Ryman Healthcare Limited (RYM) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to Ryman Healthcare's 2024 Annual Shareholder Meeting. My name is Dean Hamilton. I joined the Board in June last year, becoming Chair in August. Following the resignation of former Group CEO Richard Umbers in April this year, I transitioned to an Executive Chair role. This is a temporary role until a new Group CEO is in place. As Chair, it is my pleasure to welcome all shareholders to the meeting, both here in person and online. I'd also like to welcome all the Ryman team who have joined us today, including members of our senior executive team. Joining me this morning on stage are fellow directors Anthony Leighs, Paula Jeffs, James Miller, Geoff Cumming, Claire Higgins, Kate Munnings and David Pitman. Also on stage are Deborah Marris, our Group General Counsel and Company Secretary, and Rob Woodgate, our Group Chief Financial Officer. For today's proceedings, I will provide an overview of the last financial year and an outlook of the year ahead. Following this, we will move to the meeting resolutions of which we have 3, and then on to general business where you will have the opportunity to ask questions. Following the conclusion of the meeting, we invite you to join us for refreshments afterwards. You will have a chance to ask questions and vote on each of the meeting resolutions as they are considered. I will provide further instructions as we move through the meeting. However, if you encounter any issues, please refer to the virtual portal guide or you can phone the helpline on 0800-200-220. You can send through your questions at any time via the online portal by clicking the link shown here on the screen. I would encourage you to do so as early as possible as this will allow us to answer these questions at the appropriate time during the meeting. Voting on the resolutions will be conducted by way of a poll. For shareholders joining us in person today, you would have validated or been given your shareholder voting card. If you are a shareholder and did not register on arrival and wish to vote, please make your way to the registration desk outside the room and staff from MUFG will assist you. Shareholders joining us online will be able to cast a vote using the electronic voting card received when online registration is validated. To vote, you'll need to click on the Get a Voting Card button within the online meeting platform, which is shown here. You'll be asked to enter your shareholder or proxy number to validate your voting card. Voting will remain open until 5 minutes after the conclusion of the meeting. The company secretary has confirmed to me that the Notice of Meeting has been sent to shareholders and other persons entitled to receive it. We have not received any apologies. The company's constitution prescribes a quorum of shareholders. Based on the information from the registrar, I can confirm that we have a quorum present here today. Proxies have been appointed for the purposes of this meeting in respect of approximately 417 million shares, representing approximately 61% of the total number of shares outstanding. I would like to thank shareholders for participating in today's meeting. My fellow directors and I will vote all discretionary proxies we have received in favor of the resolutions as set out in the Notice of Meeting. As detailed in the Notice of Meeting, all directors unanimously support each resolution. Our Annual Report for the year ended 31 March 2024 has been circulated to shareholders. This is available online on the Investors section of our website and the New Zealand Stock Exchange. Copies are also available in the foyer. There is no doubt that we are in a period of change as Ryman embarks on getting fit for the future. Whilst Ryman continues to set the benchmark for retirement living and quality of care for our residents, in terms of returns to you, our shareholders, we have fallen well short in recent years. Rest assured, as a Board and management team, we are very focused on improving our financial performance, which we believe over time should be reflected in an improved share price. As we embark on our new future, we are clear on 2 things. Our residents remain at the heart of everything we do because without delighted residents, there is no Ryman. And secondly, our villages are the place where we create our value. That is where our assets are. That is where we deliver our fabulous services. Everything else we do is in support of these 2 guiding principles. As we highlighted at our recent result, we are refining our strategy and driving an improvement program that will place us much stronger emphasis on our financial performance while maintaining our commitment to purpose-driven care and exceptional resident experience. We know we need to create a more balanced existence between care and financial performance. We are focusing on 3 areas for our financial improvement: one, improving the performance of our villages; two, improving the efficiency of our new developments; and three, creating sustainable and fit-for-purpose overhead structure to support our villages and new development opportunities. We need to get fit for the future. I'm looking forward to working with the team and eventually our new Group CEO as we focus intently on restoring our financial performance and with that, our returns to shareholders. More on these areas later. There has been significant change at both Board and management over the past 15 months. Three directors have retired from the Board and 4 new directors have been appointed, demonstrating our commitment to refresh our Board membership and bringing new capability and experience to governing your company. Of the 4 new directors, 2 of those were appointed post the Annual Shareholder Meeting last year. Both of those directors are therefore up for reelection today. Kate Munnings joined the Board on the 1st of November 2023. Kate brings extensive commercial health care experience from her role as CEO at Virtus and COO role at Ramsay in Australia, where she oversaw the operation of some 80 hospitals. Earlier in her career, Kate held senior roles in construction and facilities management. David Pitman joined the Board on the 1st of May of this year. He brings strong leadership, strategic and transformation experience across a range of sectors, including retirement living in Australia. David has held senior roles at Boston Consulting Group in Australia and the U.S. and as well as the Stockton Group in Australia. I'm delighted that we've been able to attract 2 new directors of the quality of Kate and David. In addition to these 2 new directors, Dr. Bernadette Eather has joined Ryman's Clinical Governance Committee as a clinical adviser. Bernadette started her role on 2nd of April this year, replacing Dr. David Kerr, who retired at the 31st of March. Bernadette is a highly regarded clinical governance professional in Australia. She is a Chief Nurse and Clinical Service Director for Ramsay Health Care, prior to which she was the New South Wales Director of Patient Safety at the Clinical Excellence Commission. She brings valuable external oversight and input to our clinical governance processes. We have also made several changes to our Board subcommittees, and all of these committees have new chairs: James chairs Audit, Finance and Risk; Paula chairs our People, Safety and Remuneration; Kate chairs our Clinical Governance; and Anthony chairs our Governance & Nominations. We have also established a temporary Board oversight committee to oversee my performance during my time as Executive Chair. Paula chairs that as the lead independent director and is supported by James and Anthony. 2024 will see the retirement of 2 directors: Geoff Cumming will be retiring at the end of today's meeting. Geoff rejoined the Board in 2018 having been a substantial shareholder in Ryman since its listing in 1999. Geoff has been a passionate supporter of Ryman for a long period of time and I'm sure will continue to stay close to the company. On behalf of the Board, Geoff, I would like to thank you for your significant contribution. Claire Higgins will be stepping down at the end of the calendar year after 10 years on the Board. Claire stepped into the role of Interim Chair in November 2022 and was instrumental in the capital raise and the subsequent Board renewal. Claire, whilst it's premature to say farewell, as this will be -- it is your last ASM, and it's appropriate to thank you today for your contribution particularly over the last 18 months. Thank you, Claire. There's also been significant change in our senior leadership team over the last year. In April 2024, we announced that Group CEO Richard Umbers had resigned. I'd like to thank Richard for his energy and commitment during his time leading Ryman. The search for a new Group CEO is well underway. Our goal, all going well, is to have someone physically in the seat by the end of this calendar year. In November '23, we appointed Rob Woodgate as our new Group Chief Financial Officer. Rob joined us from Fulton Hogan, where he was the Group CFO and he has a strong track record as a senior finance leader, bringing a wealth of experience to the role at an important time. A number of long-standing employees have left in the last 12 months, I'd like to take the opportunity to thank them all for their efforts. Ryman has traditionally used underlying profit as the key measure of its financial performance. We