Tabcorp Holdings Limited (TAH) Earnings Call Transcript & Summary

Good morning, everyone. My name is Bruce Akhurst, and I'm the Chairman of your Board. On behalf of my fellow directors, I welcome you to Tabcorp's 2022 Annual General Meeting. We're pleased to be holding this year's AGM here in Brisbane. Queensland is an important part of our business, and over 30% of our shareholders are based here. On behalf of the company, I acknowledge the Turrbal, Jagera and Yuggera people, the traditional custodians of the land on which our Brisbane headquarters is situated, and I pay my respects to their elders past and present. I also acknowledge the traditional custodians of the land on which each attendee of today's meeting is situated and pay my respects to their elders past and present. I've been informed that a quorum of shareholders is present, so I declare the 2022 AGM open. I'd like to begin by introducing our Board of Directors. Joining us today on stage are my fellow independent Nonexecutive Directors, Justin Milne; Janette Kendall; Raelene Murphy; Brett Chenoweth and David Gallop. And next to me is our Managing Director and Chief Executive Officer, Adam Rytenskild. Also on stage is Karen Stocks, who is a Board observer prior to commencing as a Director. Also attending today's meeting is the Company Secretary, Chris Murphy. In the audience are members of the executive leadership team and Michael Collins, the lead audit partner at our external audit firm, Ernst & Young. Welcome. Before we move to the formal business of the meeting, I'd like to outline some procedural and technical matters for the conduct of today's meeting. We are holding this meeting in person and also using an online meeting platform. In both cases, shareholders can watch the presentation, ask questions and vote during the meeting. We've published on our website and the ASX the Notice of Meeting and an online meeting guide. We've also published the formal speeches and presentations to be delivered today, and a recording of this meeting will be available on Tabcorp's website after the meeting. Voting on all resolutions today will be conducted via a poll, and I appoint Daniel Reid of Tabcorp's share registry, Link Market Services, as a returning officer for the conduct of the poll. Shareholders and proxy holders who are present in the room and entitled to vote would have received yellow admission cards, which sets out the resolution and acts as your ballot paper. You may record your vote by placing a mark in the box either for or against the resolution. The shareholders using the online meeting platform, you can vote by using the Get a Voting Card button and following the instructions. I declare the poll now open so you may commence voting by marking you r voting cards or using the online meeting platform. Votes may be cast at any time during the meeting, and you may change your votes at any time until the poll is closed. I intend to close the poll approximately 5 minutes after the conclusion of the meeting. Details of the proxies received prior to the meeting on each resolution will be shown in the presentation slides after discussion of that item. I am holding open proxies in my capacity as Chair of the meeting, and I intend to vote all available proxies in favor of all resolutions. There may be a short time lag as the AGM is streamed over the Internet, so we encourage you to submit any questions now and cast your votes before the conclusion of the meeting. The final results of the poll will be lodged with the ASX as soon as possible after the meeting. Only eligible shareholders and proxy holders can ask questions and vote at the AGM. If you did not submit your questions prior to the AGM, then there will be an opportunity to ask questions regarding each agenda item during the meeting. For those present in the room today, any questions you may have should be directed to me by going to the nearest microphone. [Operator Instructions]. Questions can be submitted online now, and you don't need to wait until a particular agenda item to ask your question. An online meeting guide is also on our website, which provides further information regarding how to ask questions using the online platform. We arranged the telephone line to be available today to enable shareholders attending online to ask verbal questions, and I'm informed by Chris that no shareholders have opted to join us using that option. After introducing each resolution, I'll respond to questions already received relevant to that resolution and that haven't already been answered. And then I'll ask for any questions from those present in the room and then any received through the online meeting platform. May I please ask you limit the number of questions being asked and keep your questions as brief and to the point as possible and relevant to the resolutions. If you have questions not related to the item of business, then please speak to Chris after today's meeting. For any technical assistance during the meeting, please refer to the online meeting guide or find the share registry on the number shown at the top of your screen. So I'd now like to formally address the meeting. Tabcorp's 2022 financial year heralded the start of a new era for our company, a line in the sand for us. We successfully completed the demerger of the Lotteries and Keno business on 1 June 2022, on time and with strong support from our shareholders. We're confident that the demerger will generate long-term value for shareholders, with each business now able to adopt a more focused operating structure and strategies and shareholders better able to value each business on a stand-alone basis. The demerger has allowed us to renew our Board and executive team and embark on an urgent transformation of our business. We have a clear strategy that's focused on growth and are moving at pace to transform Tabcorp into a more competitive and profitable digital wagering and integrity services business. In our first month following the demerger, we secured proposed reforms in Queensland, which when implemented, will ensure that here in Queensland, Tabcorp will no longer pay more wagering taxes and fees than foreign online bookmakers. This will allow Tabcorp to compete on a level playing field for the first time, and we commend the Queensland government for delivering fair and much needed reforms that ensure the long-term sustainability of the racing industry in this state. Since then, the ACT and New South Wales governments have announced changes to point of consumption tax rates, marking further progress towards allowing us to compete on a level playing field. Our new app, TAB app, was launched in September on time and before the important Spring Racing Carnival. The launch of the new app has had an immediate impact with customers with a 16% increase in weekly active users compared to the 6 weeks prior to the launch. Tabcorp's focused on growth and in particular, growing our share of the digital