Ramsay Health Care Limited (RHC) Earnings Call Transcript & Summary

I think it's 10:30. Good morning, everyone. For those who don't know me, I'm Michael Siddle, I'm Chair of Ramsay Health Care and have been for 9 years. On behalf of the Board and management, I extend a warm welcome to our 2023 Annual Meeting. And we also welcome those who have tuned into our live webcast this year. I believe that we have a quorum, and so accordingly, I'll declare the meeting open. I'd like to begin by acknowledging the traditional owners of the land in which we meet today, the Gadigal people of the Eora Nation. And I pay my respects to the elders past, present and emerging. And I'd also like to acknowledge our First Nations employees who contribute a lot to our company. And I'm pleased to not say that we've opened an indigenous connection in Western Australia for indigenous nursing students, which is I think is a great thing for the company and something we need to do. Your directors are here, and I'll introduce them. Firstly, Craig McNally, 36 years. He doesn't look any older than the day he arrived, he says. And then I'm going from down here, Claudia Süssmuth Dyckerhoff, who is here from Switzerland today. She's a member of the Risk Committee. Claudia has had a few late nights and early mornings with the time zones in Switzerland, but she's through it and doesn't fall asleep, which is very good. David Thodey, our Lead Independent Director and Chair of the Nomination and Governance Committee and member of the Audit Committee and the People and Remuneration Committee. And as you know, he will take over the chair following today's AGM. And I think he will do a good job and is wearing a tie to celebrate the -- because he's not a tie wearer normally. Henrietta Rowe, our Group Counsel and Company Secretary, does a wonderful job for us, and she's a great supporter of the Board and the company. Karen Penrose standing for reelection with me today, and she'll address the meeting later. She is the Chair of the Audit Committee and member of the Risk Management Committee and does a wonderful job with the Audit Committee, keeping us in check. Steve Sargent, Chair of the Risk Management Committee; Alison Deans, Chair of the Remuneration Committee, and she says the hardest committee to be on and a member of the Nomination and Government committee; and down the end and last and certainly not least, James McMurdo, who's a member of the Audit Committee. So I'd just like to say that the Board does do a lot above and beyond board meetings. They visit hospitals and Steve actually sat in an operation the other day. And as I understand, he didn't faint. But that's really going above and beyond the call of duty, I think, as Ed Byrne would know. So I'll ask Henrietta to go through the procedural matters for the meeting and including how to ask a question and to vote.

Thank you Tara. We are taking questions from holders of ordinary shares or the representatives and holders of CARES. If you have a question in relation to an item of business, please proceed to a microphone at the relevant item and show your green voting card to our representatives from Boardroom. Nonvoting shareholders and CARES holders can also ask questions today and have been issued with a pink card. If you need assistance, please raise your hand and a boardroom representative will come to you with a microphone. You will be introduced and can then ask your question. We ask that you please confine your questions to the business of the meeting and shareholder issues. [Operator Instructions] If your question relates to a personal experience at 1 of our hospitals, please speak to me or another member of our executive team who are here with us today following the meeting. We are not able to address these questions during meeting due to privacy concerns. We've also received some written questions from shareholders in advance of today's meeting. These questions will be addressed during the Chair or Managing Director or CEO addresses to the meeting or at the relevant item. Voting today will be conducted by way of a poll on all resolutions in the notice of meeting. All shareholders entitled to vote at the meeting will have received a green voting card on registration. Shareholders and proxies who have been given discretion as to how to vote should tick for, against or abstain for each resolution. Any appointed proxy that has been directed how to vote and has no discretionary votes to cast does not need to vote as those votes will automatically be counted in accordance with those directions. At the end of the meeting, please sign your completed voting card and place it in 1 of the polling boxes that will be at the back of the room at the end of the meeting. The poll will remain open for a further 10 minutes after the close of the meeting to ensure that all shareholders have the opportunity to lodge their vote. The results on voting on all resolutions will be lodged with the ASX and posted on our website later this afternoon. I will now hand back to the Chair.

Thank you, Henrietta. And I now open today's poll. Shareholders are invited to join the board and members of our executive who are, by the way, here in the front few rows. A lot of our staff here. We have people from Norway, from the U.K., from Paris, and they're all here for some meetings later on. So we look forward if you want to talk to them afterwards. I'm sure they're happy to talk to you. I'll now give a short overview of the past year, and then Craig will do a more detailed presentation. As we predicted this time last year, the worst of the COVID pandemic is now behind us. Albeit, we expect the disruption caused by smaller waves of cases will remain part of the operating environment for the foreseeable future. It hasn't gone away. The legacy of the pandemic for the health care sector in financial year 2023 was ongoing workforce disruption and restrictive hospital protocols and procedures. These issues, combined with inflationary cost pressures, in particular, wages and slower-than-anticipated growth in activity have impacted the private hospital sector globally. So we're not alone being victims of this downturn. While Ramsay is performing well relative to our peers, we understand that the slower-than-expected recovery in the business resulted in a lower dividend than last year. Unlike other companies in the health care sector, our share price has underperformed compared to the broader index. I want to assure shareholders, and I do that the Board and management team are focused on driving initiatives that aim to improve shareholder returns, including lifting our dividends. To this end, we have accelerated a number of transformation programs across the business, in particular, in Australia, that are designed to drive top line growth, improve operational and financial performance and delivered a more streamlined patient experience. The CEO of our Australian business, Carmel Monaghan, who's up there in red and our Chief Transformation Officer and Digital and Data Officer; Dr. Rachna Gandhi, who's now here in the front, outlined the details of those programs a few weeks ago at an event held at our Green Slopes Hospital in Brisbane. You can have a look at that recording of that webcast in the investor center of our website, and it's probably worthwhile having a look at it. It goes into a lot of detail. Turning briefly to the results for the 12 months to 30th of June 2023. We reported an 8.8% increase in net profit after tax. This reflected an improving result in Australia, strong growth from our acute hospital business in the U.K. and from Ramsay Sime Darby, our Asian joint venture but a lower result from Ramsay Sante and a disappointing result from Elysium, our mental health business in the U.K. Pleasingly, Elysium has shown good signs of recovery in the first 4 months of this financial year, and Craig will give you more detail on that later. The result also reflected the impact of materially higher financing costs flowing from rising interest rates over the last 18 months and higher-than-average drawn debt. We are focused on reducing our leverage, thereby reducing our interest costs and intend to use the proceeds from the recently announced sale on our joint venture in Asia Ramsay Sime Darby, to lower that gearing. Our banks have remained supportive, as they always have been through this period, and we've recently finalized changes to our debt programs and profile which received strong backing from both existing and new bankers to Ramsay, and we thank them all for their support. The banks have always supported us for the last 30 years because I think they see the value in our business. In addition, we've progressed a range of activities under our Ramsay CARES sustainability strategy, in particular with regard to investments in programs designed to attract and retain our people and in reducing our greenhouse gas emissions, which Craig will go through in more detail. Whilst workforce challenges have eased somewhat in the last 6 months, retention and recruitment of our people remains the key focus of the Board and senior management team because, frankly, people are our company. As you will have seen in the notice of meeting as announced in the stock ASX in June, after 9 years in the role, I will step down as Chair of Ramsay at the conclusion of this meeting. If reelected today, and I hope you reelect me, I'll be staying on as a director to ensure continuity of corporate knowledge and health care experience on the Board. Lead Independent David Thodey, will be appointed to the role of Chair. David joined the Ramsay Board in November 2017, and his understanding experience at technology and driving transformational change, make him the ideal person to lead the board through what will be a significant period of change for this business. It's something we'll have to come to grips with. I'd like to thank my fellow Board members and senior management team for the support they've given me in my role as Chair, and I look forward to continuing my association as a Non-Executive Director. We will continue to look for new directors to join the Board to strengthen our hospital health care experience, and we hope to make an announcement early in the new year. It is fitting that as I deliver my last address as Chairman of this company on the eve as are celebrating our 60th anniversary of the opening of Ramsey's first facility, a mental health care hospital in Mossman. It had 14 beds, you'll be pleased to know. I've been associated with the company for 55 of those 60 years. And as I reflect on how we have grown and evolved, I know that what has carried us through the good and the more difficult times like now has been our people that live and breathe the Ramsay way every day. Following the removal of COVID-related restrictions on hospital businesses, the Board, as I said, both individually and collectively has visited a number of hospitals this year. That's both in Australia and overseas, some of them, while they were on holidays, which was nice. And I was lucky enough to join our Australian hospital management teams at our conference in May. There I caught up with some familiar faces who have been part of the Ramsay family for many years, and it reinforced to me the strength of our culture and the dedication of our workforce in supporting our patients and the business. The commitment of our people and our clinicians to our patient's well-being is reflected in our annual -- in our patient and customer feedback, which is disclosed in the annual report. And this has remained consistently high across all the regions despite the challenge of recent years, and it's very hard to get good results when COVID is around. So on behalf of the Board, I again like to thank our people for their ongoing contributions to the business. And so thank you very much, and I'll now hand over to Craig.