now believe that there are better indicators of performance that are more closely tied to our audited financial accounts. We have turned our focus to 3 key financial metrics: firstly, the cash flow from our existing operations; secondly, the cash flow from our development activity; and thirdly, our net profit before tax and fair value movements per share. The first 2 measures are cash measures. We believe cash flow, like in any traditional business, is the most objective measure of performance over time. Existing operations and new developments have very different performance drivers and cash flows and we believe are best reported on separately. The combination of these 2 measures, we term as free cash flow. Net profit before tax and fair value measures the operating performance of our existing villages. It excludes development activity, it excludes refinancing gains on occupation rights and the unrealized valuation movement in the portfolio between the start and the finish of the year. The latter will fluctuate year-to-year and over time, we believe, whilst it's very relevant to the growth in shareholders' equity, it is unrealized because as you all know, we don't sell the underlying properties to residents, we instead grant a right to occupy. Our financial results for the year ended 31 March 2024 were disappointing on a number of fronts. Firstly, on the positive side, we reported an 18% increase in revenue to $689.9 million, driven by growth in our care, village and deferred management fees primarily as our new villages continued to mature. However, the combined impact of impairments and one-off costs, some $283.9 million in total, has led to a significant reduction in reported net profit after tax to just $4.8 million against the $257.8 million we achieved the prior year. The result has been achieved in a particularly challenging operating environment, with residential property market subdued and cost inflation impacting all areas of our business. We took the necessary decision to reassess the carrying value of our land bank sites in light of the current economic environment and with a higher hurdle on whether they could be financially successful new developments. This led to 2 sites being deemed unsuitable for us at Karori and Kohi, and these will be put up for sale in coming months. The 2 sites that we had started but paused have now been written down and bought back into our land bank at Ringwood in Victoria and Takapuna. Despite these noncash write-downs, it was pleasing we achieved an improvement in our cash flow from our existing operations to $43.3 million compared to minus $8 million last year. Contributing to this was a record number of resale settlements of occupation rights, which, in my view, continues to underline the attractiveness of Ryman as a place for residents to live. Ryman achieved an underlying profit of $270 million, down 11% on the $302 million achieved in the prior year, and within our February 2024 guidance of $265 million to $285 million. The reduction in underlying profit was primarily a result of lower margins on new developments, which have suffered from higher cost to complete, the impact of delays and higher interest costs. We are committed to prudent capital management. The Board made the decision during the year to suspend dividends. The need to continue to spend capital to complete our village buildings, to deliver on our promise to residents and the desire to limit increased borrowings being key factors behind what I believe to be a logical decision and in the best interest in the short term of all shareholders. As previously communicated, the company intends to undertake a further review of the dividend policy at fiscal year '26. It's important to note that any future dividend policy is expected to be based on cash flow. At March 2024, net interest-bearing debt was $2.51 billion, up $210 million from the March 2023 number, however, in line with our position at September '23. We had total funding headroom at March of $507.5 million. Gearing of 36.2% has increased 3.1 percentage points, reflecting both higher debt and the impact on shareholders' equity from valuation movements and impairments. This sits slightly above our medium-term target of 30% to 35% gearing. The financial focus of the Board is to strengthen cash flow outcomes from our existing operations, to release capital from our in-flight developments and grow the value of Ryman whilst gradually reducing our net debt position. Turning to new developments. During FY '24, we completed developments at both John Flynn in Melbourne and William Sanders in Devonport. These are fabulous new villages for our residents, with state-of-the-art amenities and a continuum of care. We also opened the main building at Deborah Cheetham in Ocean Grove, welcoming residents into our sixth main building in Australia. At year-end, we had 10 villages under active construction, including 9 of which were already open. The current build program is unusually skewed to main buildings, of which 4 are expected to be completed in FY '25. Since year-end, I'm pleased to announce that the main buildings at Miriam Corban and James Wattie, as shown, have both opened. Our village and regional teams have done a fantastic job of operationalizing these buildings, which offer a wide range of village amenities and a key part of our proposition for new residents. Care beds and serviced apartments in these buildings will now gradually fill over the next couple of years with both new residents and existing Ryman residents who transition from independent living to more care-based offerings. We're very focused on finishing the 10 inflight projects on time and at our forecast cost, which will allow us to repay bank debt as we sell down the occupation rights. We have increased our focus on the efficiency of potential brand-new village developments with a much stronger lens on expected cash recycling. We expect to operate with a smaller land bank going forward and with a smaller number of developments underway at any one time. We need to have the capital discipline to only start a development when we know we have the financial capacity to finish it. At March 2024, we had 5,371 units and beds available for development, including 2,627 at sites already under active development and 2,744 at our land banks where we are yet to have started building. Ryman is committed to our sustainability journey and decarbonizing our operations. We are pleased to have released our first Sustainability Report in May this year, which showcases progress across our 3 priority areas of climate change, quality care and indigenous engagement. This report is available on our website, and I'd encourage you to read it. During the year, we announced that our greenhouse gas emission targets have been validated by the Science Based Targets initiative. This achievement has been reached following Ryman formally setting an emissions reduction target of 42% for our Scope 1 and 2 emissions to be achieved by 2030 relative to our starting position in 2021. We remain committed to reducing our environmental footprint. The procurement of renewable energy is a key initiative in our emissions reduction plan. In 2023, we signed a long-term power purchasing agreement with Solar Bay through Mercury Energy. As part of this agreement during FY '24, Ryman's New Zealand electricity emissions were offset by renewable energy certificates, which helped to materially reduce our New Zealand-based emissions. In addition, in our 2024 Annual Report, we have published our first climate-related financial disclosures as required by the New Zealand External Reporting Board. The disclosure report outlines how we are embedding climate considerations into our business model as well as the impact of our business is having on the climate. This year, Ryman's celebrated a number of key achievements. We are proud to open 3 new villages during the year, welcoming our first residents at Northwood, not far from here, Patrick Hogan in Cambridge and Bert Newton in Victoria. In addition, as mentioned earlier, we opened a new care center at Deborah Cheetham in Melbourne, and we finished the year with 48 operating villages, home to some 14,600 residents. We continued to be recognized by the industry for delivering great care and by the community for their trust in our brand. We're proud to be named Reader's Digest Most Trusted Brand in aged care and retirement living in New Zealand for the tenth time. In addition, we won 4 awards at the 2024 Asia Pacific Eldercare Innovation Awards, including Operator of the Year for the second year running. We also continued to play an important role in our local communities, working with our teams and residents to raise funds for the Fred Hollows Foundation across New Zealand and Australia, who work tirelessly put an end to avoidable blindness. We are committed to improving our financial performance. As I mentioned earlier, we are focused on 3 key areas. Firstly, improving the financial performance of our existing villages. We are looking at both revenue and cost opportunities. What is the optimal mix of deferred management fee, weekly fees and the services that we offer? On the cost side, how do we match the operating efficiencies of our best-performing villages right across our portfolio? Secondly, we need to improve the financial efficiency of our new village developments. We've been unable to fully recycle our build costs with the first sell-down of occupation