Ryman Healthcare Limited (RYM) Earnings Call Transcript & Summary

[Foreign Language] Good morning, everyone. Welcome to Ryman Healthcare's Annual Shareholders Meeting. My name is David Kerr, and I'm the Chair of Ryman's Board. Firstly, I'd like to say it's nice to be back in front of a real live audience here, and I'd like to welcome those of you who are online. You may recall that last year, our AGM was an entirely virtual event, which felt somewhat sterile to those of us presenting. In the past 18 months, we've been taught that we have to be nimble at all times, and this hybrid meeting is designed to allow the best of both worlds. We'd normally hold the meeting in a village, but we decided that in a constantly changing landscape, it would be best to hedge our bets and have the meeting here and minimizing the risk of any infection in our residents villages. So we love showing our villages off to you, and we will again soon. And if anyone wants a tour of a Ryman village, we're already always keen to do that. So a big welcome to our shareholders who are in the room and to those of you who are online through our virtual meeting platform, which is provided by our share market registrar, Link Market Services. Also, in the room, there are quite a number of senior executives of Ryman Healthcare, and a big welcome to them. And they are the engine room. They are the powerhouse of this business, and so lovely to have them in the room with us. As with the normal annual meeting, anyone in the room or online is able to ask questions and vote. And clearly, we'd encourage you to do so. I'll provide you with further instructions as we go through the meeting, but it's -- if you encounter any issues, please, if you're online, refer to the virtual annual meeting online portal guide or you can phone the helpline on 0800-200-220. You can send through your questions at any time through the online portal by clicking the link shown here on the screen, and I'd encourage you to do so as early as possible that allows us to answer the questions at the appropriate time in the meeting. The agenda for the morning includes a review from me, and then I'll hand over to our Group Chief Executive, Gordy MacLeod, to give you an overview from his point of view. We'll then also hear from David Bennett, our Chief Financial Officer; and Cameron Holland, our Chief Executive of Ryman Australia. We'll then move to the formal business, which includes the resolutions that are before the meeting. Voting on resolutions will be conducted by way of a poll. And shareholders joining us here today, you will have been validated or been given your shareholder voting card. If you're a shareholder and did not register on arrival, then please make you way to the registration desk outside the room again, please, and the staff from Link will assist you. Shareholders who are joining online, to be able to cost their vote using the electronic voting card they received when online registration is validated. To vote, you'll need to click Get Voting Card within the online meeting platform, which is shown here on the screen. You'll be asked to enter your shareholder or proxy number to validate. Please refer to the virtual meeting online portal guide or use the help line if you require any assistance. Voting will remain open until 5 minutes after conclusion of the meeting. So before we formally begin, I'd like to introduce you to my fellow Board members, and I'll start with the Victorian-based directors who are at home. Well, they're not with us, obviously, because of the recent lockdown. So first of all, Claire Higgins based in Victoria. Claire if you just -- great. That was a wave. So Claire is a nonexecutive director with experience across a range of sectors in both Australia and New Zealand. She joined the Board in 2014. She is Chair of REI Superannuation Pty Ltd and GMHBA Limited, and she hosts director positions in the medical device and philanthropic sectors. Claire is the chair of our audit and finance risk committee. Secondly, Paula, if you could give us a wave Paula just so we -- fabulous. Paula is a Melbourne-based human resources executive with experience across health care, finance and government sectors and deep expertise in workforce planning, organizational capability and executive of coaching. In the early stages of her working life, Paula actually spent several years as a carer in the aged disability sector, and she is currently the Chair of our People and Safety Committee. George Savvides. George a wave from you would just help everyone identify. Great. George lives in Melbourne and has 25 years experience in the Australian health care industry. George was made a member of the Order of Australia for his considerable contributions to community, charitable groups and business. George served as managing director of Medibank, Australia's largest health insurer, before moving to governments, and he is Chairman of our -- sorry, he's Chairman of the Australian -- no, he is Chairman of SBS, the Australian Public Broadcasting Service. I apologize, George. He's a fellow of the Australian Institute of Directors, and George Chairs our clinical -- that's what I was trying to get to. He chairs our Clinical Governance Committee. Geoff Cumming. Geoff, a waive from you would help. That's great. Thank you. Geoff is the New Zealand and Canadian citizen. He lives in Melbourne. He rejoined the Board in 2018, following the retirement of Kevin Hickman. And interestingly, Geoff was inducted into the Alberta Business Hall of Fame for the following year, and he's a significant international philanthropist. Geoff's been a long-term supporter and significant shareholder of Ryman. He has more than 30 years experience as a Chairman, Chief Executive, director and investor. He served on more than 25 corporate boards in a range of industries and countries. And he chairs our Governance, Normalations and Remuneration Committee. And now to our New Zealand-based directors who are here with me. Immediately on my left, we have Jo, Jo Appleyard. Jo is a partner in Chapman Tripp and is an experienced advocate litigator. She specializes in commercial employment and resource management law. Her skills are sought after by larger corporates, and Jo's experience in relation to civil disputes is particularly wide and varied. She acts on all manner of commercial issues. She's been a member of the New Zealand Markets Disciplinary Tribunal and is a member of our Health and Safety, Clinical Governance and Development and Construction subcommittees. Warren Bell is next along the line. Now Warren is an experienced public and private company director. He's currently Chairman of Hallenstein Glasson, who operate both here and in Australia. And he's also a Chair of St. George's Hospital, which is the largest private hospital in the South Island. He's also a director of a number of private companies. And then we have Anthony Leighs. Anthony Leighs joined our Board in 2018, and Anthony is the Director of Leighs Construction, a business that we founded in 1992, which has become a leading commercial and construction business operating throughout New Zealand. Anthony is a former Chair of the New Zealand Registered Master Builders' Association, and he chairs our Development and Construction Committee. Last, but no means least, I'd like to welcome Greg Campbell. Greg joined the Board in March, following a long and distinguished career in executive roles and board positions in Australasia across listed and privately held organizations. Greg brings a deep operational understanding of businesses from more than 25 years as a CEO, and he's got a strong interest and sustainability and climate change. And then is the Gordy MacLeod, who, I am sure, almost everyone will know. Gordy is our esteemed and extremely hardworking and highly valued Chief Executive. So he's here. And beyond him is Dave Bennett, our Chief Financial Officer, who also is highly regarded, esteemed and highly valued as the CFO and Company Secretary. So the Company Secretary has confirmed to me that the notice of meeting has been to shareholders and any other persons entitled to receive it. And we've received apologies at this moment from John Boscawen. Are there any apologies from the floor? I take it there are none. So I move that we accept the apologies. Seconder, please. Is there a seconder? Thank you, Don Trow. I should have really welcomed Don Trow. Don was one of the founding directors in Ryman Healthcare. And his stamp has been lift on the company over a long period of time, and he's been absolutely valuable director and subsequently. So Don, thank you for seconding, and welcome to yourself and [ Diana ]. So motion be put seconded, and who was in favor, I. Thank you. Now the company's constitution prescribes a quorum of shareholders based on the information that the registrar has provided, I can confirm we have a quorum present. Proxies have been appointed for the purposes of this meeting in respect of approximately 309 million shares, which represents over 61% of the total number of shares in the company. I'd like to thank the shareholders for their level of participation in today's meeting, whether they're here or online. My fellow directors and I intend to vote all discretionary proxies as we have received in favor of the resolutions as set out in the notice of meeting. So our annual report for the year ended 31 March, including the auditor's report, has, been circulated to shareholders, and we'll take that as read. When I addressed the last AGM 12 months ago, we were in the midst of a hugely challenging period. A year later, we're definitely older, hopefully slightly wiser, but 2 things are immediately apparent to me. The first is that we've come a long way since then, and we've learned an awful lot about the COVID challenge, but I feel we're nowhere near the end of the pandemic yet. The second more positive thing is that we have tremendous course for optimism, thanks to the miracle of not just one, but a number of highly effective vaccines. In addition, I'd note the extraordinary resilience of both, the house markets that we operate in. It bears repeating that the way our teams have coped with the COVID challenge is an absolute credit to them. The team in Victoria, which has been through, I think this is its fifth lockdown, has never missed a beat, and we're incredibly proud of them. Lockdowns for a village means that all the staff were in PPE. I recently flew to Melbourne for a brief visit to the teams over there, and just wearing a mask for 4 hours was quite challenging, let alone 8 hours a day, every shift, sometimes with face shields added on. So it's enormous credit to them. The pandemic and the associated care and attention that our staff provide each and every minute means that the true -- what would I say, it means that the true impact is really very profound on our staff. But importantly, it actually means that the value proposition of our villages is even greater to the residents and their families. The offering that we have is more relevant than ever. And I suggest that the recent results, which we're going to talk about shortly, a good testament to that. So if I just remind you quickly of our full year results, which have been announced, the audited underlying profit was $224.4 million, which is down 7.3%, which reflected the increased costs associated with COVID-19 and the impact of the lockdowns in both our markets. Construction and sales were obviously both affected. And Victoria, as you know, is an area of growth for this company. And it was in various stages of lockdown for about 6 months of the last financial year. The reported or IFRS profit increased 59.8% to $423.1 million, and this includes unrealized valuation gains. The total assets increased to $9.17 billion, up 19.5%, and our balance sheet further strengthened with net assets increasing 23% to $2.83 billion. Full year dividend was $0.242 per share, and we've now paid out more than $1 billion to shareholders since we listed in 1999, which represents a pretty significant record of both creating value and sharing it with the shareholders. I'm pleased to say that the Board has reviewed trading in the current year, and we've had a record first quarter of total sales of occupation rights, which Gordy will touch on in just a moment. This follows on from our best-ever January to March quarter. And so it's been an encouraging start to the calendar year. We'll update you, of course, again at the first half results, which we would normally have in November. Ryman Healthcare has always been a company with 2 very important goals since we were first founded in 37 years ago. The first is to provide excellent care to the residents who put their trust in us as a company. The second is to provide excellent financial results to our owners. And this, of course, enables the excellent care provision that can then be provided. When I think about the first of these goals, I believe it means providing a safe environment at our home and the best of care according to the need for our residents and also providing strong reassurance for their families that they've been cared for. In this manner, I believe that Ryman makes a distinctive contribution to society. In addition, each village, we build releases existing homes into the residential real estate market and also includes our providing critical health care infrastructure with our range of care beds because care has always been a core part of what we do. Over time, our village has then become an integral part of the health care system in the areas they operate in as well as the community hubs. And of course, as we build and operate a village, we create entirely new employment opportunities along the way. Without these care beds that we provide, I shudder to think how the public hospital system would cope with our many frail elderly residents. It amazes me that the New Zealand government seems to value this care so broadly. As shareholders, you share on this purpose of providing critical health care infrastructure. Your investment in us, therefore, has a built-in social and ethical purpose. As a Board, we recognize that companies must operate these days in a much broader context so there's appropriate attention to not only our purpose, but also to the planet, to our people and, of course, profit. You'll have seen our focus on these different areas in the annual report. The common purpose of excellent care provision uniting us -- unites us as a Board and village staff and management team. COVID has been a massive challenge to our desire to ensure excellent care, and COVID is indeed, what you would call, a black swan event. And it's been a great test of our management and frontline staffs resilience. Both groups have excelled absolutely wonderfully, and we are enormously grateful. The company's got a very talented, dedicated senior executive team, and many of them are here with us today. I can assure you that they work tirelessly to turn our versions of both value creation and high-quality care into a reality. You'll recall I noted the second and equally important function of the company is in providing excellent financial performance. We are, in essence, a growth company. Growing is not always easy. And growing financial results at a rate of 15% compound annual growth rate is even more challenging. It means we must be building and selling or occupying around 9% to 10% more units each year. Only 3 to 4 years ago, we were building at around 4 sites. And today, we're building at 13 sites. There is an associated imperative to be acquiring sites at a steady rate and ensuring they move through the consenting and building phases smoothly. This has all been a major step-up in activity for the company and all our various teams. And as you'll appreciate, there are many construction challenges when working at more than 13 sites, with some sites being more complex, local government being risk averse around design and in some jurisdictions, local government being swamped with work and there's consequential delays in consenting. Gordy will touch on our current construction workload at the moment. But needless to say, it is substantial, and it will remain so to meet the growth ambitions. To enable that growth, we've increased our debt, as many of you will have noticed. It is important to note that our bankers continue to be supportive. The debt is in large part to enable the acquisition of l and the construction of these sites until such time as residents are able to occupy the villages. The good news is that there's no shortage of demand for our village currently with having high occupancy across all sites. A recent in-depth analysis by JLL Property Analysts of the demographics in New Zealand show that the number of people over 75 will increase by 500,000 over the next 30 years, and that will surely underpin demand. And of course, the numbers in Australia will be significantly greater. A core part of our measurement of our financial performance has been the aim to achieve our underlying profit, 15% annual growth. This hasn't been achieved for several years, which is the fact that has not escaped us, I can assure you. It's always been our medium-term target. And as you know, it means that the company's profits double every 5 years, providing what we believe is a good reward for shareholders. We were on target to achieve this in the full year '20 financial year, but life changed forever in January 2020, as you'll recall when the pandemic hit. The lockdowns in New Zealand and Victoria significantly impacted people's ability to move into retirement villages. Through this period, we invested in keeping our staff and residents safe and connected, and the direct impact of that on our FY 2021 result was around $20 million. Our expenditure on PPE was very significant. But given how things are going currently, I reckon that was a good investment. Covedism remains a challenge. It's the new normal for us. However, we remain very focused on achieving a good financial result in the current year. and there's very intense focus from all of those involved in the company in this regard. Despite the COVID challenges, we still see strong demand. We're still profitable. We're still expanding rapidly with both the occupancy advances and the NTA increasing by 15% compound annual growth rate over the last 5 years. Our focus on underlying profit increasing has not diminished though. We're talent-led organization, and we're constantly looking at adding to the team to enable this growth, but always making sure that the care culture remains in place. It's fortunate that we have a long-serving team of leaders and again, many of them are in the room with us today, with values -- those values embedded in them. Gordy gave us an early signal of his intention to depart after 15 years at Ryman. Fortunately, he's given us plenty of warning and time to look for a group Chief Executive. He will be exceptionally difficult to replace. The group Chief Executive is the linchpin between both human capital and our financial capital, and it sizzle his responsibility to use the brain's trust and knowledge within the company to effectively enable the 2 goals that I've described to you. Value creation is mission-critical as is delivery of best possible care, and both of those goals are dependent on our having high-quality talent in the organization. So we're looking for someone of the very particular set of skills. We're partway through an international search for this critical person, and we'll update you as soon as a replacement is found. At a recent AGM, we were asked about the risks we face. And I thought it was a very good question. And I must say there are no shortage of things that we're concerned with at this stage. While the pandemic has been all consuming, we also have front-of-mind areas like cybersecurity, health and safety of staff and contractors at construction sites and in the villages, the construction challenges for procurement and access to good quality construction staff as well as the maintenance of that excellent clinical care, which is so dependent on millions of moments of personal interaction between our staff and our residents. Of course, there are other potential things such as legislative change, climate change, ESG issues to name but a few. All are important, none are ignored. I can assure you. Cybersecurity has, however, been a significant focus for us. Dependency on IT in a company like this has steadily increased, and detection of incursions along with education and constant testing is critical. Internationally, this nefarious activity of cyber attacks has grown by 150% in the last 2 years and is now worth $11 trillion annually. That is greater than the whole illicit drug trade in the world. So it has to be seen as a major enterprise risk to all companies like ours. In the room with us is Rick, Rick Davies, who's our IT Lead, and you'd be welcome to chat with him about this challenge after the meeting. So look, Ryman Healthcare is a very good heart, thanks to our committed team in all parts of our business, extremely supportive residents and their families who are the most powerful marketing tool I suggest to you and understandably, our Board are extremely grateful to have one in the Ryman family for your support. So thank you very much, and over to you, Gordy.

