it is our major conference. One thing to sell it, another thing to put it in. People don't focus on this as much, but we do because it's so important that you have a seamless integration. In the past, a lot of institutions would not buy a new system because they were concerned about implementation risk. Either it would fail, and there had been some very high-profile failures in the past; or it would just take 2 years and would be a slugfest and the department wouldn't work properly. And it was just too big, too big an undertaking. Whereas we've been able to prove even in the very largest that we've been able to cut them across so quickly. We do a lot of the work in background, all the migration of the data, all the testing of all the interfaces. Everything is done remotely in background. The actual cut across, in some instances, is Big Bang, the whole organization goes live Monday. If they're really large and regionally based like a Baylor, that may be 4 medium-sized banks simply because it's so big and regionalized. But the cut across will be very, very, very quick, and we think it's a key differentiator, largely predicated on the fact that the technology is so simple to implement and how we train and do all the integration and testing in background. We are known as the most expensive. I know I say that every year because we get told that by every single client, so I have to believe it. So why do they buy us? Simply because we believe we provide the biggest return on investment. And unlike other areas, there are really 2 returns on investment in health care. One is financial. It's got to wash its face or better, and we believe our clients make multiples back of what they pay. But the other one is clinical. It has to be as good, if not better. It has to allow the radiologist to do things quicker, but not only quicker: as accurate, if not more accurate, than their previous platform. And I think we have empirical evidence we do both far more so than any other system. So this one is just to give you an example, and we have a number. Mariam Aboian is a pediatric neuroradiologist at Yale. So she's very, very highly specialized, largely dealing with pediatric tumors. One of the problems she had was tumors, when they have metastases, not like a little golf ball, a little pea, there could be 20 or 30 of them and they're all different shapes and sizes. And you have to assess each one and then work out with the therapies that you're giving whether they're changing bigger, smaller; changing shape; changing their sort of, what we call, morphology, what they actually are. Now that could take 5, 6 hours in a complex case. We've been able to bring it down to under a minute. So really material improvement. And [ Leigh ], if we can look through the video, just to have it in Mariam's own words. [Presentation]