Thanks, Michael. Good morning, everyone, and welcome to those in the room and those joining us on the webcast this morning. I want to begin by reiterating Michael's commitment to take decisive action to unlock value for shareholders. And I'm pleased to report that we are making good progress on key initiatives to drive improved returns and position the business for long-term growth. Ramsay has continued to outperform the industry through a challenging period. And while the operating environment for the global hospital sector has recovered more slowly than expected post COVID, we are pleased to have seen activity levels continuing to improve in the 4 months -- in the first 4 months of this financial year. We continue to navigate the inflationary headwinds that are prevalent in the health care sector globally, and we're making progress on our discussions with key payers. We're also beginning to see the benefits flow from our operational and digital transformation programs. Importantly, we have strengthened our balance sheet with new debt facilities and will realize significant shareholder value when the recently announced sale of Ramsay Sime Darby completes. Looking ahead, the long-term outlook for Ramsay remains strong, and we are confident in our strategy with our market-leading positions and unique portfolio of assets supported by our targeted investment to strengthen our core business. I would like to add my thanks to our people and clinicians around the world for their efforts to make Ramsay a leader in the delivery of sustainable health care. While the labor market has improved over the last 12 months, recruitment and retention remain a key challenge facing the industry. The Ramsay Way has always been the bedrock of our fantastic culture, which creates strong employee advocacy and recognition outside the company. We will continue to work hard to evolve our culture to ensure Ramsay remains a great place to work. Over the last year, one of the highlights for me has been seeing the growing opportunities for our people to access new learning and development programs, ranging from the on-ground clinical training through the new Ramsay leadership academies. This enables our people to grow and expand their future opportunities and delivers benefits to our patients and to Ramsay, including building expertise in areas impacted by more significant labor shortages such as theater nurses. Over the past few years, we've made great progress with our Ramsay CARES sustainability strategy. This is all down to the great commitment and passion shown by our people. We have implemented a range of initiatives designed to assist in meeting our net zero greenhouse gas emissions ambition, which reduced emissions in FY '23 by 9%, despite the growth in activity across the group. This has been thanks to initiatives such as our group-wide Greener Feeders campaign, which has delivered a 17% reduction in emissions from anesthetic gas use mainly from the switch away from desflurone to gases with lower global warming potential. Our important contribution to the health care industry through our research and community programs has continued. In Australia, the Ramsay Hospital Research Foundation has gone from strength to strength since it was established in 2017. This includes supporting 42 research grants investing in clinically important and innovative projects. The Research Foundation has now turned its attention to playing a part in breaking the cycle of disadvantage by addressing the social determinants of health. Through this, we are hoping to find meaningful ways to improve the health outcomes of 3 key cohorts: women, rural and regional communities and older people. We've also seen good engagement with our suppliers on modern slavery issues with over 40% based on spend, having undertaken the sustainability assessment to date. This work will be ongoing with the target engagement of 80% of our suppliers by spend by 2027. Moving to an update on business trends in each region. Activity in Australia continues to improve with every category growing over the previous period in the first quarter, save maternity, which has continued to decline, albeit at a slower rate than past years. We continue to expect earnings in FY '24 to improve on the back of mid-single-digit volume growth, combined with productivity improvements coming from labor management and cost-saving initiatives. The top line will benefit from the opening of our new hospital in Epping in Melbourne, the Northern Hospital, which is pictured on this slide, and that will open in February 24. Our key focus is accelerating the improvement in the performance of our Australian business. We have targeted initiatives in a number of areas that include programs aimed at driving growth in revenue. This includes reopening discussions with some of our payers around reimbursement rates, which are more commensurate with the inflationary headwinds faced by the hospital sector, in particular, wage inflation. We're making progress and have signed new agreements with some of our larger payers. We've also been running a targeted operational excellence program activity with the establishment of a performance acceleration unit, focused on our larger hospitals. We're also fast-tracking the rollout of technology and AI across the business to streamline processes and reduce administrative work for our teams. Finally, we are accelerating cost control programs to improve profitability. Having seen higher wage growth in the last 12 months, we are finalizing outstanding EBAs within expectations, which enable us to develop and maintain our workforce. As a result, we feel we are well placed to remain competitive in the labor market. On consumables, Ramsay will continue to leverage its global procurement capabilities to drive improved pricing. And as COVID-19 conditions improve, PPE and other COVID-related costs have normalized. While activity levels have been slower to recover than expected in Australia, the business has been a leader in the industry in terms of financial and operational performance. Our strategically placed network of services and facilities means we are well placed to benefit from the strong demand for health care services forecast over the next decade. We believe the investment that's being made in the business over the next 5 years will enable us to take advantage of the technological and service delivery changes and demand for services expected over the next decade. Moving to the U.K., where our acute hospital business, Ramsay U.K., has had a strong start to the year, underpinned by growing volumes from the public sector and the private insurer market and a higher level of acuity. The business will also benefit this year from volumes coming through recently opened facilities, including Glendon Wood Hospital, which opened in August this year and as shown on this slide. The business continues to take action to offset the impact of inflationary headwinds, particularly labor costs with a range of efficiency programs running across the business. We continue to expect improved earnings in FY '24 driven by mid- to high single-digit volume growth. The business is the leading private hospital service provider to the U.K.'s National Health Service and has expanded its relationships with the private health insurance sector, leaving it well placed to benefit from the expected multiyear above-average demand created by the healthcare waitlists in the U.K. The performance of Elysium, our mental health services business, has continued on the upward trajectory seen in the fourth quarter of FY '23, boosted by an improved labor market, which has seen the business onboard over 900 net new starters since the beginning of 2023. This has resulted in a significant reduction in the use of expensive agency staff, lowering labor costs. Continuing to raise occupancy levels, combined with an ongoing focus on recruitment and retention, are the key focus areas for Elysium across the balance of FY '24. The business is a trusted partner of the NHS and is well positioned to take advantage of the growth in demand for specialist mental health care, and that's particularly over the next decade. Turning to Ramsay Santé, where the first 3 months of the year are a seasonally quiet period which means it can be difficult to get an accurate sense of underlying activity levels. However, the French business has reported volume growth consistent with our full year expectations of low single-digit growth. High cost inflation remains a feature in the business, and the current French government tariff does not fully compensate the business for the inflation experienced over the last few years. The private and public sector continue to lobby the French government for increased compensation. Activity growth in the Nordics region has been stronger than France with contributions from recent acquisitions, combined with an improved performance from the acute hospital business. While the weaker Swedish krona against the euro has impacted the Nordics earnings contribution, we continue to expect better than low single-digit growth in the Nordics region for the full year. Ramsay Santé proved itself a trusted partner to governments in all its regions over the last few years and has leveraged its position to expand further into adjacent services such as imaging to support and grow its core hospital business. Together with our private hospital operators, we continue to work to demonstrate the strategic importance of the private sector to the overall health care sector to drive satisfactory tariff outcomes. Over the last few months, we have focused on extending our funding group debt maturities and establishing a more orderly maturation profile. We have extended each of the 3 $500 million tranches of our sustainability linked loan by 2 years and launched a new $300 million 6-year syndicated facility, which has been upsized to $500 million following strong demand. Importantly, the funding group's base rates will not change as a result of the new facilities due to our existing hedging programs. The funding group's weighted average margin on the facilities will be circa 10 basis points higher, reflecting the longer tenor of the extended and new facilities. On 13 November, we announced the sale of our Asian joint venture, Ramsay Sime Darby, for approximately $2 billion. The transaction is expected to complete by the end of the third quarter FY '24. This translates to a net profit after tax of approximately $630 million for Ramsay, reflecting the significant value we have created on our $265 million investment. Ramsay will receive pretax proceeds net of costs of approximately $935 million, which will be used to further strengthen the balance sheet by paying down debt. Based on current forecasts, this will result in the funding group leverage moving well below our stated target of 2.5x by 30th of June '24. And will extend the weighted average duration of our debt profile to 3.2 years. Again, we will continue to review the business in the context of how we can improve shareholder returns and are assessing a range of strategies to unlock value and drive improved performance. Moving to the FY '24 outlook and consistent with our commentary at the full year result, excluding the contribution from the sale of Ramsay Sime Darby, we expect further growth in earnings in FY '24 underpinned by mid-single-digit revenue growth. We expect the growth in earnings will be weighted to the second half of the year, primarily reflecting the positive contribution from nonrecurring items in the first half of FY '23 and in the absence of French government compensation for the impact of inflation. Turning to our long-term strategy. The health care industry is expected to be underpinned by strong tailwinds over the next couple of decades. These include technological and clinical developments, rising health care expenditure as a proportion of GDP, a growing and aging population and the associated rising incidence of chronic conditions which is also resulting in increasing health care costs for governments, thus creating commercial opportunities to partner with private health care providers. We continue to believe that through Ramsay's strategically located footprint of facilities, investment in clinical excellence, which has created an industry-leading proposition for physicians, trusted payer relationships, our selective push into new and adjacent services to support our core and our investment in technology to drive efficiencies and improved stakeholder experience, we are well positioned to benefit from these tailwinds and drive long-term growth for shareholders. As operating conditions continue to improve globally, we are recalibrating our long-term strategy and positioning in the market to drive top line growth and an improvement in margins over time. Our priority is to continue to leverage and strengthen our core hospital business through a series of transformation programs and by investing in a wider range of services that feed into and support the core, ultimately driving improved outcomes for patients. We remain disciplined about our new investment. And in light of rising interest rates, we are applying a more conservative approach to new projects. I'll close by thanking you, our shareholders, for your ongoing support through what has been a volatile period for the health care industry and once again, thank our people and clinicians for their efforts to make Ramsay a leader in the industry for the provision of care. Just before I hand you back to Michael for the formal part of proceedings. I'd just like to congratulate him on his term as he's been a fantastic Chairman. Thank you.