Good morning, everybody. All right. I got to get my thing right here. We're good to go? As David mentioned, we've had a record start to the year with cash receipts of $403 million in the first quarter, up 82% on the first quarter of last year. It's the best first quarter we've ever had were strong sales volumes, record total sales of occupation right agreements and the highest prices that we've seen. When you consider we had a record final quarter in the ended FY '21, it adds up to a great 6 months for Ryman from the 1st of January to the 30th of June as the strongest first calendar 6 months of trading that I've seen in my career with the company, and it's a real credit to the sales team and everyone involved. So we had a record first quarter for cash receipts from residents. And as you can see, here, we've had a total sales of occupation right agreements transacted, which has been the highest value in the first quarter ever. Total volumes were also a record. So you can see that in the far right-hand bar on that chart. So we're in the middle of winter, but occupancy at our established care centers has been excellent. We finished the first quarter at 97%, which was up on the year before because we were unable to admit new residents during COVID. Our resale stock remains low at 1.4% of the portfolio at the end of the first quarter, which is equaling the low level we had at the end of March '21. So record cash receipts, strong sales, high occupancy and low levels of resale stock, all show that there's excellent demand for what we do at Ryman. What's also pleasing is that we're starting to see stronger pricing feeding through as well. This means that even if the housing market flatlines for a period of time, we still have the ability to lift our prices over, say, the next 18 to 24 months. We're also delighted today to reveal that we have acquired a new site in Victoria at a place called Mulgrave, which our Ryman Australia CEO, Cameron Holland, will talk about in a minute. This comes on the back of 3 purchases we announced in May this year, at Essendon and Melbourne, Karaka and Cambridge in New Zealand. So those 2 sites in New Zealand, particularly and also Mulgrave are sites where we can build significant amounts of townhouses or villas, which obviously creates a lower working capital commitment. My highlight of the past year has been how we, as a team, have kept everyone safe during COVID. The discretionary effort over the past year from our team of 6,300 people has been extraordinary. Our team in Victoria, in particular, has done an amazing job coping with 5 lockdowns since early last year, and the ongoing professionalism and commitment they show is inspiring. To put that into picture during the recent lockdowns, our care staff have had to wear face masks and a plastic face shield while dealing with people with cognitive in hearing issues, and that requires an enormous amount of effort. And it's a great credit to them and obviously also to our teams in New Zealand when they've had similar situations. We're now well through our vaccination program. We geared up to vaccinated as many people as we could, and we actually trained 50 Ryman vaccinators. Our vaccination team are so good that some DHBs in New Zealand have asked us to give them a hand. And our Ryman team has been administering vaccines in fact, for other retirement village operators around New Zealand. As of today, we've actually delivered 24,271 COVID-19 vaccine doses to residents and staff. And I don't think there would be a nongovernment organization that would be anywhere near that. Again, the discretionary effort of our team has been incredible as we rolled out our vaccination program. The logistics involved is very daunting, though. The vaccine has to be carefully thought, and each dose has to be measured out and that don't come sort of ready to go. On our longest stay of the campaign at Edmund Hillary in Auckland, the first team member arrived at 5:00 in the morning to start preparing the doses, and the team did 1,000 vaccines in 1 day at 1 village, which is amazing. Our care residents and staff were mostly vaccinated some weeks ago now, and we're providing as many vaccinations as we can to -- across our independent residents as well. We've also been busy looking at ways to improve the resident experience, and we're in the midst of the Olympics at Ryman. Because you can't just sort of -- we were conscious that COVID hasn't been a lot of fun for people, and we wanted to have a look at what we could do. This project was dreamed up by a Head of Technology and Innovation, Rick, who is here today and has involved more than 700 resident volunteers and residents across 42 villages in both countries. We spun it up at short notice with an agile approach, and we teamed up with both the New Zealand and Australia and Olympic Committees as partners. The main aim was to give residents a great experience. We've had a long haul with COVID, and we wanted to do something that would light a competitive fire in our residents on both sides of the Tasman, and believe me, it has. The second name of the Olympics at Ryman was to use the latest technology and push the boundaries of what's possible. We've been working with our technology partner, Aware Group, which is a Hamilton-based artificial intelligence business on a raft of new technology ideas for the years ahead that will significantly help our residents in many potential ways, so just watch the space. Our residents have been competing in cycling, swimming, relay walking, bowls and an Olympic quiz, which we're going to call the quiz [ nasdacs ] that's coming up in a week or 2. They'll bike through the streets of Tokyo using augmented reality. They've climbed a virtual reality version of Mount Fuji in the relay Half Marathon in [ Fitbits ], and the events are all designed to test a range of abilities and get everyone involved. And last weekend, we held the world's first ever Lawn bowls match at remote locations using artificial intelligence and Hololens Technology. Teams in Hamilton -- so village teams of ours in Hamilton were competing with teams in Christchurch 951 kilometers apart in the same bowls match, and it worked. So it was amazing. There's plenty of other work going on to improve the resident experience with a continued focus on our delight program for independent residents. Right. I'd like to give you a quick fly through our construction and development program. The construction team is flat out in New Zealand, and we achieved an important milestone last month when we welcomed our first residents at Keith Park in Hobsonville. Hobsonville is a huge growth area and it's a stunning village, and we're delighted with the way it has progressed. When I walked around that site 2 or 3 weeks ago, it just looked incredible. I'm really pleased with how the units are looking and residents are met with loving. Work is also well down the track at Miriam Corban in Henderson and James Wattie in Havelock North. The care center is underway at Miriam Corban on Lincoln Road, and we will start work at James Wattie's Village Center in the spring. Development of the later stages continues at William Sanders in Devonport, Murray Halberg in Lynfield and Linda Jones in Hamilton. We welcomed our first residents in at Kevin Hickman Retirement Village in Christchurch. It was a real pleasure and honor to name a village after our co-founder. Kevin's an inspiration to us, and we wouldn't be here if we [indiscernible] for him. We've also just received a resource consent for the Bishops Park portion of our combined Bishops Park and Park Terrace development in the Christchurch CBD, which is just an incredible location looking out over [indiscernible]. We're working through the rest of the process for the second part of the project just right now with counsel. Resource consents are in place for our new villages in Takapuna and Kohimarama in Auckland, and we're just getting established at Takapuna before starting to get done and work there too. We announced the purchase of 2 New Zealand sites, Karaka and Cambridge in May this year, and the team is working on plans for these already. They're both great sites with huge potential. And when we walked around those sites, when was it January, back in about March, they are beautiful. Of course, I'm always biased, but they're really beautiful. Just a reminder of the prize we're looking at here. We're targeting that the 13 villages currently in progress will generate $3.1 billion in capital proceeds and recurring income of $240 million on completion. Collectively, we anticipate that these sites will largely recycle capital, which is always our objective. And if you take into account our entire land bank, we have 26 villages in the pipeline, including those 13 underway, which we anticipate will be -- will generate $5.5 billion of capital proceeds and generate recurring income in the region of $420 million. So the economic prize, which we are chasing through our significant development program is very significant. Our build program is now 97% consented in respect of resource consents and development approvals for both FY '22 and and FY '23. Again, this is the strongest position I can recall in my time and reflects the huge amount of hard work by the design and development teams to get projects underway. The only fly in the element there could be some of the councils are pretty busy right now in the middle of the biggest building program in New Zealand, I think, but we're working very hard to get voting cosine through as well. Before I hand over to Dave Bennett, I'd just like to pass my utmost thanks to my team -- our team of fellow Rymanians. The work they have put on over the last 18 months has been remarkable. And I want to thank you, shareholders, for your support over the last 15 years. Thank you. Over to Dave.

