Ridley Corporation Limited (RIC) Earnings Call Transcript & Summary

So good morning, and welcome to the 35th Annual General Meeting of Ridley Corporation Limited. My name is Mick McMahon, I'm pleased to address the meeting as your Chair. I declare the meeting open and confirm we have a quorum. I'm delighted to be able to extend a warm welcome to our shareholders today, and thank you for joining us either in person here in Melbourne or via our webcast. For those of you here in the room, in the event of an emergency, please follow the emergency exit signs and the instructions from [indiscernible]. In addition to being webcast, this meeting is being recorded for the purposes of taking minutes. For those in the room, we ask that you ensure any devices are on silent or turned off. I'd like to take the opportunity to introduce our Board to you. Managing Director, Quinton Hildebrand. Independent Nonexecutive Directors Patria Mann; Rob Van Barneveld; David Lord, who is retiring at the conclusion of today's AGM; Rhys Jones, who is presenting for reelection at this meeting; Julie Raffe who is presenting for election at the meeting and who joins us virtually; and Non-Executive Director, Ejnar Knudsen, who joins us virtually as well. I also welcome Richard Betts, our CFO; Company Secretary, Kirsty Clarke, as well as KPMG partner, Julie Carey, representing our external auditors. The minutes of the last AGM held on 24th of November 2021 have been signed by myself as Chair of that meeting. Our Company Secretary, Kirsty, has a copy of the minutes available for inspection for any member. And copies of the notice of meeting have been made available to all members and can be found on the Investors section of the company website. [ Moving off ] on some procedural matters, we'll begin the meeting with a short presentation and then go to the formal proceeding. This year will comprise of 6 items to be decided by poll in accordance with release constitution. Results of the poll will be released shortly after the meeting on the ASX announcements platform and on Ridley website. All virtual meeting participants, voting on the resolutions is now open. You can change your vote at any time until I declare the voting closed. You can also change your vote at any time throughout the proceedings. I'll give you a clear prompt later in the meeting to warn of the close in voting. For those attending virtually, if you are eligible to vote, once voting opens, press the vote icon. All resolutions will be activated with voting options. To cast your vote, simply select 1 of the options for each resolution. There's no need to hit a submit or enter button as the vote is automatically recorded. You will receive a vote confirmation notification on [ your screen ]. You can change your vote up until the time I declare voting closed. Please note that only shareholders, proxy holders or authorized shareholder representatives may vote. Any directed proxies given to you by a shareholder will automatically be cast as directed when the poll is closed. For those joining us in person, you have been issued with voting cards upon registration. When the poll is closed, our share registrar Computershare, will collect your voting cards. After introducing each item, I'll take questions from those in the room then from those participating online. [Operator Instructions] We will address any questions received prior to this meeting at the relevant part on the business, and general questions after the close of the meeting. [Operator Instructions]. If you have any difficulties voting or submitting questions, please refer to the user guide located on the right-hand side of the webcast screen or refer to instructions within our notice of meeting. If you experience technical difficulties reported during the meeting, we will assess next steps and we'll update you by our posted message on the webcast. In the unlikely event of the complete failure of technology, the share registrar, Computershare, will contact shareholders via e-mail, if you've provided one to advise of any adjournment. We may also provide an update on the ASX. For the formalities of the meeting, each resolution and the valid proxy details in respect of that resolution will appear on the screen. As Chairman, I intend to vote any proxies in my favor, in support of all motions put, including any undirected proxies in relation to item 2, 5 and 6, which relate to remuneration issues. I'll now hand over to our Chief Executive and Managing Director, Quinton Hildebrand, to provide a brief business update. Quinton.

