Steadfast Group Limited (SDF) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. It's great to be able to see some of our loyal shareholders have come to many AGMs. And now we can meet face-to-face and have a chat rather than do it virtually online. So on behalf of the Steadfast Group Board, I am pleased to welcome you to Steadfast 2022 Hybrid Annual General Meeting. As we are in Sydney, I would like to acknowledge the Gadigal people of the Eora Nation and pay my respects to the elders past, present and emerging. I also welcome Joan Cleary to her first steadfast AGM. Joan was appointed as a director in late July this year. If we experience any technical issues today, a short recess or an adjournment may be required depending on the number of shareholders being affected. If this occurs, I will advise you accordingly. As a quorum is present, I declare the meeting open. Next to me is our Managing Director and CEO, Robert Kelly. I'm pleased to say that Robert was recently awarded an AM for his outstanding contribution to the insurance industry and his very generous support of numerous charities over many, many years. All of your nonexecutive directors are present Vicki Allen, Joan Cleary, David Liddy, Gai McGrath, Anne O’Driscoll and Greg Rynenberg. Also attending today's meeting is Linda Ellis, the Group Company Secretary and Corporate Counsel; and Scott Guse, relationship partner of KPMG, our auditor for the FY '22 year. Scott is available to answer any questions you may have about the conduct of the audit of Steadfast financial statements and the auditor's opinion. The meeting will proceed as follows. I will provide an opening address and will then ask Robert to speak about the company's performance, strategy and the outlook. I will then deal with the items of business in the order in which they appear in the AGM. Shareholders will be given the opportunity to ask questions in relation to items of business being considered at this meeting. On behalf of the directors, I'm pleased to report another year of outstanding Steadfast Group results with strong growth in revenue and our FY '22 underlying net profit after tax at the top end of our upgraded guidance range advised in February 2022. The group produced a 29.5% increase in underlying earnings before interest, tax and amortization called EBITA to $340.4 million and a 29.3% increase in underlying net profit after tax, called NPAT, to $169 million. Pleasingly, we reported an increase of 16.5% in underlying earnings per share to $0.1758. The group delivered this record result against the background of geopolitical unrest, rising inflation and increased frequency of natural hazard events. Statutory net profit after tax, including nonrecurring net gains, was $171.6 million compared with $143 million for FY '21. The group's continued strong cash flow and profits allowed the Board to pay a fully franked final dividend of $0.078 per share on 22nd of September 2022. This is an increase of 11.4% from last year and takes the total FY '22 dividend to $0.13 per share, fully franked, up 14% from last year. The total dividend represented a payout ratio of 75% of NPAT, consistent with our policy of balancing a healthy return for our shareholders with ongoing investment to continue our track record of growth in the business. Shareholders have experienced consistent growth in fully franked dividends and the value of their shares. The total shareholder return for those shareholders that have held shares since listing in August 2013 is now 399.6%. We continue to be prudent with our capital as we assess potential acquisition opportunities against disciplined criteria. We made a number of earnings accretive acquisitions during FY '22 for a total investment of $552 million, with the largest acquisition being Coverforce for $411 million in August last year. Steadfast has already completed some acquisitions for FY '23, including the acquisition of Insurance Brands Australia, called IBA, for a maximum of $301 million, including deferred consideration of up to $25 million subject to meeting performance criteria. The acquisition of IBA was funded by existing debt facilities and the issue of new group shares -- Steadfast Group shares to the vendors. In addition, we have a Trapped Capital acquisition pipeline of around $400 million. We anticipate completing a number of them for a cost of around $220 million in FY '23. These acquisitions will be funded by the recently completed underwritten institutional placement and associated Share Purchase Plan, raising $233.4 million of equity. At 30 June '22, our group gearing ratio was 19%, excluding premium funding, which is well within the Board mandated group maximum of 30%. We consider a low level of gearing is prudent at this time, given rising interest rates and inflation and the current uncertainties around the world. As at 30th September, Steadfast has unutilized facilities of $226 million plus free cash flow for future expansion, including the Trapped Capital initiative. Your Board acknowledges its responsibility to work with management to implement and support Environmental, Social and Governance programs, ESG like it's called, within Steadfast Group. So these programs are integral to the sustainability and continuing financial growth of our business. Steadfast Group continues to positively contribute to the communities in