Service Stream Limited (SSM) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. My name is Brett Gallagher. And as the Chairman of Service Stream Limited, it's my great pleasure to welcome you to our Annual General Meeting for 2025 and also the first meeting we've had here at our home base. So welcome to Service Stream to those that haven't been here before. Before we commence today, I'd also like to acknowledge the traditional owners of the lands of which we met today, the Wurundjeri people from the Kulin Nation and pay my respects to their elders past and present. Under Service Stream's constitution, a quorum is required for this meeting. I've been advised that a quorum is present, and therefore, I'm able to declare the meeting open. A significant number of shareholders have already voted, appointed proxies and submitted questions ahead of the meeting today, and we thank them for doing so. Prior to the formal aspects of the meeting, I'll take the opportunity to make some general remarks on the 2025 financial year. Following my remarks, our Managing Director, Leigh MacKender, will provide some further insights into the performance of the company and the outlook. My address and Leigh's address were released on the ASX earlier today. After our Managing Director's presentation, I'll move to the formal aspects of the meeting and respond to questions that are raised both in the room or questions that were received prior. Let me start today by introducing our Board who are all present with us today. First is our Managing Director, Leigh MacKender, on the table to my right here. Martin Monro on the left. Martin is our Non-Executive -- Independent Non-Executive Director and Chair of our Remuneration Committee, and I note is up for election or reelection today. Next to Martin, we have Sylvia Wiggins, our Independent Non-Executive Director and also Chair of our Audit and Risk Committee. Next to Sylvia, we have Liz Ward, Independent Non-Executive Director and Chair of our Health, Safety and Environment Committee. And welcome to our newest Director, [Brent Jennison], on the end there, who joins us for the first time and is also up for election today. Welcome, Brent. As always, Linda Kow, our Chief Financial Officer, sitting here next to Lee, available to answer all the [indiscernible] questions that I can't. And also representing our audit today, PricewaterhouseCoopers, we have Andrew Cronin, who's in the second row there. Also, as is always the custom, our senior executive team have flown in from all over the country. So thank you, team, for that, and welcome they're all in the front row here. I'll now quickly go through the voting and question process before we get going. By joining our annual meeting today, you as a Service Stream Limited shareholder or your appointed proxy will have the opportunity to ask questions and submit votes if you haven't already done so. Voting today will be conducted via a poll on all items of business, and Computershare will act as our independent returning officer. For shareholders, proxies and corporate representatives in person, I'll ask you to vote once we've gone through all items of business today by completing the blue voting card that was provided to you on vision. White cards are for visitors only who cannot vote or ask questions. Shareholders with the yellow card are not entitled to vote on any items of business. I'll provide a warning before I close the voting at the end of the meeting. Questions. Thank you for those shareholders who have submitted questions in advance of our meeting today. I'll respond to those questions during the meeting. We also ask some questions in the room. We ask that they are concise, be confined to the particular item being discussed and matters relevant to shareholders as a whole, be informative and concise. Given this is a physical meeting, I'll first take questions from those present in the meeting and then finally, any written questions received. If you are attending in person, only shareholders, validly appointed proxies, corporate representatives who are given a blue or yellow voting card upon entry are entitled to ask questions. When I call for questions, please raise your blue or yellow card, state your name or the organization that you are representing before asking your question. Okay. That's the housekeeping out of the way. So I might just now open with a few remarks from the Chair from the last financial year. Fellow shareholders, the financial year 2025 has marked a period of exceptional achievement for Service Stream. We secured a record value of work in hand, made significant long-term investments and exceeded our targeted financial performance metrics for the year, delivering exceptionally strong returns to shareholders. This has all been achieved by maintaining a disciplined approach to our group strategy and underpinned by the ongoing support of our customers, shareholders and dedicated workforce. Now in its third year, the company's strategy is built upon the strategic pillars, delivery, optimization and growth. This year, shareholders have continued to realize the benefits of our successful optimization program, strategic