As I mentioned, this is just one example of some of the work we're doing. It's a mixture of the actual platform itself. It uses our AI accelerator, so AI to actually find, measure and segment the tumors. And it's with that, that we take 6 or 7 hours, which is prohibitive and often not done -- usually not done because no one's got 6 or 7 hours and [ distill it ] down to literally minutes. So we have created the largest annotated dataset in these pediatric tumors in the world with the help of Yale and some other research institutions that are all part of this program. And there'll be some new papers. Dr. Aboian and our people have presented papers on this, but there will be more and more and more. So a lot of interesting work being done in background not related to the announcements you see about our sales, but a lot of work going on, and there will be more in the coming year and beyond. The next big topic in radiology, as in most of the medicine but radiology in particular, is burnout. So even if you're an academic where they don't look at dollars and cents as much as maybe the private practices do, radiologists were drowning in the amount of work. So they would always have work left over every day, and it would just accumulate. They could see no light at the end of the tunnel. It is the most talked about thing in radiology at the moment. How did it happen? There's an acute worldwide shortage. It's the same here. Ask any radiologist, they will tell you, you just can't get radiologists. Everybody is competing for them. Some believe that the reason was reduced intake into radiology training programs 5 years ago because people thought AI would do away with the need for radiologists in 5 years, so why go and train when there won't be a job. They were wrong. Large datasets are just more images to look at. People are now looking at work-life balance. They want a day or 2 at home just like other people in the workforce. And for the first time ever, we've seen groups struggling to do their current workload. And some of them are actually giving back contracts to read for hospitals because they just cannot manage what they've currently got, which is unheard of because there used to be 5 or 6 groups competing for every contract. Often when a contract comes up, no one even bids for it because they just don't have the manpower. We address that. We make the radiologists, no matter which ones they are, what area they're working, we make them significantly quicker. And we have had people clock at it up to 50%. That's really at the upper end of the spectrum. It's usually around 20% to 25% or above. So it's incredibly important and material, and it really makes a big difference. And Brad, he loves this. You may notice on the right, the green fire extinguisher, the Visage fire extinguisher putting out the burnout fire. Cloud. Cloud has become huge for us. You will have heard me speak about it in all of our presentations. Every sale in the past 3 years has been cloud. Every implementation has been cloud. The interesting thing is it's counterintuitive. It's actually quicker than on-premise. So sending images up into the cloud and streaming them on demand is actually quicker than streaming them from your own data center. So we do, do complete deployments. It is suitable for all sizes of implementations, which is important because those mid guys, they don't have the wherewithal to stand up servers in a data center. It's just too big a job. But with cloud, you just say, "Here it is. This is a cost per exam," and it's perfect. It auto scales to the size of the organization. So unprecedented swing. And as I mentioned, we see it as a huge and significant strategic advantage because we don't know that any of our competitors that are fully cloud capable as we stand here today. I'm sure next week, when Nick and Clayton and myself at our -- at the RSNA, tongue twister, every single booth will have cloud smattered all over it. But the reality is that's largely marketing. We're actually doing it. Three products. We talk about full stack. The archive, which we have always had but introduced to the U.S. about 5 years ago, has become a very important product for us. It enables the storage of the images, not just the viewing. Images have to be stored for a minimum of 7 years, till the patient is 16 if they're pediatric and forever if it's breast imaging. So it has helped us in terms of the total contract value. So if they take the viewer and archive, we -- obviously, the contract size is bigger. And then the most recent product, which we announced in 2021 at RSNA and started production in 2022, our worklist, has become the third part of the stack to make the full stack, and we're selling a lot more of the worklist. I think it's -- we've sold it in 12 out of the last 12 sales. And even though we haven't announced it because of materiality, we have been starting to sell it back to existing clients. So NYU, Yale have both got our new worklist where we replace competitive products. Lastly, I'll finish off in a minute, the One Viewer, the other ologies. We have been talking about this for a while. No one has ever done this before. If they have cardiology solutions, they're separate platforms. We're talking about being on exactly the same platform, an extension of their current Visage implementation. We are going to be releasing our cardiology offering next week at RSNA. It will be version 1.0. We believe it's now feature function complete and ready for prime time. So we are hopeful to do a fair number of demonstrations, particularly to existing clients, with a view to commercialization early in the new year. AI, the words on everybody's lips. It has been around in radiology for quite a while. Medicine and AI are well suited to each other, and imaging and AI, even better suited. Of the FDA-cleared algorithms, roughly 80% in -- that have been cleared in health care are in health care imaging. So it is the hot area at the moment. We see multiple uses for AI. I won't go through them all. There's not one size that fits all. But we think we're at the end of a disappointment phase in the cycle. There was a lot of hype years ago. As I mentioned, residents weren't going into radiology training, thinking they wouldn't even have a job when they came out. That hype has led to disappointment, and I think we're at the tail end of the disappointment phase. So we think we're slowly reaching a -- I won't call it inflection but a change point where we're starting to see more commercial AI applications in this space and we're readying ourselves for that. The team led by Malte Westerhoff and Detlev Stalling. They're the 2 co-founders of the Visage platform. They invented and developed it with their teams. As Peter said, Malte is our Global CTO. Detlev is our Head of Development based back in Berlin. And Ming and Raj, 2 PhDs. Raj is also an MD that work in this space for us and will be busy with Nick at the RSNA looking at all the AI opportunities because they'll all be there. One last thing about AI we don't often talk about. Our platform is the only one that is actually AI-capable. It's AI-ready. So either through good planning or good fortune years and years ago when we first built Visage, it was based on NVIDIA GPUs, which then were really used by the gaming community. AI wasn't even heard of. But AI is all based on GPU technology, and every single Visage client has to have GPU technology because we can't run without it. So we already have the infrastructure in place. It doesn't sound like much, but trying to get new hardware inside a hospital could be an 18-month job with security and verification and all that sort of stuff. We already have it in there. So we are really ready to go, I think. We have the open API for the native integration. We are working with our third parties like Yale, NYU, Mayo and we believe there soon will be others. And we see opportunities now with third parties in this space. So our first algorithm, breast density. You've heard about it before if you follow us. Again, we'll be showing it at the RSNA. It was recently a top radiologist, Liane Philpotts from Yale, gave a paper. She said that it was 99.3% accurate, which is off the charts for AI. So it's actually more accurate than any one individual radiologist in determining breast density, and that's over 70,000 cases. So very clear. It's incredibly accurate, incredibly reproducible. It's now up to us to commercialize. Final slide or 2. RSNA, as I mentioned, next week. It's our biggest show. It's the fact [ that we'll ] conference. Around 50,000 to 60,000 people turn up for it. It's our biggest marketing spend, and we're totally booked out already for pretty much the entire show. So that's a good port end of the activity that we're anticipating. And every year, we say it's our biggest and best. Hopefully, this year will be bigger and better than that again. So to finish off. As Peter mentioned, we are ahead of budget on a constant currency basis. We've had record level of contracts for the first 5 months, AUD 200 million at minimums. Contract wins do span multiple markets, which is really important for addressability. Pipeline is strong. And as obviously these opportunities have come out, new ones are coming in. We think we're strategically positioned for AI [ and the other ologies ], particularly with what we're going to be showing next week at RSNA. And it's shaping up to be our biggest and best to date. Thank you.