which we operate, mitigate the environmental impact of our business activities and to ensure the fair treatment of our customers, employees and suppliers. Steadfast recognizes that climate change, together with increased urbanization, continues to be a global risk and a material issue for the insurance industry, including insurers, customers and the whole economy. In recognition of the issues arising from climate change, Steadfast Group announced its intention to publish a Scope 1 and Scope 2 carbon-neutral transition plan by the end of 2022 for its head office and its operationally controlled subsidiaries. In doing so, we acknowledge that many of our customers will continue to need support through our and their transition. Steadfast Group continues to adhere to the corporate governance principles as set out by the ASX Corporate Governance Council. Our governance framework and robust risk management strategies are set out in more detail on our investor website and in our 2022 annual report. I note another year in which there were no material departures from these principles, which is a great contributor to the Steadfast team. Shortly, shareholders will have the opportunity to ask questions and vote on the remuneration report. As a people-centric business with global operations, Steadfast's success relies on our ability to attract, motivate and retain world-class talent and drive a collective focus on the agreed strategy through to execution. Ensuring that Steadfast Group has the right leadership team with appropriate incentives is critical to the ongoing success of the group and to continue building sustainable long-term shareholder value. The objective of Steadfast Group's remuneration framework are to maintain market competitive remuneration that enables the group to attract and retain key talent; to align remuneration to the group's strategic and business objectives and the creation of shareholder wealth; to be fair, transparent and easily understood by all stakeholders; and to be acceptable to the substantial majority of our shareholders and to meet community expectations. During the past 12 months, Steadfast Group has continued to perform strongly and achieved record full year underlying results well in excess of initial guidance announced in August -- on August 16, 2021. This is despite the uncertainty and challenges of continuing COVID lockdowns in the first half of the financial year. We believe that the results achieved by Steadfast Group reflect our prudent approach to implementing our strategies and plans, and the focus, and the professionalism and the dedication of our employees, in particular, Managing Director and CEO and his executive team, most of whom are here today. The Board continually reviews its Steadfast Group's remuneration arrangements to ensure that our framework is fit for purpose, continues to support our core business objectives and align management short- and long-term incentives with the value created for shareholders. As we highlighted last year, in FY '21, the Board enlisted the assistance of an independent remuneration consultancy firm to undertake a review of our remuneration framework. The Board also considered the feedback from our shareholders. A number of the changes prepared by -- proposed by the independent review were adopted for FY '22. These changes and the changes proposed for FY '23 are outlined in the remuneration report contained within the Steadfast Group 2022 annual report. I welcome feedback and questions you may have on our remuneration framework to ensure it is meeting the needs and expectations of our shareholders, employees and other stakeholders. During the year, Philip Purcell retired after 9 years of serving as a Director of Steadfast Group. The Board, the employees and our network brokers are very, very grateful to Philip for his outstanding contribution, particularly in the areas of insurance law, people management and governance, and we will solely miss him. Recently, we welcomed Joan Cleary to the Group Board. Joan has over 30 years of global finance and leadership experience in the general insurance and reinsurance industry. The Board is conscious that to effectively carry out its role, it needs diversity and a range of skills and experience. It has a succession plan in place for directors and the Managing Director and CEO. Finally, on behalf of the Board, I would like to thank our people, including our highly experienced CEO and Managing Director, Robert Kelly, and our executive team for their significant contribution in delivering another record result for our shareholders and at the same time providing market-leading support to our network brokers and other stakeholders. They should be very proud of the track record of consistent growth and value for shareholders. Our strong performance would not have been possible without the outstanding contribution from Steadfast brokers, Steadfast Underwriting Agencies and our complementary business and our ever-expanding network and the loyalty of our clients. Finally, I would also like to extend my gratitude to my fellow Board of Directors who continue to be focused on driving increased shareholder value, supporting the Steadfast team and improving our already strong governance. I will now hand over to Robert to address the meeting, including giving you an update on the year-to-date. Thank you.