Thanks, Gordy, and good morning, everyone. As Gordy sort of talked to us about all the investment that we've been making over the last few years, I think it's important for us to note that the lifting of the number of sites in our land bank, the lifting of number of villages that we're building across and ensuring that we are well resourced for the future growth means our debt has lifted to $2.25 billion. But what is important to remember is that this debt is a function of our growth plans. So it relates to our future growth. This is why we view our debt as productive or working capital debt, and this is how our funders view it. If you think of our debt of $2.25 billion, we consider about $420 million of that to be core debt relating to our existing villages. The remainder of that debt relates to our land bank or our current work in progress. We use this debt to fund the development of our villages. And by the time they are fully occupied and sold down, the proceeds are used to repay this debt and fund future villages. And we are left with a portfolio of assets that will generate growing recurring revenue streams. We have seen our net assets more than double over the last 5 years from $1.3 billion to $2.83 billion. Net assets -- net of bank debt and take into account the dividend payments we have made to shareholders. So it shows the value we have created from building these villages. Alongside our new assets doubling over the last 5 years, our gross occupancy advances have grown from $2.1 billion to $4.21 billion, a compound average growth rate of 15%. This doubling in value affects that a number of the new villages we have been building have been located in high-value locations and also the wider real estate market as our units have resold. Higher value locations require a greater amount of working capital, and that's a function of what we are building. So if you think about the high-value locations, they're typically apartment-style developments that require significantly more capital upfront than a townhouse-style development. With that though, in those high-value locations, you do see higher sales prices coming through. So if I compare our sales price since 2017, the average new sale price was $439,000. That's now -- in the last year, it was $785,000. So obviously, it costs us more to build there, but the returns are higher when we sell that village down. And these gross occupancy advances were interest-free capital sums, a key value creator of the business. As these occupancy advances are repriced as units resell and our 20% deferred management fee that we collect also increases as advances grow. The resale bank of gains still to come in our existing portfolio currently stands at $1.37 billion. And so that's up from $1.15 billion at March 31, 2021. So this movement reflects the increase in unit pricing that we've introduced in July this year, following the increases in the wider property market. However, it is important to note that we have not captured all this movement that we've seen in the broader market. And in New Zealand, we've seen the lift of over 29% in the broader real estate market. So if the market continues to hold, we could expect to have prices further over the next 18 to 24 months. So you can see there's a lot of potential still to come, and we're very excited about the opportunity ahead of us. And at this stage, I'd like to hand over to Cameron Holland, the Chief Executive of Ryman Australia to say hello and talk you through our plans over the year.

Thank you, David, and hello, everyone, from Melbourne. I'm pleased to take this opportunity to say hi to you all. I wish I could be there in person. We're just starting to come out of our fifth lockdown over here, and all the team are taking it in our stride. As David mentioned, the team has done an extraordinary job over the past 18 months. For me, joining Ryman has been a real pleasure, and I would not have come back to the industry for anyone else. I first became aware of Ryman about 7 years ago [indiscernible] being built. I remember them thinking here comes some real competition to Australia. And in my respect for the model, the people and the ambition has only grown since starting here. I've been pleased to see how focused the team is on providing quality care and great places to live that really do stand up to the good enough for mom ethos. I'm excited to be part of the next phase of growth for Ryman in Australia. As Gordy mentioned, we're cracking on with development here. And today, I'm delighted to announce that we have purchased Ryman's 12th site in Victoria at Mulgrave. It's a large undeveloped 4.6 hectare site in Southeast Melbourne, which will allow us to build our first Melbourne Metro villas alongside our apartments and care options. There is an existing planning permit in place for an integrated retirement village with homes and care for more than 350, and we will modify that to our model. The site has great views of the Dandenong ranges in a well-established part of the city. So we're delighted with purchase. It follows on from our recent asset in purchase, which we announced in May and means we will now have more than 2,300 units and beds in a development pipeline over here. In terms of other construction sites, our construction team is busy with work continuing at John Flynn at Burwood East and at Aberfeldie in Melbourne, also down Charles Brownlow and Deborah Cheetham on the Bellarine Peninsula. We have just started construction at our site in [indiscernible] this month and will soon be underway at Ringwood East. We continue to work on plans for our Mt Eliza and Mt Martha sites as well. We were recently unsuccessful with the VCAT application at Mt Eliza, but we were pleased to see that the ruling supported our proposed use -- to develop our retirement village with care beds. The technician has given us detailed guidance on the heritage values of the site and how we might make it work. So we will continue to pursue it, and we are working on a revised scheme for Mt Martha as well. Back to you, David.

So look, I'd now like to give shareholders an opportunity to ask questions. Shareholders online can continue to provide questions through the portal, and we'll address them as they come. But first of all, we'll take the questions from the room. When I call questions for shareholders, if you could please wait until a microphone that's handed to you. And then if you could state your name, so we have a good record before asking the question. And I'll take questions from those present in the meeting first before moving to questions from shareholders online. So in the interest of fairness to all shareholders, if you could be as concise as possible and consider it to other shareholders that would be much appreciated.

Right. My name is [ Margaret Gilman ], and we live at Shona McFarlane Retirement Village out in the Hutt Valley.

Welcome, Margaret.

Now you've discussed new construction. We are in the process being one of the older villages of a major revamp where the common rooms have been pulled down, and they're going to be twice the size with the cafe and things like that. I was wondering what your statistics are on your rebuilds of the villages like ours?

That's a very good question, and thank you, Margaret. So I can tell you that yesterday, the Board had several hours on exactly this matter, where we looked at our portfolio. So we have a portfolio that -- some of which is from 30-plus years ago through to today's portfolio. And we have a regular program of refurbishment. We have to combine that sort of program of asset refurbishment with meeting expectations that change with our residents. So for example, when a cafe is put into 1 village, the next village is -- alongside this says, well, why can't we have a cabin. So we have to balance both the resident expectation and our program of refurbishment. It is a very active program led by a significant team under the operations guidance of [ Shane Chimes ] who's here. And I can only tell you that we are constantly trying to balance the interruption to the residents life in the village versus trying to get the construction completed. And it is not easy, and I feel for you if it's disrupting the village. But equally, the end result, we hope will be worth it. Gordy might like to make some other comments.

It's good to see. And how is the team going with it?

Well, it's been rough on the residence, and it's going to get rough when all the common roads are closed off for several months, and we have no access.

Can you take that because I would hit it online.

Okay. In simple terms, it's not the nicest experience for residents while [indiscernible]. And look, we're very conscious of that, and that's why we're very careful as to when we start works. And -- but look, it's going to -- at it will be fantastic when it's done, and the team are conscious of the time frame, but they need to work to for you. And we've -- one of the things that we put in place 4 years ago was that our property team was probably -- was pretty small. There was only a couple -- really just a couple of people on that. We recruited someone who's very experienced looking after property, portfolios and she's grown the team, Julian's grown the team appropriately. And that means that we can -- as some of our villages get older, we can do a wonderful job of making sure we keep them looking great and make sure that our residents are heavy with new amenity and that sort of thing.

[ Kim C ], the shareholder. Firstly, I just want to thank Gordon for his service over the last 15 years. And secondly, I want to acknowledge all the staff at the coal face over the last year. We've seen that ourselves when we visited Edmund Hillary. And in actual effect, we were there one of the days that they were doing the vaccine. And I just couldn't believe how chirpy the staff were in dealing with a large of people coming through that day.

Great to hear.

Now just getting on to some of the annual report-type questions. And I -- to be fair, I haven't taken in everything in the press release this morning. So that may cover it a little bit. But just in terms of profitability, I'm wondering you have touched on the fact that the 50% target has been missed over the last few years for various reasons. The question then becomes is the model and the goal still compatible?

I believe it is. Yes, I do. I believe that had we not had those particular impediments in the last 2 years, we would have achieved a 15% underlying profit growth. You can't foresee what you can't foresee. And I can only tell you that the Board, who met in the last 2 days, are as committed to achieving the 15% underlying profit growth as ever we've been. But we can only cope with what we can cope with. It is a challenging metric that 15% underlying profit, but we're up for the challenge, and we believe it is an achievable goal.