wagering market. The hero metric we've adopted to measure our performance in our core wagering business is digital revenue market share, and we'll be reporting to shareholders regularly on our progress against that measure. At our FY '22 results, we announced our intention to sell our noncore eBET business, and in September, announced we entered into an agreement to sell the business for $62 million subject to usual working capital and other minor adjustments. We are pivoting our gaming services business to be a provider of integrity services to government and recently won the license to monitor all electronic gaming machines in pubs and clubs in Tasmania. And earlier this month, we announced that we'd entered into an agreement to acquire a 20% equity interest in fast-growing social betting company, Dabble. This strategic investment will give us exposure to innovative product capability and a younger customer base, and it aligns with our strategy to grow digital revenue market share. Moving to our financial performance for FY '22. Our financial results were again heavily impacted by COVID-19, with retail and venue shutdowns in our 2 largest markets of New South Wales and Victoria in the first half impacting our Wagering & Media and Gaming Services business, while unprecedented wet weather in the second half further impacted our Wagering & Media business. Despite this, our business remains financially strong. Group EBITDA from continuing operations before significant items was $382 million. Pleasingly, following the end of COVID-19-related lockdowns, the performance of our business has improved, and Adam will provide you with a trading update on how we're performing to date in FY '23. Tabcorp paid dividends in respect of FY '22 totaling $0.13 per share fully franked, representing a payout ratio of 80% of NPAT before significant items. This dividend included 11 months of earnings from the Lotteries & Keno business prior to the demerger. Now I'd like to provide you with a brief overview of our business post the demerger. Tabcorp is Australia's biggest multichannel wagering company. We are the only wagering company that combines digital, retail and media content to give our customers a complete wagering ecosystem. And Tabcorp is now a more focused business. We have a renewed Board and executive with new capabilities and a customer-focused strategy that's centered on growing digital revenue market share. On completion of the demerger, Steven Gregg, Anne Brennan and Harry Boon retired from the Board of Tabcorp to join the Board of The Lottery Corporation, and we'd like to thank them for their contributions to Tabcorp. During FY '22, we announced the appointment of 3 new Nonexecutive Directors. Raelene Murphy and Brett Chenoweth were formally appointed to the Board in August after receiving the necessary regulatory approvals. And both Brett and Raelene are seeking election today, and we'll hear from them shortly. Karen Stocks also joined the Board in June as an observer, and we look forward to her formally joining the Board upon receipt of the necessary regulatory approvals. Karen, who is an Australian, is currently a senior executive of Google based at their U.S. headquarters in Silicon Valley, and her experience will be invaluable as we transform our digital experience for customers. So our new Board is diverse in gender, in age and in experience. All members of the Board have led organizations. And together, the Board has a breadth of experience that's deeply aligned with our new strategy across key areas such as digital innovation, media, marketing, and customer insights. Upon demerger, David Attenborough retired as MD and CEO after 11 years, and Adam was appointed our new MD and CEO. We thank David for his leadership and service for Tabcorp. We've also refreshed our executive leadership team with new capability; a broad set of skills focused on customers, digital innovation and technology; and importantly, a new energy and sense of urgency to transform the company. Jenni Barnett joined as our first Chief Customer Officer, having successfully overseen digital transformation programs at Telstra and the Commonwealth Bank. Alan Sharvin is our new Chief Information Officer, and Alan has worked with some of the world's biggest wagering organizations, and his expertise has already proven invaluable as we launched a new digital platform. Angus Tiet joined as Chief Strategy and Ventures Officer after successfully playing a role in the transformation of Aristocrat. And John Fitzgerald has recently joined as our new Chief Legal and Risk Officer with extensive experience operating in regulated environments. Sustainability is at the heart of our business operations. We are Australia's most trusted wagering company, and that's a role we take very seriously. Following the demerger, we adopted a new sustainability framework with customer care at its center and with a strong focus on the community, our people and sustainable business practices. We aim to put our customers first and deliver entertainment experiences safely and responsibly. In FY '22, we continued to invest in initiatives to protect our customers. We delivered an early intervention model to proactively contact customers who may exhibit signs of gambling harm. And we're also rolling out enhanced responsible gambling training for key customer-focused teams. We continue to be strong advocates for the introduction of tougher restrictions on gambling advertising, in particular during prime time television. We believe there's too much gambling advertising, and we'll continue to work with governments and advocate for the introduction of additional restrictions around gambling advertising to protect young children, teenagers and vulnerable Australians. We look forward to participating in the federal government's inquiry into online gambling and continue to support a ban on television gambling advertising during certain hours. During FY '22, we're again one of the largest financial contributors to the Australian racing and wagering industry. We're proud of the role we play, supporting a vibrant local racing industry, Australian jobs and venues such as pubs and clubs. In conclusion, FY '22 was our line in the sand for Tabcorp. We completed the demerger and are now a more focused company with a core focus growing our digital revenue market share while putting our customers first. We have a renewed Board and executive team and renewed energy to urgently transform the company. And as you can see, we've emerged from the demerger with strong momentum. On behalf of the Board, I'd like to thank our people for their remarkable efforts in implementing the demerger, steering a path through the challenges of COVID-19 and successfully delivering the launch of our new app. And I'd also like to thank you, our shareholders, for your continued support as we transform the company. I'll now hand you over to our Managing Director and CEO, Adam Rytenskild. Adam?