Thanks, Frank, and good morning, everybody. The ninth time that we've stood in front of our shareholders and talked about the business, it's a different scenario to when we thought about putting this business together back in the day. So I'm pleased to say that the ninth report that we're putting you today is considerably better than the first one we did, and the second one, and the third one, and the fourth one, and the fifth one, and the sixth one, and the seventh one and the eighth one. So let's keep our fingers crossed for the tenth one, which is coming up. Okay. So FY '22 continues our year-on-year growth, as I've just said. Our 26.2% increase in our underlying revenue, bring it to $1.14 billion, puts us in the top 20 brokers in the world in terms of revenue. And I'm very pleased to say that not that there's competition, but it does give some perspective about what a small Australian company can do when it stretches its wings. So we had 29.5% increase in our underlying EBITA to $340.4 million, a 29.3% increase in underlying NPAT to $169 million. And all of these are the results of our proven business model. It's very important to just reflect on that for a second. When we put the business together and we put the perspectives together, we detailed clearly how the business would run, it would run on acquisition of the network that we owned and other opportunities and also working on the stability that we can put into the company and its executive team that will keep organic growth running through. This consistent approach to our acquisitions has demonstrated our strong performance of our equity brokers and our underwriting agencies. I think in FY '22, the broking network increases gross written premium to -- by 13.1% to $11.1 billion. It's an amazing situation when you consider a company like us can be doing $11.1 billion worth of sales. When we first put this company together back in 1995, when we were thinking about it, we thought we would eventually have a $200 million GWP. So our brokers increased their volumes over the prior year and experienced continued premium rate increases from our strategic partners. As you know, the market has been hard and hardening and it's not getting any softer because of all the situations that we see before us. Growth in revenue from our equity brokers is driven by the hard market. And the volume growth that is mitigated by the fact that our very experienced CFO, Steven Humphrys, who sits down the front here with me here now, was able to start mitigating our cost increases by making sure that we've looked in advance to see what was going to happen after the COVID to battle a couple of years' worth. And so he flagged increases in our expenses to put our guidance out, and we've been supported by the strong market to make sure that our revenue is aligned. This is a strong growth period. We've had strong growth from acquisitions that we made in FY '22, resulting in excellent underlying EBITA, which growth, as Frank said, of 23.6% to $269.7 million. As of June 2022, we had 427 brokerages in the network, and 355 of which are in Australia, 50 in New Zealand. Head of New Zealand sitting up the front here, Allan Reynolds, and he's done an excellent job working with our New Zealand people, and of course, works also in Singapore where we have 22 network brokers operating. The Steadfast Group has equity holdings in 67 of those 427 brokerages in the Steadfast Network. I just might reflect a little bit on that -- in that. When we complete the current range of Trapped Capital acquisitions, we will control about 55 -- about 50% of the GWP, that $11.1 billion. So it's pretty exciting. Now, further, the global network of UnisonSteadfast, which we own 60% of, encompasses another 272 brokers across 140 countries with billings of USD 40 billion. That's an amazingly intricate piece of business that we got involved with a few years ago to give us a footprint across all those countries with our name and people there that we can do business with. The Steadfast Underwriting Agencies, again, continue to outperform with sustained organic growth, generating over $1.8 billion of GWP during the year, which is an uplift of just under 20%, 19.9% over FY '21. This growth in GWP, combined with further premium price increases in the market, has led to an under underlying EBITA growth of 22.5% to $146.4 million. The strong performance was assisted by our quality products and services and the diligence and scale of our underwriting team. The expertise contained within this is absolutely amazing. As of June, we had 28 specialized agencies over 100 niche products. So it's no mean feat to dominate the Asia Pac market with a group of MGAs like that. It's outstanding to the people who work within them and the services they provide. In FY '22, we had $940 million of gross written premium transacted through our market-leading Steadfast Client Trading Platform, which is a contestable platform for the brokers to take advantage of the efficiency it creates, the ease of obtaining the best terms and tailored policy wordings based on our Claims Triage teams experience. A lot of the policies that we mold and put into the market are not aimed to be the cheapest policies, but to be the most covering from the consumer's point of view based on a whole series of information we get from claims. So we have to triage where there's some ambiguities in how a claim settle. This is a very powerful tool in order to make sure that the wide market access that the platform delivers for the brokers is actually best in class. Steadfast continues to refine and improve our technology to drive growth and enhance broker and client experience with the rollout of more products and insurer offerings on our Client Trading platform. During FY '22, we launched further auto-rating capability and Liability and Professional Indemnity products and added another 4 insurers on our Commercial Motor product. These developments contributed to an increase in the use of the SCTP over the prior year, 45% more commercial line business was done from the year before on that platform. Steadfast Technology still remains focused on the continuing development of this platform with more product lines, new insurers and the expansion of our auto-rating capabilities to drive increased Client Trading platform usage. The next commercial product that we're developing under this program is Farm, and it's expected from our point of view to be live during FY '24. We do roughly $450 million worth of Farm business through the network. So we've got to make sure that the efficacy and quality we deliver in that is matched to the Client Trading platform. As of June, there were 182 brokers live on our INSIGHT platform, which is the broker's back-office system, that links into the Client Trading platform with 4,400 users -- user licenses operating on that. Steadfast team will continue to support that further migration of the platform. We have 24 -- 21 brokers at the moment committed to use INSIGHT, and we've got further discussion with 75 brokers. That's an amazing situation in a small market like ours to actually have such dominance within our group of such an effective program, which is the INSIGHT program backed up by the client trading platform. It's something we've developed over the last few years and ably headed up by Martyn Thompson, sitting up the back there, who's a Steadfast Risk