And then just one of the challenges we had, Kim, was back in March 2018, our build rate was lower, and that hadn't happened for a while. And what really made us think about, okay, in like 2015, 2016 and so on, we needed to be doing more consenting and land acquisition work. And so that's why in the last few years, we've acquired a large number of sites if we sort of -- if we listed out all the ones that we bought. And that's why we were so determined to increase the number of sites and progress from -- we only had 4 sites in progress in September '18. And so to feed that sort of 15% growth, we knew we needed to increase the velocity and number of options that we've got. That's why we went from 4 to 12 quite quickly and obviously came with significant working capital demands because the first half of each site is just about all cash out the door with civil work, storm water, wastewater, establishing staff, establishing compounds for the build team and all that sort of thing. So that's why we've seen a significant capital buildup during that time. But we were very conscious that when you hit those years, it looks like a like a one-off blip, but those years mean you need to do a lot of work to get back to a more steady state build rate.

I think the other thing, if I could just add and, Gordy and Kim, is that the results we announced today are a function of decisions we took some years ago. And so now we have a very strategic view of what our land bank should look like in terms of the portfolio sort of view where they are, how complex they are, what the competition -- much more detail goes into the feasibility because we know that the decisions we take today with Mulgrave, for example, that came as just showed you. That's what will determine some of our results in 3 to 4 years. That's the sort of time frame we have to cope with.

And secondly, and you've answered to some degree. The debt rate has climbed someone like tenfold in 10 years. In the charts that are provided at the various presentations and reports don't really explain to the average shareholder like myself. Exactly what's going on to drive it, particularly when I link it to the build rate, which has actually been quite stagnant over the 10 years. It's averaged 745 beds and units over the 10-year period. It's been a bit up and bit down, but it stayed the same. Back 10 years ago, the debt was $213 million. So it's very hard to understand, apart from the land bank, what's happening with the debt? And I suppose the most concerning, but is that probably about $400 million for existing villages seems to be still sitting on the top end of that?

Yes. So look, a couple of things I hear what you're saying, and that's one of the metrics that we look at as welcome, Kim. A couple of things to think about is that we -- there has been a working capital cost of launching into a new country. So we didn't -- we weren't experiencing that 10 years ago. So launching into the Victorian market, which has happened in the last sort of 5 or 6 years since those metrics you've spoken about has created obviously a significant drain on working capital in the short term. We were really happy to meet that by 2020 milestone at the end of December last year despite the build team working at 85% and 15% in Victoria. They did a great job. And it was a big relief for me on the 23rd of December to see the photos of people coming in. And the other thing is just that increasing the number of sites so quickly in a short period of time has significantly increased the working capital requirements and the those early phases for sure. And of course, now we're at 13 sites, and we're about to be at 14 sites. We have more than sufficient working capital available to us to meet our growth plans. And the other factor to take into account is the much higher value of the sort of units that we're dealing with. And that was shown already in Dave Bennett slide with the occupancy advances 5 years ago. So what they represent is they represent the capital sums from residents for service and independent living units, our retirement village units. Over the whole life of Ryman, over 35 years, they were $2.1 billion 5 years ago. Now they're $4.2 billion just in a 5-year period, so they've doubled. They've grown a 15% compound annual growth rate. And of course, the deferred management fee of 20% is applied to $4.2 billion, not $2.1 billion. And when you're building a much higher value locations like Auckland and also Melbourne, the working capital on the construction site is also commensally much higher, too. So there's just a number of reasons there to -- perhaps give you a bit more flavor to it. And I think what I'm hearing from you, Kim, is that you'd appreciate us explaining that better.

Finally, just 2 more questions. The first one relates to Mornington Peninsula sites. I've read those decisions. And it appears to be that we've got a hostile. And even the appeal authority, I was suggesting in 1 part that didn't actually see a need for village out there. And then suggested that you chippered in. Will it still be economic if you meet those requirements.

It's interesting you challenged the council and suggest they might be hostile. I sort of thought it was worth doing a postmortem on our original feasibility for Mt Eliza and dug out all the details. And at that time, we had a very supportive council. We had extensive communication with them and it was supportive. And then, of course, there's election. And with an election, everything is thrown up in the air. So we do have challenges with the council. But we also have very large numbers of local residents who want us to build a superb village, and it is a superb site at Mt Eliza.

And we've got, Kim, 300 people in the database and growing. And they are as keen as [ master ] to get in. It's going to be a beautiful site. We remain confident we're going to get across the line. We've got some difficult paths to follow down. But Cameron was on earlier, he's very determined, and his teammate to make it work. And I think that village is going to be incredible. We'll need to have lower density than what we first put forward to VCAT a few months ago. And the good thing about the ruling is that they've said look at good purpose of the use of the site for a retirement village associated with the place of worship, and aged care, which is great. And they just felt there were some buildings that could be reduced in size. And the great thing, the really great thing is given us extremely clear guidance on exactly what we need to do. So the team are working hard on that. Will the economics stack up? Obviously, we'll have less units that might affect price, of course, because there will be less availability. So I think it will be something that we'll be pretty proud of in a few years' time.

And just finally, what's the average tenure of a resident in a village, bearing in mind that many of them pass through 2 or even 3 stages of a village? So you published the results for independent and the serviced, for instance. But a lot of people actually go right through that and into the care side of it. So what would be the average tenure of a resident?

Yes, sure. So for independent living, the average age of entry is 78.6 years. And the average tenure for residents is 7 years. Now obviously, there's variability in that. Some people are shorter, some people long, but that's the median. For -- I feel a bit awkward talking about residence. For assisted living units, the average age of entry is 87 now, and the average tenure is 3 years with obviously an older age of entry. And look for aged care, Kim, oh, Gosh, it's a really wide variety, sometimes when people have early onset dementia. It could be 70. But generally, it's 80. And the sort of tenure in an aged care facility can vary wildly from depending on its hospital level care or rest time, but it could vary from shorter 3 months, where it's sort of more palliative type care through to a couple of years. Does that help?

Yes.

[ Alastair Duncan ].

Welcome, Alastair.

I'm shareholder for A2, one of the unions that represent staff here. First, I want to congratulate the Board on the work that they have done and the management team under Gordy. There's a whole lot of people under Gordy that make the difference, really strong result. It may even prompt me later in the day to vote for the board increase. I see on Page 148 of our document that we employ 428 people in the organization who earn more than $100,000. I'm sure they earn every penny. My question is what about the people who earn less than the living wage of $22.75 an hour? I cannot believe that a company of this standing with this capital base, with this reputation, with this management team and with these directors does not pay all our staff at least the living wage because the women and they are predominantly women who clean up and care and deliver are our single best asset. They don't show on the balance sheet, although if we had ethical investment and reporting policies, they may well. So please tell us that this will be the last year any of us need to sit here knowing that under the extraordinary gains that our business is making, we finally get rid of the shameful spot. I'd appreciate a feedback. And just as I may have to slip away, I'd like to foreshadow a question for each of the candidates. And the question will be, do they support statutory minimum staffing levels being reintroduced into the sector? But if I could have a response on the dark side of our fabulous business.

Thank you, Alistair. We will certainly make a point if you've slipped away of asking the directors around statutory minimum staff at levels. I think that probably the detail of our staff remuneration is better explained by Gordy. He will give you the details. But before we actually get to the specific numbers, I think it's really important that we reflect upon the more global work experience that people have, the planning opportunities that people have, the way in which we keep for our staff over the over COVID time with wage increases, with unlimited sick leave, with wellness days and all that. So the employment experience is a package. But you're quite right, money is critical. Gordy, can you maybe -- we didn't have those numbers quite recently?

Yes. So the -- for our registered nurses, we pay our debt, we've decided in 2018 to lift without government funding to the DHB rates that were agreed at the time. And as you know, Alistair, during the -- in terms of the aged care sector, that's been a big point of debate between government and the aged care sector because probably half or 60% of the sector, have -- don't pay the registered nurses at district health board rates, and it's causing a major issue in aged care in New Zealand. There's 900 vacancies today for registered nurses in New Zealand. So that decision that we announced at the 2018 AGM, where we would pay at DHB rates, I believe, made a massive difference over the last few years and obviously during COVID. And we have very low vacancy rates with us, including the other aspects which our registered nurses have part of what they do with us. In terms of caregivers, the equal pay settlement, which many of us are familiar with, just went through, and the last one went through recently. And someone is on sort of Level 3, 4 is on over $26 an hour. And that's transformative compared to -- if I think back to 4 years ago, I think generally, caregivers run about $16 an hour when, Alistair, I think roughly -- it was roughly in the sector. So the work of the tract the unions did with government together with operators as well has transformed caregiver pay. In terms of our starting pay for staff, we announced a couple of years ago before the New Zealand minimum wage went up to $20, Ryman minimum starting wage of $20. And we're actually very close now to the living wage for our lower-paid staff. [ Andrew ], was that -- yes. So I mentioned that won't actually be too long.

Is there a commitment?

Well, we do have to look -- unfortunately, we do have to look at government funding as well, Alistair, because it's chronically -- we have not received any funding for paying nurses at parity with district health boards for 3.5 years now.

My question focused on the household. Women who claimed the fees...

I understand what they do.

Yes. Have a microphone, please.

Thank you. Can -- is the microphone reaching?

It is, it is.

I'm [ Marilyn Paul ], a shareholder. Unlike Alistair, I don't claim to represent the views of everybody here. I don't think that one person should stand up here and claim to represent everyone. So my questions are my questions. Now I've got 2 questions, please. Ryman used to be the dialing of the retirement care sector for share buying. But I noticed now that there seems to be more recommendation to buy Somerset. Somerset seems to be doing very well. Have you got any thoughts for why that's -- the balance has changed? That's question one. Question two. David Bennett was mentioning debt levels and bank debt level. So with inflation and increased interest rates, how is that going to play out? And you prefer bank debt to going to the shareholders, because the shareholders got all this money floating around. You don't want to do -- more like the bond issue question. So that's 2 questions and a comment that we shouldn't -- if we stand up, we shouldn't say we represent everybody.

Yes. Look, what a wonderful series of questions, Marilyn. Firstly, we used to be the dialing, and there is no doubt about that. And you identified that one of our competitors is currently the dialing. I was told many years ago that the responsibility of the Board is to focus on the company's performance and other people will determine that the share price. And it goes back to that -- I think it was Benjamin Graham, who said that in the short term, the market is a voting machine. In other words, it determines who is popular and who's unpopular. But in the long term, it's a weighing machine, and it assesses substance and value. And so I think that our focus is -- I'm a shareholder like yourself, I would like to see a different value proposition being seen by the investing public. But just currently, that's not the case. I think the results that we're describing to you though suggest that, in fact, it's a very good buying opportunity. That's all I'll say on that. Gordy, do you want to make a comment on that?