investments in new business opportunities and our people and our systems and our transition away from the uncertainty of large fixed price lump sum contracts. With a strong balance sheet, a healthy cash flow and significant portfolio of work in hand, Service Stream is well positioned for further growth and value creation for our shareholders in FY '26 and beyond. Our exciting announcement recently of the award of a $1.6 billion base services contract with the Department of Defense is transformational for our company. This has taken a number of years of strategic investment, commitment and dedication by our team and now opens up an important new vertical for the company with ongoing growth opportunities. The contract initially spanning 6 years with a possibility of extending to 10 demonstrates the Department of Defense's confidence in Service Stream and reinforces our reputation as a trusted long-term delivery partner to government. The scale and scope of this agreement is in perfect alignment with the group strategy and the breadth of our capability. In FY '25, the company has adopted the human organizational performance framework, HOP, to improve our levels of safety performance. HOP recognizes that safety is one of the many emerging outcomes from work, emphasizing a shift from viewing people as problems to be managed towards seeing human errors as an opportunity for learning and improvement. This approach complements initiatives such as safety leadership workshops, the walk, talk, lead and care safety model and our critical controls program. Over the year, health and safety remained a primary focus of the Board and management, evidenced by a 42% reduction in high potential incidents and further additional investment in our safety leadership model. In FY '26, the Board will continue to support management in pursuing further gains in our safety performance. Delivery in FY '25, Service Stream completed over 55 million service visits nationwide. This is a testament to our reputation for delivering quality services safely and reliably. Our results also reflect growing customer investment in our sectors and the business's ability to deliver synergies across our operating corporate services divisions. The business is strongly positioned for further operational growth and revenue diversification in the future. Strategic priorities for FY '26 include the diversification of our revenue and customer base, the optimization of our ERP systems further embedding the HOP principles and tools within our safety framework. Our people are the core of Service Stream's success and their dedication to quality, safety and customer satisfaction is our focus. Through a profitable growth mindset and targeted investment in workforce development, we've expanded our employee base. With a contracted pipeline of in excess of $9 billion of work in hand across our blue-chip client bases, we can offer certainty, continuity and opportunity to our workforce. We continue to invest in sustainable practices to support growth of our business, people and our community. A sustainable business, however, is built on profitability and providing sustainable returns to our shareholders. During FY '25, on the back of improved results, it was pleasing to see Service Stream share price increased more than 55% and our total franked dividend of $0.055 per share being 22% increase on FY '24. The Board remains committed to the consistent dividend policy aligned with profitability while ensuring prudent capital management in support of both operational delivery and the execution of our strategic plan. On a personal note, to all shareholders, customers, employees and contractors, I extend my sincere thanks for your ongoing support, loyalty and commitment. I'd also like to thank my fellow Board members for their valuable contribution throughout the year. Their dedication to continuing the growth and success of the company is considerable and greatly appreciated. I note that Martin is seeking reelection today, Martin Monro. Martin is a valuable contributor of the Board and an excellent Chair of our Remuneration and Nomination Committee. His continued service is unanimously endorsed by the Board today. Additionally, I'm delighted to welcome Brent Dennison, who joined the Service Stream Board in March this year as a Nonexecutive Director. Brent brings a considerable expertise in operations, finance and strategic planning gained across a diverse range of industries, both in Australia and overseas, skills that will be advantageous to the business as it enters its next growth phase. The Board unanimously supports Brent's election today. Finally, on behalf of the Board, I'd also like to thank our Managing Director, Leigh MacKender, his executive team and all of our valued staff for their hard work and commitment throughout the year. It's been such a successful year for us. I personally look forward to the next exciting growth chapter for Service Stream as we build on our reputation as a leading provider of essential network services in Australia. Thank you. I'll now hand over to Leigh to provide a bit more detail of FY '25 and a glimpse into FY '26. Thanks, Leigh.