Group. We continue to build our comprehensive range of market-leading risk management and alternative risk transfer solutions and the systems that our broker networks clients need to be able to use these, and we'll continue expanding this suite of product lines. We further made an investment this year in a firm that one of the shareholders in New South Wales University in Flame Security International. It's an amazing range of preventative and protection technologies in fire, defense and solar, effectively reducing the harm caused by fire threats against the communities and the environment that we all live in, in which insurers have to ensure any mitigation we can do on this is absolutely germane to making sure we can get policies placed and we can get premiums contained. This investment is expected to bring in new option to our risk management team offering and the broker network and their clients while building additional measures to protect people, structures and environment. Just highlighting environment, the product that is fire retardant in this is absolutely biodegradable and completely effective in mitigating flame exposure, as opposed to some of the other products arranged in the market. You may want to reflect on what we would spend on fire retardants, and it's into the billion-dollar mark in this country. So fire threats, insurance coverage, challenges, mitigation, it all adds up to -- this is an incredible adventure for us to get involved with. When -- just diversifying from that, when COVID travel restrictions impacted the world, what Steadfast commenced how we would go about developing our involvement in the UnisonSteadfast network. So now that it's been released, our COO is working very diligently on the integration of our management team within the units and Steadfast management, and that's been starting to take effect in the second part of the year. So this strategic step signals the next evolution in our successful partnership of both networks. In the process of this integration, we have identified potential opportunities for both parties and resulted in the launch of Steadfast risk products into the UnisonSteadfast network that was started in June '22 this year. As again, solidifying our mutual commitment to growing the global distribution platform for both UnisonSteadfast and more particularly the Steadfast network brokers. We are working on a number of other initiatives to enhance the value of the broker network worldwide. And -- in terms of that side of the business, it is a long road, but an incredibly adventurous potential of how we might develop what we've developed in Australia and put it around the world. Just on -- FY '22 was another successful year of acquisitions with $552 million of earnings accretive acquisitions completed, including the major acquisition of Coverforce, which was successfully integrated and continues to meet all profit expectations. We continued to develop our Trapped Capital project, which enables the group to increase our equity positions in network brokers by providing them with the opportunity to unlock and realize value from the capital they've buildup contained within their businesses by partial sale of the Steadfast Network. I see one of our foundation brokers down the front here who hasn't taken advantage of it. So always pleased to talk to you after if you'd like to, [ Colin ], and show you the way we may be able to enhance your lifestyle going forward. We have -- perfect. We have carefully progressed on this initiative, and the implementation has been sensational. We have 8 -- as of today, we have 8 term sheets and due diligence commenced and representing a further $5.2 million in annualized EBITA. We've got 7 term sheets issued representing another $8.6 million in EBITA. And we have 55 other Trapped Capital opportunities in negotiation, representing a further $23.6 million of annualized EBITA. These are not simple things to do. The M&A team, which is vast within our organization, work so diligently, working on the prime fancy way to go about making sure that when we do a deal like this, it is earnings accretive. It is great for the seller. It's great for us as they acquire, and ultimately, it's very, very good for the shareholders of this company. Overall, the first quarter unaudited underlying EBITA was 24%, ahead of the same period last year and slightly ahead of our expectations that we gave in the guidance, but it's early days yet. So -- but wait, we'll continue to drive the business. Since July 2022, Steadfast has invested $361.7 million in EPS accretive acquisitions, including the recent acquisition that we did in Insurance Brands Australia, which is a very much aligned business in the form of scale, multiple revenue streams and has a great track record of growth. The acquisition provides us with the opportunity to further strengthen Steadfast's position as the leading general insurance broker network in Australia. Since we reported our FY '22 results, insurers continue to increase premium rates due to the large number of recent catastrophes and higher claims inflation. Together with solid volume growth, both have been a major contributor to the performance of our first quarter. The FY '23 guidance is now expected to deliver towards the top end of the range given that the pleasing results for the first 3 months. But 1 swallow doesn't make a spring, so we have to -- we've got 9 months to go in running the business. But at the moment, it looks very good, but based on the hardening premium rates. Steadfast upgraded its guidance in August this year for FY '23 towards the top end. And underlying EBITA of between $400 million and $420 million. Underlying NPAT of between $190 million and $202 million. And underlying NPATA between $233 million and $245 million. And underlying diluted EPS NPAT growth of 5% from 5% to 11%. Key assumptions included in this guidance are well documented in the directors' report on Page 50 of the 2022 group annual report. So I'd like to personally thank the Board members. Let's not just a throwaway line. It's a very complex company. This is what it operates in a lot of range of areas. You have to be on the Board to follow what we're doing, and we've got a dedicated Board -- a group of Board members who are diligent in their application. I'd also like to thank the outstanding employees that support and make us look very powerful in the industry and are constantly under attack from our competitors. It's really nice to know that our competitors try to steal our staff. I must say that we haven't stolen any of our competitive staff, so I can say that with great scale at this particular time. But it's nice to know they all want to knock out people off. So it's a testament to how hard they work and how well they go. Outstanding operation of the network, outstanding underwriting agency people, our clients and strategic partners, I want to thank for contributing to our record performance. And I'd also like to thank the shareholders who've set the ones that have joined us both virtually and here today, and thank you for your continued report and give you my undertaking and the Board's undertaking and everybody works were that we will keep doing the best we can to continue to make sure that, that graph of growth continues in the right way. So thank you for your time. Thank you for listening to me, and I'll return it back to you, Frank. Thanks a lot.