Thank you, Sam. I thought for a moment you wouldn't actually get to what is RSNA, but the last slide actually cleared that up, so thank you. I'll now invite shareholders to submit any questions they may have. And we'll initially deal with the questions in relation to the comments made by Sam and myself. We'll later seek to answer questions in relation to the items of formal business as we deal with each item. And we'll deal with the questions in the following order given that it's a hybrid meeting. It makes it a little bit more -- we need more process around the questioning: firstly, those received prior to the meeting; secondly, questions from those attending in person; thirdly, questions from those utilizing the online portal; and finally, any questions from those attending by telephone. [Operator Instructions] To ensure questions reach us in time, I ask that you submit them now if you haven't already.

So written questions that we received prior to the meeting. We had 2, and I'd like to thank those people for taking the trouble to do -- to provide that -- those questions in advance. The first question is an interesting one. "During the referendum, can you please advise how much Pro Medicus donated to the no side and how much to the yes side?" The answer is the company didn't provide any funding in relation to the referendum. And as a general rule, the Board doesn't involve itself in -- or the company in social issues unless they're relevant to the company's operations. And if any shareholder wishes to support a particular cause, we leave that in individual shareholders' hands. The second question, which I'll get Sam to answer, is, "Please comment on the relevance to Pro Medicus of moves to AI." And I think Sam may have covered much of this, but he may wish to add, moves to AI and the opportunities and threats that might present to the company.

[indiscernible].

[indiscernible].

Yes.

Well, we see AI as an opportunity. No question about that. We have been working under the bonnet on it now for a number of years, and we see that we are building it into our own application. As we were showing with the brain tumor segmentation, if you can do that in the brain, you can do it in other parts of the body. It will enable our product to stay even further ahead of the competition than others. We see AI as a second set of eyes, an aid to diagnosis. And I think that will be positive, but like everything, it -- there's -- there are a lot of questions around it in terms of its accuracy, whether it works across different ethnicities and geographical areas, so it's not a do one algorithm and all of a sudden it will take over the world. But we do see where it can be of significant use, so we see it as positive. We're positioning ourselves to be a material player in that space and certainly not a threat.

Thanks, Sam. Now the next line of questioning is from those of you here in the audience today, so I'll open the session to questions from the audience. Are there any questions on anything that Sam or I -- yes, [ Peter ]?

[indiscernible] in the past, there has been mention of markets in Europe. And [indiscernible] Berlin and -- there has been mention of markets in Europe. And you have sort of tackled it a little bit but no mention today, so I'm just wondering. Is that off the cards now?

It's not off. I think Europe is interesting because a few reasons. One, it's not one country. It's many. I think a broader issue is health care in Europe is almost 100% funded by government. And the problem with that is you get this massive bureaucracy layer that you tend not to get in the U.S. And then the opportunities, each one is much smaller. So a lot of the European health care is regionalized, so we won LMU, which is a huge hospital. Apparently it takes 12 minutes to walk from one end to the other on any one level. It's that big, but it's only one, whereas if you go to Mayo Clinic, they have 3 major hubs in Rochester, Arizona and Florida. And each one is multi hospital, so opportunities in the U.S. is just that much bigger. And finally, the last thing is cloud hasn't -- Europe hasn't caught on to cloud yet. There were particular reasons to do with privacy, which have now been navigated between the U.S. and the EU. So we think we'll grow our base in Europe. It will be a lot more incremental, more medium term. And the other thing is we don't want to lose focus from the U.S. because we're at 7% of the market. And as I often tell my staff, it's like being [indiscernible] Wimbledon and you're winning. You don't want to get off, so focus on the U.S., with an eye to other markets more sort of medium term...

Yes -- sorry. [ Anthony Solman ], longtime shareholder and a very happy one, just wondering. Why so conservative on the balance sheet? This government is looking at making some changes to your ability to distribute historical franking credits. Why not, when you've got a very strong cash flow, use the cash that you're generating to sort of pay out further to shareholders? If you want to make acquisitions, I have no doubt that the shareholders will happily support you in whatever it is that you want to do, but why sit on cash? You could even dip into debt, if you had to, to make acquisitions. I suspect you're probably not looking at anything too big in any case because, as you say, you don't want to take the eye off the ball on the growth that you're already doing.