Thank you, Mick. Good morning, ladies and gentlemen. We appreciate your attendance at the AGM today. Thank you. As Mick's indicated, I'll provide a brief summary on our performance for FY '22, outline the high-level strategy, and restate the outlook statement that was provided to the market on the 14th of November. FY '22 was a successful year for the business. Despite the challenges of COVID-19 and the fallout from the war in the Ukraine, we delivered on the needs of our customers, handled greater volumes through our operations and maintained our focus on safety. Both reporting segments grew in FY '22, delivering a group EBITDA from operating -- ongoing operations, of $80.1 million, up 16% on the prior year. FY '22 was the final year of the 2022 growth plan. In this 3-year period, the business delivered an EBITDA CAGR 18.6%, implemented a disciplined capital allocation framework, invested growth CapEx in both reporting segments, the old underperforming assets and realized a total shareholder return of 79%. At the start of FY '22, the Ridley Board announced a capital allocation framework to ensure future capital discipline and maximize shareholder returns. This framework prioritizes maintenance, ESG and working capital requirements to sustain the future earnings of the company to support a conservatively geared balance sheet. Thereafter, surplus cash flows are available to pay dividends and fund organic and inorganic growth opportunities. Ridley's balance sheet strengthened in FY '22 with a reduction in net debt of $60.2 million achieved with the sale of Westbury extrusion plant and surplus land assets as well as the operational earnings. On the back of the strengthened balance sheet, affecting confidence in the sustained performance of Ridley, the Board approved an additional $15 million in CapEx, Project Boost, increased the dividend payout ratio guideline to between 50% to 70%, permitting dividends for FY '22 at the upper end of this range and announced the intention to undertake an on-market share buyback up to $20 million through to the 30th of June 2023. To date, no shares have been acquired under the buyback and the Board will maintain a disciplined approach in the execution of the buyback, taking account of prevailing economic conditions [indiscernible] valuation multiple relative to its peers and returns from competing uses of capital. In May, Ridley announced its sustainability pathway, which is designed to embed Animal Nutrition as a key contributor to more sustainable and profitable farming. We're working with our customers and suppliers to deliver real value in sustainable ways with a focus on smarter ingredients, optimized production, effective solutions and meaningful partnerships. We believe that Ridley is well placed to execute on these initiatives, and this will further strengthen our competitive advantage with our customers. At the end of May, the Board approved the FY '23 to FY '25 growth plan. This plan supports the ongoing earnings momentum of the business, invests in sustainability pathway within our work streams, and operates within the capital allocation framework with the aim of delivering a total shareholder return of over 15% per annum. In summary, both reporting segments have plans to grow. Bulk Stockfeeds strategy aims to leverage the benefits of scale, extend our role in the supply chain, and enhance our market leadership position. Package and ingredient strategy is to invest in processing capability to produce the value-added product -- to produce value-added products for our customers. I'm pleased to report that just 4 months into this 3-year plan, we're making good progress. Looking forward, future demand for Ridley's products is positive with Australian farm gate output forecast to continue increasing. As the market leader in the animal nutrition sector, Ridley enjoys scaled benefits and has the capacity to employ specialists and adopt technology, should allow us to continue differentiating our offering and margins. As expectations rise in regard to sustainability, Ridley is well positioned to partner with our customers to deliver profitable solutions through our sustainability pathway, provide sector leadership. Whilst there will always be challenges, the combination of Ridley's geographical spread, poultry species offering, customer mix, disciplined risk management should provide earnings resilience. With a well-defined growth plan, strong balance sheet and disciplined approach to capital allocation, Ridley has a platform to execute on growth opportunities that create shareholder value. In repeating the statement provided to the market on the 14th of November, [ our ] outlook is unchanged with first half EBITDA earnings expected to improve on previous corresponding period. This is expected to be achieved through a mix of positive contributions from the growth plan initiatives across the business and through the packaged and ingredients segment benefiting from ongoing favorable tallow and meal pricing which is expected to offset the impact of wet conditions and challenging transition to the new crop in the Bulk Stockfeeds segment. In addition, the strong balance sheet supports the ongoing investment in the business whilst leaving options to execute disciplined capital management and pursue growth opportunities. In closing, I'd like to thank the Chair and the Board for their direction, guidance, challenge and encouragement over the past year. I'd also like to acknowledge the work of the leadership team, all employees at Ridley who continue to go above and beyond that have delivered these successful outcomes for the business. And finally, to our shareholders, thank you for your ongoing support as we continue on our journey to take Ridley to its full potential. Thank you.

Thanks very much, Quinton. So the first item of business is the consideration of the company's financial reports for the year ended 30 June 2022, which are available on the company's website. There is no requirement for shareholders to vote on, approve or adopt these reports. However, shareholders may ask questions concerning the financial statements of the company. These auditors are present to answer any questions relating to the conduct of the audit. I invite shareholders to ask any questions regarding this item of business.