Thank you very much, Chairman. Good morning, ladies and gentlemen. I too wish to warmly welcome everyone, and thank you for joining us at our AGM today. It's my pleasure to provide an update on the business's performance, particularly after what I think reflects such a strong and successful year for Service Stream. Today's content largely reflects a bridged version of that, which was uploaded at the full year on the 20th of August. I have made some additions to cover aspects of our defense operations as well as a trading update and group outlook. At the conclusion of the presentation, I'll welcome questions from anyone in the room on the content or more broader operations. Okay. From the outset, in line with the Chairman's comments, we're obviously very pleased with the performance throughout FY '25. The year reflected one in which we've worked diligently against our strategy to deliver improved and sustainable results for our shareholders. The results were headlined by another period of improved financial performance with double-digit increases delivered across both earnings and profit, coupled with exceptional operating cash flows. The results further strengthened the group's balance sheet, and we delivered improved returns for our shareholders. Delving into the numbers, we see revenue for the group was $2.42 billion, favorable to the prior year by 1.2%. Whilst that is a smaller increase than what we've seen over the preceding couple of years, we do note that in this year, the business was just cycling off a major upgrade program with a telecommunications provider, and we're also cycling out of some low-margin and loss-making contracts from our utility operations. More importantly, however, than revenue, earnings with EBITDA -- underlying EBITDA of $146.1 million, that reflected a 13.1% increase on the prior corresponding period. Further down the P&L, our net profit after tax and amortization, NPATA of $68.5 million reflected an increase of $36.7 million -- 36.7% rather on the prior period. And a positive attribute to our group's operations and our contracts we've discussed many times is the strong cash flow generation that the business is able to generate. And we're really pleased to report an OCF bit of $148.9 million was achieved over the full year, and that resulted in an EBITDA to OCF conversion rate of 104%. Those high cash flow supported a further strengthening of the group's balance sheet with a net cash position closing at $73.6 million. That reflected an improvement of $65 million on the prior period and $18.2 million from the period just preceding ending 31 December. On the back of those results, as per the Chairman's comments, the Board were pleased to increase the group's fully franked dividend, $0.03 per share paid in the final dividend. That took full year dividends for FY '25 to $0.055 per share. I've often talked about an important focus area for services business is not only the retention of existing contracts as they reach their natural term, but also in parallel being able to secure new growth opportunities. And again, as per the Chairman's comments, the business had one of the most successful years in its history with regards to both winning work and securing new growth opportunities. The business secured $4.2 billion of contracted works over the last 12 months. We increased our work in hand to be $7.6 billion at the end of FY '25, and that reflected a growth rate of 40% on the prior corresponding period. The success in these areas has significantly enhanced the group's work in hand. And I think it's also important to note that on the back of that record level, it reflects a higher quality of work with our order book largely now consisting of longer-term operations and maintenance or annuity style works. A major priority and highlight over FY '25 was to drive further improvements across our utility operations with respect to both earnings and profit. We're very pleased to have delivered across both of these areas over the course of the year. EBITDA increasing by 29.6% to reflect $44.5 million for the year. And EBITDA margins moved up 100 basis points from 3.5% to 4.5% Importantly, the business still has further works to deliver in this space, pressure, David. We have a clear plan. We are working diligently through a range of initiatives, and we are confident that we will make further strides in improving that margin and delivering that 5 handle across FY '26 period that we've previously discussed and committed to. The improvements across the Utilities division, alongside similar improvements across our Telecommunications and Transport segments with respect to their margins, assisted in lifting the overall group EBITDA margin of 6%, which reflected a 60 basis point improvement on the prior year. As I've stated many times, the health and safety of our workforce, our clients and the community with whom we engage with is our absolute #1 priority across Service Stream. It's not a slogan. It's a deep commitment that myself, the Board, the executive and all who work in Service Stream share, and it really underpins how we approach and manage our operations day-to-day. We're very conscious of the 55 million property visits that are undertaken by 5,200 staff and a network of specialist contractors that now exceed 17,000 operating across the country. Over the course of the year, really proud and pleased to see further substantial improvements made across our safety performance. We saw a 24% reduction in total recordable injury rates. We saw a 28% reduction in lost time injury rates and a 42% reduction in high potential industry rates. And these were substantial reductions of what were already industry-leading safety figures. As we move forward, we are still looking to drive further improvements. Our main focus is on higher risk activities and ensuring that those critical controls that will keep our workforce and the community and our clients safe are adhered to across all of our operations. I spoke at the onset of the presentation about the importance of the business, resecuring contracts as they proceed to market at the end of their natural term and also securing profitable new growth. During the year, it was really pleasing to see the business secure a number of significant agreements. Some referenced here, but this is certainly by no means an exhaustive list. There's a couple of points I would point out, though, which reflect those one, Certainly, firstly, I think, is the quality of the client base here. SA Water, Urban Utilities, NBN, Telstra, AGL, Optus, TPG, a Tier 1 client base. The business continues to maintain a strong renewal rate. We achieved a 98% renewal rate across our contracted works that went up to market over the last 12 months. As I said earlier, $4.2 billion was secured over the year. That increased work in hand to $7.6 billion, and that is only reflective of the initial term in our agreements. And important to note, many, if not most of our agreements have an extension option that our clients generally look to fully execute. If we cater to that extension period, that equates to another $5.2 billion, taking work in hand as we sit here at the end of FY '25 to $12.6 billion of future works. And that's before we think about adding in defense and other work that we secured in '26. So we enter FY '26 and years beyond in a position of strength. And whilst those contracts were secured in '25, it was with absolute pleasure and pride that the business was successful and able to announce in mid-September that we have been awarded a major and material contract with the Department of Defense. The property and asset services that we are delivering are associated with the management and maintenance of hard assets across the Department of Defense infrastructure. And it covers 4 basic areas: the assets and infrastructure associated with aerodrome operations, the state upkeep, which is your facilities and buildings, land management and the training area and range management services. The contract marked the culmination of 4 years of strategy, which has all assisted in positioning Service Stream as a credible sovereign provider and long-term partner to the Department of Defense. The contract started mobilization in September. That mobilization program will run through to go-live, which currently is scheduled for 1 February. Over that period, we will engage circa 600 FTE, a large portion of which will be employees and complemented by some specialist subcontractors. The contract in its first full 12 months, so FY '27 is expected to generate about $240 million in revenue, and we've guided the market to expect mid-single-digit returns in terms of its initial EBITDA. And of course, the opportunity to grow and expand further with capital works, building upgrades, et cetera, exists over and above that headline value. Over the course of FY '25, we've seen further substantial improvements to the mix of work that's delivered across the group. And I'd just point out a couple of aspects, which I think are notable. Firstly is that 66% of the work that delivered by Service Stream now reflects operations and maintenance, that lower risk annuity style often long-dated contract works. That's complemented by 30%, what we categorize as minor capital works. These are small value, short-term, short-duration projects. And I think that's an appropriate balance for us, providing us with access to our client's capital expenditure programs. And if we look at the commercial models that we delivered under or underpinning those agreements, 94% of our work now is referenced under these lower risk schedule of rates or cost reimbursable/alliancestyle works with only 6% associated with fixed price operations. If we drill further into that, we're seeing extended term. Over the last 10 to 15 years of my time, the average contract term was previously 3 years. We are now seeing that expand out. 5 years would now reflect the average contract term with many going out to twice that period. Service Stream's average contract tenure is 17 years. And in fact, we have a number of agreements, which we are proud to have seen extended into the 30th year. So even though our clients have to test the market every 3 to 5 years, our business has a fantastic track record at being able to resecure that work on the back of delivery and the results, the relationship that we are able to foster with our clients. And if we finally think about the breakdown of that work, about 2/3 of that is delivered for government, federal and state and 1/3 with Tier 1 industrial clients, asset owners and network operators. At the start of FY '23 and as the Chairman referenced, we refreshed the corporate strategy for Service Stream to support our vision of becoming the leading essential network services provider and with the intent of unlocking and creating shareholder value. Three pillars underpin that strategy, delivery, optimization and growth. Delivery focuses on superior performance outcomes, strong delivery and maintaining strong relationships with our clients. Optimization focuses on a range of initiatives to look to improve, simplify and enhance the business delivery model and growth looks at profitable growth, both organic and complemented by potential M&A. Over this period, we've successfully delivered incremental improvements to our financial results and significantly strengthened the balance sheet. We've expanded our group capabilities and now expanded into new markets. We've delivered positive changes to the group's contracted revenue profile, and we've delivered enhanced returns for our shareholders. If we look at some of those outcomes specifically delivered over the last 3 years, you see revenue growth, compounding revenue growth was 15.7%, organically growing from $1.5 billion to $2.4 billion that we reported in FY '24 -- FY '25, sorry. EBITDA from operations, 17% compounding growth rate year-on-year from $91 million in FY '22 to $146 million reported at the last full year. And generating enhanced and sustainable returns for our shareholders is ultimately the key principle and focus of our strategy, and we're really proud to have delivered a 28% compounding growth rate in earnings per share and total shareholder returns of 186% over that period. So finally, in terms of trading outlook and update, I'm really pleased to confirm that, that strong momentum generated throughout FY '25 is carrying through to '26. Group performance during the first quarter of this year has been positive and reflects a solid start to the financial year. We expect the business to return to what has been a traditional second half bias as the expansion and growth of operations continues to come month-on-month. We are confident that the further improvements in our Utility division margins will be evident and reported across the year. And our new defense contract will support future incremental growth. But as per my comments, that won't contribute to earnings in '26 given the mobilization time frame, that will be an FY '27 element. I think before I open for questions, whilst the business reflects, I think, an improved and strong position, we still have much to do to drive further improvements and capitalize on the growth opportunities that exist across each of our markets. I certainly believe despite these positive results or with these positive results, the best days and stronger results are still ahead for Service Stream. That concludes my presentation. If I can say, it's an incredible pleasure to serve as Managing Director of this fantastic business. I would like to take this opportunity to sincerely and personally thank our Chairman, Brett Gallagher, for his steadfast support, extend that thanks to our entire Board of Directors for their support and guidance over the last year. And on behalf of the Board, I too would like to acknowledge the fantastic work of our executive team and our staff working right across the country, which have all contributed to what has been a strong and positive year. I'll pause now and open up questions from anyone joining us today on any of the content that we presented here or our results more broadly. Letting me off very easy, very easy. I do have one question that was submitted by a shareholder, the Walker family, which I'll just quickly run through. So the question references that Service Stream have recently secured a number of government contracts and inquiries as to what the business is doing to look to win more work out of the private industry. I think as we said, as you would have noted from my presentation and the information release, about 2/3 of our work is with government, both federal and state government. We think and we're very proud of that reflection. I certainly don't think that we should consider that we have a concentration risk around government. I think that government is a fantastic client for us. I think they pay their bills on time. They do not service a credit risk. They generally contract under a reasonable set of terms and conditions. So I don't think our shareholders should be concerned to see larger and more substantial government contracts coming into the business. We certainly are focused on growing across each of our markets, and we don't focus purely on government. Tier 1 asset owners and operators, like some of I referenced before, make up an important aspect of our client base. And as opportunities present, we'll certainly try and secure those. But we do feel comfortable with the mix of work where it currently sits. I'll ask again any questions from shareholders joining. Thank you. I'll hand you back to the Chairman.