Thank you for the question. It's something that exercises the Board's mind as to how much is too much, and -- but some of the opportunities we've looked at, the amount of cash we've got on the balance sheet wouldn't cover. And we think -- personally as another conservative member of this Board, we think it's better to hold the cash for the moment rather than give it to you and then ask for it back later when the acquisition may come. So at this stage, we think we're comfortably sitting, but it's something we continue to review because, as you know, we're [ probably ] conservatively only distributing 50% of our profits. So it's not something we're ignoring. And as you can see, by retaining 50% every year of a growing base, it's certainly becoming significant. And the other issue, which I sort of tried to cover in my earlier address, is that the value of some of the opportunities we might have looked at 2 years ago has probably come down given the movement in the market, needless to say, with current interest rates, we're not actually suffering too much by holding the cash. So it's a comfortable position to be in, but we're not idly thinking we'll just hang on forever. It's a matter of deploying it in the various ways, rewarding shareholders; continuing to invest in the business, which is critical; and also acquisitions. But thank you for the question. Are there any other questions? Sir?

Just a minor question on the accounts, just for clarification: the other financial assets. There are 3 lines there where it mentions debt instruments. And the fourth one, just as managed fund, doesn't -- so does that mean there's equities in that investment?

My short answer to that is they're essentially -- in the managed funds, I think there are essentially the -- probably government bonds that have been invested by the manager. And there are hybrid investments with one of our other managers which, I suppose, have an element of debt and equity within them, but those hybrids, of course, provide -- and they're all bank hybrids, I should say. They provide fully franked dividends which also flow back to shareholders ultimately, but we're not -- the Board's view at the moment is not to increase the level of nonfinancial or other financial assets at this stage. And they're under -- continuing to be under review as to whether we continue to hold them in that form or whether we convert them back into cash. Hopefully, that answers your question. Are there any other questions anyone has? Okay, well, I'll move -- if there are no other questions in the room, I'll go to questions online. Danny, are there any questions online?

Thank you, Chairman. Yes. First question is from [ Chris Lloyd ]. "Competitors must celebrate when the [ CP miss ] margins. Are you aware of any competitors developing radiology software that will provide sub-second access for large data sets and allow radiologists to read anything anywhere at any time? And if so, how many are in the race?"

Okay. We've often said we believe we are 18 to 24 months ahead of the competition. Obviously it's you -- there are multiple data points that lead us to that, RSNA next week. Our clients or prospective clients go to all the technology providers, and you get feedback. We know who we are up against when we go into an RFP. And we know why we win it when we win it, which we win most of them, so we don't believe anyone has been able to crack that nut. Bear in mind the product is totally proprietary. It was built from the ground up. It is ours. We have patents around it, but importantly, we don't provide a road map of what we did for others to follow, so at this point, as far as we can tell from everything we hear in the market, we don't believe anyone has been able to do that. That doesn't mean someone Monday may not, but we're not standing still either, and I think that's the important thing. We talk a lot about sales and opportunities. What we don't say is we are always continuing our investment in R&D because to us it's so important because, the minute you stop, you did. So short answer is no. We don't know of anybody at this point.

Question also from [ Chris Lloyd ]. Has Pro Medicus been able to quantify the improvement in radiologist productivity that is achieved when using PME products versus its competitors' products? "And are you able to comment on scale of the productivity improvements achieved by the use of PME's products?"

In that slide where I mentioned about burnout, we routinely say 20% to 25%. Now in some areas it's actually higher. For various reasons, it's invariably not lower. We have had clients measure it, so it's not just anecdotal. Some of it is, but clearly we've had clients that have actually tried to measure before and after. So we -- conservatively our band is roughly 20% to 25%, sometimes higher.

Next question comes from [ Stella Wang ]. "My question is, when contracts come to interment, do most of the customers return to the market to tender again? The U.S. Veteran Affairs network is up for renewal, with current term ending early current year, '24. Having been a customer for 10 years, do they have to go back to market to retender, or can they simply choose to stay with Visage?"

Today, we've never had anyone go back out and retender. So all of our renegotiations have been closed door just with us. It's usually around 2 things: term and price. They want the price they paid 5 years ago. We've been able to negotiate something higher, but we haven't had anyone actually go back out and put out an RFP. We've been able, 100% renewal at this point.

Question from [ John Sabiag ]. Are you able to talk about the current competitive risks facing Pro Medicus?