[indiscernible] from the Australian Shareholders Association. Today, we're representing 38 shareholders, and we have 1.4 million proxies. I note that you're reporting safety data for the operation in your annual report, and effective performance is open of the personal KPIs for executives. But I couldn't find any historic performance data or targets for the current year. Would you like -- would you start reporting historic data and targets in future annual reports?

Thanks for the question. Safety is obviously a critical area of focus for the business. We can say in respect of history and trend that the safety performance has shown an improving trend over time, and that's clearly what we want to see. We can have a look at the historical disclosure. There's no reason we wouldn't disclose that. In terms of KPI, safety is always a difficult one because, obviously, the clear objective would be to have no safety incidents. That's where we start from. And of course, we have to continue to improve our systems and processes to be able to deliver on that. So disclosing safety targets is a little bit harder. We prefer to have 0 safety incidents out there, have a look at the disclosure directly track record. Any other questions in the room?

Peter [ yet ] again. I couldn't find a sustainability report on your website, and I know that there are some segments under your social responsibility. Would you commit to publishing a comprehensive sustainability report annually, which includes details of your carbon pollution reduction plans?

Yes. Thanks for the question. We have been putting a lot of effort into the development of a sustainability strategy, and I'll ask Quinton to comment on that. What we didn't want to do was go early with a lot of commitments without having done the groundwork, if you like, in order to be able to deliver and make progress against them. But Quinton, do you want to comment on where we are?

Thank you for the question, Peter. You will find some pages on sustainability in our position and the sustainability pathway that was approved in May is in our annual report. That is being further developed, as Mick has indicated, as we get baselines and build up our initiatives in this area. In the subject to about producing a separate sustainability report, I think we'll continue to develop it and provide information and metrics to shareholders whether that's included within the annual report or a separate sustainability report, I think, is still a matter for consideration.

Thank you. Any other questions in the room? Go online. Kirsty, any questions online?

We do have a question, Mick. So we've got a question from Mr. [ Stephen Mayne ]. Did of the 5 made proxy advisers recommended against any of today's resolutions? Which of the proxy advisers are covering us, and have there been any material protest vote? Do we disclose proxy votes before the debate on each resolution So shareholders can ask questions about the reasons if there have been any protest votes? Also, why not disclose the proxies to the ASX with the formal address like [indiscernible].

Okay. So a multipart question, I'll try to take them in steps and [indiscernible]. What's the first one?

The first one was, did any of the 5 main property advisers recommend a vote against.

So we're aware 2 proxy advisers who recommended a vote against 1 of the resolutions, which is in respect of the reelection of Rhys Jones to the Board. The concern raised was in respect of overboarding, as they call it, or that Rhys has sufficient time in his other executive and Board meetings. That's 2 of the proxy advisers. We're only aware of 2 of those who cover us, that's the only recommendation against. You will see shortly the voting results and you can judge for yourself whether that's had a material effect on voting. We'll comment now. We're comfortable -- more than comfortable with Rhys contribution to the board. It's up to him to manage his time, and we see great value added by Rhys in terms of his commercial experience, organizational experience, and giving us a perspective from New Zealand as well. So we're very comfortable, but we know and acknowledge the recommendation from the proxy advisers. So that was 2 covering. I think the second one is the approach to this, but that's in the eye of the beholder. You'll see the results shortly. Do we disclose it? We disclose the vote, and they'll be on the screen shortly and on the webcast. Whether we don't -- currently, we must disclose the votes.

We do. During the meeting, obviously, we disclose the votes. Historically, we haven't disclosed them. We've loaded the managing director's address, and that's not inconsistent with market practice.

Yes. But if market practice evolves in that respect, and it's a good practice to do that. I don't see any reason why we. I think that covers that question, doesn't it? No other questions in this respect?

No other questions.