rights across 14 of our last 16 developments. Many reasons have driven this, including a combination of challenging land sites, higher construction cost inflation than we thought when we started, greater overheads, our own changes to scope once underway, or significant delays through either COVID or financial prudence. This has come at a significant cost to shareholders. However, the best thing for residents and shareholders now is for us to finish the 10 developments that are underway and to meet our revised forecast. I'm very confident our team can do this. In terms of new developments, we intend to delay putting any spades in the ground until we're very confident that any new development can 100% recycle capital. Thirdly, we need to recreate a sustainable overhead structure that supports the villages. We have, over the last 8 years, seen our support costs grow at a faster rate than our unit and bid numbers. At Ryman, we have to become leaner in what we do. All of these 3 areas are under current review. We know change is necessary, and we'll be leaning into this in coming months. We look forward to providing an update on that at our interim results in November. Ryman released its External Auditor Independence Policy in December 2023, providing guidance on the appointment and independence of the external auditor. The policy requires the tendering and formal assessment of the external auditor at least every 10 years. The company's current auditor Deloitte has been our auditor since listing on the stock exchange in 1999, a total of 25 years. Deloitte has worked constructively with the company as its auditor since this time. In accordance with the External Auditor Independence Policy, the company carried out a tender process overseen by Ryman's Audit, Finance and Risk Committee. Following a careful review and consideration of the responses, the committee has recommended to the Board that PwC Auckland was the most suitable appointment as the external auditor for the current financial year and looking ahead. The Board agreed with the recommendation of that committee and seeks approval today from you, our shareholders, for the appointment of PwC Auckland as auditor for the financial year commencing 1 April 2024. The decision to recommend a change of auditor in no way reflects the performance of Deloitte, or the services that they have provided to Ryman. We'd like to thank Deloitte for the services that I've given the company during their 25-year tenure as our auditor. Throughout the year, Ryman continued to advocate for change to the current aged care funding models in both New Zealand and Australia. As the aging population expands and age longevity increases, more older people are occupying hospital beds and require care, putting huge pressure on health care systems around the world. As highlighted in the first phase of a Te Whata Ora Health New Zealand commissioned review, the sector in New Zealand that's facing unprecedented challenges and financial pressures, leading to care bed closures by some operators and limited newbuilds despite growing demand. Despite this independent review in their hands, Te Whata Ora, with limited consultation, has provided only a 3.2% increase in funding for the whole sector for the current year, and said that they will provide financial support to weaker operators on a case-by-case basis. We at Ryman don't believe that is the right answer for aged care in New Zealand. We question what measure of sustainability, let alone incentive to grow with new beds, does that provide the broader sector which has some 37,000 care beds, 2/3 of which are actually in charitable and private hands. We need governments to acknowledge the crucial role that retirement living sector has to play in meeting the housing and health needs of the growing number of older people in both countries. We believe the government needs to change the funding mechanism rather than tinkering at the edges. At Ryman, we believe that New Zealanders deserve to have a choice in the products and services they receive as they age. If it's not fixed, aged care will inevitably become a broader health care issue. Instead of paying, the government paying $250 a night to aged care providers, Te Whata Ora will be paying $1,400 a night for a public hospital bed and blocking those beds from the general public. We're optimistic that the new coalition government will see the bigger picture here and create positive change to enable sustainable and equitable access for New Zealanders. In Australia, Ryman has been actively engaging with the government on similar issues. It provided a submission to the aged care task force, which subsequently provided recommendations to the government earlier this year, including support for a co-contribution model. We're hopeful of bipartisan support being reached in current negotiations shortly. The change will be a positive sign for the industry and make investing in new aged care assets in Australia potentially more attractive than in New Zealand. Looking ahead, current economic conditions remain challenging in both New Zealand and Australia, and it's unclear when interest rates will begin to decline and support the improved housing market conditions and liquidity. Incoming residents to a Ryman independent living village in most cases need to sell their home in order to fund an Occupation Right. And as a result, residential market conditions do, in fact, have an impact on the timing and affordability for potential new residents. Most market commentators are expecting tough housing conditions to continue for the balance of calendar 2024. At Ryman, we can do little about these external factors. However, we do need to be focused on improving our own performance. There continues to be demand for living in a Ryman village, as evidenced by strong demand for our independent living opportunities, noting we achieved over 1,500 ORA settlements last financial year, our high care bed occupancy at our existing villages and the growing occupancy at our new care facilities. We are assuming that tough housing market conditions will continue for the balance of our financial year. In my mind, market conditions simply reinforce our need to get fit for the future. Our guidance for the full year remains unchanged from what we disclosed at the full year result: we expect to be cash flow positive; we expect to build between 850 and 900 village retirement units and aged care beds; we expect to spend between $700 million and $820 million on capital expenditure. Your Board is positive about the future of Ryman. We are energized by the need for change and are committed to improving Ryman's financial performance, whilst at the same time maintaining great care and great experience for our residents. Thank you very much for your time. Before we move to general business and your opportunity to ask questions of both the Board and Management, we will now move to the formal meeting resolutions, which are outlined in the Notice of Meeting. Each resolution set out in the notice of meeting is to be considered as an ordinary resolution and, as such, must be approved by a simple majority of the votes cast by shareholders entitled to vote and voting on each resolution. A poll will be held on each of today's resolutions. For those of you here today, you'll be issued a voting card. Please mark your voting intention for each resolution and the voting cards will be collected at the conclusion of the meeting. If you require assistance with this, please see MUFG outside the room. For those of you voting online, you'll need to click Get Voting Card within the online meeting platform. Please mark your electronic voting card in the way you wish to vote by clicking For, Against or Abstain. Once you've made your selection, please click Submit Vote on the bottom of the card to lodge your vote. Please refer to the virtual meeting online portal guide or use the helpline specified if you require assistance. 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 New Zealand Stock Exchange. The outcome of proxy votes received prior to the meeting will be displayed for your information after voting on all the resolutions. There will be an opportunity for shareholders to ask questions on each matter being put to the shareholders. For the sake of good order, shareholder questions raised should relate directly to the matter currently being considered. There will be time at the end to ask general questions. When I call for questions, can shareholders present in the room please wait until a microphone is provided to you and clearly state your name. I'll take questions from those present in the meeting first before moving on to questions from shareholders online. I ask that in the interest of fairness to all shareholders attending this meeting that anyone wishing to ask questions be as concise as possible and be considerate of other shareholders also wishing to ask questions. Turning to Resolution 1. Pursuant to Section 207P(2) of the Companies Act 1993, the Board seeks approval of the shareholders to the appointment of PwC Auckland as the auditor of the company and pursuant to Section 207S of the Companies Act 1993 to authorize the Board to fix the Board's -- the auditor's remuneration for the ensuing year. The Board unanimously supports the appointment of PwC Auckland as the external auditor. Are there any questions of the Board concerning the resolution from shareholders in the room. Are there any questions online?