Thank you, Bruce, and good morning, everyone. FY '22 really was the launch of a new era for Tabcorp. As Bruce said, we've drawn a line in the sand. I want to transform this company into a more nimble and innovative organization. I want us to be more courageous. And as Bruce has outlined, we're already showing that. Over the next couple of years, we're creating a company that's stronger with or without cash and tote licenses, a simpler business with customer innovation at its core powered by digital technology and competing with the same margins as foreign online operators. More competitive, more profitable and growing. We're urgently transforming. The hero metric for us is growing digital revenue and market share, and I want us to be customer obsessed in everything we do. That's why I created a new team. We have a terrific team and have appointed Tabcorp's first ever Chief Customer Officer, Jenni Barnett; and an industry leader in Alan Sharvin as our Chief Information Officer. They've had an immediate impact with not only the launch of a new TAB app, but a brand-new digital platform that will allow us to get products to market faster than ever before. We're making strong inroads on structural reforms that will allow us to compete on a level playing field with our competitors, and our Gaming Services business has secured early wins as it pivots to an integrity services model. As you can see, we're moving at pace to transform the company. We want to change quickly, and we are. I'd like to take you through our FY '22 results and the momentum we've built since the demerger. As you know, FY '22 was heavily impacted by COVID. Our retail businesses in New South Wales and Victoria were impacted for 4 months, and we provided substantial financial concessions to pubs and clubs that were impacted during this period. The results reflect the disrupted period, a line in the sand and the end of an old Tabcorp era. Our key numbers were: group revenues from continuing business of $2.37 billion, down 4.3%; group EBITDA from continuing operations of $382 million or $361 million on a pro forma basis; Wagering & Media revenue was down 5.1% to $2.18 billion; while Gaming Services improved with revenue up 5.3% to $193 million. Net debt at June was $20 million. We paid dividends totaling $0.13 per share fully franked. And our share price, including the final dividend, has outperformed the market by 21% since the demerger. Post-demerger, Tabcorp is financially strong, and we have a solid platform to grow from in FY '23. Now you've heard today that we're a new Tabcorp. I want us to be different in everything we do. And I think you've seen over the last 4 months that we are different. We're more nimble, and we're delivering on what we say. To transform the business, we must transform the culture. That's commenced, and we've brought in new talent to better align with a digital-focused strategy. Our products are already rolling out faster, and our talented people better align with the core objectives of the business, and that will continue to evolve in FY '23. I'll talk about our new products and technology platform shortly, but having more innovative products more regularly is a key pillar of new Tabcorp. Our products will better reflect the needs of our customers. Everything we do is about our customers, and that's why we've got our first Chief Customer Officer. As I've said, Jenni has had an immediate impact on our business, and that's just the start. I'm pleased to report that we launched the new TAB app on time as promised, and it's had an immediate impact on our business. The app is 9 seconds faster than the old app to place a bet, and it's much simpler for our customers to use. Our customers love it, and we know that because the figures tell us that. Compared to the 6-week period prior to launch, there's been a 16% increase in active weekly customers, a 7% increase in the average bet and a 33% increase in reactivations. TAB Everest Day was TAB's highest-ever turnover day on a New South Wales meeting in the history of Tabcorp. But this is more than a new app. It's a whole new digital platform. We're using Google Flutter technology, which has allowed us to increase development speed by 160%. The digital release cycle is down from a whopping 4 months to just 4 weeks, and it will get faster from there. We said we'd be more nimble and this is proof of that. What this means is there will be multiple upgrades of the app again over the next 12 months. We'll turn around new products faster. The back end to this app is perhaps the most important part because it allows us to transform and to become a market leader. Now it's well-known there's a war on for technology talent at the moment. And under the leadership of Chief Information Officer, Alan Sharvin, we're creating a great team. Good people want to be part of new Tabcorp's transformation. The new digital platform will allow us to complete 2 new products and multiple digital upgrades before Christmas, including a social betting function and a same race multiproduct. These products and updates are critical