Thank you, Craig. I'd now like to respond to questions from shareholders on our addresses and the business and the operations generally. And having said that, Henrietta, we have some written questions which we've received in advance of the meeting. So we'll deal with those, and then we'll ask for general questions afterwards. So Henrietta, I'll turn to you.

Thank you, Chair. We've received several questions and comments from shareholders in advance of today's meeting in relation to our performance, dividend payment and recent share price, including from Jeremy Cotton, [ Andrew Pelle ], [ Sam Paparalado], Lorraine Marshall and [ Anthony Albourne].

Thank you. And as I understand, those questions are very pertinent. Look, I think Craig and I have addressed those issues, but I'll reiterate that we understand shareholder concern with the recent underperformance of the Ramsay Health Care share price. It's been an extremely challenging year for the health care sector, particularly the private hospital sector. The rate of growth and recovery in the operating environment has been definitely slower than we anticipated. Many of the industry are struggling to stay profitable. And whilst Ramsay's performance has been good relative to other operators, we understand that the slower rate of growth and recovery is reflected in our share price. And many of you, of course, have mentioned the dividend cut, and I understand why shareholders are disappointed. In fiscal year '22 and '21, dividends were paid out above our target payout ratio in recognition of shareholders not receiving a fiscal year 2020 final dividend due to the uncertainty caused by the COVID pandemic. The Board closely considered the fiscal year '23 dividend. And due to the circumstances at the time, it was decided it was prudent to pay at the bottom of the range. As both Craig and I said in our addresses, the Board remains confident in our strategy to position Ramsay for long-term growth. The digital and operational transformation is well underway. We continue to invest and drive growth in our brownfields and greenfields investments, and we're confident returning Elysium to a stable platform, and we will invest in our people.

Thank you, Chair. We also received some questions and comments from shareholders in advance of the meeting in connection with the voice referendum and specifically the YES campaign from [ Graham and Maryland Williamson], [ Charles Parbery ] and [ Shirin Power ].

Okay. There seems to be some confusion here. Look, this is a good opportunity to clarify Ramsay Health Care did not make any financial donation to either side of the campaign in connection with the recent referendum on the voice department. However, the Paul Ramsay Foundation did donate to the YES campaign. Whilst the foundation is our largest shareholder, it is an independent entity, and so it has no bearing on our company at all.