There are no questions online.

Thank you. I now propose that PwC Auckland is appointed as auditor of the company and the Board is authorized to fix the auditor's remuneration for the year. 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]

Turning to Resolution 2. Under the NZX Listing Rule 2.7.1, a director appointed by the Board must not hold that office without reelection past the next Annual General Meeting following the director's appointment. Kate Munnings was appointed as a Non-Executive Director by the Board with effect from the 1st of November 2023. Kate accordingly retires and offers herself for reelection today. Kate is considered by the Board to be independent. The Board unanimously supports the reelection of Kate. She will now introduce herself. Thank you, Kate.

Thank you, Dean, and good morning, everyone. My name is Kate Munnings. And as you've heard, I joined the Ryman Board in November 2023. And today, I seek your support for my reelection. Ryman Healthcare is an iconic company, and I am honored to have the opportunity to serve you on the company's Board. Thank you for the opportunity to share what I hope to bring to the Ryman Board and to the wider Ryman family. My career has been quite diverse, and I think it marries nicely with the needs of Ryman at this stage of the company's history. I started my career many, many years ago as an assistant in nursing, working in aged care. I generally worked night duty because I was training to be an RN. So I spent many nights talking with residents about their lives and experiences as well as providing residents and their families with nursing care and support. So I bring to Ryman frontline experience in caring for residents, and I have a deep understanding of how important that responsibility is for a company like Ryman. I then became a registered nurse and specialized in HIV and AIDS nursing. AIDS patients in the '80s were ostracized and isolated, often for reasons that had nothing to do with their disease. That experience led me to study law and I left one of the most loved professions and joined one of the least loved when I became a solicitor in the 1990s. I spent 12 years in private legal practice, specializing in construction law, and I progressed to partner in -- and had a leadership role in the international law firm Baker McKenzie. I spent those years in private practice, solving complex legal and commercial problems for my client. So I bring to Ryman an understanding of legal issues in the property and construction sector as well as experience in solving complex legal problems. I then left private practice and spent 8 years at ASX-listed company Transfield Services as their Chief Risk & Legal Officer and Company Secretary. There, I did extensive international M&A work, corporate governance advisory work across Australia, New Zealand, the U.S., Canada, Chile and the United Emirates. This was a dramatic change, as in that role, I was a corporate lawyer, advising an ASX-listed Board on their responsibilities as directors, developing an enterprise risk management program and running large international acquisitions. So I bring to Ryman an understanding of corporate law, risk management and corporate governance. When I eventually moved into an operations role, I was responsible for Transfield Services' construction, logistics and consulting businesses across Australia and New Zealand. This included providing facilities management services in complex environments such as social housing, schools and defense spaces. My business unit was also responsible for rolling out the NBN across Australia and the fiber rollout for Enable here in Christchurch. So I bring to Ryman operational experience in running facilities management and logistics businesses in sensitive environments as well as running a construction business, which included a large infrastructure project here in Christchurch. After 23 years of working outside of health care, I returned to the sector about 10 years ago. Since then, I've been running large health care organizations, first as Chief Operating Officer at Ramsay Health Care and then as Chief Executive Officer at Virtus Health Care. So I bring to Ryman operational and leadership experience in running complex health services, where I was required to balance the need to provide exceptional patient care with sustainable commercial performance. Importantly, I've also led a number of transformation programs. They include a significant transformation program across Ramsay's hospital network where I was responsible for 73 private and public hospitals; another program across 46 assisted reproduction technology clinics that spanned 5 countries at Virtus; and I also guided a transformation program from a Board role across 8 hospitals and multiple primary health networks at South East Sydney Local Health District. So I bring to Ryman experience in delivering transformation programs in large complex health care environments. My experience also includes delivering impact from a governance role. I was previously the Director of South East Sydney Local Health District and Ramsay Hospital Research Foundation. I currently chair the Digital Health CRC and have recently been appointed to the Board of Wesfarmers Limited, an iconic Australian company with operations across Australia and New Zealand. So I bring to Ryman governance experience as a Director of large and complex organizations. I commit to you that I will bring all that I've learned in my career to the Ryman Board. I will help to support and guide the Ryman team and I'll work extremely hard to ensure that Ryman delivers on its ambition and promise of providing exceptional care to residents and exceptional return to shareholders. Thank you.

Thank you, Kate. Are there any questions for Kate or the Board concerning this resolution from shareholders in the room? Are there any questions online?

There are no questions online.