Thank you, Robert. We will now proceed with the formal business of the meeting. I propose to take the notice of the Annual General Meeting as read. Also, I will dispense with the formality of moving or seconding resolutions as all matters are properly before the meeting. Voting on the resolutions will be conducted by way of poll. Please note that only shareholders, proxy holders or shareholder company representatives may vote. I declare the polls open. Link Market Services is the returning officer for this meeting and have been since listing. Shareholders attending the meeting online will be able to cast their vote using the electronic voting card received when online registration is validated. If you have any difficulties, please refer to the guide available in the AGM tab in the online Steadfast Investor Center. There's also an AGM help line provided. Shareholders attending the meeting in person will have a yellow card, which you will be asked to complete and hand to the registry staff at the appropriate time. I will advise when it is time to complete your voting card. If you need assistance, please ask one of our registry staffs. Shareholders who have a blue card have already voted. There are 2 ways to ask a question by using a microphone in the auditorium or by typing and submitting a question through the online platform. We did not receive any questions -- any request to submit questions by phone, however, we have received some questions online. If you are participating online through the virtual meeting website and wish to ask a question, please click on Ask Question, type your question and click submit. I encourage shareholders online who have questions to send them through as soon as possible. Online questions will be read aloud by the company secretary during the relevant item of the business. Shareholders and proxy holders present in person will be holding a blue or yellow card. There are 2 members of staff holding microphones. Please put your hand up at the appropriate time if you wish to ask a question about a particular resolution. Following the voting, general business questions will be taken. Shareholder questions received prior to the meeting will be addressed after the formal business of the meeting. The resolution about amending the constitution is a special resolution and must be approved by 75% of the votes cast by shareholders entitled to vote and voting on the resolution. Each other resolution set out in the notice of the meeting is 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 the resolution. Shareholders should note the voting exclusions set out in the AGM notice of the meeting. Please note that I intend to vote in favor of each resolution for those proxies that are open for the Chairman's discretion other than, obviously, my appointment, which will be handled by the Deputy Chairman. The first item on the agenda is to consider and receive the financial report for the company and its controlled entities, the directors' report and the auditor's report for the financial year ended 30th of June 2022, as set out in the company's 2022 annual report. These documents have been made available to shareholders. There is no vote on this item of business. Linda, are there any questions online?