Thank you. If there are no more questions, I'll proceed with the resolutions to be considered. I ask members to consider and adopt the remuneration report set out on Pages 27 to 37 2022 Annual Report. The Corporations Act requires the remuneration report to the vote. Please note that the vote on this item is advisory only and does not bind the directors or the company. The rem report sets out the policy for the remuneration of the directors, the CEO, and the other designated senior executives and details how their remuneration is structured. It also contains remuneration details for the directors and senior executives for the year ended 30 June 2022. Noting that each director has a personal interest in their own remuneration from the company, as set out in the rem report, the directors recommend that shareholders vote in favor of adopting the remuneration report. No votes may be cast on this resolution by key management personnel. Details of these remuneration are included in the report and their closely related [ RPs]. As Chair, I will be voting as proxy only, only where I am entitled to do so. The resolution and the summary of the proxies are displayed on the screen. Are there any shareholders in the room who would like to ask a question or would like to comment at the remuneration report. Peter.

Peter [indiscernible] from the Australian Shareholders Association. Whilst your rem report appears to be comprehensive, it's not particularly readable or transparent from our perspective. It's a bit heavy in terms of words and lacking in tabulation of data. For example, the KMP's fixed income was only in the table at the back. Many companies are there, including that this part of the structure of their income. So it's quite clear you don't have to start trying to work out what that is, and therefore, what the multiples for STIs and LTIs are. And I didn't find any mention of a holding for a part of -- did STI paid is 100%? Or do you hold a portion of that before you pay it for a period of time?

So on the first point to the feedback. And obviously, it's a bit of an evolving process, what's disclosed, how it's described, what best practices. So that's the best say on that one, is we would take that on board and take the feedback. And Julie coming in as the new Chair of the rem committee can look at that with some fresh [ eyes ]. In terms of the STI and how that -- David, would you like to comment on that? I think the specific question was all cash or what is escrow building shares.

Thanks, Mick, and thanks, Peter, for the question. The STI award just for noting, there was a 92% of the available incentive was awarded to AMP for the year. And that amounted to $1.24 million of $1.35 million available. The -- none of that is retained. Once the awards have been calculated at the end of the financial year, the payments are made as part of the payroll. I think the September, was that Richard? Is that correct?

Yes, that's correct.

September. There's none that got retained. The LTI is the incentive program that is based on equity.

Thank you. Are there questions in the room or online? Online in respect to the remuneration report.

No, we have no online.

Thank you. We'll move on to Item 3, the reelection of Rhys Jones as a Director. Rhys retires by rotation in accordance with constitution and being eligible, has offered himself for reelection. Rhys was first appointed to the company's board on 22 August 2020 and 30-plus-year career working in this Australasian building, manufacturing and packaging industries. Rhys is currently the Managing Director and CEO of Vulcan Steel Limited, an ASX/NZX listed steel distributor with over 72 business units across Australasia. He's also a Director of Metro Performance Glass Limited. Prior to joining Vulcan Steel Limited in 2006, Rhys held senior roles in particular with Carter Holt Harvey and Fletcher Challenge, leading as Chief Operating Officer of the Pulp Paper and Packaging businesses of Carter. The resolution and the summary of the proxies are displayed on the screen. Are there any questions on this item from shareholders in the room? Are there any questions online in respect of this item?

[ No, Mr. Chair, there are no questions ].

Thank you. We will now move to Item 4, the reelection -- the election rather of Julie Raffe as a Director. Julie was appointed by the Board on first of September 2022 and presents herself for election. Julie has 40 years of professional experience and is currently a Non-Executive Director of Latitude Group Holdings Limited, a non-executive member of the Advisory Committee and Chair of the Audit and Risk Committee Ironman 4x4 Proprietary Ltd, President of the National Board for Finance Executives Institute of Australia and Chair of its Victorian chapter, Deputy Chair and Treasurer of Entertainment Assist and not-for-profit industry forum. Julie is a former Finance Director and Company Secretary for Village Roadshow Limited, previously an ASX 200 listed company with operations in Australia, Asia, U.S.A. and Europe. The resolution and a summary of the proxies are displayed on the screen. Are there any questions on this item from shareholders in the room. Kirsty, questions online?

We do have an online question from Mr. Stephen [ Mayne ]. Would new Director, Julie Raffe and the Chair comment on the recruitment process that led to her appointment to the Board, was a headhunter involved? Did the full board interviewed Julie and did they interview any other candidates. Did Julie know of any of our directors before engaging with the recruitment process?