in enhancing our customer experience. Our recent investment in Dabble will further assist in the transformation of our digital business. It will provide Tabcorp with an exposure to an innovative new business with a younger customer base that will be critical to implementing our strategy. Now we make no secret that the hero metric for our company is to grow digital revenue market share for TAB. The Gaming Services still remains a core component of our business. It's a business that has been under review for some time, and I'm pleased to say we're now moving at pace to pivot the business towards integrity services and the monitoring of gaming machines for governments. As you know, we've already secured the license to monitor all EGMs in Tasmanian pubs and clubs, and this is just the start. We have bold plans to grow the integrity services business, and the sale of eBET helps us focus on delivering this. I'd like to provide you with a trading update on how we've performed for the first 3 months of FY '23. This information is unaudited and provided for information purposes only. It shouldn't be considered as forecast or market guidance. I'm pleased to say the results are strong, noting, of course, that Q1 last year was impacted by COVID retail restrictions. At a group level, revenue was up 18.7% on the same time last year. We retained FY '23 cost guidance of 3% to 4% on FY '22 pro forma. We do expect there'll be higher cost growth in the first half of FY '23 with investments in the new app, Spring Racing Carnival and in the FIFA World Cup. The benefits of our Genesis cost-out program is skewed towards the second half of FY '23. Turning to Wagering & Media. Revenue was up 14.2%, and digital revenue market share was 24.7%, up from 23.9% in the fourth quarter of FY '22 and stable on the comparative period. This again highlights that we've stabilized and improved digital market share after it fell below 24% in FY '22. And it's important to note that this result is almost entirely delivered on our old app, with the new app launched to first customers in the final days of Q1. It's a particularly positive result given the retail cash market has returned but has not dented our digital business. For Gaming Services, revenue was up 91.7%, noting that the comparative period was significantly impacted by venue closures and fee relief provided to venues. As I've mentioned before, we've secured strong outcomes as we pivot the business to an integrity services model. I'd like to echo the comments of Bruce that a priority of our business is customer care. All wagering companies operate with a social license, and that's a role that we take very seriously. We're continuing to ensure our teams have access to more tools than ever before to detect potential problem gamblers early. We'll continue to evolve these during FY '23. Our digital growth strategy will be strongly complemented by ongoing enhancements in customer care measures. I also strongly support the Board's view that there's too much gambling advertising. We support government policy that places additional restrictions on gambling advertising and look forward to participating in the federal government's online gambling inquiry. To conclude, I said when I was appointed MD and CEO that we will be a new Tabcorp. I'd like to say that we're ripping off the cardigan, and I believe we have. We're more nimble, we're more agile than we have been in the past. We have a clear strategy that's focused on growing our company and creating value for you, our shareholders. I said at our Investor Day back in June that previously, we were fighting with 2 hands tied behind our back: one internally because of the conflicted challenges of working with Lotteries & Keno, and one at a regulatory level because of the additional wagering fees and taxes. As you've heard from Bruce, the successful implementation of the demerger and the subsequent initiatives undertaken to level the playing field have tackled these challenges head on. Internally, we're now positioned much better to grow digital revenue market share because we're a business which has wagering and media as its absolute priority. That's the hero metric for everyone in the company, and we are incredibly passionate about achieving that. We're executing on our strategy to pivot gaming services to an integrity services business, with outcomes in Tasmania and the sale of eBET highlighting this. The update we've provided today highlights that we're on track and we've got strong early momentum. This isn't just rhetoric, and you can see today that we're delivering on what we say. I want to thank our people, who have done a fantastic job through a very disruptive time for the company over the last year. And I also want to thank you, our shareholders, for your support. You are our #1 stakeholder. This is your capital, and we're investing it wisely to create strong returns for you. Tabcorp is changing. We have proof points of those changes, and I look forward to updating you on further positive progress at our half yearly results. Put simply, we're raising the game.