I now propose that Kate Munnings be reelected a director of the company. Thank you. 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 turning to Resolution 3. Under NZX Listing Rule 2.7.1, a director appointed by the Board must not hold office without reelection past the next annual meeting following the director's appointment. David Pitman was appointed as a nonexecutive director by the Board with effect from the 1st of May this year. David accordingly retires and offers himself for reelection at the 2024 Annual Meeting today. David is considered by the Board to be independent. The Board unanimously supports the reelection of David. David, he will introduce himself now. Thank you, David.

Thank you, Dean. Good morning. My name is David Pitman. And as you've heard Dean mentioned, I joined the Ryman Board on the 1st of May 2024. And today, I seek your support for reelection. As this is my first time before you, it seems appropriate to give you a sense of my background. I've accumulated 40 years of experience in general, operational and financial management, strategy development and M&A in executive and consulting roles. My undergraduate training was at the University of Sydney, where I earned a Bachelor of Aeronautical Engineering, with honors, which led to a 9-year career in the aviation sector, holding commercial management roles in Sydney and Los Angeles with the responsibilities for aircraft maintenance and product support businesses. Wishing to broaden my career, I undertook an MBA at the University of New South Wales, from which I was chosen to attend the Wharton School in Philadelphia on exchange. Upon completing my MBA degree, I joined the Boston Consulting Group, where I remained for 12 years advising on a diverse range of issues from competitive strategy through to transformation across many industrial sectors, including financial services, industrial goods, airlines, forestry and consumer products. I served clients in Australia and New Zealand and also in the U.S.A., being based in Los Angeles again for a period of time. I became a partner of the global firm in 2003 and, having developed some expertise in shareholder value management, I was chosen to lead the Corporate Finance and Strategy practice in the Asia Pacific region. In 2007, I transitioned to Stockland Corporation as Executive General Manager of Strategy and Corporate Development, later assuming the role of CEO of Stockland's Retirement Living division. In that role, I led a transformation of the retirement business, growing the portfolio from 24 Melbourne-focused villages to a national network of 62 villages through a combination of organic development and acquisition. Cash profitability was restored and grown in both established operations and in new village development. The culture of the organization became more performance-oriented while retaining high levels of resident satisfaction and employee engagement, outperforming the relevant external benchmarks. I also drank a lot of cups of tea. After more than 6 years at Stockland, I have returned to BCG as a partner again, this time in Boston, Massachusetts, as Global Finance Director, overseeing the firm's finance operations, accounting and control across 50 countries. I subsequently reallocated back to Sydney in 2018 with my family, assuming a senior adviser role of BCG before moving into private consulting. I'm excited to have the opportunity to be involved with Ryman, a business which has earned a reputation for outstanding resident care and high-quality villages. The business is now undergoing a transformation. And as one of your representatives on the Board, I can say I am personally committed to seeing that we maintain our record of great care while driving a material improvement in shareholder value. If elected today, I look forward to leveraging my experience in finance, strategy, property and retirement living to help achieve that goal. I would appreciate your support to be reelected as a director of Ryman. Thank you.

Thank you, David. Are there any questions for David or the Board concerning this resolution from shareholders in the room? Are there any questions online?

There are no questions online.

I now propose that David Pitman be reelected a director of the company. Please mark your voting cards in the way you wish to vote by ticking For, Against or Abstain in the appropriate place on the card. [Voting]

I'm sure you'll join me in being delighted that we've been able to attract new directors of the quality of Kate and David and we're delighted have settled in very well to the Board as you would hope.

I would now like to give shareholders opportunity to ask questions, whether related to the presentations, the financial statements or the management of the company. We will do our very best to answer these. Shareholders online can continue to provide questions through the portal, and we will also address questions from the room. If you're asking a question from the floor, please state your name, whether you are a shareholder or for a proxy holder, the name of the shareholder that you represent. Please wait until we bring a microphone to you so that the people in the room as well as online can clearly hear you. Do we have any questions in the room?

Good morning. [ Malcolm Payne ]. I'm speaking on behalf of my wife, [ Adie ], who is right here. The first thing is that we've heard nothing about the Park Terrace property. I don't think there was anything in the Annual Report. I'm wondering if you could tell me what the plans are for that. And secondly, I wonder whether Ryman's fixed fee -- weekly fees policy is the right one because Summerset, who seemed to have stolen a notch on Ryman's, do not have a fixed fees policy and increase their weekly fees each month -- each year. Those are my questions.

All right. Thank you for your questions. On Park Terrace, we have no immediate plans for that. It's a development that we would like to do at some stage. In terms of our financial capability, we have our hands full with 10 on the go at the moment. As I look back and some of the trouble that we got ourselves into is having too much on our plate. When the music got challenging through COVID, we had over 14 live developments, and that really stretched our capability. So I think we just have to have that capital discipline to get done what we have inflight. We have lot of these we've committed to existing residents that they're ready. We haven't finished the main buildings. We need to get that done and deliver on our promise. And then we need to look at what's going to come next. And that Park Terrace will definitely be part of that review. We're committed to Christchurch. We've got a lot of villages in Christchurch: Kevin Hickman underway, Northwood underway. I'm sure we'll get to that at some stage. But yes, we'd all love that to be done. It's a little bit of an eyesore on the side of the river there. But yes, I think we just have to be disciplined in the current position. In terms of your comment on fixed versus indexing, that's currently under our review. Certainly, fixing has been part of the Ryman way and residents value that. But at the same time, it's proven to be very expensive because, as you all know, probably if you're in private residence, your rights bill has gone through the roof, your insurance bill has gone through the roof, getting a plumber probably cost twice what it used to. So those just have become expensive, and we didn't anticipate when we set the fee in 2016 or 2017, and that's fixed for life. So that's certainly been quite a financial drag on us. So we're steering at that now, and we may well offer a choice, I think, but it's under consideration. It's a good point. Other questions in the room? There's a couple there. This lady here, in pink, has put her hand up twice.

[ Monica Cheng ]. I'm a shareholder. I have 2 questions. One is, on the slide, there was an indicator for net asset per share at $6 and the formula is a bit strange. It has used -- equity usually is residual, right, after the asset deduct the liability, right? It sounds a bit boring my question is. But in the small letter, it says it deducted intangible asset and then tax asset, and it comes to $6, I think. That's a bit strange compared to current share price.

Yes.

Okay. There was another one.

Sorry. Shall I answer it, would you like?

Could I ask both questions first? I might forget it straight away.

Of course. Sure. One of us are going to forge it straight away.

