Super Retail Group Limited (SUL) Earnings Call Transcript & Summary

Good morning and welcome to the 17th Annual General Meeting of Super Retail Group. My name is Sally Pitkin, and I'm the Chair of your company. The time is now 11:30. And as we have a quorum of members present, I declare the Annual General meeting open. As this meeting is being held virtually with shareholders present in many different locations, I would like to acknowledge the traditional owners of the country on which we each are present and recognize their continuing connection to land, waters and culture. We pay our respects to their elders, past, present and emerging. Today's meeting is our first virtual AGM, which we consider appropriate because of the ongoing COVID-19 pandemic. We want to protect the health and safety of people while enabling shareholder engagement and participation. If we experience any technical issues today, we may need a short recess, but I will let you know if that occurs. I would now like to introduce you to each of your directors. Joining me here in Strathpine, Brisbane is our Managing Director and Chief Executive Officer, Anthony Heraghty. Joining by telephone from Sydney, Brisbane and Melbourne, we have Annabelle Chaplain, Gary Dunne. Annabelle and Gary both joined the Board in March this year. Diana Eilert, Peter Everingham, who is taking over as Chair of Human Resources and Remuneration Committee at the conclusion of this meeting; Howard Mowlem, who's the Chair of our Risk and Audit Committee; and Reg Rowe, the founder of Super Retail Group. Also in attendance in Sydney are Rebecca Farrell, Company Secretary and General Counsel; and Paddy Carney, Partner of PricewaterhouseCoopers, who is the auditor of the group. The notice for today's meeting was made available to all shareholders on our website, where you will so have found the minutes of our 2019 AGM, our constitution and our 2020 annual report. I will take the notice as read and deal with the business of the meeting in the order that it appears in the notice. But before we do that, I'd like to explain how voting and questions will work today in our virtual meeting. Firstly, voting. Your Board has determined that all voting at the meeting will be by way of poll. So that you have enough time to vote, I will shortly open voting, and it will stay open until 10 minutes after the meeting closes. Shareholders, corporate representatives and proxy holders attending today will be able to cast their vote online in real time. To do this, please click on get a voting card button on your screen. It will set out all the resolutions to be voted on today. Please use this electronic voting card to vote for, against or abstain on each resolution. If you wish to cast some of your votes for, some against and some abstain, you can record the number of votes in each box. You can also edit your vote at any time during the meeting. However, once online voting has closed, all the voting cards will be automatically submitted and cannot be changed. As we come to formally put a resolution to the meeting, the proxies received in relation to that resolution will be shown. That number will include votes on undirected proxies cast by me as Chair. And as set out in the notice of meeting, these undirected proxy votes will be cast in favor of all resolutions. Today, we have appointed Matt Forster of LINK Market Services, the company's share registry, as the Returning Officer. After the votes have been counted and reviewed by the Returning Officer, the results of the meeting will be released to the ASX and also made available on our website. I now declare voting open on all items of business, and you can now submit your online votes at any time. In relation to questions and comments, general business questions will be taken for Item 1 and questions relevant to each item of business will be answered following the introduction of that item. To ask a question, please click on the ask a question button and submit your question. You type it in and click submit. And questions can also be submitted at any time. Shareholder questions will appear on a screen before me, and I will read them out and then answer the question or pass it on to the most appropriate person to answer. There is a character limit for each question. It's 512 characters. And if there are multiple questions on the same matter, I will endeavor to group them together and answer them together. We now have 2 prerecorded presentations from myself and Anthony Heraghty to share with you. After these presentations, we will turn to the formal business of the meeting. We prerecorded these presentations just as part of a plan to manage any technical risk that we might incur or experience today. I'm pleased to report on a successful 2020 financial year for Super Retail Group. Your company has delivered continued revenue and earnings growth and strengthened its financial position despite the impact of extraordinary external events on the business. The past 12 months have been very challenging for our team members, customers, suppliers, the wider community and the group. Following droughts, floods and tragic bushfires, which devastated many communities over the Christmas period, we have endured the COVID-19 pandemic, which has significantly damaged the economy and changed how we live, work and shop. It was arguably the most testing period of our 16-year history as a public company. However, your company's strong fundamentals, combined with the extraordinary commitment and dedication of our team members in working collaboratively with our partners, helped the business navigate the initial crisis and deliver a resilient financial performance. Our omni-retail strategy, together with decisive action in response to the crisis, helped us to adapt quickly to changing consumer behavior and deliver strong trading performance. We implemented a swift and comprehensive response to the coronavirus. Anthony and the management team implemented a number of operational measures across the group, which enabled us to profitably navigate through this difficult period while protecting the health, safety and well-being of our team members and customers. As well as taking a number of steps to manage costs, cash flow and liquidity, we implemented safety measures and training and education programs across all of our stores, offices and distribution centers to keep team members and customers safe. We introduced contactless Click & Collect in all stores in April. We pivoted all our marketing materials from catalog to digital, leveraging our active customer base of more than 6.6 million members. We transferred store-based resources to areas of high activity, like our distribution centers and customer call center, to meet elevated levels of online demand. And with the exception of 3 stores in Tasmania, we kept all of our Australian stores open throughout the entire year so we could be there for our customers and keep as many team members in jobs during what can only be described as a health and economic crisis. In addition, we successfully completed a $203 million equity raising in July with strong support from both institutional and retail shareholders, including the group's founder and major shareholder, Reg Rowe. The strength of the group's balance ensures we have the flexibility to continue to execute our strategy and, notwithstanding the ongoing economic uncertainty, seek to grow our market share in the year ahead. The group's financial position and solid trading performance during the year has supported the Board's decision to reinstate the payment of dividends and determine a fully franked final dividend $0.195 per share. This represents a payout ratio of 55% of underlying net profit after tax for the second half, which is in line with the group's dividend policy. In line with good governance and Board succession planning, during the year, we welcomed 2 highly credentialed directors, Annabelle Chaplain AM and Gary Dunne. After a career in investment banking with global financial institutions, Annabelle has diverse board experience with a range of ASX-listed companies, while Gary brings to the group more than 25 years' experience in operations and strategy with Coles, ALDI and Woolworths. I thank my fellow directors for their commitment to the group and their guidance and sound counsel during these tumultuous times. I also wish to offer our gratitude to Anthony and his executive team for their hard work and unwavering focus on optimizing our capabilities and team member engagement at such a challenging time. Finally, and perhaps most importantly, I would like to again pay tribute to all our team members, especially our frontline store teams for their dedicated efforts over the past year. In the immediate term, with the macroeconomic environment encumbered by continuing volatility and uncertainty as Australia and New Zealand emerge from recession, we will no doubt encounter fresh challenges. However, with a strong balance sheet and no net interest-bearing debt, Super Retail Group is ideally placed to deliver on our omni-retail strategy, enhance our footprint and capitalize on organic opportunities to grow market share as we pursue long-term value for you, our shareholders.