I wish we had the whole market to ourselves, but we don't. We often get asked this. I mean there's everybody else out there, and things change. So years ago, the big equipment manufacturers were -- they were the big alligators in the pond. They used to buy up everything and do everything; and then all of a sudden, they stopped, which opened the door for nimbler companies such as ours. So the market is always changing. We have competitors at various segments. They're material competitors. I just think our technology is a entirely new generation that helps us win, but we don't win every one. Some people buy on price. Some people will say, well, if XYZ have it and they compete with us, "We want something else." They're all the normal dynamics of any market, but certainly don't think we have it to ourselves. We don't.

Question from [ Curtis Larson ]. How do you see the monetization model working for AI?

[indiscernible].

[ Perhaps I should stand up ]. It might be easier. I think there are 2 things -- I was hiding. There were 2 things. One is we -- some of the AI, we will actually build into the product. So what we showed today from Yale is something we'll actually build in and will allow us to stay further ahead of the competition and, hopefully, also increase price because of value. There are other discrete AI where I think you can charge for it. There's not one model that's been accepted by the market. I think a transaction-based model, an opt-in model is the best simply because it -- you pay for when you use it rather than having to pay for it upfront and possibly use it or not. So our breast density will be an example where we will look to charge a transaction fee and people will decide whether they wish to use it or not. And I think a lot of AI will go along with that model.

Just one additional point on that. There are third-party AI which we could also monetize, assuming that our end user would be prepared to pay. And we may take -- that may be a new revenue stream, but up to now it hasn't been.

No. And we're looking at that because you can't do it all. No one can. There's 2,200 differential diagnoses in radiology and each one would require an algorithm, so we're looking at who's best in breed in certain areas. We're developing some of our own. And we are looking to commercialize some of the tech that we have in our research collaboration agreements. I've been talking about this for multiple years. These are things that you can't just drag and drop and start from an idea and go to market in 6 months. There has to be a lot of clinical validation, a lot of curation of data; and all these things are happening in background. We just -- it's under-the-bonnet stuff you don't get to see. What you would get to see is once it's gone through FDA, and that's more towards the tail end of its development. So plenty happening. We think it will be an exciting space, and more importantly, we think it will actually move the needle clinically.

Last question, from [ Mary Curant ]. "Congratulations on a great year. With regard to longer contracts, in particular a 10-year contract, is there a CPI component, i.e., costs year -- in year 1 versus costs in year 10?"

Usually not. The reason was it was getting too complicated. In this contract, there is a reset from years 6 to 10, where it could only go up, not down, and can go up within a certain amount. When we talk about the $140 million, we don't factor that in because we don't know what that uplift will be, but they're usually fixed price. But obviously, if they're longer, we bake in concept of CPI each year. And then there's a material step-up when they renew. So we don't renew them to what the current market price is, but it's a material uplift from where they were. So on the renewals, we've had 35%, 40%, 45% increases in the cost per transaction, on the renewals, so we tend to do it more in steps rather than [ each year ].

And just to add to that point, though. The -- when we set the price upfront, we take that into account, that it won't be increased for several years. So it's factored into the initial price. It may not be escalated, but it's built in, in taking advantage of movements. But of course, in past years, inflation hasn't been significant, so it hasn't been a big issue. That's becoming more of an issue for us now and we're looking at that. Or we have factored that into the bylaw, contract.

[ Yes, contract ]. The only other thing I'll say is we -- our cost out -- by far, our biggest cost is people. And so we don't have any material inputs. It's not like [ Qantas ] with fuel, so inflation per se doesn't impact us. And the other thing is there are not 10,000 of us. There are 115 of us, so whilst we are looking to mark-to-market for wages and make sure our staff are remunerated and, as wages go up, we meet that, the important thing is that as a percentage of our total revenue is actually relatively small going forward.

Thank you. Are there any questions on the phone? No, no. Okay, well, thank you, everybody, for those questions.