There's another one. I understand the company has gone -- went through a lot of change. So it says it's getting fit for the future. But from the whole presentation, I failed to see what competitive landscape is like in both New Zealand and Australia because I would love to see more on that because we are buying the share for the future, right? And also a little bit benchmarking how we are doing because we're seeing what the company thinks, but I think will be objective to see some external forces and players' situation.

Sure. Thank you. Yes. So in terms of the NTA, it's a relatively traditional measure. So for us, it's our shareholders' equity. And then that will be a net asset backing, but then to be a tangible asset backing, we deduct 2 things. We deduct our intangibles, which is primarily our computing systems that we've invested in, but also our deferred tax asset. So those 2 things, under most accounting definitions, get deducted from an NTA. So without those deductions, it's about $6.60. With those deductions, it's about $6.01. Let's put that to one side. We have traditionally traded at a premium to those numbers. We've traded at a premium to our shareholders' funds. And over the last 4 years, it's steadily detracted down such that we're now trading, today, roughly $4.50. So that's about 0.7 of that number. I think at our peak, we might be 3x that. So the whole sector has come down, but no more so than Ryman. And I think in part, that is because we've really being challenged by our new developments, and we've taken on a lot more debt. And I think that toured our equity. So we're very conscious of that desire to trade that back up. And ideally, over time, can we get back to a premium? Time will tell. But certainly, that's a reasonable ambition to be trading back in our share price, at least equivalent to what our equity is worth. That's the first point. On the second point, we look a lot internally at our competitive position relative to what other people are doing. We didn't present it today. I thought half an hour listening to me was probably going to be enough. But rest assured, we are very external in our perspectives as well because you can become quite insular. But no, we certainly look at what our main competitors in New Zealand do. I think probably 20 years, there are very few competitors who look out there today. You just have to watch the news, there's an advert for Arvida before or other people's villages. So we're very conscious that we need to be very aware of what competitors do and that potential reasons have choice. So we need to make sure we continue to have great care, great resident experience and our commercials are also competitive. And we do a similar thing in Australia as well. So maybe next time, we'll present some of that. But certainly, internally, we look at that a lot. Next question. Some more -- some questions down here or there's one you're walking past.

My name is [ Malene Rowan ], and I'm a shareholder. In relation to the fixed fees and you alluded to the fact that the Board is presently looking at those for existing residents, they have signed a legal agreement, therefore, their fixed fee couldn't be altered. Could it?

Correct. Yes. If I wasn't clear, that's totally confirmed. That will be for a future resident. It's fixed for life.

And so you did say, in the future, if you do decide to change the weekly fixed fee, would that mean that people have a choice to have the fixed fee or to have the annual fee reviewed?

Yes, we haven't landed on that decision at the moment. But just to be very, very clear, those contracts are sacrosanct. We will not change an existing resident at all. It will be the resident who starts, for example, tomorrow, he has the contractual terms that we will propose, and that will have a fixed fee element in it. That's been part of the Ryman way. The consideration we should also have a choice where people can have a fee that goes up over time at the pension or whatever rate that happens to be. We haven't made that decision, but we fully expect we will continue to have a fixed fee alternative. There's a gentleman up there that we've walked past a couple of times. We've got plenty of time, we'll get through the questions.

[ Allen McNorton ]. You mentioned the cost overruns, and I've got 2 questions, one about difficult sites. And I thought if I was buying a site, you would look at what was wrong with it, what was needed to be done to that site before you've actually made an offer to buy it. The second question is you talked about making changes to the buildings. With the amount of buildings Ryman has done, I find it strange how you have to go back and make major changes to the buildings you're actually going to complete when you've got a lot of experience in doing others.

Sure. Two good questions and certainly ones the Board's asked as well. So in terms of the complex sites, some of those have been -- we've known those, for example, something like Murray Halberg, that's quite a steep site. And so we basically walk to another steep site, so it was always going to be a steep site. So that probably proved more challenging to build on them what we thought. We, for example, in the land bank at Takapuna, we did due diligence on there. It ended up that it had more poor ground conditions than what we thought even despite our due diligence. So that was disappointing. So we've had to remediate. Chemicals are found in the ground there, and we're largely done with that. So that's in a couple of situations where the ground has been with that. So that's in a couple of situations where the ground has been more challenging than what we had originally hoped. In terms of challenges to building, it's not really a cookie cutter approach. So every village is slightly different in terms of scale and mix and location. And sometimes, we've decided to change from potentially so and so. These things when we buy a piece of land, get it consented, start building, the competitive dynamic can sometimes change, the market dynamic can sometimes change and sometimes it makes sense to change what we're building at the time. But that's an expense, and we consider that at the time. So most of those things are in response to something that we're seeing either around. When you make those changes inflight, they're not cheap options. So plenty of lessons learned on the last 16. Next question, please. Down here, I think there's a couple.

Around 2018, the shares were $16. Now they're -- I knew that's the target, at all, for share price recovery.

Sure. Look, it's a very dangerous place for a Board to go. I think ultimately, what we can be accountable for is the financial performance of the organization. And that's what we have to be very focused on. And ultimately, the share -- people will value the shares as they value them. And I think -- in my experience over time, very dangerous when Boards start having share price targets or share price expectation or this is how you should value it. Ultimately, that's up to investors and analysts. So we need to be very focused on improving our financial performance. And over time, that's highly correlated with improved share price, so we expect that we're getting that direction right, ultimately, the share price should follow up. Where it ends up will be your decision, not mine at the end of the day.

Sure. Second question, you mentioned one of the key things was to increase the cash flow of existing buildings. Have you got any specific details on that? Or is that still being reviewed?

No that's -- it's under review. And I think it's going to be an opportunity to look at -- we've got a lot of assets sitting in there that kind of valued at $10 billion in our balance sheet. And we need to improve the financial returns on those. Partly, the fixed fee has hurt us as we've honored that over time, and we'll continue to honor it. I think no one expected to see rates going up by 15% per annum. And my sense is they're going to continue to go up, my house bill insurance other day went up 15%, and that's the second year in a row they've done that. So I think just those -- they were hard to predict 4 to 5 years ago when you set those and that's gone past. So we need to make sure we don't do that to ourselves again because that would not be very clever. So I think we need to look at that weekly structure. We need to look at the services that we offer, and now we're being paid for those things. But we're very conscious as well that we're not going to lean in and take a whole lot of services out. We're not going to reduce our quality of care. So it's a gentle way through that ultimately. We're very conscious that we need to continue to deliver great care.

So nothing specific then?