Thank you, Chair. The next question is from Michael Holmes. He asks, the Board of Ramsay ultimately decided that the sale of RHC to the KKR consortium was not in shareholder's best interest at $88 per share. Since this time, the share price has dropped by over 40%, that has negatively impacted all shareholders. The offer made at the time would have paid a 10% premium on the share price, providing for an exceptional ROI for shareholders. For reasons not fully disclosed, the offer was rejected by the Board. Why have those responsible for this poor decision not left the Board? Company shareholder, [ RMGB Plumbing Pty Ltd ] asked a similar question.

Look, while I understand shareholders concerned with the recent share price, there's still some confusion here. And I want to reiterate, as I said last year that the KKR consortium withdrew their proposal. So we did not have an offer to accept. So we did not reject any proposal for consortium. And ultimately, as I said, there was no offer to consider.

The next question is from [ Mitchell Jones ] and he asks, with Peel Health Campus in Western Australia being taken over by the state government, how do you foresee the financial forecast for the loss of that income stream that's affecting share prices? Is there talk of the other Western state assets being taken over by the government as well?

Thank you for that question, Mitchell. No, not to our knowledge. Noting that Peel is a government-owned hospital, and we had a contract to operate and we did not own it. The transfer of the Peel Health Campus operations will commence in August next year. So any impact of the transition will flow through for the financial year and in 2025 and is not material.

The next question is from company shareholders, [ Stokes Partners Superfund ] and asks, given the company's need to correct the misstatement of a director's claimed professional qualification and to amend the annual report following its release to the ASX, please outline and confirm the veracity of the checks the company makes to verify stated qualifications of Board members and employees prior to their appointment.

Look, prior to the appointment of any director or senior executive, thorough checks, background checks are carried out to verify the credentials of the individual. I'll refer this to Henrietta because it's a little bit complicated, and I don't think it's overly material.

In relation to Mr. McMurdo, appropriate background checks were undertaken in accordance with the process that Michael has just referred to. Mr. McMurdo was awarded the accreditation as a qualified chartered accountant in 1997 by the Institute of Chartered Accountants in England and Wales, and does not hold himself out to be a practicing ICAEW chartered accountant. Ramsay understands that it is the ICAEW's current view that Mr. McMurdo was unable to use the letters ACA because he is not currently a member due to the fact that he does not pay membership fees or undertake continuing professional development. Accordingly, after being contacted by the ICAEW, made aware of their view, Ramsay amended the FY '23 annual report to delete the letters ACA that went next to Mr. McMurdo's name, and we'll continue to take this approach while McMurdo resolves the matter directly with the ICAEW. The next question is from company shareholder, [indiscernible] Proprietary Limited and asks how well protected is the company against cyber risk?

Look, we've done an enormous amount on cybersecurity. Our executive in the audience have been driving it, given the Medibank Private and the Optus experience, but I would get Craig just to give you more detail.

Okay. We certainly recognize the importance of cyber security and privacy in what is an increasingly hostile environment. Our investment in this area has increased significantly in the last few years. We have a global cybersecurity framework, which includes controls associated with prevention, detection and recovery. It has been revised to align with the NIST cybersecurity framework and the framework is externally validated, routinely tested and subject to ongoing review and continuous improvement. On a regional level, each region monitors cyber risks and data and privacy concerns and has its own accountability framework to reduce risk, protect data and meet regulatory requirements, which are different in each region. As part of this, each region has dedicated data protection and privacy offices and delivers comprehensive training to staff. Our information security teams across our regions, led by our Group Chief Information Security Officer, are continuously monitoring our systems and the external threats to limit the risk as much as we can.

Thank you, Craig. The next question is from [ Sam Papalarodo ] and asks, will the company do any share buybacks? If not, why?

Look, at the moment, we're focused on reducing leverage. So we're not in a position to conduct a share buyback. As our leverage moves into our target range, however, Ramsay will closely monitor its capital management programs, including whether a share buyback is an attractive option.

We have received 3 questions from Robert [ Vezina ]. Do you enjoy this chairmanship? If so, why? Are you committed to this industry and the shareholders? And are you honest?

Interesting question. Look, as I said in my address, of course, I've enjoyed the role. But after 9 years, it's time for a change. We always need new blood and younger people, Mr. Thodey, I'm glad to say. And look, I'm committed to both shareholders and the industry, obviously. And yes, I am honest. I think, am I?

Shareholders [ Percy and Prasad Kotwal ] have asked if we can have the AGM in Melbourne.

Yes. Look, thank you for that. Look, we've considered it, but from a logistics point of view and a cost point of view, we're determined to keep our AGM in Sydney, but we'll keep it under review. We -- our AGM arrangements, we're always looking at it, but I think it's probably unlikely.

Timothy Clifton has asked 3 questions. The first question is, at present, Ramsay Health Care does not operate shareholders a dividend reinvestment plan. Is it likely that a dividend reinvestment plan will be offered to shareholders in the future?

Look, as announced to the market in February this year, Ramsay reactivated its dividend reinvestment plan and was pleased to operate it for the half and full year dividends in 2023. But of course, when considering the payment of any dividend, the Board will consider whether it's appropriate to continue the dividend reinvestment plan.

Mr. Clifton's second question is, at present, Ramsay Health Care shares are 100% franked at the 30% company tax rate. What is the possibility of the franking credits being reduced in its percentage in the future through increased overseas earnings?

Thank you for that question. I'm not an expert in franking credits, but we do have experts. And at the 30th of June, we had an $876 million franking credit balance after taking into account the franking credits attached to the '23 final dividend. The balance increased 7% on the 30th of June 2022. We have stated recently that we do not have plans to make any material acquisitions outside of Australia. But obviously, it will depend on what the level of dividends we pay and the mix of our onshore and offshore earnings. At the current time, we believe we have sufficient franking credits to pay fully franked dividends for the foreseeable future.

Mr. Clifton's third question is at present Ramsay Health care employees, Ernst & Young as its auditors. Does Ramsay Health Care intend to employ 1 of the other large auditing companies in the near future?

I better be careful here because our auditors are in the room. Look, not at this time. However, the Audit Committee reviews the performance and independence and objectivity of the company's external auditors annually. Of course, Ramsay also complies with all applicable legal requirements. For example, the lead audit partner rotated last year in accordance with those requirements.

Thank you, Chair. The next question is from [ Victor Zapia ]. Is RHC basically a company that works for the government? This is no longer a publicly listed independent company. Company shareholder, [ VZ Super Proprietary Limited ] has also asked a similar question, is RHC beholden to governments more than to its shareholders? It seems COVID revealed how much you are at the government's mercy.

Look, thank you. That's an interesting question. Look, but I can assure you, we certainly remain an independent company. In responding to the COVID-19 pandemic, governments globally put in place extreme measures. One of these measures was in Australia restricting surgical activity. The pandemic and the increasing demand for health care services around the world requires us to work with governments closely. Ramsay maintains and develops relationship with governments at all levels, which helps us to provide high-quality health care to both the private and public patients in the community.

Victor Robinson has asked, French hospital system has a high reputation for its care of patients, a level above Australian hospitals. Has Ramsay found this to be the case?