No Chairman.

Are there any questions from the floor? As there are no further questions or no questions for this item, we will move on to the next item of business. And the next item on the agenda is to adopt the remuneration report for the financial year ended 30th of June 2022. Noting the personal interest of the directors in this resolution, the Board recommends that shareholders vote in favor of this resolution. Linda, are there any questions online?

No, Chairman.

Are there any questions from the floor? It's interesting. One of the challenges we give our Chairman of Remuneration Committee is to get a high mark on the remuneration report. And great to see that the previous Chairman, David Liddy held that record, but the new Chairman beat David by 2% and getting yes votes there. Well done, Vicki. You'll probably get me later, so don't worry. As there are no questions, we will proceed to the voting. Please now select either for, against or abstain for this resolution. [Voting]

The next item on the agenda is to approve the grant of equity to the Managing Director and CEO in relation to his FY '22 remuneration. Robert was one of the co-founders of Steadfast some 25 years ago with a vision of what you see today, which is just amazing. His passion for the business and his extraordinary ability to create and drive new initiatives to enhance and grow Steadfast has resulted in significant value creation Steadfast shareholders and Steadfast network brokers consistently over many years. Against this background and the outstanding performance FY '22, the Board, with Robert abstaining, recommends that shareholders vote in favor of this resolution. Linda, are there any questions online?

Yes, Chairman. Shareholder notes that there are some votes against the resolution to approve the grant of CEO incentives, whereas the remuneration report was well supported. Did proxy advisers recommend against this resolution? And if so, which ones? Further, there seems to be a view that the targets for the CEO are not as demanding as they should be based on historic rates. Could you please comment on this?

I think I'll pass that question on to our worthy Chairman of the Remuneration Committee or Chair of the Remuneration Committee. Vicki?

Thank you, Frank. Well, the remuneration report was well received because there is really material alignment between the pay performance and shareholder outcomes. As Frank alluded, total shareholder return since listing is just shy of 400%, which is an outstanding outcome. At the same time, dividends per share have risen by 200%. The rewards for our CEO have risen by about 120%. And so there's actually very strong alignment and focus on shareholder outcomes as well as executive outcomes, but not to the same extent. And I think shareholders can take that as a very positive structure in relation to our remuneration. The other thing I should also highlight is that quite a lot of the CEO and the KMP's remuneration is actually linked to performance. So because that element is at risk, the team are actually very well incentivized to make sure that they perform, again, in the interest of shareholders because when they achieve those outcomes, it means that they are remunerated as well. So they're a very strong alignment, and I think that's important. When we set KPIs ahead of -- for the next 3-year period, which we do for long-term incentives, we set those KPIs with reference to what our CFO, in particular, with regard as stretch budgets and our assumptions of business performance and the business conditions that we'll be operating in over a 3-year horizon. And so I'm very confident that we have a structure in place that actually, as I say, incentivizes high performance from our executive team, encourages retention of those important executive team, but importantly, prefers the interest of shareholders' outcomes in our payment processes. Thanks, Frank.

