Acrow Limited (59Y.F) Earnings Call Transcript

Good afternoon, ladies and gentlemen. I'm Peter Lancken, Chairman of the Board. And on behalf of Acrow Formwork and Construction Services, I welcome you to the 2020 Annual General Meeting. It's now 1 p.m., and there being a quorum present, I declare the meeting open for business. I confirm that the meeting has been properly constituted. Given the current guidelines and restrictions issued by Australian state and federal governments in relation to COVID-19, this meeting is being held as a hybrid meeting, and I'd like to welcome those attending joining us today by Zoom. When we reach the formal business of the meeting, shareholders attending via Zoom and wishing to vote on the resolutions being put to the meeting should note that you will need to separately log into the registry's online voting portal per the instructions that were included in the notice of meeting. A summary of these instructions can be seen on your screen now. If you've already lodged a proxy vote, please note that you do not need to vote again through the online voting portal. Your votes will already be counted in the poll on each resolution as per your proxy instructions. If you have any problems logging into the online portal, please call the support number shown on the screen. We will let the shareholders time to log in. The online voting portal is now open and will remain open until I declare it closed at the end of the formal business. Your votes must be submitted prior to the poll being closed for them to count. Zoom attendees are also asked to note that if you have any questions or comments to put to today's meeting, this should be done through the Q&A function, which you will find at the bottom of your screens. When you submit a question or a comment, please start by typing which resolution it relates to so that can be addressed at the appropriate time. Questions of a general nature will be collected and addressed after the close of the full business of the meeting. In opening the 2020 AGM, I'd like to introduce you to my fellow Board members who are in attendance. Mr. Steve Boland, on my left, CEO and Executive Director; Mr. Gregg Taylor, Non-Executive Director; Margaret Prokop, down here on my right, Executive Director; and Mr. David Moffat, here on my left, Non-Executive Director. Also in attendance is the company's Chief Financial Officer, down the end, Mr. Andrew Crowther; and our company secretary on my right, Mr. Lee Tamplin. The agenda for today's meeting will be as follows. Firstly, I will provide a chairperson address which will be released to the ASX prior to the meeting. The company's CEO, Mr. Steven Boland, will then provide an update which will also be released to the ASX prior to the meeting. After Steve's update, we will proceed with the formal matters to be considered at today's AGM. And finally, there will be the opportunity for questions and discussion. I think it would be fair to say that 2020 has been a year like no other in my working life and certainly in the life of this company. The onset of the COVID-19 pandemic in early calendar 2020 has had a profound impact on our lives and the economy. Thankfully, I'm pleased to say that due to our gross market positioning, the implementation of swift mitigation measures by management, and both the federal and state governments' determination to keep the essential services operating, Acrow has to date successfully navigated these conditions and recorded a solid financial performance for the 2020 financial year, which Steve Boland will outline during his address. Having earlier regrettably withdrawn the interim dividend payment due to the uncertainties surrounding the financial impact of the pandemic on our business, it was pleasing to see that Acrow's full year earnings performance provided your Board with the covenants to reinstate the dividend, declaring a final dividend of $0.0105 per share fully franked which was paid to shareholders on the 30th of November. Two years ago, Acrow embarked on a strategy of repositioning the business away from the highly fragmented and competitive 2-storey residential scaffold market towards the more highly specialized and high-margin civil formwork sector. In line with this strategy, in October 2019, Acrow acquired Uni-span, a complementary formwork and industrial scaffold company, which operates -- with operations across the east coast of Australia. I'm delighted to report that the integration of the Uni-span business was successfully completed during the year. Uni-span has not only provided Acrow with an expanded product and service offering that now allows us to bid for contracts that would, otherwise, have been outside our capabilities, it has also delivered an exciting new opportunity to build a national industrial scaffold business, operating within similar market dynamics to the formwork market. In addition, Uni-span enhances Acrow's product sales strategy to complement our high business, which will be a key focus of the company going forward. In August 2018, Acrow acquired Natform, a construction screens business, to augment its formwork business. I'm very pleased to report that after a slow start, the business is exceeding initial expectations with fourth quarter '20 reporting its best quarterly profits since being acquired, a trend which has continued into the new financial year. In December 2019, the company raised $5.2 million at $0.30 per share to assist in funding our growth strategy towards the purchase and deployment of specialist formwork equipment. This equipment was primarily acquired to service the Sun-Metals contract, our largest contract to date, and other various obligations. And I'm pleased to report that the initial return on this investment -- invested capital exceeded 40%. As Acrow evolves, so too will the composition of the Board to best meet the needs of the company. As such, we were pleased to welcome the appointment of David Moffat to the Board as a Non-Executive Director in September 2019. A seasoned construction industry professional, David provides really great support for the Board. Regrettably, Josh May announced his resignation last month due to other work commitments. Josh's contribution to the Board and management will be greatly missed, and we wish him all the best in his future endeavors. The company has actively been looking for new Non-Executive Director -- a new Non-Executive director to replace Josh and expect to be able to announce an appointment shortly. Acrow has come a long way over the last few years. Involvement in marketing civil infrastructure projects including the Sydney and Melbourne Metro Rail, the Melbourne Western Distributor, the Snowy Mountains 2.0 project is a testament to the recognition by the civil construction industry of the enhanced capability of Acrow and its team. With a record level of transport infrastructure spend proposed over the next 5 years, your Board remains optimistic about the future of the company. In closing, I'd like to thank the dedication and commitment of our Board, the executive team and staff and particularly given the challenging environment -- and particularly given the challenging environment endured by all over the last year. On behalf of the Board and the executive team, I would also like to extend our appreciation for the support from our contractors, customers and suppliers and not the least our shareholders. Thank you. I'll now hand over to Steve.