All right. Good. Thanks, Adam. So now we come to the formal business of today's meeting. The Notice of Meeting has been published and made available to shareholders, and I'll take it as read. Each of the resolutions will be put to the meeting and will be moved in the order set out in the Notice of Meeting. At the end of each item of business, I'll respond to questions. So I encourage you now to submit online any questions you may have for any item of business, and may I once again ask that you keep your questions relevant to the agenda items. The first item on the agenda is to receive and consider the financial report and the reports of the directors and of the auditor in respect of the year ended 30 June 2022. These reports were approved by the Board and were included as part of the annual report released on the 24th of August 2022. They're also published on our website and the ASX. While this item is not subject to a vote, in a moment, I will respond to questions from shareholders regarding the financial report, the reports of the directors and auditor and the performance of the company over the past year. Ernst & Young is the company's external auditor. Michael Collins, the partner of Ernst & Young who signed the audit report in 2022, is present today and available to answer questions which should be restricted to audit matters. So this resolution is now open for discussion, and I'll ask Chris to read out any questions received prior to the meeting in relation to this item.

Thank you, Chairman. We received one question prior to the meeting on this item from shareholder David Bryce , who asks, what time lines has Tabcorp given ESG investors of Tabcorp to become carbon neutral? And what percentage of Tabcorp's total capitalization [indiscernible]? Is the total capitalization of Tabcorp held by these investors disproportionate to the amount of money that Tabcorp has to spend to become carbon neutral?

Well, thank you, Mr. Bryce , for your question. We currently don't have any major ESG funds or investors with significant shareholdings in our company. But we do know that increasingly, our investors, shareholders and customers expect us to take proactive steps to manage our material ESG risks and opportunities, and this includes in relation to the environmental and climate change. While Tabcorp's environmental footprint is relatively small when compared to other Australian companies and industries, we do recognize climate change as a significant global challenge and are committed to minimizing our impact on the environment. We're committed to achieving net zero in our operating emissions by 2050 and are currently undertaking work to set a new baseline for our environmental footprint post the demerger. This will allow us to finalize our net zero plan later this year. We've already delivered a number of initiatives to help us achieve our net zero plan. By reducing our emissions, we will look also to identify any cost savings opportunities. In any event, we'll approach this in a disciplined manner. Now we'll turn to live questions in the venue here. So if anyone has a question, would they like to come forward to the microphones, please? Any questions? Yes, please.

Mr. Chairman, I'd like to introduce shareholder Gary Russell .

Good morning, Mr. Chairman, Board members, key management personnel and fellow investors. I'm past the age of 75. I've been probably around the world a few times. My main question to Mr. Adam Rytenskild. You want an increase in your salary or remuneration. Would you classify yourself as being in the same vein as Robbie Cook and your predecessor?

Mr. Russell , thanks very much for the question. Let me just answer that for you. We're very, very pleased to have Adam as our CEO. He's got over 20 years experience in the industry. And I think as you've seen, he's very determined to plot a new positive course for Tabcorp, which is exactly what we need. He's put together a great team, and we're looking forward to growing shareholder value and making you a happy shareholder.

I've got another question. I go [indiscernible] Adelaide Street with a management team, and I think they're former hoteliers. And they walk around telling people not to use their smartphones. So I don't use a smartphone honestly. And is this something the company recommends?

No, it's not.

Well, someone better get on these people and stop them from doing it.

All right. Well, thanks for drawing our attention to it, and I'm sure Adam will look into it for you.

I've been to the state's. I've just come back from my 9-day trip and I got to get your copy of that Kentucky Derby field. Now Mr. Rytenskild, I'll test your knowledge on derbies. The Kentucky Derby will only take in colts . They will not have geldings or rigs or fillies in the field. [indiscernible], unfortunately, [ got chicken. My $5 on the field, 20 stars and roughly ] gone up. Rich Strike [indiscernible] $100 and got back $409. I've been to 5 Melbourne Cups. The first Melbourne Cup I went to was when I was in the Australian Navy. Back in those days, if you wore your uniform, you're betting free. And I was fortunate to see Light Fingers [indiscernible] first win. Thank you.