So I think I can answer that. Julie can correct me if I'm wrong. So firstly, the process for appointing a new director. Julie was introduced to us from a third-party professional company as 1 of 4, a short list of 4 candidates, tank up a directorship. That was reduced to 2 and others interviewed the 2 and then Julie, as part of the process interviewed or met with all of the other tractors on the board. So that's the process that we followed. We played out over 3 or 4 months. And I should say we're delighted to get someone with Julie's experience on the board. It's rare to get a mix of functional, professional and line management experience, and we expect Julie will make a strong contribution to Ridley.

No more questions online, Mick.

Thank you, Kirsty. We now move to item 5. The maximum aggregate amount of remuneration available to be paid to all non-executive directors during a year -- I should go back. We were asked if Julie now any directors prior to appointment, part the question. Not to my knowledge, I don't believe Julie was known to any of the existing directors. Thank you. Back to item 5. The maximum aggregate amount of remuneration available to be paid to all non-executive directors for any year is $700,000. The current maximum and an aggregate amount was approved at the 2003 AGM and non-executive director fees have not increased since this time. It's proposed that the non-executive director's fee will be increased $150,000 to $850,000. Proposed increase will provide necessary flexibility and headroom to operate the Board with varying numbers of non-executive directors. This will enable Board succession plans, including transition and potential overlap of incoming and upcoming directors. In addition, the proposed increase will enable the Board to effectively meet the oversight and governance requirements of the company attract and retain high-quality executive. We really undertook a benchmarking exercise against ASX listed companies within its sector, taking into account the relative size of Ridley and other companies. Based on the outcome of the benchmarking exercise, the company believes proposed increase to the aggregate pool is reasonable in the circumstances. The resolution and a summary of the proxies are displayed on the screen. Are there any questions from shareholders in the room. Peter?

It's a little bit related. And I would note that our own research would indicate that your directors are overpaid at the moment. We just wondered whether the company has a policy for a minimum shareholding for directors and KMPs noting that in your annual report, you already show that directors do hold significant shareholdings in the company.

Yes. Thanks for the question. We don't have an explicit policy other than strong encouragement for directors to hold or build equity in the company. And as you have noted, across the board, the significant equity held personally, but from the directors of the company. As part of this change and an increase to the headroom, we will look at potential policy in that respect, and we can update shareholders at the next meeting. Thank you. Are there any questions in the room. Questions online?

No questions online.

Thank you. And we'll move to the next item. Item 6, the Ridley Corporation Limited long-term incentive plan is part of the company's remuneration policy of providing long-term rewards linked to shareholder returns. ASX Listing Rule 10.14 requires shareholder approval for the issue of new securities to a director under the employee incentive scheme. Quinton Hildebrand is a Director of the company. Subject to the receipt of shareholder approval under this resolution, the Board has resolved to offer the Managing Director 716,905 performance rights. These rights will convert into fully paid ordinary Ridley shares subject to the achievement of all relevant performance criteria over a 3-year period 1 July 2020 to 30 June 2024. A detailed summary of the terms and conditions of the proposed offer is provided in the notice of meeting. The resolution and a summary of the proxies are displayed on the screen. Are there any questions in respect of this item from shareholders in the room. Any questions online, Kirsty?

We do have 1 question online from Mr. Stephen [ Mayne ]. With the CEO summarize his past LTI grants as to whether they have vested or lapsed. Also has he ever sold any ordinary shares in the company any on market without relying on an incentive scheme to build his equity position in the company. Please don't say look it up in the annual report and through the ASX announcements it's complicated and the CEO could actually summarize the situation in 30 seconds.

Can you put the clock on it.

Quinton are you happy [indiscernible] that.

Yes, I think in 30 seconds, the 2019 LTI grants vested on the first of July this year. And the majority of those vested and the balance lapsed. The 2020 LTI is still to be tested next year, the '21 and '22 are in the same situation. The numbers are contained in the rem report, I don't have those memorized. As far as owning shares outside of the LTI grants, I have family members, and it's disclosed in the annual report who hold shares in Ridley. So I've got an interest in those. And those were acquired back in 2020. And then in 2020, the STI program, notwithstanding that the scheme is 100% cash. Even the debt level of the company back in FY '20, the Board resolved to issue that STI in the form of shares. And I continue to hold those. So at this point in time, I have not sold any shares in Ridley. I might add, though, that, that may not always be the case because one still triggers tax obligations as you go. So that may have to happen over time. But at this point, I haven't.