Thanks, Leigh. Before we get to the formal aspects of our meeting today, it's dawned on me that I've [indiscernible] forgot to introduce the most important person in the room. In fact, today wouldn't happen without this person, and that's our Company Secretary and General Counsel, Chris Chapman. I've got a strong sense of I've done this before. I'm going to have to put you on the Board at least I can see you there. Sorry about that. I'll now move to the formal business of the meeting. The Notice of Meeting was distributed to shareholders on the 19th of September 2025, and copies are available on our website. I take the notice of meeting as being read. The minutes from the previous Annual General Meeting held on the 23rd of October 2024 were approved by the Board and signed by me. Should any member wish to inspect those minutes, a copy is available from our registered office for that purpose. Now to the advertised business outlined in our Notice of Meeting. There are 5 items of general business as stated in the Notice of Meeting. And I on the proxy form, as the Chairman will be voting all undirected proxies in favor of each item of business. There are voting restrictions for some resolutions as outlined in the Notice of Meeting, which apply to those who have an interest in the resolutions or their related parties or associates. Section 317 of the Corporations Act requires directors of a public company to lay before the Annual General Meeting the financial report, the director's report and an auditor's report for the year ending 30 June 2025. The members of the company have received these documents. Please note that a vote on this resolution is advisory only and doesn't bind the directors or the company. I'll move now on to the items of general business. The proxy position on all resolutions will be shown on the screen once I put the resolution to shareholders. All right. Resolution 1 on the agenda, the adoption of the company's remuneration report. The resolution being put to the meeting is now displayed on the screen. We'll now have the proxy positioned on the screen. All right. Looks pretty clear. We'll move to the next agenda item, Item 2 on our resolution agenda is the reelection of Martin Monro. The resolution is put to the meeting is now displayed on the screen. Before I proceed to the proxy position in relation to resolution 2, I might invite Martin to say maybe a few words on his nomination and his reelection today. Martin?