Thank you for that question, Victor. I've got our French CEO here, Pascal. I don't know whether he agrees with that or not or whether it can be measured, but I'm not sure what the basis for that view is. At every Ramsay facility, including those in France delivering high-quality patient care and treatment is at the heart of what we do. Patient outcomes and experiences are an important performance index, and our Net Promoter Scores remains world-class across our facilities. So I think around the world, our standard of care is equally as high. Am I right?

Right.

Thank you, pascal.

Victor Robinson has also asked, medical science is developing in terms of research studies, university talent, et cetera. Is Ramsay spending enough on R&D to be innovative and progressive in the advancement of medical science?

Look, thanks for that. we proudly support a growing range of health and medical research for the good of our patients and the good of the community generally. We know how attractive it is for clinicians to have the opportunity to advance their work through medical research. In Australia, the Ramsay Hospital Research Foundation has more than 1,700 clinical trials and health research projects underway, involving more than 500 clinicians and thousands of volunteer patients. Our clinical trials network has expanded to 20 sites across Australia. And since its inception in 2017, the foundation has allocated more than $22 million in support of those 40 research grants.

Margaret and Ross Brown have asked if it could be investigated by Ramsay Health pharmacies offering recycled tubs for empty blister packs.

Yes. Look, reducing waste and increasing recycling is a focus for Ramsay in Australia. And this is something our pharmacy team will definitely look into.

Chair, that concludes the written questions.

All right. So I'd now like to invite general questions from the room. If you have a question, please proceed to the microphone. If you need assistance, let us know.

Mr. Chairman, my name is [ David Cullen ]. I'm a retired surgeon, another voting member. I actually got a copy of this. I'd like to congratulate the Board for some many wonderful initiatives this year by Mr. Thodey, digital transformation sounds like a painful prostatic examination [ indiscernible ] maybe look at that name. But also, I want to congratulate or acknowledge all the wonderful people who work for Ramsay. But I have some perhaps less attractive questions. Mr. Siddle you've recently more from Ramsay life after 55 years and great contribution to a willing seller using [indiscernible] last year. And in parallel with that change, starting in the late months of 2019 before COVID was embedded, there were multiple board resignations that started with the company's long-standing lawyer, 5 directors quickly followed him overboard. Some immediately sold shares out of scrap Ramsay from their social media pages. Your deputy, Mr. Evans, after a little cleanup job followed shortly after, 7 directors resigned in short time. 2.5 years later, a bid from KKR, which you've just confirmed was abandoned. They walked away after doing their due diligence presumably. And between those 2 extremely alarming events, directors jumping over board, KKR abandoning their bid. Your national CEO resigned without explanation was replaced from within the Ramsay [ indiscernible ] circle by your company's PR boss, the top [ spin doctor ]. So my questions to you are, what did KKR find during their DD that made them so empathically abandon their bid? And would any other potential suitors have the same concerns? And was Ramsayn's participation in the terrible Ramsay events at the [ ] hospital the reason for the mass board resignations? Did KKR walk away a couple of years later for the same reasons? And while you gather your thoughts, I'd like to ask Mr. McNally, maybe you can tell us have all those problems ceased? It's your job to know they've ceased. Perhaps you can tell us how you know they have ceased. And please tell us if it had been adequately contained or covered up. And finally, to the new Chairman, I'd like to know if those events at Ramsay, if they come to light, how much the share price will be affected. And you've been accused by the press of wanting to have a clean slate. So clean the state nearly need to come clean. And I don't mean you personally. And to Mr. Siddle, Mr. McNally have an obligation to disclose those Ramsay problems and events to the market before they benefit from any restructure or before they sell any shares.

I don't know what problems you're talking about. I mean excuse me, let me finish. We've refreshed the Board. We had board members who have been on the board for 20 years, and that's not desirable. And those Board members retired because they've been around for a long time, and it was time to refresh the board. There were pressures from institutions that we needed to refresh the Board, so we refreshed the Board. There was no reason any of those directors stood down for any of these problems, which I don't know what you're talking about. I just don't know what they are.

Well, you said you're honest. Now Mr. McNally does know because I wrote him by registered mail and outlined those problems, and he has failed to return any correspondence, okay? So we know what the problems are, but I'm not at liberty to discuss them here for legal reasons have been put in place by your organization. You do know what the problems are, certainly Mr. McNally does. If they come to light, I think that will affect the share price. But my question to you was did KKR walk away for a specific reason? What did they find?

Okay. What we understand is KKR's funding fell through. Last year, the financial markets moved quite considerably, so their funding costs increased considerably. The cost of their property, the yields on their property went up. And therefore, we think -- well we understand, we haven't had this directly from them that they couldn't proceed with the bid because financially, it didn't stack up. There wasn't anything they found in due diligence at all. And in fact, they were quite happy with the first stage of due diligence. We didn't proceed to the second stage of due diligence because there were issues around the French company, and then they were through the bid. That's the story. And we don't resolve from that. There was nothing in there that's -- you seem to think there's some sinister things in there. I really don't understand it for legal reasons, you can't tell me or like, I can't respond to them.

They may come to light and thanks for that explanation. The market certainly wasn't aware of it, I understand it. But getting back to the point, Mr. McNally is aware of the Ramsay events that occurred in Albury, the terrible Ramsay events that occurred in Albury, perhaps they will come to light and then you will understand and so will the market.

Thank you for that.

Mr. Chairman, introducing Peter Gregory, he's a shareholder and also a proxy holder representing the Australian Shareholders Association.

Yes, we know, Peter. Welcome.

Thank you. Good to see you. As was just said, on the shareholder I'm representing the Australian Shareholders' Association. We're a largely volunteer organization that represents the interest of individual shareholders to companies. And I'd like to thank Ramsay for their engagement with us as part of this process. Today, I'm representing 216 shareholders who hold a total of 315,000 shares. I'd like to ask you a question about the Board's skills metric that's in the corporate governance report. It lists the skills required and the number of directors who have each skills. But we'd like to suggest that given the unique nature of this business, the specific skills of experiences of operating a private hospital and hands-on understanding of the health care reimbursement system should be included in that metric. And I'd suggest that if that were the case that they probably only be yourself, Michael and Craig, who would have those skills which, to our mind, represents a risk to the organization and that you're both nonindependent directors, but are the directors who hold these specific skills. We would suggest that, I understand you're undergoing a Board recruiting process right now. But if it's necessary to have people with those skills that you consider an additional director as well.

Look, I mean, we agree with what you say. I'd like to think, Mr. Thodey after 5 years has picked up some skills around hospital management. Yes. And by the way, it's not easy to find people that have been in the private hospital industry that we can put on the board. We've looked -- we've been -- we basically have a constant search. We've identified a couple, and in fact, I approached 2 of them, and they didn't want to become public directors, public company directors. So we are continually looking because we agree, we probably are a little bit light on there. But I don't think it affects the way the Board operates. But I certainly take your point.

Okay. Can I further suggest that this situation, depending on the depth of skills and experience within the management team, can possibly give rise to a concern with CEO succession planning?