Thank you, Vicki. Are there any other questions online Linda?

No.

Thank you. Are there any questions from the floor? As there are no further questions, we will proceed to the voting. Please now select either for, against or abstain for this resolution. [Voting]

The next item on the agenda is to improve Steadfast's placement capacity. The Board recommends that shareholders vote in favor of this resolution. Linda, are there any questions online?

Chairman, we have 3 questions. The first question is why are we bothering to refresh the placement capacity? Does this suggest that we plan to do another placement? Further, why are we not using a renounceable structure open to all shareholders, such as the patrio?

I'll get you to read the second question in a minute. But on the first question, Robert talked about the network, the Steadfast network with $11.1 billion of GWP and that's grown consistently over years. He also talked about the UnisonSteadfast network, which is a new opportunity, which we, as a Board and management, are taking it very, very carefully because it's a new area of potential growth for steadfast. Robert talked about the Trapped Capital project and the importance of giving an opportunity to those brokers that have built up the business over years to exit. We need to be ready when these opportunities arise. We don't want to be in a position where stock market sells down our shares because they feel that we don't have enough capacity to be able to take these opportunities. Steadfast, as you know, is a strategy. It's all about organic growth and acquisition growth. So we need to be ready, and we feel strongly as a Board that we need to make sure that our capacity is there, available to take the opportunities when they arise. And that's why we have by this recommendation to our shareholders. So the second question was again?

Thank you, Chairman. The second question is, the recent placement was for $225 million with a floor price of $5 followed by a $25 million share purchase plan. Why did you limit the 9,000 retail shareholders to just 10% of the raise? The placement ended up being placed at $5.14, so well done at taking the market price. However, there was only $8.4 million raised in the retail aspect. Was the VWAP discount too skinny? And how many shareholders applied?

We, as a Board, are very much in favor of ensuring that the shareholders who have supported -- the small shareholders have supported us over many years, get an opportunity to participate in any capital raising that we have. It's a fundamental position of the Board. We determine what we need from institutional investors, and we give an opportunity to our shareholders. We've never said that if we get more than, in this case the $25 million, we would stop it at $25 million. In actual fact, if we've got more than $25 million, we would have accepted it gratefully. The share price was sold down after the institutional placement for a number of reasons, not the least of what's happening around the world. A number of shareholders participated, a number didn't. And my hope is that those -- my hope -- my feeling is that those that have participated are going to be having a little smile on their face as time goes by. So we do give an opportunity to allow our shareholders to participate. And the last time we did it, obviously, the share price went up after the Coverforce acquisition and a number of our shareholders participated. So hopefully that answers the question, but we will never shy away from giving our moms and dads, our small shareholders an opportunity to participate in a capital raising.

Thank you, Chairman. The final question on the placement refresh is as follows. Only 124 million shares abstained on this item and 686 million participated in the vote. Are you sure that no institution who participated in the capital raise voted on the resolution? If they didn't vote on the resolution, does that imply that major institutional shareholders didn't participate in the placement?

I'm afraid I'll have to ask those people that didn't vote because we give you an opportunity to all investors, shareholders to vote. We don't go out and chase people and say, why don't -- why haven't you voted. My guess is they're pretty happy because they've probably participated in the placement.

That's -- there are no more questions on that resolution, Chairman.

Are there any questions from the floor? As there are no further questions, we will proceed to the voting. Please now select either for, against or abstain for this resolution. [Voting]

The next item on the agenda is to prove the amendment and amendment to the constitution. And I have to say on behalf of the Board, that Linda has done an amazing job. It's a massive task to upgrade our constitution to bring it into in line with current market practice, and Linda you've done a fabulous job. Are there any questions online?

No questions, Chairman.