Thank you, Sally, and good morning, ladies and gentlemen. It's my pleasure to provide you with an update of the 2020 financial year and an update on our year-to-date trading performance in the 2021 financial year. It's something of an understatement to observe that 2020 has been a challenging year for your company and for the wider community. 2020, we remembered as a year we managed not 1, but 2 significant events, devastating bushfires and the COVID-19 pandemic. Events like these test limits of any company's resilience and plenty has performed. And whilst there are many factors, the most significant is the tireless efforts of the Super Retail Group team whether it is the executive, our support office, our DCs, but frankly, most importantly, our store teams. I'm incredibly proud of the team. We've all -- we have asked a lot of them and they have delivered. The next slide provides an overview of how our business responded to the challenges of COVID-19 and why we are well positioned to capitalize on consumer trends emerging from the pandemic. Your company responded quickly and decisively to COVID-19. Our first priority was to protect the health, safety and well-being of our team members, customers, trade partners and the broader community. Hand sanitizer, Perspex screens and socially distant customer service has quickly become a permanent part of our company's Lexicon. These measures placed operational pressure on the business, and I'd like to take this opportunity to publicly thank our frontline, retail store and DC team members for their extraordinary efforts during very challenging times. Our next priority was protecting shareholder value. The group took a number of preemptive measures, including the cancellation of the interim dividend and securing of an additional $100 million facility to enhance our liquidity. We received support from our trade partners through agreed extended payment terms and our landlords through measured rent relief. I thank them for their support. These early measures enabled the business to continue trading through the peak lockdown period in March and April. Keeping all of our Australian stores open during this critical period enabled us to secure a significant uplift in online demand and achieve strong digital sales growth. After successfully implementing these short-term measures to protect the business and given the continuing uncertainty, we conducted a successful $200 million equity raise in June. Today, we have a robust balance sheet with no net bank debt and the confidence to execute our business strategy and take advantage of opportunities to grow our market share organically, where appropriate. Despite the ongoing threat of COVID-19, this is an exciting period for Super Retail Group. We've been successfully able to capitalize on consumer trends that have emerged during the pandemic to better position the business. These include a channel shift to online, the acceleration of that health and well-being trend and a substantial increase in DIY and leisure activity. With our COVID-tested omni-retail capabilities, combined with leading brands in attractive categories, your company is well positioned to benefit from these trends. In framing the past year's performance, it's important to consider just how the bushfires and COVID pandemic had the potential to derail our short-term performance. The combination of these significant events meant that Christmas and Easter, our 2 strongest trading periods, were significantly disrupted. We were required by the New Zealand government to shut our 45 Supercheap Auto and 36 Macpac stores in New Zealand for 7 weeks. Major shopping centers were virtually empty for almost 2 months. And organized sport -- community sport was effectively canceled. Domestic travel and leisure activities were heavily restricted. Despite these headwinds, the group delivered. We had sales growth of 4.2% and like-for-like sales growth of 3.6%. While delivering this top line growth, the group was also able to maintain EBIT margin at 8.4%. But it was our relentless pursuit of our omni-retail strategy and our investment in online that has delivered the biggest dividend during the pandemic. In the final 6 months of 2020 financial year, the group experienced a significant acceleration in customer migration to online. This is beyond our short to medium-term expectations. In fact, online sales grew by 44% to $291 million, representing now 10% of group sales. Click & Collect, which leverages the strength of our store network of 697 stores, represented 43% of group online sales. We added over 1 million new online customers during the year and online sales more than doubled in the fourth quarter. I am very confident that the strength of our brands and our focus on customer service means that these customers will continue to shop with us in the future, both online and in-store. We now have 6.6 million active club members across our 4 core brands and together, these club members contributed to just under 60% of total sales. Over the past 4 years, the group's active club membership base has grown almost 5x the rate of our store numbers. Scalable growth is critical to our success and our ability to expand the group's customer base multiple times faster than our physical network reinforces our conviction in our omni-retail-led business strategy. During this period of accelerated online sales growth, characterized by concentrated demand for specific products, namely weights, customer satisfaction levels have improved with average club member NPS increasing to 60.7. In omnichannel, we delivered several important milestones, including implementation of our Phase 1 of our order management system, opening our Macpac Australian DC and rolling out Click & Collect in New Zealand. And despite lockdown restrictions, Click & Collect sales increased by 41% year-on-year. We've also managed to improve our sustainability metrics. We completed energy efficiency upgrades for 62 stores. We've reduced our carbon emissions by 8% and increased our recycling rate by 2% to 65%. On our all-important team members, our safety performance continues to improve. We've improved our Total Recordable Injury Frequency Rate by 25% compared to the previous year. We made special one-off payments between $250 and $1,000 to each of our frontline team members to acknowledge their dedication during the immense challenges of COVID-19. The pandemic has underscored the importance of our team to this business like never before. And finally, this year, we were also recognized as an Employer of Choice for Gender Equality by the Workplace Gender Equality Agency. In the 6-year history of this program with strengthened criteria, Super Retail Group is the first retail business to achieve this recognition. Before moving on to discuss the performance of our brands, I would like to briefly highlight the tremendous online sales performance of the business. Our omni-retail strategy provided us with the flexibility to adapt to quickly changing consumer preferences during the COVID-19 crisis and pivot to meet this elevated online demand. Group investment in digital and omni has boosted all of our brands, and this is reflected in their strong online sales growth numbers. This is shown on the table on the right-hand side of Slide 10. It is also worth noting that Click & Collect represents a relatively high proportion, 43%, of our online sales. We are expecting this number to rise again next year given the increased