Yes. Look, someone said we've done very well in recent times. So all credit to them, I would say. And -- but in terms of sort of key differences to think about is that over the last period of time, our biggest growth markets that we were planning on to the end of March '21. And all of our internal business plans was for our growth in underlying profit to be driven out of Melbourne. And Melbourne was shut, completely shut for 6 months. And during those times, it takes a long time to come out of lockdown, too, because they are very high risk periods. Our building team had to reduce their rate to 85% and sometimes 15%. And our New Zealand-listed peers that the analysts compare us all together never acknowledge what we do in Victoria. I don't know why we communicated with them. But as we -- that's a strategic decision we made to enter that market, and it really affected us last year. We also chose to invest significantly more relatively in COVID protections, obviously, with the Victorian exposure, but also here. And we have a significant presence in Auckland more so than others as well, where 20% -- and Auckland was locked down for 20%. I think the other thing just to think about is that some commentators in the market view different levels of debt. And one of the things which we do differently is we build larger scale care centers and village amenities. So when you're building predominantly villas-type developments, with only 36 aged care beds as opposed to, say, 120, their capital commitment is vastly different. And obviously, the village amenities, therefore, will be very different as well. And so I think that the lack of understanding of our Victorian plans in the short term and also the fact that we're building different type villages have been a bit lost on people. But like David said, I think that news will be understood over time and Victoria will get back on track, and we'll really be cooking at that stage. Yes.

Yes. And then Marilyn, to your -- the second part of your question, I think was around our debt levels and hazardous impact of inflation and interest rates, yes? And why do we raise capital from shareholders? Look, we haven't -- it's -- the raising capital is a bit of a sacred cow, and that sacred cow has quite a thick height as somebody said to me. So we tend not to want to dilute shareholders' value at all. So we haven't raised capital. Dave Bennett and his team have done a great job with diversifying our debt across a number of banks and including the USPP. And the rates -- the tenure is pretty significant and the rates, I think add up to around 3.1% with a tenure of averaging 7...

The average tenure across our bank and non-bank debt funding now is about 9 years. So a significant lift on previous years. And we did also do a retail bond in the local market as well, so people could participate from a deep instrument perspective. And we'll continue to look at diversification options in the future as well. So...

So we're coping with it by 10-year and diversification at this stage. Thanks, Marilyn. Sir?

Martin, Shareholders' Association. We just got 1 question. And thank you, Gordon, for 15 years of service. Your replacement, is that an international search. Or are you looking at internal candidates as well?

Yes, that's a good question, isn't it? We would consider an internal candidate. We -- I think it's an axiom of business, isn't it? That internal succession planning is ideal. But at this moment, we don't have an internal candidate. And so I have to look on the positive about an external candidate. We have a very stable senior executive team, and external candidate won't change the culture in this company. They might actually introduce a new way of thinking. And remember, this is really a new role. So Gordy has been our Chief Executive. He also has the title of Group Chief Executive at the moment. But when we have in the future a New Zealand Chief Executive, an Australian Chief Executive, the group role will be somewhat different. So it is a different person from Gordy. How do you -- if I could, I'd grab some DNA, but that won't work. I don't think it's -- he has given us such wonderful service. If we'd had an internal candidate, we would have appointed them. We don't at this moment have one, but we are about midway through our search process.

Yes, that would seem to be a failing of your systems. I think you were an internal appointment, Gordon? And that's worked out well. It's quite dangerous time for an organization like yours when you bring an external person, and they may have different priorities.

And to be absolutely transparent when John Ryder and Kevin Hickman went their separate ways, Kevin became Managing Director. Simon Challies was appointed as Chief Financial Officer, became Chief Executive. Gordy was appointed as Chief Financial Officer, became Chief Executive. That is certainly the model that we would prefer. But I have a strong belief in the embedded culture in our senior management team. And so is this company going to suddenly take a different direction? Absolutely not. Are we going to be as committed as ever we were to care and excellence? Absolutely. So I can only answer that much really. Thank you, Martin.

[ John Amerlynck ] Share and Trust shareholder. Thank you very much, Gordon, for your good analysis you gave us. First is -- 2 parts to the question I have here. First is the cash from residences, if my memory serves me correctly, I didn't pick up a breakdown between Australia and New Zealand in that figure, which drove it the most. That's the first part. The -- and by the way, commendable result anyway, not to wish to detract from that. The second factor is the ratio of risks, in particularly pertaining to Melbourne, which seems to have a never-ending love affair with COVID and clearly, they are not on top of it. So risk is still there to me. You may have a different view, I'm [ interested ] to hear it. But also in New Zealand here, we have a chronic shortage of building supplies of skilled tradesmen. And the building plans you have for growth, admirable as it is, the timing of when units come online for sale, I couldn't find any indication on the shareholders' report on that, wonder if you can assist on that. Because my logic is simply if they're not built, you've got nothing to sell. I mean a bit simplistic perhaps, but that has an impact upon profitability and your forecast that you're looking forward. That doesn't mean to say mean that what you're doing is, in fact, admirable. I just think there are some terrible risk against you. Share price has already gone down from $16 to $13. I'm wondering how are we going to plateau there? Is it leveling out? Or is, in fact, life going to be a bit more cruel to us? Hope you can help.

I'll ask our little -- to talk about COVID. He's pretty more informed than me.

Look, if we've known about COVID when we first decided to go to Melbourne, I suspect we would have stayed here in New Zealand. But like Melbourne, Victoria really is going to be potentially a big growth area. And so the costs of going there, I believe, are warranted. COVID will be addressed. COVID will be solved. It's just not solved at the moment. And like the effectiveness of the vaccines is really significant and the evidence around the third vaccination is something, a dramatic increase in effectiveness. So I believe it will be solved. And I believe that whilst we have pain at the moment and angst at the moment about our Melburnians' ability to manage COVID, we will come out the other side. You asked about the cash flow split between Australia and New Zealand.

I'll pick up on a few of the other questions. So I mean, look, my take on Melbourne is if you'd asked me that question a year ago, before we knew how the vaccines are working globally, and before we delivered 24,271 vaccines into our staff and residents, I'd be feeling very different. But there's an absolute way out of this now, and it's coming fairly soon. And I think that it is remarkable, and I'll put an -- make a movie about just how amazing those -- the speed of those vaccine developments and the safety of them without them being actual virus is amazing. So I think that we're probably like in a 5- to 6-month risk window, I suppose. But the projections from governments is to -- well, if you look at our care centers, for example, care centers, care staff, they're vaccinated in New Zealand and in both countries, give or take a handful of people. So we're just reducing our risk every day. You're probably vaccine here a few people today here, Cheyne?

Yes.

Yes. So in terms of building supplies, one of the -- I'll come back to the $400 million. One of the issues we have is that we have always treasured long-term relationships at Ryman worth building suppliers. And what that means is that when times are bad, we hope and we see it coming through that they prioritize what we do because they can also see that we're building critical health care infrastructure, which arguably is more important than a lot of other building projects. And so they tend to look after us really well. The good profile is that we pay everybody on time, on the nose every single month on the 20th. And if we mark up and we miss an invoice or something, we make sure it gets paid. We also work very strongly on enhancing the safety protocols of our sites. So they are good places for people to work. And we've invested a lot in having much better sort of café and rest facilities on our building sites. So in the building industry, we're really respected for our safety protocols, how we look after people, how we pay people. And all of those things sort of add up to better relationships and long-term relationships where, I guess, are most important right now. That doesn't mean to say that we can't have an overseas supplier, just pull the plug on some steel or something. So look, it is a risk. I can't deny that. But when I speak with the team, they're all over it. They've got a detailed schedule of every single thing coming in, where it's coming from, what they think the risk is and how they're managing it. And I think that's about the best we can do. And in terms of the statement you made, if it's not built, you've got nothing to sell. We do actually sell-off plan. So we do build when there's physically nothing, and we presell sometimes 12 months out. So we can still [ box ] on with pre-sales. It's obviously unideal if there's a delay, but we communicate really well with residents if there is a delay, either of our making or something else, and we really look after people during that process. In terms of the $400 million, $70 million came from Australia and $330 million came from New Zealand. So the lion's share from New Zealand -- thank you, Dave, for writing it down for me. And I think that was it. Does that cover it off?

I think so? John, that was it?

The timing, the timing?

Timing of -- oh, the timing of when deliveries are...

Building, building coming online.

Yes. I guess we've always tended to provide higher level build-type targets rather than individual stages. So we're probably stick with that. And I think we'll be -- otherwise, we'll be reexplaining ourselves quite a bit because [ that's to ] change a bit. But we know what our overall objectives are, don't worry.

Sir.

My name is [ Keith ]. I'm a long-term shareholder of Ryman's.

Welcome, Keith.

And I'm very disappointed to hear that you're leaving, Gordon. Whenever a CEO leaves a company, the share price falls. So I think everyone should expect that will happen. My problem was the share prices, with all the accolades you've got -- you've received, they're all well deserved for you and your staff and no doubt about it because the best retirement company in New Zealand and Australia. But the problem is your share price has not recovered from pre-COVID-19. Pre-COVID-19, it was around $17. Today, it's around $12. No wonder the Chairman doesn't want to issue shares to us because you have to give them $10 or more than that. However, he does miss the point as the Chairman and his Board with 1 or 2 exceptions over the years, and this is my question. Now talking about the interest rate at 3.1% on the debt, that debt has to be repaid. If you buy -- if you get some shares from me, you pay me about 1.8%, and you don't pay me back. If that's it, I only get the return. So there's a heck of a big difference, man. If you can get it from your shareholders, your profit will go through the roof. And the profit to shareholders is very low. You're paying, I think, 50% of the underlying profit, not the capital profit, underlying profit to shareholders. That should go up by 10% as soon as possible to 60%. Now that is my question. What are you going to do about these things and change the debt structure? And that is for you, Mr. Chairman. I've been to many of the meetings and you say the same thing each time, you are consistent. I'll give you that. You have not changed your tune, and I suggest you asked Professor Trow who was on your Board, and he would agree with me, I suspect, not you on that basis.