Any other questions?

There are more questions online.

Thank you I would like to advise that the voting on all resolutions will close in approximately 1 minute. Please fill in and sign your voting cards and submit votes online to ensure your vote is counted. Computershare representatives will start collecting voting cards physically in the room from you after the voting has closed. Voting results for all of today's resolutions will be released to the ASX and also made available on Ridley website after the conclusion of voting. I now declare the physical and online voting closed. Please provide your signed voting cards to Computershare representatives in the room. Before we close the formal meeting, I want to thank David Lord, on his retirement as a Director today, after 6 years, including [ served ] as Interim CEO and the Chair of the Rem Committee. On behalf of the company, its staff, shareholders and your directors. we, thank you for your contribution, David, and good luck for the future. Business of the meeting is now completed, and I declare -- we would like -- we would now like to provide an opportunity for you to ask any general questions you may have.

Last time when I was here, the gentleman in charge was from South Africa. Is this the same man?

That's me. I lost my accent.

I asked about my relation of mine who has a firm sugar -- sugar harvesting firm in Johannesburg.

In case for people online, the question was about a little bit of history, I'm not sure whether you want to comment on it.

Is David Lord in relation [indiscernible].

Which David Lord are you or talking about?

Maybe you can ask him that afterwards on a cup of tea.

A cup of tea and we'll talk about it.

I'm [ reading ] Silver City at the moment, the story of Broken Hill. And Mr. Lord is the first man in that district to defense.

That sounds like David.

Is that some form of yours...

I look forward to getting that detail over a cup of tea.

Are there other questions -- general questions in the room before we go on line? Kirsty, general questions online.

We do have a number of general questions online. We also had a question that we received prior to the AGM from James Seeto in relation to Novacq Pro...

So question from Mr. James Seeto. What is the capacity of the Chanthaburi plant to manufacture the Novacq Pro product? Can you describe the drying process, the biomass or solar and nonsolar means? So I'd just like to respond that Ridley owns approximately 50 hectares in the Chanthaburi district, Thailand, and we're currently using 14 out of the 50 volumes in the production of Novacq Pro. The Chanthaburi site has progressed beyond just drying Novacq through solar means and the biomass drying method today also includes dewatering and heat-based drying and sterilization process. A follow-up question is, is the Propel product manufactured at the Chanthaburi site? So I might just give some context. We produce Novacq in Chanthaburi in Thailand. We import the ingredient into our Narangba plant in Southeast Queensland, where we make fish feed at that point. And the Novacq Pro is included into the diet to produce Propel, which is the product that we're selling to domestic prawn customers, and we're looking as an export opportunity as well. So I hope that answers that second question. And then a third follow-up question, is the Novacq Pro product being tried on other crustacean species. And I'd answer that in saying that, we've done extensive and published trials on the 2 major crustacean target species. That's the black tiger prawn, monodon species as well as the white leg shrimp, which is the vannamei species. And we've also conducted some preliminary trials on other crustacean species, including lobster, redclaw crayfish and ornamental shrimp. And all of those have shown some improvement in the performance due to Novacq Pro. That's the answer to Mr. Seeto's question.

Thank you, Quinton. Kirsty, next question.

We have a question from Mr. Edmond [ Courroux ]. Is there a recession in 2023 that sees lower demand domestically and internationally. Is there a risk of producers gradually destocking and hence, really seeing lower demand for [indiscernible].

I think Quinton is probably best placed to answer that, but we would see longer-term strength in agriculture and volumes in agriculture. There may be ups and downs. But of course, Ridley is well placed with a broad spectrum of proteins and value sources regardless of what happens. I think Quinton can.