And we'll now move to the business of the meeting, the formal business of the meeting that is, which was set out in the notice paper. And with your permission, I'll take that notice of meeting as read. Minutes of the previous Annual General Meeting, the Board did review those minutes of the meeting held on 21st of November 2022; and I've signed those minutes as a true and accurate record of that meeting. And the company Secretary has a copy, if any shareholder would like to refer to them. With your permission, we will note those minutes as a true and accurate record of proceedings. [indiscernible] I would now like to refer to the process of shareholders' questions and voting on the resolutions before the meeting. Those present at this meeting may ask questions as each resolution is considered. Those attending virtually online may ask questions, and voting, using the portal. [Operator Instructions] To ensure questions reach us in time, I ask that you submit them now if you haven't already. Again, any general shareholder questions submitted online during the meeting will be addressed after the formal business is completed. If we aren't able to get through all of them today or if there are specific questions that would be better addressed on an individual basis, we'll respond to them after the meeting. If we receive multiple questions that are similar, we'll try to amalgamate them into one to -- or choose to answer the broadest question which will cover off on the others. Voting. Voting on the resolutions will be conducted by way of a poll. Those voting in person can do so by submitting their votes to the returning officer, who is Jim, over there, when we get to that. Those who are attending online can do so by using the electronic voting card you should receive after clicking the "get a voting card" button. Pro Medicus' share register provider, Link Market Services, will conduct the voting by way of a poll; and Jim Kompogiorgas will -- of Link will act as returning officer. Voters will be -- votes will be counted after the end of the meeting, and results published on the ASX and Pro Medicus Limited's website. Shareholders can cast their vote using the electronic voting card received after validating online registration. To validate registration, you'll be asked to enter your shareholder reference number or holder identification number, commonly known as SRN or HIN; plus post code if you're in Australia or country if you're outside Australia. To then cast your vote, click the "get voting card" button. If you're intending to vote, you'll be able to finalize and submit votes after 5 minutes after the meeting ends. I'll remind you at the end of the meeting. Final results of each resolution, as I said, will be posted on the ASX later. Proxy votes that have been submitted will be set out on the slide shown for each resolution. For some context: The current number of Pro Medicus shares on issue is approximately 104 million. A number of shareholders have appointed the Chair of today's meeting as their proxy. As indicated on the proxy form and in the notice of meeting, it's my intention as Chair to vote all discretionary or undirected proxies held by me in favor of each resolution. So having gone through all of that, we'll go on to accounts and reports. And the first resolution before us is to receive and consider the financial statements of the company for the year ended 30th of June 2023; and the related directors' report, directors' declaration and auditor's report. Whilst no vote is required on this item, I'd like to call for any questions shareholders may have in relation to the financial statements and the reports thereon. Are there any questions on the financial statements from the floor? No. From online, no questions. Well, that's -- that gets -- I think it's [ turning us ] off the hook. Lucky men. The remuneration report. We will move to adopt the remuneration report, which is contained within the annual report, on Pages 30 to 37, for the year ended 30th of June 2023. Whilst again the vote in relation to this item is not immediately binding on the company, we do naturally take seriously the views of our shareholders. Before putting this motion, are there any questions in relation to the remuneration report? Sir -- no. Wait for the...

[indiscernible] you are.

No. We'll wait for the microphone. Thank you.

I noticed that the head of global marketing and the head of global sales are now no longer considered key management personnel for the purposes of the report, the remuneration report. I'd just like to know the reasoning behind that and why they were there last year and not this year. What's happened [ that sort of changed things, please ]?

Yes, certainly. We went back to the definition of what a key management personnel is. And I don't have it in front of me at the moment, but it's essentially those executives who are involved with key strategic decisions outside of the Board. And in looking at that, those 2 individuals who we removed from the list don't make key strategic decisions. They work in a day-to-day function and they are in management, but they're not in an -- they don't have an ability to make strategic decisions. They are largely with the Board, the executive directors and the 2 people in particular that we identify being the CFO and the Global Head of Technology. That's the reason we decided not to list -- it's not that we're trying to hide those people. It's purely they don't actually fit the definition.

Okay. It was just that I thought they were both fairly significant role. I can understand why in Australia the same things happen too, but I thought more marketing and sales were pretty important.

Yes. No, we did think long and hard about that issue. And we felt that it was -- we went back to basics and decided that not all of the people we had on the list were in fact qualified or what -- didn't qualify under the definition of what is a key management personnel. Any other questions on the remuneration report? Are there any online questions on the remuneration report? No. Well, we'll just show you the proxies. And I must say we're a bit disappointed with this result. It's somewhat out of character with our previous votes. And we haven't received any prior indication of what the concerns might be with those shareholders who voted against the remuneration report; needless to say the Board can't vote in this issue, so it's left to non-Board members to express a view. We will, however, seek to identify those shareholders who voted against the motion because it may be about remuneration. It may be about some other reason that they might have for some other concern that they have, and we would obviously like to address those concerns. I will seek to identify those institutions. I think it's mainly institutions -- and try to establish the reasons behind that vote, but -- it doesn't give rise to a strike, but it's not a happy position for a company like ours to experience, I have to say, okay? And just to remind everybody else to vote on this issue, those who haven't voted, if you've got your voting card. I'd naturally appreciate you voting yes. If somebody else said that, [ then it didn't get the ] right answer, so I won't go any further on that point. Okay, reelection of directors. Before we consider the reelection of the 3 of our company directors, I just did want to comment on the Board structure and process. We do enjoy -- or the company does enjoy a very diverse Board membership with a -- quite a wide range of skills and opinions which -- and emphasize the opinions. There's no yes men on our Board, or yes women. So that is critical, I think, to coming to as many strong resolutions for the effectiveness of the company. And each nonexecutive director in particular brings their skills and their perspectives to the fore, as required, both within and outside the board room. When a particular matter needs attention, the most relevant director may certainly roll up their sleeves and assist the company and its management to address the matter at hand, so I wanted to just assure you there are no passengers on our Board. We're all actively involved at various times if our particular skill set can add to the management needs. So having said that, I'd now like to put the resolutions to you on each of the directors. The first is Ms. Deena Shiff, being a director who is retiring in accordance with the company's constitution and listing rule 14.4 and, being eligible, offers herself for reelection, be reelected as a director of the company. Details of Deena's background and experience are outlined in the explanatory memorandum [ that's actually in the ] notice of meeting. I will now invite Deena to address the meeting prior to putting the motion.