Look, yes. Thank you, Keith. Thank you for the endorsement of my consistency and approach. I guess I'd answer, Keith, that we have divergent views from shareholders. Some shareholders assiduously seek no dilution of their shareholding, and other shareholders have a completely different view. And that particular vexing challenge, I mean to be transparent, we discussed only in the last couple of days the dividend reinvestment program and these sorts of things. So we are sort of -- we are constantly looking at the issue of capital raising, dividend payout, flexible dividends, dividend reinvestment program. We are doing that. Have we reached a decision? I'd have to tell you, I'm sorry, we haven't. And I've been announcing it here today if we had. I -- is it any consolation that we are closer to a decision? No, I'm sure. I understand, I understand.

I suspect it used to be [indiscernible] your Board didn't bring it up.

Well, that would be interesting to ask the Board, but I guess I could ask them alongside this whether they support statutory minimum staffing levels, whether they would support a capital raise. You did identify that Professor Donald Trow might well support you and that would be a potent stimulus to me. The thing that Don says, I would be listening to closely. But I am the Chairman, not the Board. And so I'm only able to represent the Board's collective views. But thank you for your question and prompt and reminder. Look, are there any questions from shareholders and attendants online? I'm very mindful that we've been -- there are?

First question online. What are your plans for extending land banking purchases to other states in Australia?

Right. Well, I can answer that by saying we don't have any plans at this moment to extend beyond Victoria. We think there's lots of opportunity in Victoria. The states are different as we see even with COVID. And so -- but clearly, the company at some stage will expand beyond Victoria, but that's not part of our current thinking. I hope that answers that question.

That was from Brendan Brooke. Second question from Neil Anderson. Given the New Zealand labor market and in particular, the care industry has been badly skewed by our alliance on migrant labor. Now with COVID, the consequences are being felt throughout the economy, what positive actions are Ryman taking to help get this part of the local labor market back to a much more manageable situation?

Great question for Gordy. He's been actively involved in that.

Yes. So there's a number of things we're doing, ranging from nurse to entry practice programs, where we are working with politics and nursing graduates so that we can encourage people to join us as graduate nurses. We have done things like implemented apprentice schemes for shifts, gardeners, construction workers. In fact, when I was watching the Bulls on Saturday at Diana Isaac for the Olympics, one of our gardeners, [ Zia Logan ], works at Charles Upham, he was telling me about the apprenticeship-type training course that he's currently doing for gardening, which he was really, really enjoying. So -- and that scheme is something that we've put forward and promoted. We're also spending time at sells, high schools, trade shows, all that sort of thing. So we're very conscious that it's not either. or, it's and. We're very respectful and supportive and seeking for better treatment of our migrant staff because I think the way that migrant's spoken about in the media and by government, I think, is disrespectful. And we're also conscious that we need to grow our New Zealand pipeline of people in the construction industry and also nursing health care and throughout. And by meeting people at villages, I can see that that's really happening.

How are asset valuations calculated, by whom and how frequently? Do the directors feel that the current valuations reflected in the accounts are conservative and realistic in light of the current Australasian housing markets and the economic backdrop? And that's a question from Robert Hayward.

Okay. Do you want to do that? David?

Thank you. Yes. So in terms of the valuations, the retirement village part of the business, so our underpinned and service department units, they are revalued every 6 months. And that's performed by CBRE in both New Zealand and Australia. So that's what we performed every 6 months and forms part of our IFRS profit we report on a 6-monthly basis to the market. The aged care aspect of the business, so our rest home, and hospital and dementia units, they're revalued every 2 years and -- but they sit as part of our property, plant and equipment. So the movements and debt valuation don't go through IFRS profit, they go directly to the reserves. So yes, at the end, they are performed by CBRE on both sides of the Tasman.

And I would just add that CBRE, I think, are a very reputable company who are experienced in this particular sector. And the Audit and Risk Committees sit and meet with them without management on a regular basis to gain some assurance about the accuracy. Is it fully valued, undervalued? I think it's probably somewhere in the middle, slightly conservative possibly. But then we don't want it going like this all the time. So next question.

A question from [ Yash Apilla. ] What is the leadership team's strategy to differentiate Ryman Healthcare from your competitors, i.e., Summerset, Oceania, et cetera?

Well, look, I think our strategy is significantly different. We have a very intense focus on care, which is a contrast to other parties in the sector, and Gordy just gave you some numbers a moment ago. We have a Ryman guarantee or promise that we give people, and that people are always paid out within 6 months that the weekly fees stop immediately on vacating the unit. We have a DMF level that is significantly less than other operators. I don't necessarily want to attribute to Summerset but that's in the question. our DMF levels are lower. So we're able to, with that extra care availability in a village to ensure that people can move through the village, to the question that was put earlier and assure them that there is care. So look, I think that's probably a fair answer. Thank you, [ Alistair ].

[indiscernible].

Yes. You -- but we have a saying with Gordy that he must take the high road. And so as long as you take the high road.

Oh, yes. I will.

Question from...

He...

Oh, he's getting...

Gordy wanted to make some comments.

So I think from a resident point of view, if I was looking at a village, I would think about what's going to happen in the village and what are the terms I'm entering into. So our Ryman peace of mind differences, as far as we can see, leading in the sector. So our deferred management fee is 20%, and it doesn't restart when people move from one unit to another. Our weekly fees are fixed for life. No one has waited more than 6 months to be repaid. Having exited the village, weekly fees stop at vacancy. And we also give people a 90-day money back guarantee if they enter the village and choose not to -- if they don't enjoy it. So we provide the lowest deferred management fee that we're [ aware ] of in terms of the major players, fixed weekly fees. We don't charge when people aren't on there. So it's a nice straightforward, very fair deal on the terms front. And then in terms of what happens inside the village, that's where I guess a lot of the magic happens. So if you look at the things we do in the community center through our activity coordinators, through things like the Olympics at Ryman, speaking with residents at Diana Isaac last Saturday during the day, they couldn't come up to me quickly and after tell me about what we did for them during COVID lockdown and what they described to me that their friends and other villages received. And it was very different. And they were very proud of the fact of what they enjoyed at a Ryman village. And also in terms of things like innovation, think about myRyman Care. It's probably the leading aged care system in Australasia specifically made for aged care, where the roster is linked up with the care system so the primary care groups, who's allocated to residents and staff has clearly done and where people's needs and wants and the latest features is all bespoke and where people have a service device and every single room to make that happen. So whether it's investing significantly in proprietary care systems, whether it's creating new fun, new ideas for people pushing the edge on things like remote bowls, whether it's looking after people and going the extra mile for COVID, whether it's having the best terms and conditions, whether it's having great locations, great staff, I can probably end there, should I? But I think there's a difference. I think there's a difference.

We believe so. Yes.

And we obsess about it. We obsess about it all the time.

A question from Bruce Parks. While debt can be productive, the gearing ratio is on an ever upward curve, what is the maximum debt ratio you will be comfortable with?

All right. That's quite a hard question to answer, really. Look, I think that's -- probably the easiest way to answer that is that we forecast our debt to stay about where it is. We know that the net tangible assets are going to steadily increase. So I don't -- we don't work to a ratio, but all our business planning would suggest that our debt is about -- that's about where we're going to sit for at least several years.

And I think just to add to that, David, as well that we are mindful of managing that sort of absolute debt number. And you can see that with the sort of rebalancing we've talked about with the land bank as well, so with the site such as Karaka and Cambridge and Mulgrave coming on. There are sites that will allow us to sort of make sure we have that balance and that it's not all high-density developments coming through. So we can manage our program accordingly.

And the other thing is we've beefed up our construction team. We've got a more investment in things like commercial managers, Head of Construction Finance, more quantity servers in the field and that sort of thing because we're very conscious of managing our costs very carefully in our construction program because it is a big program of work. And I think what you could see is the gearing will just sort of just come off quite nicely over the next sort of 2 or 3 years because our balance sheet will grow, our earnings will grow. And we've already gone through a fair bit of pain just to get us to the level of sort of number of sites that's about right, right now.

No more questions.

No more questions. Okay. Look, ladies and gentlemen, thank you for those questions. We missed those really at the last AGM, and it's good to have the interaction. I do understand that this is your opportunity. So we now come to the formal part of the business, so -- and the matters requiring resolution, which are outlined in the notice of meeting that you've received. So there'll be an opportunity for shareholders to ask questions on each matter that is being put to shareholders. So for the sake of good order, again, if you can just focus the questions and keep them reasonably concise. And the poll will be held on each resolution. So for those of you here today, you'll be voting using your voting card or smartphone. And if you require assistance, then Link are outside to help. Using the voting card, please mark your voting intention for each resolution, and the voting cards will be collected at the conclusion of the meeting. Shareholders voting with a smartphone that can swipe left and follow and vote on resolutions. For those of you voting online, you'll need to click Get the Voting Card within the online meeting platform. Mark your voting card in the way you wish to vote by clicking for or against or abstain on the voting card. Once you've made the selection, then click Submit Vote at the bottom of the card to lodge the vote. Refer to the online portal guide that we identified earlier, if you have any need for assistance. So a quick reminder. Voting will remain open until 5 minutes after the conclusion of the meeting. Results of the vote will be announced via the NZX, and each resolution is to be considered as an ordinary resolution and must be approved by a simple majority of the votes cast by shareholders entitled to vote and voting on the resolution. The outcome of proxy votes will also be displayed for your information after voting on each of the resolutions. So resolution 2.1. In accordance with the company's constitution and the NZX Main Board listing rule, Gregory Campbell, having been appointed by the Board, retires from office. He is eligible to seek election. Greg has offered himself for election, and he will introduce himself now. But I think it's appropriate to advise shareholders that at our Board meeting yesterday, the Board unanimously elected Greg as a Board Deputy Chair. In doing this, the Board also expressed its real gratitude to Warren Bell, who so ably filled that post for a number of years. So Greg, would you like to speak?

[indiscernible]

Yes. Well, possibly here, it would be easier. I think the microphone might be better.