Thanks very much, Mr. Russell . We'd like you to obviously bet on the Tabcorp races that we cover. But we do look closely at what's going on in the States and Kentucky Derby is obviously a great race. So thanks for your observations and interest in the company. Chris, are there any questions via the online meeting platform?

Thank you, Chairman. We've received a number of questions. The first question is from shareholder, Stephen Mayne. His question is, the Victorian RSL was previously one of the biggest Gaming Services clients, with all but 1 of the 50 RSL venues using our services where we supplied and serviced the machines and charged the branches approximately $28 per day per machine. The Victorian RSL recently created an in-house pokies management capability. Have we retained any of the Victorian RSL business? What is the nature of the arrangements? And is it profitable?

Thanks, Chris. Adam, would you like to comment on that?

Thanks for the question. As I said, we're actually changing the Gaming Services business a bit more focused on integrity services. The regulatory market as it relates to gambling generally and gaming, specifically in this instance, is changing substantially, and we're adapting our businesses to grow in that environment. So the old model of TGS where -- which covered contract we're talking about is -- has been changed and is different. So we're going to have less of that type of business and expect to have us more of monitoring type gaming. And we'll be at that part of the gaming ecosystem rather than at the services we've provided previously, such as to the RSLs.

Thanks, Adam. Chris, any other questions?

Thanks, Chair. We have another question from shareholder, Stephen Mayne. His question reads, Troy Stolz is a former ClubsNSW executive in charge of money laundering policies, and he became a whistleblower. He alleges that many New South Wales clubs are failing to prevent or monitor large-scale money laundering. With our Gaming Services' pivot to integrity services, is preventing money laundering in New South Wales pubs and clubs a business opportunity for us? At the moment, criminal syndicates can load up to $7,000 of cash into 100,000 New South Wales poker machines. Is the move to cashless gaming the most important integrity reform that should be implemented?

Thanks very much for the question, Mr. Mayne. As Adam and I have been saying, the social license for Tabcorp is very important, but integrity is at the highest levels. And so this pivot in our Gaming Services business to providing integrity services is key to that. We think we can provide a really good service to cut out that sort of behavior that Mr. Mayne is referring to. So that will become a central feature of what that business does. We're expanding that business, providing more and more services and trying to improve the integrity and help the clubs and pubs that are using those services. Chris, any other questions?

Chairman, we have one further question from Stephen Mayne. His question is, did any of the 5 main proxy advisers recommend a vote against any of today's resolutions? Has there been a material proxy protest vote against any of today's resolutions? And will you disclose the proxy votes before the debate on today's resolutions so that shareholders can ask questions about the reasons if there have been any protest votes?

I'm not aware of any. And the -- as I said during my address previously, we'll give you all the proxy numbers when the votes are counted at the relevant time.

Chair, there are no further questions on this item.

All right. Thank you. We'll move on. We've got a question in the room.

Mr. Chairman, I'd like to introduce shareholder, Mr. Justin Goodfellow .

Hello, Chairman. Hello, everyone. I'm a long-time shareholder through many incarnations. This might be strategic or operational or maybe a very basic thing outside of your scope. Some of the new features, including the money back guarantee deal that's on the apps now, has been a total game changer for me. Absolutely fantastic. I want to ask about that in a minute. But another thing, I'm starting to get the feeling or the idea that all sport in New South Wales has just got to get called off at some stage. It just rains all the time at every single event. All cricket matches are called off. They run on heavy tracks in New South Wales every weekend, and some of them are abandoned important races or abandoned -- it even rained at Bathurst nearly every day. Strategically and operationally, is that something that the Board talks about? Like if this sort of thing going forward happens all the time every month -- I mean not just New South Wales, of course. But I mean New South Wales is worst, obviously. But is that something that's spoken of? Because if it becomes a thing that just happens all the time, which I don't think is far away, is that something that's spoken about? And if so, how? And also with the money back guarantee betting -- again, terrific. And it's mostly on Saturdays and a little bit on Wednesdays. It's often very different. Sometimes it's fixed odds. Sometimes it's tote. Sometimes it's second and third. Sometimes it's up to fourth and all combinations. And I was also wondering, who makes those decisions as to what exactly the money back guarantee is? Because it's taken a bit to learn and there's a lot of ways to get it wrong. And I'm quite often at TABs, and a bloke will be waiting for his money back guarantee bet to come in because his horse ran second but he placed a tote bet where it's fixed or so forth, had to be out of the venue, so forth and so on. So could you just tell me who makes that choice? And do you speak strategically and operationally about the rain? And if you have one of a bit of...