Thanks, Peter. I've had the privilege and pleasure of being on the Pro Medicus Board for 3 years now. And I -- as Peter said, I currently chair the People and Culture Committee. It's a committee that focuses on our people, our talent, succession, what we believe to be our most important asset in the company. I've served as chair on a number of other Boards as -- of the -- Chair of people and culture committee, including currently Opera Australia's people committee. In terms of experience, I've previously been a partner in a major law firm, a group managing director at Telstra, but the last 10 years, I've been a full-time nonexecutive director, largely in tech-led global companies. My current boards relevantly are a Geneva-based global health fund called Gavi, global alliance for vaccines and immunization. I also chair the international advisory board of Australian Research Council center of excellence based here at RMIT, but -- a consortium of Australian and overseas universities doing a 7-year program of research on the social impact of AI, something that's become extremely relevant with the rise of generative AI and, I believe, helps me to navigate the work that we're currently doing in AI and its social impacts against best practice, so I hope to continue to serve in my capacity as a Board member -- and confident that the company is in good hands with my fellow Board members.

Thank you, Deena. Are there any -- before I put the motion, are there any questions of Deena? No questions. I will now put the motion; and should note, of course, that the Board does support Deena's reelection. Would you please cast your votes if you haven't already? Or later in the meeting. And we'll now refer to the proxies. And given, I think, there's a majority of the shareholders given the 104 million that I referred to, I think I'm able to congratulate Deena on being reappointed. Congratulations, Deena. The second director who is standing for reelection is Dr. Leigh Farrell -- being a director who's retiring in accordance with the company's constitution and listing rule 14.4 and, being eligible, offers himself for reelection, be reelected as a director of the company. I'll now invite Leigh to address the meeting prior to putting the motion.

Thank you, Peter. I've been on the Board of Pro Medicus. I think it's since 2017. The reason I wanted to be on the Board of Pro Medicus is because it very clearly knew what its why was. I work with a lot of companies that have a focus on the what and the how but not the why. You've heard the messaging from radiologists. We make a big difference in their lives, but importantly, we make a big difference in patient lives, so it's both customer centric and patient centric. That's important to me. The other thing that I like about the company is its agility in product development. We work in lockstep with radiologists, and you've heard the testimonials from radiologists. You hear all too often companies spruiking how good they are. When you hear it from the mouths of radiologists whose lives you're making a change to, that's important to me. By way of background. I've got a -- many years ago a PhD in biochemistry and immunology. That's long forgotten. I can kind of remember biochemical pathways, but it's long gone. My background is really in business, business strategy. I ran a venture capital fund at one point. Currently I'm the Head of Health Security Systems Australia (sic) [ Health Security Systems Australia Division of DMTC ], which is a day job. That's focused on preparedness, prevention, response and recovery from chemical, biological, radiological and nuclear threats, so that gives me a background in disaster recovery and planning for that. So that's a heavy area of interest that I bring to the Board's from a resilience perspective. I also work very closely with the management team. As Peter mentioned, we roll our sleeves up and we get in there and work with the team, so I'm heavily involved in strategy, for example, so for me, I -- it's been a wonderful ride since 2017. So now we're building a company that is fully scalable to address the markets that confront us, so I'm honored to be a director of the company. I love working with the Board. I love working with the management. Thank you, Peter.