number of home order deliveries during the COVID-19 lockdown period. This clicks and bricks model is working for both Super Retail Group and our customers. We are very encouraged that our ongoing investment in digital as part of the omni-retail strategy is returning a solid dividend. In terms of our brand, Supercheap Auto saw sales increased by 7.6% to approximately $1.12 billion. Like-for-like sales growth of 6.3% reflected both transaction growth and increased units per sale, driving higher average transaction value. Segment EBIT increased by 11.9% to $134.9 million and EBIT margin of 12% was 40 basis points higher than the prior comparative period. Auto accessories and auto maintenance, which represents about 75% of divisional revenue, were the strongest performing categories. Like-for-like sales growth was achieved in all categories, including tools and outdoors. Overall sales in Supercheap Auto reflected a shift towards essential, DIY auto and household project products during the peak COVID-19 restriction period. Online sales increased by 37% to $82 million and these represented 7% of Supercheap Auto's total sales. Click & Collect accounted for more than 60% of these online sales. Supercheap Auto active Club Plus membership increased to -- by approximately 4% during the financial year to 1.71 million members. Sales attributable to these club members increased to 40% of total sales. In Rebel, sales increased by 3.3% to approximately $1.04 billion. Like-for-like growth of 2.7% was driven mainly by a higher average transaction value. Sales declined in April due to government restrictions, but rebounded in the fourth quarter following like-for-like sales of 9.1% in May and June. Segment EBIT increased by 3% to $96.6 million and an EBIT margin of 9.3% was 10 basis points higher than the prior comparative period. Fitness goods (sic) [ fitness and hardgoods ] were the best-performing categories as the COVID-19 restrictions led to strong demand for home fitness products. Online sales increased by 49% to $141.2 million, representing 14% of Rebel's total sales. Rebel's active club membership increased by approximately 12% during the financial year to 2.88 million members. Sales to club members increased by 66% of Rebel's sales. BCF increased sales by 4% to $535 million. Like-for-like grew 3%, driven by both increased transactions and higher average transaction value. Sales -- the fourth quarter sales rebounded at 68.1% like-for-like sales growth in May and June. Fishing was the strongest performing category, followed by camping and apparel, with all categories delivering positive like-for-like sales growth. Segment EBIT decreased to $15.7 million and EBIT margin declined to 2.9%. The BCF club loyalty program experienced strong growth with active club members increasing by approximately 6% to 1.54 million. Sales to BCF club members increased to 83% to $45.3 million, representing 9% of total BCF sales. At Macpac, sales fell by 5% to $131.9 million, and like-for-like sales decreased by 9.1%. In Australia, like-for-like sales decreased by 9.7% due to the impact of summer bushfires on peak Christmas trading and the dampening effect of COVID-19 on store foot traffic during the key Easter trading period. In New Zealand, like-for-like sales decreased by 8.2%, mainly due to the government-mandated COVID-19 store shutdown. Sales in both Australia and New Zealand rebounded during the fourth quarter, with 7.8% like-for-like sales growth in May and June. Segment EBIT decreased to $7.2 million and segment EBIT margin declined to 5.5%. Online sales increased by 83% to $22 million representing 17% of Macpac sales. Macpac club membership increased by approximately 10% to 450,000, and these club members represented 64% of total Macpac sales. On the group strategy, we have continued to focus on 5 strategic pillars: growing our 4 core brands; simplifying our business model; leveraging our closeness to our customer; optimizing our supply chain; and investing in our omni-retail model. This strategy has proved its worth during COVID-19 and as a result, we have been able to quickly align our category and range mix across each of our brands to meet really dynamic changing consumer trends, leverage our distribution center assets and call center resources to service significant online demand. In less than 8 weeks, we introduced contact-free Click & Collect across all our brands. We've pivoted our advertising -- our focus from mail catalogs to digital. And ultimately, our efforts enabled us to trade profitably through one of the toughest period ever for the retail sector, while reducing our supply chain costs per unit and increasing our customer satisfaction scores. These results are a further testament to the resilience of your company. I am pleased to provide an update on our year-to-date trading performance for financial year '21. In the first 17 weeks, the group has delivered both total sales growth and like-for-like sales growth of 25% despite the impact of COVID-19 restrictions, including lockdown in Melbourne and Auckland. The group has maintained strong momentum in digital channels, with online sales growth of 132%, including Click & Collect sales growth of 123%. Click & Collect represents 44% of the year-to-date online sales. Year-to-date sales performance across the group's core 4 brands includes: Supercheap Auto, total sales growth of 22% and like-for-like sales growth of 21%; Rebel has grown sales by 16%, with like-for-like, also up 16%; BCF has experienced strong growth year-to-date, with year-to-date total sales growth of 63% and like-for-like sales growth of 61%; Macpac, heavily impacted by the Melbourne lockdown in particular, with a sales growth of negative 2% and like-for-like down 1%. Online sales continue to accelerate for all 4 brands, with online sales growth ranging from 121% to 184% in the first 17 weeks of financial year '21. Group gross margin is more than 200 basis points higher than for the prior comparative period and has benefited from reduced promotional activity, particularly in Rebel, as the group protects its inventory position in the lead up to the peak Christmas trading period. Given the continuing uncertainty in the economic outlook, we do not believe that year-to-date performance should be treated as an indicator of full year performance. The group intends to make an additional investments this year to enhance its digital capability and modernize its technology infrastructure. As a result, the group now expects capital expenditure in FY '21 will be approximately $100 million. Despite the ongoing challenges around COVID-19, the group is in a strong position to inspire our customers to live their passion, deliver on our strategy and create value for our shareholders. The strength of our balance sheet will allow us to confidently execute our business plans and prudently take advantage of opportunities that present themselves to organically grow our market share. While the economic outlook remains uncertain, given the attractive lifestyle categories in which we operate, the group is well placed to benefit from consumer trends relating to personal health and fitness, do-it-yourself, at home projects and demand for domestic travel and outdoor leisure activity. I look forward to updating you on our progress throughout the year. In closing, I'd like again to thank all our shareholders for your continued support of our company, and I now hand back to Sally to conduct the rest of the meeting.