Mr. [ Goodfellow , look, terrific questions, and we really appreciate your enthusiastic support over many years of Tabcorp, and we love that you love the new app. You're not alone. We're getting a lot of engagement and a lot of very positive feedback from our customers. So you're another one of those. I think in relation to specific ideas about the app and how it works and improvements and things like that, I suggest you have a word to Jenni Barnett, who's our Chief Customer Officer, at the conclusion of the meeting. And Jenni is all ears to all of our customers, and we're doing this first turnaround to keep improving, keep improving and innovate on the app, and very much appreciate your feedback. As far as the wet weather is concerned, I should say that we're sitting here in beautiful sunshine in Brisbane, but our thoughts and best wishes are with all the people listening in around Australia who are suffering from the floods that are afflicting their daily lives. Terrible situation. It wasn't so long ago that we were worrying about drought. So these patterns seem to come and go. We have a diversified business. So it's not raining all over Australia all of the time, but it does have -- when some of these race meetings are called off, it does affect outcomes. So we do talk about it. We look at it. We work out what mitigations we can do, how we can run additional programs and things like that to make up and also support the racing clubs in the areas where they've been affected. So it is an item that we talk about all the time. Thank you for the question.

Mr. Chairman, I'd like to introduce proxy holder, Noel Ambler, from the Australian Shareholders Association.

Thank you very much. Noel Ambler, volunteer company monitor for the Australian Shareholders Association. I have 2 questions. One, of course, is more relevant now. The ASA basically is holding about 250 shareholder -- holding and approximately 2 million odd votes. Can you please elaborate on the process that the Board followed in selecting the new CEO? How many candidates were interviewed? And were any external candidates considered?

Yes. Thank you, Noel, for the question. We spent probably the best part of the year thinking about how we needed to set this company up post the demerger. What changes would need to be made, how we could make the company successful, what skills we needed on the Board, what would be different so that we could get back to growing the company and being a strong growth company for our shareholders. So that was the forefront of everything we were doing, and it's what's exciting us and what's our mission here to improve the company and win in the marketplace. So we put together a Board, which we're very, very excited about, who has that shared vision and that shared mission and that enthusiasm to improve the company and make sure it's winning in the market. That took some time to do. We spoke to a lot of people. We interviewed a lot of people and considered their background and skills, their chemistry, how they would work together, and we're actually very delighted with the group that we've got together here. We think they're the right team to drive this company forward for you. The same went with the management team, frankly. And if you look at the management team, they're all new. They're all new in their roles. A lot of people come from outside with experience in the industry elsewhere or in other industries or with relevant skills in technology, data, digital transformation and so on. So we wanted to put that type of team together. But we also needed someone with proven leadership skills, someone who knew the industry, somebody who had strategic capability and somebody who knew all the stakeholders in the industry. Very important because we work with the clubs and the pubs and we work with the state governments, and we work with the racing industry, et cetera. So we needed that sort of person. We did look outside. We had search firms engaged. We interviewed a number of people, but Adam came up trumps and we were delighted to secure Adam as our new leader. Thank you, Noel.

Mr. Chairman, I'd like to introduce shareholder, Mr. Kaz Kazim .

Thank you. Good morning. I'm a foundation shareholder, and I've been with the company since its first early start. The CEO said he's thrown away the cardigan and the wisdom that might have gone with it. What I'd like to know is, are you using consulting services? If so, to what degree of the total funds that you spend on developing internal as well as funds to develop staff within the organization?

No, we've really tried to establish the company so it's self-sufficient. So we have the people within the organization who can run the company, develop the strategies and think and work the way forward. We do have some contractors that help and we do get some external advice. Might be on capital structures of the company, that sort of thing so -- where it's very particular advice. But no, this team is the one that's running the business, setting the strategy and taking accountability for the future.

But you don't have any figures on saying how many consultants were used and how much was paid out for their services?

Is there a figure in the annual report? No? No, I don't. I'm sorry.

I'm interested because there are companies like CBA, for example, and a few other companies who have sought to reduce the use of consulting services. And -- but they haven't said the savings that they have made have gone into developing their own staff or just bank the money.

Yes, we're developing our staff. We have staff development programs. And we want the best staff. We need the best staff. They're there every day. They're being remunerated through the remuneration system to make sure that they grow shareholder value. This is not a company that's using consultants everywhere. I've seen those companies. That's not this issue here.

So how do you recognize and reward the staff that are actually doing the hard work on which the results are based and the CEO and the others get their bonuses on?