Thank you, Chair, and good morning, ladies and gentlemen. It's a great privilege to be standing for reelection today. 3 years ago, when I first was appointed to the Service Stream Board, I spoke of my experience and understanding of risk born of a lifetime career in contracting and construction. In the past 3 years, I've sought to deploy that experience in a way helpful to the business, supportive of the leadership team, complementary to my fellow directors and hopefully in a way that has preserved growth and supported growth for you, the shareholders. I'm committed to continuing this approach by deploying effort, energy, time and focus to the same task over the next 3 years. And in the context of the vote today, I thank you for the opportunity to do that. Thank you. Thank you, Chair.

Thanks, Martin. We might put the proxy position. Again, I think that's pretty clear cut, Martin. Congratulations. We'll move to Item 3 of the agenda, and that is the election of Brent Dennison, the resolution being put to the meeting displayed on the screen. And again, I might invite Brent maybe to say a few words in support of his reelection today.

Thank you, Brett, and good morning, all. It's been a great experience being part of this Board over the last 6 months. The executive team is extremely impressive and the future opportunities to expand and grow the business are particularly exciting as Leigh and Brett have outlined today. I very much look forward to being a part of that ongoing involvement. My personal background has been, as Brett sort of gave a brief summary of has been business strategy and growth in Australia and abroad, both via acquisition and organic initiatives. And I've been pretty lucky to be a part of some very good management teams. So I feel like I have a good sense of what very good looks like, and there's absolutely outstanding talent and capability at Service Stream that I very much enjoy being a part of going forward as a Board member. It's been commented on a few times today already, the strength of the balance sheet and the well-established business processes that I think are going to serve the company extremely well as they look at further industry consolidation and growth into new sectors as has been done so successfully with the defense space. So I would view the opportunity to continue to be a part of this Board, as Martin suggested, as a great privilege and have enjoyed working with the team today.

Thanks, Brent. I'll put the proxy position up there and quite clear cut again, too. So congratulations, Brent, and welcome. Now I'll move to Item 4 on the agenda is the acquisition of securities by Leigh MacKender under the FY '26 tranche of the company's short-term incentive plan. The resolution being put to the meeting is displayed on the screen. I might just go through this one that for the purposes of ASX Listing Rule 10.14 and all other purposes that the grant of performance rights to the Managing Director, Leigh MacKender, under the company's FY '26 short-term incentive plan and in accordance with the terms of that plan and as described in our explanatory statement be approved. Chris, can we have the proxy? Thank you. Very good. Item 5 on the agenda is the acquisition of securities for Leigh MacKender under the FY '26 company's long-term incentive plan. The resolution being put to the meeting is displayed on the screen. That for the purposes of the ASX Listing Rule 10.14 and for all other purposes that the granting of 413,151 performance rights to the Managing Director, Leigh MacKender under the company's FY '26 long-term incentive plan and in accordance with the terms of that plan and as described in the explanatory statement be approved. Thank you. All right. That concludes the resolutions for today. I'll now ask -- that's already done, the proxy position for all resolutions. It's pretty clear that all those have passed, although the results will be verified and released on the stock exchange later today. I'll now, before we finish the meeting, I might open the floor up to if there's any questions on the floor. Yes.

My name is [indiscernible]. Congratulations on the [indiscernible] very, very positive, very successful. Well done. A comment about the meeting itself. You scheduled this annual general meeting of [indiscernible] shareholders and should come to these premises. And you don't even have 5 [indiscernible] and have time lines from the industry to participate, to observe if the current 10 -- the ASA advocates for hybrid meetings to provide equitable access and real-time information for all shareholders. Will the Board commit to a more shareholder-friendly format for forthcoming years.

Thanks, Mike, for your question, and I appreciate where you're coming from. This is our first AGM here at Service Stream. Historically, I think the last 4 or 5 have been an external venue at quite a substantial cost to shareholders. And I think in the last couple of years, there's been very minimal turnout to our meetings. So in a bid to, I guess, drive some cost savings there for all shareholders, we've brought it to our office for the first time. And -- but I certainly take your point on online streaming. Obviously, shareholders have an opportunity to vote or submit questions prior to our meeting, and we -- and we will, as Lee has already done, answer the questions that have been submitted in writing. But thank you. So we will consider that. following the meeting.

Help those people who ask questions to be able to easily [indiscernible] answers. I know you're going to put the thing out, but that's [indiscernible].

And a full video of today will be on our website and a transcript of the AGM will be available for those shareholders as well.

So the Board will consider that?

We will.

I have a question for the [indiscernible]. One of the key audit matters in the annual report was the impairment assessment of the utilities business when you read the annual report notes, it says that there's no cash generating unit is impaired even in a range of sensitivity scenarios and various assumptions is applied. So the question to the order is, why did you choose them to highlight the impairment assessment of this particular group as a key audit matter.

Andrew, do you have a [indiscernible] microphone there?