Thank you, Anthony. We now come to the formal business of the meeting. Each resolution is set out in the notice of meeting will be considered as an ordinary resolution and must be approved by a simple majority of the votes cast by shareholders entitled to vote and voting on the resolution. Our first item is to receive and consider the financial report for the company for the year-ended 27 June 2020, together with the Directors' report and the auditor's report. A copy of these reports was made available on our website, the ASX platform and was also sent to those shareholders who requested it. No resolution is required on this item, but I do invite shareholders and their proxies to comment and ask questions. Questions may also be asked of the auditors in relation to the conduct of the audit, the preparation and content of the audit report, the accounting policies adopted by the company and the independence of the auditor. I will now take questions on Item 1. Are there any comments or questions on this item? We have a question from Mr. [ McNally ], the monitor for the Australian Shareholders' Association. And Mr. [ McNally's ] question is, ASA's preferred capital raising is by way of [ paid TREO ]. Your June raising was a rights entitlement, but did not include tradable rights. If shareholders cannot be granted tradable rights, would you, in future, kindly consider at least offering overs up to at least 50% of entitlements so that shortfalls are taken up by existing shareholders not allocated -- and not allocated by underwriters where preference is given to their corporate clients. Thank you for that question, Mr. [ McNally ]. When we did the capital raising, we did consider a number of different structures, and we believe our structure was fair for our retail shareholders because it gave every shareholder the right to take up their pro rata allocation without dilution. At the time, the market environment was very volatile, and it is likely the very deep discounts to -- would have been required for us to provide an opportunity for tradable rights. But in terms of your suggestion, Mr. [ McNally ], that we include a retail oversubscription facility in any future capital raising, that is certainly something that we can consider. Thank you for your question. We have another question from Mr. [ Robert Taylor ]. And the question is, good morning, Mr. Rowe. As a fellow resident of Strathpine in the '90s and played AFL at the Strathpine Swans, it is amazing to see a local company perform so amazingly. First, did you see the company achieving such heights? And what do you see in the future of the company? Well, that's a question definitely for you, Reg. So I'll hand over to you to answer that one.