Yes. When we appointed Craig years ago, I said to him his first job is to find his successor. We are working on succession planning. Craig hasn't given us a date yet as to when he may retire, but he won't be around forever. So we -- well, we have a process. It goes on slowly, and we're not ignoring it. But it won't be easy to replace him.

Okay. That was 2 questions. I have further. Can I keep going?

Yes.

The portfolio of services chart on Page 9 of the annual report shows a diverse range of services across geographies that Ramsay operates in. Has consideration being given to rationalizing those services that don't strongly support the core business? And are there business facilities within the portfolio that don't deliver a sufficient return to justify retaining them?

Sorry, I just need to [ indiscernible ].

It's the geographies versus services chosen.

Oh yes, okay. Sorry, what's the question? Do we...

Are you satisfied that all of the services you have delivering to the core business? Or are there some of the core business being effectively running private hospitals? Are all of the services you're involved in delivering good outcomes? And the second question is, are there some facilities within the whole Ramsay group that you're not -- you're concerned about their ability to deliver returns?

Look, our core business is running private hospitals. And so most of the things we do have some connection to running private hospitals, whether it's primary care, whether it's imaging, whether it's pharmacy, but they all relate back to the hospitals. So at this stage, we're not going into business that aren't hospital related. I don't know whether Craig wants to elaborate on that.

Yes, I'm happy to add to that, Michael. Certainly, when we look at the strategic direction for the group, so our strategy of Ramsay 2030, it's about hospitals being the core business that we have, but adding adjacent services is an important part of providing better patient experience and better clinical outcomes. So each of the regions will annually at least, we do a portfolio review about where we're heading directionally in terms of the strategy. The portfolio review we'll not just look at what the performance is in the short term, but what the role of a particular facility or services -- service will be in the long term. And sometimes, there are adjustments made to service profile and facilities. But I'm not going to say that today, there is a particular facility that isn't contributing that doesn't have a role going forward, but it's regularly reviewed.

Does that cover it?

Yes. No, that's a good. Also on the question of reimbursement, you did refer to it in your presentations. And if I can ask you a longer-term view as to how the competitive environment in terms of delivery of health care services, participation of different players might impact on Ramsey's business. And do you have the flexibility to respond to the changes that you might envisage occurring in the future?

Look, we have a very valuable set of assets and then they're not replaceable. Governments saw the benefit of them during COVID. They had us on standby to cover COVID patients. So we were a very important part of the health care system at that stage. I'm just trying to remember the question now.

In terms of the change that's occurring within the...

Yes, look, the change is -- and David might want to say something is we know that the health care business has changed. COVID has changed things. Doctors are operating in different ways as our medical people will tell you here. we are responding to those changes. They are -- this is the first time I have seen it in 55 years. And so we are transforming the business, using a digital and data program. And I might sort of throw to David here. But it has to produce returns because it's quite a great deal of money.

Here we go. Peter, I think it's 2 different levels. One is we're investing in technology to run really efficient hospitals and deliver better care, but also the innovation in clinical excellence is changing radically. And so we need to do both together, I mean be it oncology, cardiology, even [ must have seen ] enormous changes. And so we need to provide an environment for our surgeons to be able to deliver outstanding health care, and that's what we're doing. And that's a big program of work. But we need to get our operations efficient, running well, supporting our nurses who are so important and making sure they've got a great environment to work and then also we'll be seeing clinical excellence.

Craig, did you want to add something?

Yes, I was just going to add that when you sort of referenced or alluded to it in my presentation, when you look at long -- the drivers for demand for health care over the longer term, you're going to see an increase in demand for health care. And that will play out in every subsector and every -- once every service, but generally across the health care spectrum. And so the important thing for us is to recognize what that environment looks like going forward. There's going to be more pressure on any taxpayer-funded health care system. So for us, it's how do we continue to grow the acute part of the business and then the other adjacent services so that we get a model of health care in a -- we can describe it as an ecosystem, but a model of health care that allows us to be relevant produce world-class outcome, health care outcomes, allows us to be affordable and relevant to payers, whether they be government or individuals or private insurance funds. But you'll see the pace of change in health care quicker over the next 5 or 10 years. And so we're very cognizant of that. But we still have a strong belief that the acute hospital business will still be at the core of our business going forward. It will have different rates of growth for different services. But as we broaden our service profile and provide a more integrated service, we're trying to capture what those changes will be in the future.

Then my questions, my colleague, Jennifer Owen, also has a couple of questions for you.

My questions are largely related to the financials. So the Elysium acquisition cost $1.5 billion, of which $1.3 billion was goodwill. And the Chair explained why in the impairment testing of U.K. assets, the company lowered the discount rate to 9.7 and increased the terminal growth rate to 2.5% for the U.K. business despite interest rates rising over 2% or 200 basis points in the year. Karen, would you want to address that one?

Yes. So thank you for your question. When we look at all of the parameters for the goodwill testing, we do it with regard to the market. We tested also and have it independently looked at by our auditors, Ernst & Young. And so that was the view of what the right parameters were for the goodwill testing with everything considered. Martyn, do you want to add to that?

The other thing we consider in our impairment testing is we look at the U.K. as a whole segment. So we look at the Ramsay U.K. business as well as Elysium. And so when you look at that combined, as Karen said, those numbers do fluctuate from time to time, we'll review them every year and get the validate [indiscernible].

And I noticed also in the impairment testing note, you did stress test the -- sorry, the company to stress test the discount rate and the terminal growth rate. And it's in your note, you've observed that the carrying value at that point given those altered metrics, pretty much equaled the recoverable amount. So pretty much on the edge there of an impairment. So you've outlined some improvement in the Elysium business this first 4 months of the year, which is good to hear. So -- but there was some caution in the annual report and the presentation to shareholders around further impairments for the U.K. business if Elysium didn't improve. So what are we looking at now with respect to impairment risk, further impairment risk for Elysium given what you're seeing in the first 4 months of the year?

I'm happy to take that at a high level. We're certainly seeing Elysium, as I said, tracking to the trajectory we saw in the last quarter of FY '23. So the real issue with the Elysium performance related to workforce. And so when the U.K. was coming out of COVID and sort of the other industries such as hospitality and retail started to rebound, that put a lot of pressure on the unskilled workforce. And so Elysium has a big dependence on health care workers, who are generally unskilled workers, who then we train internally to be able to utilize them. And so there was a significant impact of retail and hospitality in particular, mopping up that workforce. So this is a long-winded answer. so when that happened, we had -- 2 things happened. We had an increase in costs because we had to use agency staff. And so agency staff are more expensive, but we also had to use more of them because we needed to make sure we have safe environments. And in doing that, that restricted the capacity we had. So we didn't get activity growth through that period. And so that's been redressed. And I made the point of the number of new staff that have been onboarded since the start of calendar '23. And so we are seeing Elysium continue to improve its performance back to where our expectations would be, but it's still got some to go so.

Okay. So it's still not quite in line with your expectations at the time of the acquisition.

No, we've got that catch up to make. But it's not something that we're as concerned about as we were 6 months ago.