Yes. Thanks for the question. In the prior year, there were reasonable possible change disclosures for the utilities business. And so it was still an area of focus for the audit this year. It was a significant area of focus. But given the performance of that business, given the outlook for that business, we didn't feel that further disclosures were required in respect of the reasonable possible change disclosures. So still an area of focus, still an area we spent considerable time through the audit work, but not something that we felt enhanced disclosures, which are only required under accounting standards when there's a reasonable possible change assumption that may result in an impairment.

Thank you, Mike. Have we got any other questions from the floor before we. No. So if you've got...

Question on remuneration.

Okay. Thank you. We note that the threshold performance for the performance measure, the 3-year growth EPS measure in the long-term incentive plan is only 5%. Given your recent performance of 27% growth and all of the significant renewals and new contracts we heard about this morning, why has the Remuneration Committee chosen to retain such a modest threshold of performance?

Yes, I might have a go at that one. Remuneration is obviously one of the key aspects that directors turn their minds to when incentivizing our executive team and also the loyalty and the performance. We speak to proxy advisers. We do benchmarking across through independent parties, and we spend a lot of time on this. We believe, and I think our results would reflect that we have got those settings very right. Our people -- we retain good people. Our executive team are all here today. They were all here last year and the year before. So we think we're happy to take feedback, but we think we've got those settings right. And we are -- we review them every year based on performance and also the industries that we face into, either the challenges or the opportunities of those 2.

So you think the 5% is okay?

I'll say that what we've put in place to date, which will continually be reviewed, is working very successfully for shareholders as our results, our TSR for shareholders and our dividends would support.

Okay. I have a question on directors. We have noted in the governance statement that you have actually a granular skills matrix, which identifies each director's contribution, which we very much welcome that. And it's a little bit of a rarity and something that the ASA likes to see. So well done on that. However, we would prefer to see the matrix published in the annual report because most shareholders don't read the governance statement. And they're going to vote, they rely on the bios or whatever they rely on, they're not going to look in the governance statement. So will you publish the skill matrix in the annual report next year?

Look, I don't think that's a controversial. The AI will take that on board and look to maybe do that, yes.

Okay. Thank you. I have a question for Mr. Dennison or should I address it to you?

You should address it to him.

Okay. We can all see from your bio in the annual report and the notice of meeting, you have a key role in a blood and cell therapy investment business is the way I read it. The director skills matrix says that you bring experience in utilities and in infrastructure and engineering. Can you -- the buyer is a little bit light on in terms of your past experience. So can you provide us with specific examples of your work in companies in each of those sectors in the utilities, infrastructure and engineering?

Just to -- thank you for your question, firstly, and I appreciate the opportunity to clarify sort of the background. The business that was in the health care space, I ran from '13 to 2021, and that was subsequently sold. Sometimes better to be lucky than good, and we were particularly lucky in that situation because it delivered great returns for shareholders. So I'm no longer involved in that venture. Prior to that, I ran a precision engineering business in Italy, serving in the ceramic sector. We did all the machinery and automated equipment that served internationally. It was several hundred million euro and served internationally ceramic tile, the ceramic tile sector around the world. And I've worked in the U.S. in a consulting role with Boston Consulting Group and [indiscernible] and in Europe with them in a number of utilities spaces and sectors. So I have relatively extensive experience in that space for the time.

All right. Thank you, Mike, for those questions. This will be one of Mike's questions next year, so before we move to voting, I think this is my 10th year as Chair of the company. So Michael will pick me up on that, no doubt next year, so I shouldn't be hearing. It's by far and away the most successful year that I've experienced in Service Stream. And I've never seen the future, albeit it takes hard work and it does that every year looks so bright for the company. So with that, I will now move for everyone before we conclude the meeting to vote with their blue voting cards. And I'll give you a minute there before we close the voting and that will be collected by Computershare. Can you -- when you finish, just hold your blue cards up and our representative will pick them up. Thank you. I think Mike has got another question.

We've already done that. Leigh has already done that. It was with respect to being government heavy with [indiscernible].

Thank you, everyone. If we're all good, then we might close the voting. Results of the meeting will be released on the ASX later today. If there's no further questions, that concludes our Annual General Meeting for the year. Thank you for taking the time to get here today, those that have broke the weather. And please feel free to stay around and grab a cup of coffee or tea and introduce yourself to the executive team that are here or the directors. Thank you.