Well, thank you, David, and [Foreign Language]. And good morning, everybody. It's wonderful to be here. And as David mentioned, my name is Greg Campbell, and I have recently went through the pleasure or the pain of being appointed by the Board of Ryman as an independent director. Look, I -- Ryman is a company that I've admired for many a year. Its purpose, what it does, the pioneering a new way of retirement village living and looking to improve the freedom and care for an older generation. I'm also very, very keen on the fact that in the past, it has delivered really strong returns to shareholders and to other stakeholders. So that's a real great marriage of the 2. And I think the model is a really outstanding model that we need to honor and enhance going forward to maybe deal with some of those issues that some of the shareholders have raised today around the performance of the company. Just a little bit about myself. I've been fortunate. I've spent the last 25 years across Australia and New Zealand and many CEO roles listed, privately held cooperatives and also multinationals. With that, it has provided me with an opportunity to really understand the differences between the 2 countries we now operate within and the legislative framework, the compliance and the like. With that, I've really been focusing heavily on the leadership and cultures within organizations and how they respond to the ever-growing risks that I think once of the shareholders raised earlier today. And it is absolutely important that we have the best team available to us to deliver on that. I have a passion for driving unashamedly top-tier returns with strong value creation. Making a great profit and appropriate returns, creating value is absolutely what we're here for. Unashamedly, I say that. What I love about this model, we do it with care. And I think that's really, really important. I also have a passion for making sure we do that in a way that's sustainable. We leave this planet for the next generation that comes after us in a better place. And there's no doubt about it, whether you agree in climate change or otherwise, these things are coming upon us, and we need to respond to that and the growing demand on boards around ESG is alive and well. I really very much look forward to working with the Board, the executive, our key stakeholders in moving the organization forward. It's a great organization. You know that, you've been investors for some period of time. And so I think that there is an opportunity to continue to enhance that and ensure that we improve on what's happened for the last 37 years, recognizing the heritage but also being agile and responsive to the changing needs of future generations, communities and stakeholders. I very much look forward to meeting many, many of the investors, some of I have. I had the fortunate viewpoint a number of years ago where I was the CEO of a company called Ngai Tahu, who was at that point in time was a very large investor. So I often said, we use it now. So I have a line of sight about what shareholders are looking for from an organization such as Ryman. I'm very much looking forward, hopefully, of your support for my election today. It's in your hands. I would obviously encourage you to assist me with that. And I look forward to really helping take this fantastic great company forward even more so. So on that basis, David, I won't take any more time shorter. Thank you. And I wish you all the very best.

Thank you, Greg. Are there any questions for Greg or the Board concerning the resolution from shareholders in attendance online? No. So I now propose that Greg Campbell be elected a director of the company. Do I have a seconder for that motion? Thank you, sir. Please mark your voting cards in the way you wish to vote by ticking for, against or abstain in the appropriate place on the voting card. I'm sorry to be repeating this, but I'm required to be particular about this. [Voting]

We now will turn to those directors seeking reelection. In accordance with the company's constitution and the NZX Main Board Listing Rule 2.7.1, Geoff Cumming having held office for 3 years retires from office. He is eligible to seek reelection. Geoff has offered himself a reelection, and he will introduce himself now. Geoff?

Thank you very much, David. I'd just like to start by saying, I deeply admire Ryman Healthcare. I was appointed to the Board of Directors 3 years ago, following the retirement of Kevin Hickman. Kevin is a man who I also deeply admired. Kevin established his 2 cherished goals for the company. The first being a community of village for the elders in our society and so they could live in a way, which was good enough for our mom and our dad. We need to respect and we need to cherish the elders. And to do this, at Ryman, we designed, construct and operate villages, which are wonderful expressions of Kevin's goals for our moms and our dads. And equally, his other core goal was an excellent return to the owners of Ryman, you, the shareholders, you own this company, we, the directors, are your custodians of your investment. We continue to be deeply committed to and strive to achieve Kevin's 2 core objectives. Our Chairman, David Kerr, at the beginning of this, expressed those objectives in greater detail, and he outlined it beautifully. And I share and echo his comments and the way he articulated those goals of this company. I've been Chief Executive of companies in both Canada and in New Zealand and have served on over 25 Boards of directors in numerous industries and countries. My background is more heavily weighted towards economics, investment management and strategic planning. My objective as a director is to represent you, the owners of this company, as we try to fulfill our founder's twin core objectives. Achievement of these objectives is a wonderful journey for you as shareholders, for our residents, for our executives and our staff and more importantly, to the society we live and operate in. And we're proud of this fact, and I'm very proud that we do things that are in service of the society. I ask you for your support of my candidacy as a Director of Ryman. Thank you.

Thank you, Geoff. Is the mic on? Thank you, Geoff. Are there any questions for Geoff or the Board on this resolution? Marilyn? Can we just get a microphone for Marilyn. Geoff, you're still there, I suspect.

It's Marilyn, again. The Chairman, David Kerr, said that Greg's nomination was unanimously supported by the Board. When it comes to these voting for the election of directors, It's a bit like the local body elections. You don't really know how each person is performing. So it would be good, if it's allowable, if David Kerr tells us whether each of these following 3 directors seeking reelection whether the Board is unanimous about them or rather than just hearing what they think about themselves?

Thank you, Marilyn. I can tell you that the Board is unanimous about supporting each of these nominations. I can further advise you that the Board is, as you've sort of picked up, quite different and diverse in terms of backgrounds. And that makes for significant discussions around every topic such as the quality of the care we're offering and the profitability of the company and what levers can we pull. And we have good strong debate. So the last 2 days have been solid Board meetings for all of the directors. I prefer it enormously when we're all in the same room, but we have to cope with Zoom for the Australian directors currently. But I can tell you that we have robust discussion. We enjoy each other's company and we are unanimous in our support of each of the directors. So I'm now going to propose that Geoffrey Cumming be reelected a director of the company. And do I have a seconder? Thank you, Kim. Please mark your voting cards in the way you wish to vote by ticking for, against or abstain in the appropriate place on the voting card. [Voting]

In accordance with the company's constitution and the NZX Main Board Listing Rule 2.7.1, Warren Bell, having held office for 3 years, retires from office. He is eligible to seek re-election. Warren has offered himself for re-election, and he'll introduce himself now.

Good morning, everybody. As you've heard from Geoff and some of the other directors, I'd just like to emphasize, and it's sort of really following on from the question around Gordy's departure, around the strength of the founder's DNA. You can clearly hear from the comments of the various directors that, that DNA and those targets are clearly written on the forehead of nearly all of the directors. So I think the question around the risk of Gordy's departure and the new CEO, I'd just like to emphasize that I, too, know the founders of Ryman very well. And clearly, that DNA has engrained in not only Gordy but the rest of the very experienced and much admired executive team. And I certainly support the DNA and those very simple targets that we talk about in terms of financial targets and the care goals have been good enough for mom or dad. And I have, as no doubt, a lot of you have also had family members in Ryman villages, particularly Anthony Wilding and Christchurch. And I never cease to be amazed by the quality and passion of the care and nursing that our family [ have ] received. It's absolutely outstanding when you're on the other side as a family member doing the visiting and actually failing day in and day out, what our amazing team do. And I think that I never cease to be amazed as a family member visiting our villages of that -- and that really, I think, is a really key difference about one of the key aspects of Ryman. Our people are really great having been on the other side of the fence. Just to touch on a couple of other areas that I'm involved in. David mentioned that I have been and still am the Chairman of St. George's Hospital in Christchurch. It's the largest private hospital in the South Island. There's a lot of parallels between the sort of areas and concerns in the way private surgical hospitals are run compared to retirement villages that St. George's Hospital has a wide variety of service lines. It provides to patients from heart surgery to cancer care, orthopedic surgery, eye surgery, ear surgery, maternity. So there's a lot of parallels in terms of patient care and the way that St. George's and Ryman villages look after their residents and the patients. So I find it's quite a very good benchmark for me in terms of just seeing what the focus is and what journeys that private hospital is going on vis-a-vis some of the things that Ryman are also looking at in their villages. I'm also involved, as David mentioned, as the Chair of Hallenstein Glasson, so that means that I do have quite high exposure to Trans-Tasman business and issues. That group has 37 retail stores down the East Coast of Australia and have done for some time, and there are 13 of those spread right through Melbourne. So that gives me an understanding of some of the issues around doing business in Melbourne from a retail perspective vis-a-vis Ryman's and also quite a good understanding of the demographics of some of those key areas in terms of what the dynamics and the population and housing prices and the like might be. So that's also I find a helpful benchmark for me in terms of sort of benchmarking and looking at sites. It's not like I don't have any knowledge. I don't have as much knowledge sometimes as my obvious Australian Melbourne-based colleagues who live here, but I do have my little own smell test, which I find useful. So just a couple of comments around that. So once again, it has been an absolute pleasure to have served you as Ryman shareholders, as a Director of Ryman, and the journey is not over. This is a great company and has a huge, huge opportunities in front of it. I think that DNA is really clearly embedded, and I certainly support that. And I think we have a great opportunity, as you've heard from David and the executive team about execution of that journey going forward. So if you deem it appropriate, I would obviously like to encourage you to support my continuing. Thank you.

Thank you, Warren. I am somewhat really were not involved in maternity care in Ryman Healthcare, that would be a step too far, I suspect. Look, are there any questions in the room for Warren or the Board on this particular resolution?

Just a quick question, Mr. Chairman. I see in the annual report that Mr. Bell only owns 1,500 shares in the company. I wondered whether this was an indication of his faith in the future?

No.

I think the answer from Mr. Bell was no. That's not an indication of his faith in the future.

It seems a very low number of shares to hold.

Yes. When we come to the directors' remuneration, you'll see that there is a package around directors' fees, incorporating distribution of fees in the form of shares. So that possibly will allay your concerns. So I now propose that Warren Bell will be reelected as a director of the company. Do I have a second for the motion? Thank you, sir. Please mark your voting cards in the way you wish to vote by ticking for, against or abstain in the appropriate place on the voting card. [Voting]

Resolution 2.4, Jo Appleyard. In accordance with the company's constitution and the NZX Main Board Listing Rule 2.7.1, Jo Appleyard having held office for 3 years retires from office. She is eligible to seek re-election and she's offered herself for re-election, and she will now introduce herself to you.