And with respect to discipline around acquisitions, given the Elysium performance was so disappointing so quickly from the acquisition, can the Board explain how acquisitions are assessed for a variety of potential circumstances prior to being made? What rigor is applied to a range of scenario testing to ensure that the company is not overpaying for assets?

Look, we obviously try and not overpay for assets, and we have endeavor to buy as in the past, but they have been overpriced, and we have withdrawn from any acquisitions that are overpriced. Elysium we thought was a fair price at the time. It was adversely affected by COVID. We still think the long-term value of that business is there. But all acquisitions, we're quite disciplined, and we have certainly not proceeded with a lot of acquisitions. I don't know whether you want to add some.

I just said, when we assess acquisitions, and we do a lot of homework in the markets we're in, but also some select markets. As to what opportunities may present or will present that align with our strategy, so Elysium was very much aligned with our view on mental health care into the future and increasing demand for mental health care services. And absolutely, we all recognize it had a really disappointing results through that period, which wasn't anticipated. So certainly, that discipline, we would say no to more things, many more things than we say yes to. But we do take that long-term perspective. And so when we make acquisitions, you'll see that the hurdle rates we have for that investment, we have a 5-year view on acquisitions in terms of what we expect them to perform at. And so in Elysium's circumstance, that's tracking back to that. I'd probably call out Ramsay Sime Darby. I mean many people questioned the value of Ramsay Sime Darby, I think the results evident that, that was a good investment for us. And so whilst you might not see the value as it's being created through that period, it's up to us then to be able to demonstrate that value that is being created. But I think in anyone's language, the profit we made on sale of RSD is an attractive one. and I think supports that strategy.

But I have 1 more question.

All right.

So a question on nonrecurring items. So Ramsay's strategy highlights strategic partnerships and M&A capability as one of its strong organizational foundations thus profits losses on asset sales, transaction costs on M&A and impairment testing of goodwill purchased on acquisitions are all normal parts of the Ramsay's strategy. Every year for the past 4 years that I've gone back, profits and losses from these 3 areas have been reclassified as nonrecurring. Asset guidance states that it's potentially misleading to describe items as nonrecurring, for example, items such as impairment losses and restructuring costs as nonrecurring when they are generally of a recurring nature in many businesses, albeit they may arise only in some years. The net boost to normalized profit over the past 4 years are removing these 3 items from normalized earnings has been $87.5 million. Can the Board explain why they consider these items are nonrecurring and how this treatment is consistent with [ indiscernible ]?

I'll start. Okay. We changed our policy. I'm going to -- I'll say 3 years ago to move away from core and noncore. So we don't normalize those things. What we do is we call them out for people's information. So I certainly can test the position that we do and what we don't. We changed that policy. We don't have core and noncore anymore. We just call out items so that people can make their own assessment about when they're modeling it, what the impact would be.

You still call them nonrecurring.

We don't normalize the accounts when we just say here are items that you can consider. No, we don't [ indiscernible ] something.

Mr. Chairman, we have a question from shareholder, [ Enzo Prata ].

Mr. Chairman, my question is about the cybersecurity and the risk of cyber attacks.

Just move the mic because my hearing is not as good as it was.

My question is about cybersecurity and the risk of cyber attacks. Do we store any personal identifiable information that we do not need? And by that, I mean, of course, we needed to keep names, contact details of our patients, that's fine. But do we store things like driver license numbers, passport ID, state card numbers and so forth?

Look, thank you. We do have information that we probably don't need, and we are looking at that currently. I think it's an ongoing exercise at the moment. And we discussed it at the last Board meeting, and we are trying to determine what information we have that we don't need to keep. It's generally around medical records rather than personal details. So I don't -- we don't have drivers licenses. We don't have, I think, credit cards. So there's nothing there that's particularly sensitive other than the medical record, am I right?

The short answer is, yes, we do have information, but we are taking steps to identify that and what we do about making sure that we don't keep that information longer than we do.

Mr. Chairman, I introduce Wayne Perry, shareholder.

Good morning to the Board. And as always, thank you for your time throughout the year and for your time today. A couple of questions, hopefully, looking forward in just some context from COVID and artificial intelligence. So my questions are, given that we -- where we are with COVID now, and it's more a concept that we have to live with, what are the learnings for Ramsay from the whole COVID experience? And the second question, you've mentioned AI. So can you talk to what AI looks like for Ramsay? Is it something that you're going to develop? Is it something that you're going to take off the shelf? Are you going to be bleeding edge or leading edge or a follower? Or what are your intentions in that space?

For learnings, did you want to?

Yes, how much time we've got to got to get from the learnings from COVID. But I think what many learnings from COVID and we reflect back on how we performed as an organization through that period. And I think the great positive for us was in terms of the way we managed according to our values and our priorities being around patients and staff. And I said before, they are our absolute priority, their safety and welfare through that period and remains the case today. I think we learned many things, but how to capitalize on the fantastic expertise that exists in our organization was 1 big learning. We've got some really talented people who were put under extreme pressure, and their ability to respond and make sure that the right decisions were made through that period was really encouraging to see. And I think we need to continue to capitalize on that. We had a very policy and procedural-driven period through COVID, where we were constantly updating. It could be 2 or 3 times a day on what the latest information was. And so communication I think everyone learned through that period and how important it is to communicate and you can't overcommunicate to our people. So lots of small learnings, but what we've done is reflect on the things that we need to keep that came from COVID and those things that we don't think are as productive for us. And that might reflect on productivity. We've talked for a couple of years about getting the business back to productivity levels that would have existed before COVID, but are relevant in today and getting that cultural change back has been a longer-term process. So that's the COVID. I've forgotten your second question.

David, do you want to...

well, I'll just start. There's a massive amount of resources that are currently working on what our digital and data strategy is and what the evolution and execution of that will be. AI is a part of that. And so when we look at I don't think we want to be leading edge in terms of the implications of AI on clinical practice. I think that is something we have to be cautious about. And I think that's -- when we look at sort of our risk appetite for that, we need to be looking at what's happening around the rest of the world. And I'll just call out Victorian government sort of put a ban on anything AI related in terms of the clinical activity in that state because there is no -- the evidence isn't there to support some of the initiatives that might be moving faster than policy generation can occur. But in saying that, we currently use AI and develop AI around many of our business practices, and we'll continue to do that in a drive to give you a better patient experience, get more efficiency into the business. So it will be a bit of horses for the courses.

Thanks for the question. There's no more questions. So we'll move to the formal part of the agenda. The first item of business is the consideration of the financial reports of the company and its controlled entities and reports of the directors and the auditor for the financial year 2023. Whilst there's no resolution on this item, it is an opportunity for shareholders to ask questions on the accounts. We have our auditor down here from Ernst & Young and Vida, of course, present to answer any questions that we have on the conduct of the audit, preparation and conduct of the content of the auditor's report, the accounting policies and the auditor's independence. So welcome, Ryan. So if there are any shareholders who like to ask a question on the accounts. So we'll move on to the next item. The next -- second item is the adoption of the 2023 remuneration report. As I've said, fiscal year '23 was a demanding period for health care globally with the whole industry experiencing ongoing workforce shortages and inflationary pressures. Whilst there was a gradual, albeit inconsistent recovery in the business environment, Ramsay did not meet its financial expectations in 2023. The Board has worked tirelessly to align the remuneration framework and outcomes with performance and shareholder outcomes, reflecting the group's overall disappointing performance in 2023. The short-term incentive vested at 30% of maximum for the MD and 31.25% for the group CFO and the fiscal year '21 long-term incentive did not vest in fiscal year '23. In addition, no increases were made to fixed remuneration for the executive [ KMP ] for fiscal year '23 and there are no planned changes for '24. So if anybody would like to ask a question on the remuneration report, could you come forward? No questions. All right. Henrietta, shareholders, can we ask, do we have any written questions in advance?