I would confirm that -- hard to crystal ball what will happen in 2023. But by all accounts and commentary, it would be a challenging economic climate for Australia. Ridley is in a fortunate position being producing or supplying customers who produce consumer staples. And so with food being an essential requirement, it will -- best, I think, to weather economic downturn. And historically, through previous downturns Ridley hasn't sustained material drop-offs in demand for our products. So I would say that our diversified portfolio and the business in which we're in are expected to be fairly resilient going forward.

Thanks, Quinton.

Another question from Mr. Edmond [ Courroux ]. Is Ridley seeing any potentially accretive, feasible and attractively priced potential acquisitions, either domestically or overseas.

I mean I think we would start by saying that while we're always on the lookout for opportunities that would add value for shareholders. Roots and history valuations have been very high. Our focus has been on getting the company into a strong financial position, both through the execution of the strategy, the delivering of earnings growth and the strengthening of the balance sheet. And we've done all those things. So to the extent to which there are opportunities out there, or valuations come back into a range that the Board might see is creating value for shareholders, then we're well placed to address that. But we have no specific plans in that regard. But I think we're in a strong position should the relations change in the marketplace. And to link that to our share buyback, a good use of capital is potentially buying back really changed as well as supporting the executive team in the capital program and further investment in the business. So the capital framework that we put in place in the last 12 or 18 months, I think, serves us well and should show that we stay in a strong position to assume opportunities as and when they are around.

Kirsty?

We have a question from Mr. Jason [ Lu ]. Is dividend reinvestment likely to return?

So no, it's probably not likely to return in the near term, you never say ever. But there are no points to reintroduce dividend reinvestment plan at the moment, partly for the reasons that we're see sitting on a strong balance sheet with strong cash generation.

A question from Mr. Edmond [ Courroux ], Ridley [indiscernible] unionized and as the Managing Director, Mr. Hildebrand concerned about the federal government's IR bill that legitimizes , multi-employee bargaining.

So the first thing we would say is that we're not wanting to engage in political debate only to engage constructively with our employees and work to the rules that are in place. But Quinton, how do you see that?

We have a mix of enterprise agreements across our business in different locations in which we operate. And those of -- they operate very effectively. There's good relations with our employees. And in recent times, we've managed to resolve everything amicably which is a good outcome. I think we watch with interest to see happens in the legislative environment. It's there is representation for business to try and ensure that the balance is achieved, and we'll wait and see the outcomes of that.

Thanks, Quinton. Kirsty, next question?

We have a question from Stephen [ Mayne ]. The annual report notes that Andrew Forrest Catering has emerged as one of our largest shareholders with a 6% stake. Mr. Forrest has engaged in takeover discussions with other listed companies, what engagement have we had with Tattarang and why are we on Mr. Forrest's radar.

Thank you. We -- of course, we welcome all the investment in the company and our engagement with Tattarang as with other larger shareholders has been constructive, and ongoing at various points, in terms of engagement and results and the like. But no different to that and that we would undertake with other shareholders. In respect of why they would invest in Ridley, that's obvious and the answer is the performance of the executive team and the whole Ridley team over the last few years and for the reasons Quinton's outlined today that we operate in an attractive sector. We've demonstrated an ability to grow earnings and strengthen the balance sheet that we're well placed for whatever comes over the next few years. And I think Tattarang as well as other investors see that opportunity. Thank you.

we have 1 final question from Stephen [ Mayne ]. Thank you to Mr. Lord for his many years of service. It's always helpful for investors to have access to some exit perspectives from retiring independent directors. In his final contribution as a Ridley Director, could Mr. Lord, please comment on what he regards as the best decisions Ridley made during his time on the Board. And does he have any regrets?

Well, thanks Stephen for his question. For me, a highlight of my time with Ridley and my time as Chair of the rem committee [indiscernible] the robust selection and recruitment program that we have in place at times when we have required -- been required to recruit senior managers and directors for the Board. The system has served us well. And of course, we are very aware of the correlation between high-quality people in the business and high-quality performance by the business. So I think that's certainly been a highlight in my mind. Regrets, I think perhaps my only regret is that I was unsuccessful in convincing the previous chair to invite me to join the Ridley Board sooner than he did. So just the 1 regret.

Thank you, David. There are no further questions in the room or online? Thank you. With that, thank you for your participation, and I will now close the meeting with you all for today. Thank you very much.