Are there any questions from the floor? As there are no further questions, we will proceed to the voting. Please now select either for, against or abstain for this resolution. [Voting]

I should say that the massive support we've got for the changes is very pleasing and well done to Linda and the team. The next item agenda is the election of Joan Cleary as a Director of the company. The Board considers the diversity and different skill sets are extremely important for a successful Board. Joan is a qualified chartered accountant and lawyer and has had significant global experience in the insurance and reinsurance industry. It is very pleasing to the Board to see the strong support of shareholders for Joan's election, given that it's Joan's first role as a nonexecutive director. More information about Joan's skills and experience can be found in the notice of the meeting and the annual report. I will now invite Joan to say a few words.

Okay. Thank you, Frank, for your kind words. Good morning, ladies and gentlemen. You look like a friendly crowd, which is a good start. Thank you for this opportunity to seek your support for my election to the Steadfast Board. I believe that my insurance industry and broad finance experience will enable me to contribute positively to your Board and to serve this company on your behalf. I'm proud to have worked in the general insurance and reinsurance industry for over 30 years. I started my career in senior leadership roles in the London Reinsurance Market before coming to Australia to join the listed QBE Insurance Group, where my global responsibilities gave me insight into both the Australian domestic insurance market as well as the major international markets. I also bring over 30 years experience across the breadth of finance, including in the areas of strategy and planning, performance management, financial and regulatory reporting, acquisitions and disposals, funding, governance, including participation on various internal boards, capital management, internal control and risk management. I believe that my experience will complement the skills of your highly capable Board as we continue to focus on driving sustainable performance and growth, underpinned by robust governance and strong risk management, focusing at all times on the needs of all of our stakeholders. I look forward to continuing the journey with this Board and with this very talented management team, and I'm committed to working diligently in support of the continued success of this market-leading and innovative company. Thank you for your support.

Thank you, Joan. The Board with Joan abstaining, recommends that shareholders vote in favor of this resolution. Linda, are there any questions online?

No, Chairman.

Are there any questions from the floor? As there are no further questions, we will proceed to the voting. Please now select either for, against or abstain for this resolution. [Voting]

Congratulations, Joan, on your election as a director with a massive vote in favor. The next item relates to my reelection. So I'll hand over to David, our Deputy Chairman, to chair the meeting. So my future career is in your hands, David, so...

Thank you, Frank, and good morning, ladies and gentlemen. As I expect this vote to be quite close, I've assured the Chairman that there are tissues available if you so needs them. So the next item on the agenda is for the reelection of Frank O'Halloran as a Director of the company. I guess I'm very fortunate to witness firsthand the outstanding relationship, Frank and Robert share in the leadership of this company. And I've got no doubt that without Frank's leadership from a strategic perspective and a governance perspective and also one of mentoring, we wouldn't be in the situation that we are today. He's an outstanding insurance executive and an outstanding person in his own right. Frank has been Chairman of Steadfast, and so since his appointment to the Board in October 2012, he's also Chairman of our Nomination Committee and serves on the remuneration and succession planning committees. Frank has over 35 years' experience at QBE, where he was group CEO from 1988 to 2012, and I'm not allowed to say this, but you note that the company has gone backwards since he left. More information about Frank's skills and experience can be found in the Notice of Meeting. I'm delighted to advise that the Board recommends without and with Frank abstaining, of course, that shareholders vote in favor of this resolution. Are there any questions from the floor? Are there any questions online, Linda?

Yes, there is a question. Is the Chairman intending to serve a full term if reelected? And what are his retirement plans, if any? Does he believe that the next Steadfast Chairman is serving on the Board presently, and is the Deputy Chairman responsible for the Chairman's annual performance review.

I'll answer the last part first and then hand over to the Chairman. Yes, I conduct a independent review of the Chairman's performance annually, all Board members participate in that review. I always meet with Frank with the box of tissues handy in case there's any issues that he's not happy with. But no, that's part of our constitution, that's part of the way that we operate. I'll hand over to Frank now to answer the previous questions about whether you wish to serve for the full 3 years. And is there a -- I think Linda repeat the question again, so Frank has...