Correct. But we are now -- as I said, we are looking at the DMF for new residents. We are looking at the weekly fee for new residents. So they will be quite specific and we expect to come out with a new version of those in coming months. We'll be very specific in a couple of months.

Okay. Just a final quick question. Do any of the directors have put their names down for a Ryman village?

Geoff?

Few years. Few years.

Next question.

My name is Frank Stewart. I'm a shareholder, and I also represent the New Zealand Shareholders' Association. We do a report card on your Annual Report each year. It's reasonably good in terms of how you meet our requirements. But just a quick question. I estimate there's about 90 people in this room, how many people are online?

It's a good question. Do we know that?

There's 281 attendees online.

What's interesting is, as I was talking to the person who's facilitating this, they're saying a few years ago, it used to be 2:1 the other way, twice as many people here as they were online, and that's 3:1. It's incredible, isn't it? But I think the hybrid kind of works quite well. I think the Shareholders' Association, all of them, when we spoke to them, supports that. So I think ultimately, it's something for everybody. And we have no intention of removing our physical, I mean I think it's nice to be able to physically meet our shareholders. And at the same time, some people who can't attend, they're not all living in Christchurch. I think it's a good combination, actually. Next question. [ Joanna ].

[ Joanna Hackman ], shareholder. Just wonder if you can give an indication of how trading has been for the first 4 months of this financial year?

Sure. Yes, it's been quite challenging. I think 2024 is expected to be the great year. When I joined the Board in May last year, New Zealand was in a challenging time. Interest rates were high. But most forecasts were expecting 2024 to be a good year. I think 2024 for the New Zealand economy, not just Ryman, has proved to be more challenging than 2023. I think -- we're seeing unemployment rise. I just got to Wellington recently, 2,000 public servants have been laid off in that town. So that's certainly, if you talk to restaurant owners, I talked to a cab driver, it's quite challenging. So I think 2024 has proved more challenging. You see the external commentators on residential markets. I think there's one this morning that's saying the fifth month in a row that Auckland residential prices have been down. So I think the external settings, Joanna, have been quite challenging. So we're no different into those things. I think we've got stock that we are looking to bring new residents into at the same time as other people have got stock to bring new residents into. We're still occupying. People are still coming in. We're still doing that close to 100 a month. So we're still continuing, the business hasn't stopped, but it's certainly proving harder to get every new resident. People are doing incentive offers, et cetera. So yes, I think year-on-year will be broadly similar to the first quarter of last year. Yes. But we're hopeful of interest rate reductions, and we're hopeful of a buoyant return to residential markets, but that can't come soon enough, but we don't control that, so yes. It's competitive. All right. So any online questions, please?

The first online question is from [ Bruce Rivers ]. The shares have devalued considerably and returns have been zilched. Are management and the team taking measures to rectify the situation.

Returns have been zilched. Look, Bruce as a Board and management, we couldn't agree more. It's -- we do feel for shareholders that's totally unacceptable to have a share price that's done that. You've seen that we've leaned in, made substantial changes not only the Board or management, but also in the way in which we do things. And hopefully, we'll be announcing some changes to those things at the interim result in November. We do need to make progress. So yes, I fully concur it's been disappointing, and we need to look forward and do our best to improve financial performance. And hopefully, the share price follows. But we're here for the long term. We're building 50-year assets. Ryman is a fabulous business. It's having a tough period, but I'm very energized as the chair that we have a positive pass-through and will return to a very good performance.

The next question online is from [ Lynn and Brink Goldsworthy ]. How do you balance the many stakeholders across the business whilst also investing in marketing and sponsorship to attract future residents?

Look, I think that's a good question. I think the first point is like we're 100% focused on our existing residents. They got to be at the heart of everything that we do. Probably since being shareholder, I would have visited nearly 20 of our villages. And it's just every day you go in there, you see just the criticality of that experience in that care that is the Ryman way. So first, a whole focus on the current resident, but we also have to have an eye on the next resident. Because ultimately, we do have people leaving our facilities even just moving through our continuum of care. And the whole economic model works better when the place is full because we're sharing the costs of running the business over more residents. So there is a return for both existing residents and the organization to have that full. So we have to have an eye on the next person and the next person. And so how do we do that? We need to be top of mind. So when everyone is thinking about retirement, they think about Ryman. How do we do that? Ideally, that's -- I think our strongest support is through word of mouth. People have had a great experience, although I know somebody who's had a great experience, and that's our first and foremost. But also we have to have visibility. So that might be on television. That might be at sport, that might be in theater. Thinking about -- when people think retirement, we want them to think Ryman. So it's competitive out there, way more competitive than it was 20 years ago. And so we are balancing the existing residents, but also having an eye on the future. And that's something the Board and management have to balance.

The next question is from [ Valerie Carter ]. Have you sold the Karori site?

No. No signs are going up in the next month, and we're going to run the expressions of interest program and yes, which is disappointing to not be building another site in Wellington. Wellington is short of care beds. We thought we had a site in Karori that would do that. By the time we got through consenting, we had a number of challenges, both in terms of preserving what became a historical building overlay, which we didn't anticipate. The council gave us less density, which is some irony given the lack of care beds in Wellington. And earthquake standards have just continued to increase in Wellington, so the cost to build way, way more than what it was when we built the site. So we can't see a way through that. So we're better to take our money off the table, which is a pity. I was out at our Wellington villages the other day, they're all full. So we'd love to able to build another one, but I think Wellington is making it quite hard to do that.

The next online question is from [ Andrew MacKenzie ]. Has there been any progress around government funding for care beds? If so, what progress?

So I think there's 2 elements to that. There's an annual funding round in New Zealand where Te Whata Ora provided funding to the aged care providers, including ourselves, some 37,000 beds, and they have a rate per day depending on how sick you are that they provide the aged care providers to deliver those services. And they do that annually. And the ACA, which is the Association of Aged Care providers, so we're on that. All the operators are on that. I'm on the Board of that. We told them that we believed the industry had a cost increase of 11%. They've gone and given the industry 3%. Now clearly, there's a long line of people at Te Whata Ora looking for money. And the government's leaned in there in the last week and removed the whole Board, put a commissioner. So there are obviously a lot of internal watching as well at the moment. We're disappointed at 3%. We think the industry deserves more than that. That level of funding struggles to support new builds of care, so the industry is leaning into that. Despite the wave of aging that's happening in the population, if the government continues to fund it like that, people just won't build new care beds. So we think there's the 3 point -- the annual funding round is obviously one element. And the bigger element is the industry is lobbying for a change in the way in which the industry is funded to allow for more co-contribution for people who can pay and can afford to pay should be allowed to pay because at the moment, that's capped within the government scheme. So we think there's an answer there. It's a very similar answer to where the Australian government is going. We think there's a blueprint right in front of them. So we're hopeful that in the next 12 months, we might see some legislative change, but the near-term news on the funding round has been frustrating.