Thanks, Sally. Robert, going back, I did not have a clue that this organization was going to grow to the extent that it did but it's what we actually did as a company, people wise, looking after our people, looking after our customer, advertising, selling at the right price. It was just a combination of a lot of things. But the thing is the team actually fell in love with what they were doing. And they're still in love with it. As far as the growth goes, I've got -- I just put a big lump of money into the -- into the company again. I see its future tremendous, magic, fantastic. And that's going to keep going. Thanks, Robert.

Thank you, Reg. Are there any other questions or comments on Item 1? As there were no more questions, we will now move to the next item of business. So the second item of business is the remuneration report. The 2020 remuneration report is in the annual report at Pages 49 to 78. It is also available on the company's website and was posted to shareholders who requested a hard copy of the annual report. Further details about this item are also in the notice of meeting. Overall, the group delivered a solid trading performance, particularly in light of the impact of COVID-19. But in considering COVID-19's impact on the performance of the company over the past year, the Board sought to moderate and contextualize the strong group performance by considering adverse impacts on stakeholders, including the cancellation of the interim dividend and the government wage support for 2 of the businesses. Remuneration outcomes recognize the impact of the pandemic on both the business and the interest of shareholders. The Board recommends that shareholders vote in favor of this resolution. I now move to adopt the remuneration report for the year-ended 27 June 2020. Are there any comments or questions on the remuneration report? I'll just give it a minute because sometimes there can be a little lag in questions coming through onto the screen. As we do not have any questions on this item, I will put Resolution 2 to the meeting. Please note that in accordance with the voting exclusion statement in the notice of meeting, the company will disregard votes cast by certain persons on this item. The proxies received in relation to this resolution are now shown on the screen. Please select either for, against or abstain for Resolution 2 on your electronic voting card. [Voting]

I will now move to Item 3, which considers the election and reelection of directors. This year, 2 of your directors will stand for reelection, and we also have 2 new directors who stand for election. As a precaution against any unexpected technical difficulties during this item, we have prerecorded speeches from each of the 4 directors. We will play each speech before we move to questions and comments. So turning first to Item 3.1, which is the reelection of Howard Mowlem as a director. Further information in relation to Howard's background and experience is in the notice of meeting, and we will now hear Howard's reelection speech.