We have 1 question that we've received in relation to remuneration report. [ Maurice and Cheryl Atkinson ] have asked why did the Board of Directors need performance rights. The Director or committee is elected to do the best for the company. if they need more, then they should not be there agreed.

Sure. I think it might be helpful to clarify on that one, that nonexecutive directors don't receive performance rights or any form of performance-based pay, and that's important in terms of maintaining objectivity and independence of board members. What we do have is encouragement and a policy for directors to hold 1x their fees in company shares. But that is -- they pay for those themselves. Those aren't granted.

Okay. Thank you. So there's no more questions. So I'll -- so -- there are no more questions. Please ensure you cast your vote on this item by marking the green card. The proxy results are shown on the screen, and they seem to be in favor of the motion. So thank you. The third item is the election of directors. As I'm the first director to be considered for election, I'll step down from the chair and hand over to the Lead Independent Director, David Thodey.

Thanks, Michael. Item 3 is to consider the reelection of Michael Siddle as [ indiscernible ] of the company. Now many of you already know Michael, and I think we've already sort of been through a little bit of his incredible history of this company 9 years as Chairman, 17 years as co of Deputy Chairman and 55 years in the company, so an incredible contribution. As Michael mentioned in his address, following this AGM, he will be stepping down as Chair of Ramsay and so very big shoes to fill. So I just want to take a moment to say on behalf of the Board and all the employees right across Ramsay to really express our thanks, Michael, for your incredible contribution. I know Craig said it as well. I want to be very clear, the Board asked Michael to stay on the Board because we felt his skills in managing hospitals, and he was as a long history, knows the network very well. And we're really grateful that his knowledge and his engine experience will stay on the board. So on behalf of the Board, we very strongly recommend to vote in favor of Michael's reelection. We're not going to ask Michael to say any words because I think he's well known to you all. But we're really happy to take any questions at all. And I'm sure Michael would be more than willing to answer any as well. So are there any questions at all from shareholders about Michael's reelection? Well, looking around the room, it looks like there's no questions. So please make sure you cast your vote on this important item and use the green voting card and the proxy should be up on the screen now, which are very supportive of Michael. So thanks very much. Thank you, Michael. [Voting]

Thank you, David, and thank you for your support. I tried to get out, but they wouldn't let me. No, that's not true. The second director will be considered for reelection is Karen Penrose. Karen was elected as a director in November 2020. On behalf of the board, I strongly recommend a vote in favor of Karen's reelection. She's very, very strong audit chair, sometimes too strong for me. But she certainly acts in the shareholder's interest at all times. Karen?

Thank you, Chairman. Good morning, everybody, and thank you for the opportunity to talk with you today. In preparing for this AGM, I reflected that over my 40 years of my working career, 30 years in executive banking and as a listed company, Chief Financial Officer, and then the last 10 years as a full-time nonexecutive director, there are recurring themes that underpin my skills, my approach and my curiousness to continue to learn and contribute. Those themes are for the importance of robust financial and risk management frameworks and controls, customer centricity or in other words, putting customer outcomes first and in Ramsay's case, that's our patients, their families and our people and the Ramsay Way people caring for people, strategic decision-making in uncertain times, and the value of investment in technology, digital and data platforms to drive and support growth and improve efficiency. When I first addressed you as Ramsay shareholders in November 2020, it was on the back of an unprecedented challenging period caused by the COVID-19 pandemic. I was confident then that my experience would be valuable to Ramsay to navigate those uncertain times. And as we fast forward to today, the themes and the underlying skills and approach that have driven my career to date, equally, if not more relevant to help continue to develop on Ramsay's long-term strategy to drive and support growth, improve efficiency and stay true to our purpose of people caring for people. In addition to being on the Ramsay Board, I also serve as a Director of 2 other boards in the health care sector. Estia Health is in aged care and Cochlear delivers world-class medical devices to help thousands of people each year to hear. I believe that these roles with Ramsay, Estia and Cochlear give me a broader perspective of the health care industry, both in Australia and globally. And I see these as adding to my ability to contribute to your board, particularly as Ramsay responds to the significant changes in the operational environment. As Michael said, I'm Ramsay Health Care's Audit Committee Chair, which is a role that I particularly enjoy and I'm passionate about. Given my executive experience, I really do love numbers. and because that role in the committee provides a window for me to engage with a range of Ramsay executives who oversee the financial health of your company. In addition, I'm a member of Ramsay's Global Risk Committee and a member of the Ramsay Sante Board and Audit Committee. I mentioned earlier that I work full-time as a nonexecutive director. And often, we are asked about director workloads. And I wanted to take this opportunity to assure you that I have accepted other roles on boards very carefully and in consultation with our chair, take my duties at Ramsay very seriously, and I make sure that I have enough time, especially as an audit chair to execute this effectively. However, I also believe that in serving on other Boards and as chair of their respective audit committees, this also means that I see audit and audit-related issues from different perspectives, which adds to my effectiveness as your audit chair. I believe that my skills and extensive experience in financial services and management as well as a passion for utilizing technology to drive improvements and efficiency will continue to be valuable to Ramsay as we undertake business transformation and work towards Ramsay 2030. I really appreciate your support for my reelection, and I acknowledge the responsibility that goes with that to continue to work diligently with your Board for the benefit of all Ramsay Health Care shareholders. Thank you.

Thank you, Karen. And to your point, Peter, is Karen has a fair bit of health care experience being in aged care and cochlear. So whilst not direct hospital experience, there's plenty of health care experience there. So are there any questions from shareholders in the room regarding Karen's reappointment? No. So could you please cast your vote by marking your green voting cards? The proxy results are shown on the screen and it looks fairly evident that Karen has been reelected. Item 4 is proposed grant of performance rights to Craig McNally. Are there any questions in the room in relation to Craig's performance rights? No. So please ensure you cast your vote on this item by marking your green voting cards. And again, the proxy results are shown on the screen. And again, it's fairly obvious that there's a vast majority that are in favor. So that concludes our discussion on the items of business. Please ensure that you have marked and signed your voting cards on items 2 to 4, place it in one of the polling boxes that are located at the back of the room somewhere. The poll will close 10 minutes after the end of the meeting. If you have any questions relating to voting, please see a member of the Boardroom staff. So this brings us to the end of our 2023 AGM. Thank you for your participation today. You're very welcome to join us outside for a cup of tea. And for the last time, I'll declare the meeting closed. Thank you.