Yes, there's a detailed section I could refer you to in the annual report, the remuneration section, that talks about our short-term incentive program, and we also have a long-term incentive program. The short-term incentive program refers to components in a particular financial year and targets, financial targets, customer targets, people targets, strategic targets. Lots of metrics around that, that they're measured against to provide that incentive. If they're successful, that bonus at the end of the year can be awarded. Half of it's in cash, and the other half is in Tabcorp shares, which they need to continue to hold.

I'm sorry. This is the staff that you...

Yes, that's right. Correct. Yes, that's how the incentive works.

Terrific. Thank you.

Thank you for your question, and thank you for your long-standing support of the company.

No further questions on this item online, Chair.

As there are no more questions, that concludes this item of business, and we'll move to the next item. The next items of business relate to the reelection and election of directors. Firstly, Item 2A on the agenda is the reelection of Justin Milne as a Director of the company. Justin has been a Nonexecutive Director of Tabcorp since August 2011. He retires in accordance with the constitution. And being eligible, he has offered himself for reelection. Justin is Chairman of Tabcorp's Technology Committee and a member of the Audit Committee, the Risk Compliance and Sustainability Committee and the Nomination Committee. He's considered by the Board to be independent. The Board, with Justin abstaining, unanimously supports the reelection of Justin Milne as a Director of the company and recommends that shareholders vote in favor of this resolution. I'd like to invite Justin to come forward and address the meeting.

Thanks very much, Bruce, and good morning, everybody. Yes, I've been part of this unfolding story since 2011, and I've seen many different sort of parts of the company and processes and things that we've done. We've -- when I joined, we -- it was just as we were demerging from the Lotteries side of the business, which was successfully completed. We've bought businesses and sold businesses. We merged with Tatts and then we demerged with Tatts. So I've seen a lot of changes. But I must say that today, I see a company which is more dynamic, more committed with a great bunch of new faces both on the Board and on senior management, as Bruce has said. And it does really feel like it's a moment in time for the company. We've lost market share over the period of time that I've been associated with the company, and that's been interesting and irritating. And it's happened for probably a variety of reasons, but it's principally happened because foreign bookmakers have been allowed into Australia through a very favorable licensing regime in one state. And then they were able to parlay those -- that license that they bought very cheaply in the Northern Territory into operations in multiple states online. And in some ways, Australia, perhaps even Tabcorp, were a bit slow to work out all of the implications of this. And implications were, as I said, that we've lost market share. Today, we've drawn a line in the sand when we separated from Tatts, and that's the end of that period. Now from now on, we intend to make our market share go up to the right and not down to the right as it's been and equalizing the playing field by making sure that foreign bookmakers pay the same rate of tax, pay the same contributions to the racing industry and make the same kind of contributions to the community that we make. We're happy with that, and we're happy to compete with anybody, but we want to do it on a level playing field. So we're making progress on that, and that's a good thing. I'm really looking forward to the next 3 years, if I'm reelected, because I think the next 3 years can really honestly be the best 3 years for Tabcorp. So I ask you for your vote and thank you for your attendance. Thank you.

Thank you, Justin. I will now turn to live questions in the venue. Is there anyone who would like to raise a question? Yes, come over to the...

Chairman, I would like to introduce John McCoy , shareholder.

Thank you very much. Thank you, Mr. Chairman. My question follows on from what Justin just had to say. And he spoke of the overseas bookmakers and it not being a fair playing field. I think we all agree with that. My comment would be as well, though, that some of those overseas bookmakers with their advertising that they target, it would seem to me that they are targeting specifically the audience they are after. Yet we've been through the last few years what would have been a very expensive advertising campaign along the lines of, Long May We Play. I would say, Mr. Chairman, I have not met anybody who knows what that actually meant. I'm wondering whether -- when we get an equal playing field, are we also looking at targeting our marketing in much the same way as the other corporate bookmakers are doing and doing obviously successfully?

Yes. Thanks very much for your very relevant question, Mr. McCoy . Maybe not so much for Justin's reelection, but let me just say, we agree with you wholeheartedly. Jenni Barnett's come in as the Chief Customer Officer, scratched her head and said, what's this Long May We Play thing? So the marketing campaign, you'll see -- you've seen one before the meeting today, completely different, understanding who the customers are. We don't need to reestablish the brand of Tabcorp. Everyone's heard of Tabcorp. We need to get engaged with particular customer groups who can use our products. So you'll see that changing very much. And the new app is the place they can do it, but getting the people -- getting our customers onto the app and engaging with it and bringing products that work for them is what it's all about. But I should go back to Justin's reelection. I don't think there's any more questions in the room on that. Chris, are there any questions via the online meeting platform?