Thank you, David, and good afternoon, everyone. I'd just like to start with saying how privileged I feel to be able to stand here again today before you, the owners of this company, seeking re-election to the Board once again. And coming here, I've reflected on where Ryman was when I first joined in 2009 and where it is now. I feel really proud of the parts that I believe I have contributed to that overall success story. I have reflected carefully on what my specific contribution has actually been. Now as many of you will be aware, my background is a lawyer, and I'm a partner in the national law firm of Chapman Tripp. While I do not myself, provide any legal advice to Ryman, my background as a lawyer raises the obvious question of what it is that a lawyer and sometimes accountant -- sorry, not me, and accountants can add to a Board that a company can't get from simply picking up the phone, contacting the law firm and asking for some legal advice. So to answer that question, I need a little bit of license to explain what I actually do in my day-to-day job in practice, and what I do outside the law to explain what I believe I contribute to a Board discussion. Today, investors are increasingly looking at ESG criteria and deciding how to evaluate a company's performance. And I want to focus on the E and the S. The E is for environmental and is how our company's activities impact the planet. The S for social, and that concerns issues such as how an employer treats its staff and how a company like Ryman has a social license to operate, including in our case, in the communities in which we choose to introduce our new villages. Now in my day light job, even though I'm described as a lawyer, I'm not a general practitioner. I specialize in environmental law, and that is the E in ESG. I also specialize in employment law and have a specialized employment practice, which is a big part of the S, the social in ESG. On the environmental side, I act for New Zealand's largest infrastructure and develops, and I've been at the cutting edge of very large projects, which impact very sensitive environments. I'm not purely a lawyer. I take project lead roles. I have at the other end of the spectrum taken on totally or partly pro bono roles in establishing various mental health facilities to get the lights up at Hagley Oval, and I sit on a Trust, which protects Central Otago's waterways. Outside law, I've sat on other boards, which have managed huge rebuilds in the wake of the Christchurch earthquakes, that includes the University of Canterbury. And my employment practice idea of the plethora of issues around fairness to employees, I've sat at union negotiation tables and on Boards, which are making crucial decisions around the replacement and appointment of CEOs. On this issue, I've sat on commission who [ each watch ] employee CEOs, including those which have involved international searches. And as we move to the task of finding that unicorn to replace Gordy MacLeod, I believe I have the skills to contribute and want to play a part in what will probably be one of the most important decisions that this Board will be making in the short to medium term. Lastly, I'm conscious that I am one of those with the longest tenure on the Board, second only to David. And I do remain as one of those infused with the Ryman DNA as one referred to in purpose by sitting around a table with one of our founders, Kevin Hickman. I have one role in constantly reminding us at the Board of our heritage and our purpose, and I feel that Kevin sits on my shoulder like Jiminy Cricket. And I'm often asking the question, what would Kev say. I feel like I can take this question on every decision we make and ask, is this good enough for mom or dad. So I'd be really grateful for your continuing support. Thank you.

Thank you, Jo. Are there any questions for Jo or the Board from shareholders in attendance online or in the room? Sir?

John Amelish [indiscernible] Trust. Certainly, all the more criteria you put up there. But for me, directors need to have an understanding of the business where the rubber hits the road. And from business operational management experience, I didn't hear a great deal. Perhaps you could enlighten me.

The only matters that I can raise in relation to that are my personal ones. My partner, my family has extensive commercial property portfolio, a large number of employees. We also, as a firm, have 500-odd staff. I have been on the Board of my own firm for quite a few years. I'm trying to remember how long, I'm not on the Board at the moment, but I did spend about 6 or 7 years in that role in my own firm. We are a large employer.

Are there any other questions? No? So I now propose that Jo Appleyard be reelected a director of the company. Do I have a seconder for the motion? Thank you very much. Please mark your voting cards in the way you wish to vote by ticking for, against or abstain in the appropriate place on the voting card. [Voting]

Now resolution 3 concerns the authorization of the Board to fix the auditor's remuneration. Deloitte is automatically reappointed as the auditor of Ryman Healthcare under section 207T of the Companies Act 1993. Are there any questions for the Board concerning the resolution from shareholders in attendance or online. I now propose that the Board are authorized to fix the auditor's remuneration. Do I have a seconder for that motion? Thank you, Sue. Please mark your voting cards in the way you wish to vote by ticking for, against or abstain in the appropriate place on the voting card. [Voting]

The next resolution, Resolution 4 seeks shareholder approval to increase the maximum aggregate amount of director remuneration that may be paid each year to the directors of Ryman for their services. The Board seeks approval to increase the fee pool to $1.5 million per annum based on 9 directors. I'll now hand over to Geoffrey Cumming, the Chair of our Governance, Nomination and Remuneration Committee, to provide some background on that resolution. Geoff? Have we got a connection? Right. That's an interesting scenario, isn't it? Yes. I think we'll just manage without Geoff's input. So I could just take questions. I think that on the other hand, it sounds so self-serving when you stand up talking on behalf of your own remuneration. The complexity of this company is significant in that we run a large care business, which you -- we've all talked about and quite extensively. We run a large construction business, probably the biggest homebuilder in New Zealand. And we run a large development company. And of course, there's all the real estate activity. So we have quite a number of different disciplines.

[indiscernible]

Oh, okay. Look, welcome, Geoff.

Sorry, there was some -- can you hear me?

We can hear you, Geoff. And I just started by stating the obvious, which is the complexity of the different parts of the company, but I'd defer to your skill on this.

Thank you very much, David. Let me just try to go through the issues here. So we are trying to choose compensation, appropriate compensation for directors. So that's not easy for directors to do. We're trying to find a balance between being lean and proper compensation and also being able to secure the very best directors we can, the best professional directors. So the last increase for directors in this company was 3 years ago. At the time, the Board was 8 people. It's now 9, and it was at one stage 7. So it roughly is about 6.7% compounded increase. And of course, there's other factors here. As you may know, directors fees in Australia are considerably higher than in New Zealand, and we're trying to find the right balance, what I would call a Trans-Tasman balance to that. The Board decided to engage Ernst & Young, who have extensive experience in this to prepare a report. That report has been on the website for several months now. And it goes through -- and as David was just outlining, it goes through the different situations, so the complexity of the business, the 2 countries. The commercial aspects are very complex, safety issues, government relations, competitive environment. COVID has been an enormous issue for us. I can say I've sat on over 25 boards, and only one of those boards, was more complex and challenging than this Board is, and that was during the global financial crisis. I might also use the analogy, when you're flying through a thunderstorm, it's a little bit too late to ask if I paid the pilots the right amount. We want to pay the pilots the right amount. But the real observation is, thank goodness, we tried hard to find the best possible pilots. It's a little like that when you're going through the global financial crisis. And it was a little like that when you're going through COVID. We had an outstanding management team. It dealt with that. And the Board dealt with COVID, I think, in a superb way. So -- and you will notice, we are trying to address -- and there's been 1 or 2 questions here about this. We are trying to also align the Board with the shareholders. And we haven't really done that quite as well as we might have in previous years. So under this proposal, 35% of all fees paid to directors would be allocated under a fixed trading plan. So the director has no control over that. That's a mechanical purchase of shares. They can't opt in or opt out. It's a purely mechanical third-party one. And why did we bring this policy in? We thought, as custodians of your investment, that it was very important that you be aligned properly with that. And how do we choose that? And so what we basically did, as said, of the director's fees, 1/3 -- approximately 1/3 will be paid in stock. 2/3 would be paid in cash. But if the 2/3 paid in cash, you've got to pay taxes on the whole of them. So effectively of the total fees, 1/3 is going to stock, 1/3 is coming to cash to the director, and 1/3 goes to tax. So that's the proposal bit for us. There have been a couple of issues that were raised before the meeting. I'd like to address a couple of those. One was a question of the size of the Board. We've been as low as 7. We're currently at 9. The Board fluctuates up and down a little bit depending on retirements and so forth. In terms of guidance to shareholders, we do not see the Board ever being larger than 9. We do not see the Board ever being less than 7. But there could be -- it might be 8 some point in time. I would say that you do need a fair number of directors. We have 5 committees. It is very complex work that these committees are engaged in. It requires a lot of skills across -- skills and breadth and experience. And the second question that was asked was, is the chair paid committee fees? And our policy is the chair is not paid committee fees. David has not received it, a committee fee. He's paid as chair fee. The other directors are paid a director's fee plus committee fees. There was a third question asked about leaving gifts. Has there been any leaving gifts? Or is that the policy of the Board with respect to directors? When they go -- the practice in this company and the policy is, when directors leave, there is no leaving gift. And that's been the practice in the past. And I would imagine that will be the practice for the foreseeable future. So I think that summarizes it. And maybe we -- if there's any discussion, we could entertain questions.

Thank you, Geoff. So questions for Geoff. Thank you. [ Kim ]?

Yes. In terms of the various committees, the shareholders have no visibility of what those communities are actually doing in the engine room. In future reports, can we get a couple of paragraphs from each chair as to what the key issues are for that particular year?

Yes. Great idea. Great idea. Thank you.

I think that's an excellent idea, and we will do that. Thank you for that suggestion.

No other questions. So look, I now propose that the director's fee pool be increased to $1.5 million per annum. And do I have a seconder for that motion? Thank you, [ Don Traugh ]. Please mark your voting cards in the way you wish to vote by ticking for, against or abstain in the appropriate place on the voting card. So that concludes the formal part of the meeting. Voting cards will be collected by our registry, Link Market Services, who will now move through the room to collect your voting cards. For those shareholders who are online, you can now submit your vote. Voting will be open until the close of the meeting. And look, thank you, everyone, for your attention, for your questions. It's been a challenging year. We know there's a lot ahead of us. We're in the middle of a global pandemic. And as Chair of the company, I have to say it's confirmed to me what I've known for a long time that Ryman is really a pretty special company with enormous potential, and we're at a point of change. And I'd like to thank Gordy for his contribution over 15 years and his ongoing commitment to us until a successor is found. Gordy is a 200% man. He gives everything to the role he is occupying. And he has a fierce beating heart that drives absolute determination to see that the care is there. He has an extraordinary ability to gather people around him and form a team who are cohesive, and he will be sorely missed. Nevertheless, I respect his decision to exit and wish him very well. You won't see him at another AGM. But look, there'll be other opportunities, no doubt, to thank him. But look, I'd also like to thank my fellow directors for the support and wisdom, and a particular thanks to the 6,300 staff and our marvelous 12,750, I think, residents and their families. And a big thank you to you, our shareholders, for all your support. You are the owners, and we appreciate your support. You're long-term thinkers, I suggest. And we'll always face these short-term challenges that we've discussed a bit today, but we know that the long-term mission is here, and we're here for the long haul. So we're excited still as a Board about the future of Ryman, and we intend to build as many Ryman communities as we can. So we look forward to catching up again in 12 months. Now we're going to have a cup of tea or something similar, I'm hoping. But before I do, I just wanted to name the senior execs in the room, and if they could wave their hands so that any of you shareholders present had a chance maybe to chat to them individually. So I can see Mary-Anne Stone. Mary-Anne Stone has been our Chief Marketing and Sales Officer and transitioned just recently from that into our innovation and strategy lead, absolute critical person. I can see then Cheyne Chalmers. Cheyne leads our operations, which is all the care provision and has been a wonderful asset to the team. And as I go around, I see Rick Davis, who I introduced you to before, who leads our IT. And Jeremy Moore does our development activities. Am I missing anybody?

Andrew.

Where's Andrew? I'm sorry, Andrew. I apologize. Andrew, who leads all our people and culture activities. So look, feel free to go up to them the chat, and thank you again for your time. And I'll join you for a cup of tea.