Good afternoon, shareholders, and thank you for the opportunity to address you at this annual general meeting. I've been on the Super Retail Board for the last 3.5 years. And today, I'm seeking your support for reelection as independent nonexecutive director. By way of background, my experience includes 23 years as an executive in the retail industry with 15 years in the dynamic markets of Japan, Hong Kong and Southeast Asia. This is my 17th year as a public company Director. And for the last 8 years, I've been Chair of Audit and Risk Committees, a position I currently hold at Super Retail. I've previously consulted to institutional investors looking to make investments in the retail sector in both Asia and here in Australia. And I've also been a guest lecturer at Melbourne Business School for the [ grade strategy ]. All of this, I hope, adds some diversity of experience to the Board and allows me to be a sounding board for our Chair, my fellow directors and the management team. Despite having lived in Hong Kong through the SARS epidemic of the early 2000, it's fair to say, I've never experienced business conditions such as those we have today with the coronavirus. But I am familiar with the ups and downs that typify the retail industry. And I'm convinced that we still have opportunities to add significant value to the 4 brands that we operate even in these tough times. Being in Melbourne, it's been difficult to visit stores recently, but in normal times, I'm a regular customer and interested observer of our operations. I always come away from these visits with a feeling that our business has so much to offer. We have a strong management team under Anthony Heraghty. We're operating in categories that give us opportunities to prosper even in these difficult times. And we have a robust balance sheet with ample access to liquidity when needed. It's been my pleasure to be a director in the last few years. And today, I offer myself for reelection, subject to your vote. I look forward to being able to continue to add value to your investment. Thank you.

Thank you, Howard. Are there any comments or questions on Howard's reelection? As we have not received any questions on this, I now put resolution 3.1 to the meeting. The proxies received in relation to this resolution are now shown on the screen. The directors, with Howard abstaining, unanimously recommend shareholders vote in favor of this resolution. Please now select either for, against or abstain for Resolution 3.1 on your electronic voting card. [Voting]

Before we move to Item 3.2, a further question has just come through in relation to Item 1, which I'll deal with now. There was just a delay in it appearing screen. And the question is from [ Tully Stanley ]. Why did Super Retail Group panic early before seeing the end of year results and proceeding with retrenchments of so many valued long-term -- sorry, long-serving team members acting against their corporate values, leaving so many unemployed in a terrible market affected by COVID. It seems the financial results were not too adversely affected by COVID, and therefore, such drastic measures may not have been necessary at that stage. Thank you for your question, Mr. [ Stanley ]. This has been certainly a very difficult year for many of our team members, and the health and economic impact of COVID-19 is far from over. We have worked hard to ensure we retained as many as jobs as possible, but I'd like to ask Anthony to respond specifically about the changes that were made at support office. Anthony?

Yes. Thank you, Sally, and thank you, Mr. [ Stanley ], for your question. A lot of difficult decisions were made in the last calendar year, and this was certainly one of them and I absolutely acknowledge the impact on you and your fellow colleagues in the support office. It's true. As we started to deal with uncertainty, we made a decision to be prudent about our cost base, and I think that was appropriate given the circumstances. But the second and, frankly, more important goal our ability to use some of the savings that we were able to generate to reinvest back in the business in terms of new capabilities as we start to see retail evolve and require new skills, whether it's a data scientist, cloud migration specialists, e-commerce specialists. And that has been one of the advantages of making one of those changes. But I absolutely acknowledge, those decisions are difficult and they have impact on individuals.

Thank you, Anthony, and thank you for that question, Mr. [ Stanley ]. We'll now move to Item 3.2, which is the reelection of Reg Rowe as a Director of the company. Further information in relation to Reg's background and experience is in the notice of meeting, and we will now hear Reg's reelection speech.