Thank you, Peter, and it's my pleasure to be talking to all today about the year just gone by, FY '20, and to give you an update as to where we are in the commencement of the FY '21 year, and also taking the opportunity to restate the strategic objectives of the business and some of the things that we'll be focusing on going forward to take our business further into the future. So firstly, please, next slide. So just to reiterate the Acrow strategy that we've been developing over the last couple of years. So firstly, #1 pillar in our strategy is to become the leading engineered formwork sales and hire equipment solutions provider in Australia. I'm very pleased to say that, that strategy is developing at some pace, especially in the Victoria market, where all the shareholders committing with our story will know we've started from almost a 0 base 2 years ago to now I would say clearly be the market leader in terms of market share in the formwork civil infrastructure market in Victoria. We're also making some good solid inroads now in New South Wales, and I'll talk further about that shortly. But we're pleased to announce yesterday that as part of a range of new contracts we've secured, we have secured a very large formwork contract in Sydney on the Metro station at Waterloo that complements a significant amount of other work we won on that project over the last 12 months. So I'm very pleased with how we're developing in that space with certainly the Uni-span acquisition and integration of ULMA equipment as part of the integration is helping us greatly in that area. Secondly, we now have strong ambitions around the scaffold market or Industrial Scaffold in the country, a market that's opened up to us significantly since the purchase of Uni-span. We have real ambitions now to take that business nationally. It's a very profitable market. As Peter alluded to, it's got similar market dynamics to civil infrastructure, in that it's very strongly service and quality-focused decision-making rather than price. We've developed a great reputation in the Queensland market, and we're sticking to take that nationally now. The third pillar is around our people. And we've been very successful in the last couple of years of attracting very strong talent for the business. And so we've now focused on recruiting and training the high-quality individuals, primarily in the engineering function. We've got a very, very strong engineering function. We employ up to 30 people in that area now. It's been a real focus of the growth of Acrow over these last couple of years to focus on an engineering function that provides first-class solutions to customers. And it will continue to be a very strong pillar of our growth over the future periods. The fourth is around targeting high return on investment organic growth opportunities. I'll talk in more detail about this shortly. But with the implementation or the acquisition of Natform and also the acquisition of Uni-span over the last couple of years, one of the absolute pillars of our growth will be opening up new channels of revenue to take the products from both of those businesses nationally. Natform was primarily a Sydney and Brisbane-based business or New South Wales and Queensland-based business, and Uni-span was primarily a Queensland business with a bit of an operation in New South Wales. We are making really good inroads now in growing the products from both of those businesses nationally. And lastly, we are an acquisitive business. We have made 2 acquisitions over the past 2 years. We will continue to look at other opportunities that assist the business to grow into areas that we think makes sense for the business. We have a number that we're sort of looking at, very early stages at the moment. So it will always be part of Acrow's DNA that we'll be seeking out opportunities to grow by acquisition if it makes sense to the business. So a few highlights from a financial perspective last year. So $87 million of revenue, up 22%. We are now a circa between $100 million and $110 million annualized business in terms of revenue. That's sort of the trajectory that we're running at right now in the business in the current year. EBITDA pre-AASB $15 million, was up 30%. NPAT, again, pre-AASB was up 20% to $9 million. Net debt increased in line primarily with the acquisition of Uni-span. We don't want to be a business that has a high degree of debt, but it was required to service the acquisition. We've got a pretty aggressive path paying down our debt over the next 18 months. Underlying EPS of $0.46, was up 5%. Peter -- as Peter mentioned, we declared a full year dividend of $0.0105 fully franked and operating cash profit $11.2 million, was up 27%. Last 2 slides, just to give a bit of a picture of other things. Just on our share price performance, we are very pleased with the way our share prices have managed through the COVID cycle. I think compared to the market, we've done very, very well in that regard. And very importantly, for our business, given