Thank you very much, Leigh. Are there any questions of Leigh? If not, I'll now put the motion and again note that the Board does support Leigh's reelection. If we could see the proxies, please. And given the majority of the shareholders have expressed their view, I think I'm in liberty to congratulate Leigh on being reelected too. Thank you, [indiscernible]. And last but not least is Mr. Anthony Hall, being a director who's retiring in accordance with the company's constitution and listing rule 14.4 and, being eligible, offers himself for reelection, be reelected as a director of the company. I think most people know Anthony. And so I won't invite him to address the meeting, other than to say that he is a Co-founder, of course, and a major shareholder still in the company and still works actively in the business. And certainly he's the backbone of our risk product which was referred to earlier and why we enjoy the market leadership that we do in Australia. I will say that. Are there any questions about Anthony's reappointment? If not, I'll put the motion and ask for the proxies to be noted. There he is. Well, he got more than the others, so I think -- well done. I presume that's all your friends voted for you as well. Well done, Anthony. Of course, Anthony has many friends. I should [indiscernible]. I don't have any notice of any other business, but I would invite you to ask any further questions that you might have before we move to closure. Are there any other questions from the floor or anyone wishes to ask? [ Mr. Lyle ].

Chairman, my name is [ Rod Lyle ]. I'm a long-standing and very happy shareholder. I do not have any -- like you. I do not have any questions, but I would like to commend the Board on -- and the management on the performance of the company not just for this year but over the period. It's been outstanding. So that, that doesn't come across as a platitude, I'll take a couple of minutes to put some substance to that. I think it appears to me as an outsider that everything the Board does is measured, balanced and sustainable. That would be the 3 words that occur to me. I see it in your use of cash. I see it in the evolution and makeup of the Board itself and the ongoing growth of the company in general. Some specifics: And you, Chair, referred to the extraordinarily low and positive turnover rate less than 3%. That is nothing short of remarkable. On Page 21 of the annual report, the company says the words that everyone says. Our people are our most important asset, and a positive work environment. I think [ it's all ] the phrases on Page 21. Everyone says that, but I think Pro Medicus actually does it and implements it; and not just through you, Deena, and the People Committee but the whole company. If you look at Page 9, the global leadership team. Not to single people out, but Clayton Hatch, Danny, Malte and others have been with the company many, many, many years. And generally speaking, the longer an employee is with a company, the more valuable they become. Retention is enormously important and valuable. Well done. Well done on that. Likewise, retention of customers or clients is incredibly impressive. And I would dare to say, Chair, that the two are not unrelated. The two are not unrelated. Indeed, studies at Harvard University link the 3 Cs, colleagues, clients and cash; and I think the company is doing very well in all domains. And I also congratulate the company on not indulging in the fourth C, which is complacency. It's clear, clear that the management and the Board are fully aware of competitive threats, fully aware of the need to reinvest constantly in the business and not taking things for granted. I'd also like to congratulate the Board on things they haven't done. You haven't rushed into M&A. Well done on that. And well done on not taking positions with shareholders' money on political issues. Well done on that. So in short, I would like to propose a vote of thanks in the usual way, by acclamation, for our Board and our management in not only an outstanding year but an outstanding period leading up to this year.

Thank you, [ Mr. Lyle ]. The check is in the mail -- no. I, we do take those comments very seriously. And we're quite proud of what we're achieving. Right. I have one last, talking about people. People are important to this company. I'd like to just make reference to Tony Morse, our auditor for the last 5 years. As you may be aware, there's a requirement in Australia that a lead audit partner must not serve more than 5. You probably know this really well, 5 out of the 7 successive years. As Tony served as the lead audit partner on Pro Medicus for the past 5 years, he's required to rotate off the company's audit and to be replaced by another partner. Tony has been our watchdog, or maybe I should say your watchdog; and made sure that we comply with all the regulatory disclosures and relevant accounting standards that we need to adhere to. In doing so, he's always provided the Board and the Audit and Risk Committee with proactive and helpful advice, for which we are most grateful. On behalf of the Board and the shareholders, I'd like to express our thanks to you, Tony; and wish you well in your future endeavors. So thank you, Tony. And I should just mention that Tony's replacement -- if that's the right word. Andrea Steacy is with us today, and she'll be assuming the role next year. She's just sitting next to Tony. So we'll look forward to your contribution to the company in the years to come. Thank you, Andrea. Before closing, I'd like to remind you that I -- that you will have 5 minutes after the conclusion of the meeting to cast your vote, particularly for those online. For those of you who have your voting papers, Jim will move through the audience now and collect your papers. Ladies and gentlemen, thank you again for attending the meeting. And in closing the meeting, I would invite those who are present to join the directors for refreshments. Thank you.