Thank you, Sally, and good afternoon, ladies and gentlemen. I'm delighted to put forward my nomination for reelection as a Super Retail Group Director. It's safe to say, I am very interested in ensuring the group continues to sustainable long-term value for shareholders. With the support of shareholders, next financial year, I intend to celebrate my 50 years association with this business. I'm sure many of our loyal shareholders know in detail the history of Super Retail Group. In 1972, my wife, Hazel, and I established an automotive accessories mail order business, run from our home here in Queensland. 2 years later, we started retail operations, which evolved into what we know now as Supercheap Auto. I served as Managing Director until 1996 and then Chairman from 1996 to 2004. Then Super Retail Group listed on the ASX as well as my time in the business and on the Board, I spent more than a decade in retail and merchandise roles at Myer department stores. As a director and shareholder, the past financial year has raised many questions. I have been impressed with the management team's flexibility and innovation in managing the COVID-19 pandemic. As you may know, I fully support the group's equity raising as well as the additional flexibility of -- it provides during what is unquestionably an uncertain time. It will help the business pursue its growth agenda and ensure we can continue our investment in our market leading brands. In considering my dedication to the business, shareholders should also be aware that I remain committed to my shareholding over the long term. Even in the COVID environment, I still visit many of our retail locations to stay in touch with the business and our customers. With your support, I will be working as hard as ever to ensure we continue to grow the business in the interest of all shareholders. Thank you. And now I hand over to Sally.

Thank you, Reg. Your contributions and commitment to Super Retail Group are greatly valued. Are there any questions or comments in relation to the reelection of Reg Rowe? As we have not received any questions, I will now put Resolution 3.2 to the meeting. The proxies received in relation to this resolution are now shown on the screen. And the directors, with Reg abstaining, unanimously recommend shareholders vote in favor of this resolution. Could you please now select either for, against or abstain for Resolution 3.2 on your electronic voting card. [Voting]

We will now move to Item 3.3, which is the election of Annabelle Chaplain. Further information in relation to Annabelle's background and experience is in the notice of meeting, and we will now hear Annabelle's election speech.

Good afternoon. I became a Super Retail Group Director on the 31st of March 2020, and seek your support as I stand for election today for my first full term on the Board. I have extensive experience as a Director of ASX-listed businesses, from start-ups to ASX 100 businesses, across a range of sectors. This concludes time in the role of Chair and/or as a member of board subcommittees, audit and risk, remuneration and zero harm. The Board will benefit from my strong financial acumen, built on an executive career in investment banking and a Melbourne Business School MBA. I bring a macro perspective to my board deliberations from my time working and studying in Taiwan and living in Hong Kong before returning to Australia to join global investment banks in executive roles. My time on the boards of Australian companies engaged in exporting, operating businesses in other countries and importing equipment built by subsidiaries and joint venture has provided particular insights to supply chain management and the importance of cultural awareness. Further, my involvement with 2 consumer finance companies, 1 in Australia and the other in the United States, and both with a heavy digital influence, has afforded me an additional understanding of consumer behavior, digital marketing and the value of data analytics and measurement. Super Retail Group is a great Australian company, and I'm keen to share my expertise and experience for the benefit of the business. I'm committed to bringing an independent, thoughtful and strategic perspective to board deliberations during what is certain to be an interesting time in the company's history. I'm honored to be a member of the Board and with your support, look forward to further contributing to the business. Thank you.

Thank you, Annabelle. Are there any questions or comments on the election of Annabelle Chaplain? As there are no questions on this resolution, I will now put Resolution 3.3 to the meeting and the proxies received in relation to this resolution are now shown on the screen. The directors, with Annabelle abstaining, unanimously recommend shareholders vote in favor of the resolution. Could you please now select either for, against or abstain for Resolution 3.3 on your electronic voting card. [Voting]

We will now move to Item 3.4, the election of Gary Dunne. Further information in relation to Gary's background and experience is in the notice of meeting, and we will now hear Gary's election speech.