The next question is from Andrew MacKenzie. Arvida is in the process of being sold. Has Ryman had any unsolicited buyout discussions or offers?

No. That was easy.

The next question is from Andrew Mackenzie. The cash flow estimates have not been updated since year-end. Since then, rates are up close to 20% across the country. Has this increase been assumed and budgeted?

P/E rates are like the other rates. So we have offered guidance on free cash flow, which is essentially every bit of cash that comes into the business and everything that goes out of the business. So it's quite a simple metric. And that will be shown and what was our opening debt and what's our closing debt. And we're forecasting that our closing debt will be lower than our starting debt, and we still continue to do so despite the challenging conditions. Any more questions online?

The next question online is from [ John Haylock ]. I've worked in the construction industry, all of my working life, and I'm only too aware of the impact the building industry has on waste. I know where the rest and my mom is at, that recycling battery -- that they are recycling batteries and hearing aids. Does the food waste likely go to a piggery? It seems that everything, from when the unit is renovated, is dumped and skips. Can Ryman look at possibly doing their bit to enable recycling some of what is going to landfill?

No, we're certainly looking at that as part of our sustainability efforts, the construction, both the construction intensity in terms of the amount of materials that we use and the type of materials that we use and then obviously, what happens to material waste, particularly when we do our refurbishments, et cetera. So that is definitely on Board and management's agenda as part of our sustainability effort. Any more questions?

The next question is from a shareholder named [ Sam ]. What preference would Ryman take on building its own ICT systems or utilizing off-the-shelf products for upcoming operations and plans?

Sure. I think ultimately, we have invested a lot in our own internal ICT systems, particularly the myRyman. That's proven to be a relatively expensive route to go. But I think we will always look at the option of buying off the shelf or building our own best of breed. I think the bias we're heading towards, though, is more off the shelf if we can. Any more questions?

The next question is from a shareholder named Sam. Will there be more or less investment into the Australian market by Ryman given the financial prudency of the company? And will the relatively high interest rates in the foreseeable future impact the strategy?

Yes. Look, I think we, as a Board, barring unforeseen incidences in demand, fully expect to finish our 10 land banks that are currently underway. We think that should be the priority for our capital. Where we allocate our next piece of capital is that in New Zealand and in Australia, we have 10 bits of land that are not built on, 5 of those in Australia, 5 of those are in New Zealand. So we do have choice, which is a great position to be in. And we do have those in various places around the country, in New Zealand as well. So again, we have choice. So I think what we'll be doing when we do get back into building new villages rather than the team that we're currently finishing, we will look at what's our total care return, what's the demand in these environments, what's our cost of debt in those environments. So yes, we'll be putting all those factors into where we believe is the best use of capital. And I think it's going to be a critical part of us going forward, that cold capital discipline piece. We need to be very sure when we start a village, we can complete it. And we need to be very sure when we start a village that we can recycle our capital back out of it, and not continue to build bank debt. That just puts a lot of financial strain on the organization, which is not good. So we will be very considered when we build the next village, but we will build future villages. I don't see a future of Ryman not growing. It's an element of where and when because we do have enough land bank now to see us through for at least the next 5 years.

There are no further questions online.

There any more questions in the room. Just one more down here. Oh, they put the microphone away. They thought we were done. No, they're coming down now.

My name is Malene Rowan, and I'm an investor. This doesn't only apply to Ryman's, it applies to all retirement villages, and that's in relation to staffing. If it wasn't for the Asian people especially who have come to work in New Zealand and work in the retirement industry, in my opinion, the retirement industry couldn't operate in New Zealand. I'm sure the Board as well as the rest of us visit people in retirement villages and the person in the village will talk about the staff and how lovely they are if they come from the Philippines or China or wherever they may come from. Has the Board considered staffing in the future and this problem? And are they afraid of the future in relation to staffing? Thank you.

Thank you. I think we've got great staff. And when you see around these villages, that's what slightly frustrates me actually versus the government's approach to what they're considering to fund the aged care, just fabulous what our staff do. And I'm sure that in other villages, they're almost as good, probably not as good. But they genuinely care these people. And that's probably passion and we've got a great variety of people, great backgrounds, great sets of experiences. We had a challenge in COVID when people couldn't move. And there were nursing shortages and caregiver shortages. We've noticed -- we've seen a noticeable change in that, which is great. So we're fully staffed in all of our villages, which is good. And only that continues. So -- in our discussions with the government, they've now opened a new care center at Miriam Carbon in Auckland. We've opened a new care center in James Wattie in Hastings and we're about to open a new care center in Keith Park. And you'll correct me if I'm wrong, [ Shane ], but we've been able to staff those up as we had hoped. So the current conditions are good. But we're very conscious of that. They are critical. Okay. Thank you. We're nearing the end of today's meeting. And looking ahead, 2024 is a significant year for Ryman, marking our 40th anniversary since opening our very first village in New Zealand, our 10-year anniversary since [Audio Gap]. We have an exciting future ahead. Over the next 30 years, New Zealand's population of seniors age 65-plus will grow from 850,000 to 1.5 million people. In Australia, it's projected that older people will make up 23% of the total population. We have an industry-leading reputation in retirement living and care. We have scale, with 48 operating villages across New Zealand and Victoria. We have over 14,500 residents and a high satisfaction rating of their experience living at a Ryman village. As importantly, we have a strong sense of purpose amongst our [Audio Gap]. We need to make the changes now so that when conditions improve, we are much fitter and much better place to capitalize. Before I close, I would like to acknowledge and thank our people and our teams. You make our culture unique and an integral part to the success. So very special thanks to you, our shareholders. It's been a tough couple of years. We're grateful for your ongoing support and your confidence in our capacity to deliver in the future. We'll be doing our very best. I would like to thank my fellow directors who are now [Audio Gap]. We know we need to improve profitability of our operations and efficiency of our new villages. We are very focused on getting Ryman fit for the future. Now I'd like to invite you all to join us for refreshments and an opportunity to catch up. We have our senior leadership team here, and so please take [Audio Gap] representatives on your way up. Thank you again very much for your attendance today and look forward to catching up over a cup of tea. Thank you.