Good afternoon, shareholders. I'm honored to present myself for election to the Super Retail Group Board. I've long admired Super Retail Group and its market-leading brands and look forward to continuing to be part of the business, subject to your vote today. As a customer advocate with a diverse background across retail, health care and private equity, I was drawn to Super Retail Group, given its leadership position in high-profile consumer categories and the company's focus on customer experience. Over the past 25 years, I've held leadership positions with some of Australia's most iconic brands, including Woolworths, ALDI and Coles. I have significant experience in private equity, and most recently, was the Chief Operating Officer for Sigma Healthcare. I've served on a number of boards, including the National Pharmaceutical Services Association and Members Benefits Australia, a loyalty provider. Additionally, I was Chair of NostraData, a leading health care data provider. My experience includes operations, wholesale, supply chain merchandise, marketing and omnichannel, both in the B2B and B2C setting. I'm committed to working with the Board and management to deliver on the key strategic pillars of growing the core brands and leveraging the supply chain in order to give customers what they want, when and how they choose, especially in this dynamic environment. I believe my diverse experience provides me with significant insights into consumer-facing business strategies, operations and the customer experience. I'm happy to play advocate and devil's advocate when required to draw out discussions on key strategic operational and commercial focus areas. I also believe in being a hands-on director, visiting stores, assessing competition and analyzing data. I hold a Masters of Enterprise from Melbourne University. I completed the Advanced Management Program at Harvard Business School, and I'm a member of the Australian Institute of Company Directors. I'm excited to build on the strong foundations and leadership position of the group's 4 key brands, and look forward to working with this accomplished board and a strong management team. I'm confident the business is poised for continued success and growth, and look forward to being part of that journey. Thank you.

Thank you, Gary. Are there any questions or comments on this resolution? As we have not received any questions on this resolution, I now put the resolution to the meeting. The proxies received in relation to Resolution 3.4 are now shown on the screen. The directors, with Gary Dunne abstaining, unanimously recommend shareholders vote in favor of this resolution. Could you please now select either for, against or abstain for Resolution 3.4 on your electronic voting card. [Voting]

That completes the director elections and reelections for this meeting, and I'll now move to Item 4, which is the grant of securities to the Managing Director and Chief Executive Officer. This grant of securities is in relation to the long-term incentive for Anthony for the 2001 and 2000 -- sorry, 2021 and 2022 financial years. Details of Anthony's remuneration package as Managing Director and CEO, and the basis upon which his remuneration has been determined, are set out in the remuneration report, which is contained in our annual report. The directors consider this grant of performance rights an integral part of effectively rewarding and incentivizing executive management in a manner that aligns the interest of management with you, our shareholders. And it is a key component of an appropriately structured remuneration package for Anthony. The resolution is to consider, and if thought fit, approve for the purposes of ASX listing Rule 10.14 and for all other purposes, the grant of 236,440 performance rights to Anthony under the company's performance rights plan for the 2021 and 2022 financial years. And the subsequent issue or transfer of ordinary shares on vesting of those performance rights on the terms which have been set out in the explanatory notes to the Notice of Annual General Meeting. Further information about this resolution is in the notice of meeting. Can I ask if there are any comments or questions on this item? As we have not received any questions on this item, I will now put Resolution 4 to the meeting. The proxies received in relation to this resolution are shown on the screen. The directors, with Anthony as CEO abstaining, unanimously recommend shareholders vote in favor of this resolution. Please note that in accordance with the voting exclusion statement in the notice of meeting, the company will disregard any votes cast by Anthony Heraghty and certain other persons on this item. Could you please now select for, against or abstain for Resolution 4 on your electronic voting card. [Voting]

The last item of business is Item 5, which is to consider, and if thought fit, to approve, in accordance with ASX listing Rule 10.17 and article 9.8 of the company's constitution, the increase in total aggregate maximum annual remuneration payable to nonexecutive directors of the company by way of director's fees from $1.2 million to a maximum of $1.4 million. The increase proposed for FY '21 is to accommodate the increase in the size of the Board and to provide appropriately for future fee reviews. There will be no change, though, to the base fees for nonexecutive directors for FY '21. Further information about this resolution is set out in the notice of meeting. And in the interest of good governance, the Board does not make a recommendation to shareholders in relation to this resolution. Are there any questions or comments on Resolution 5? As we have not received any questions, I will now put Resolution 5 to the meeting and the proxies received in relation to this resolution will now be shown on the screen. In accordance with the voting exclusion statement in the notice of the meeting, the company will disregard votes cast by directors and certain other persons on this item. Could you please now record either for, against or abstain for Resolution 4 on your electronic voting card. [Voting]

Ladies and gentlemen, that concludes the discussion on all our items of business. In 10 minutes, the voting system will close. And once voting has closed, all the voting cards will be final and cannot be changed. So I ask, could you please check that you have cast your vote on all resolutions before you log out of this meeting. On behalf of the Board, I would like to thank you for your support, attendance and participation today. I regret that we do not have the opportunity for a chat over a cup of tea at the end of this meeting. But I hope that I can welcome you in person at next year's AGM. I now declare the meeting closed. Thank you.