the market we operate in, our lost time injury frequency rate, you can see, of 2.4 was the lowest in the history of the business. And, in fact, we only had 3 lost time injuries across the whole course of last year, so very good performance of the business in that area. We're now going to look at a number of key initiatives across last year, and also, I guess, the major significant things that occurred to the business operationally last year. The first one really is around the pivot that we undertook 2 years ago, as Peter mentioned, again, to focus more on formwork and civil infrastructure formwork, and less on commercial residential scaffold. And you can see over the period from '17 through '20, this has basically turned on its head from having only sort of roughly 42% of our earnings coming out of the Formwork part of our business in '17 into '20, we now have 75% of our earnings coming from either Formwork or Industrial Scaffold. It's been very important that we undertook this change given the -- I guess the way the country's construction market has moved towards civil infrastructure and also given the different competitive environment in that market. It's looked a less fragmented market. It's not a commoditized market, and we've really done, I think, a very, very good job. I think the other thing that's actually lucky when you look at this rather than planned, is given what the country is just going through with COVID, given where most of the investment in construction appears to be going forward, it's going to be highly government-funded construction market, whereas I think privately funded construction is uncertain. I wouldn't call it soft, but I think it's -- there's more uncertainty around the speed of privately funded projects. Government-funded projects are going to go at some pace, and that's clearly the area now where we find our most -- we're getting most bang for our buck. Some of the other key highlights. EBITDA result and margin, you can see on that chart there. It's great for me. I've been running this business now for 7 years. And every year, our EBITDA has improved across that 7-year period. So you can see, if I go back to FY '15, just under $3 million of EBITDA to be up to $15 million in 2020, and certainly will do better than again in '21. I'm extremely pleased that this is a business in which great trajectory continues and will continue again this year, and also in the margins. So up to -- we're up sort of closer to 18% return -- EBITDA to revenue margins down, climbing from low 5% back in '15. Very good returns now from Natform, I'll talk about that in a second, and Uni-span. Pleased to say that the growth CapExes are returning better than 40% on invested in their first year. And one of the things that we're really seeing now in the new year, we're getting far better at purchasing. There are some scale benefits that are emerging, and this is actually the result of Uni-span. It's fair to say that the Uni-span business was better than Acrow was in terms of its buying ability for both capital equipment and stock -- [ the sale stock ] equipment. Those benefits are now being seen across the group and are giving us better margins on sales and also just lower cost of purchasing new equipment across the board. Next slide. So COVID-19, what did Acrow do? I think what we did was get off our back side very quickly and take some real early measures to make sure that we can mitigate and minimize the impact that the COVID-19 pandemic would have on Acrow. I'd love to say we've lost no days due to COVID-19 except [indiscernible] that went through the whole of the country last week. We lost 3 days. Fortunately, it was only 3 days. But across the rest of the country and especially in Victoria, where the people of that state have had to endure incredible lockdown situation for many, many months. We didn't lose 1 day of work in that Victoria business. In fact, they recorded record results through that period. Remarkable, really, by our people in Victoria over that period. If you consider what they were going through in their personal lives, it was quite an amazing situation. We took a range of cash flow savings measures immediately March of this calendar year. And I'm pleased to say that the measures we took have saved around $6 million in cash over that period. One of the first things we did was talk to our bank, Westpac, and get a 6-month deferral of principal repayments on our term debt. Those payments have restarted again now in October, but that enabled us to save about [ $2.5 million ] in cash over the period. And the term has just been announced that 6 months have been added to the end of the debt period so we don't have to catch up those payments. The other thing we did that was significant was we took the opportunity to renegotiate the whole range of our property leases, where I could see that the leases were going to come up for expiry within, say, the next 18 months to 2 years. And these were all facilities that we knew we wanted to stay as the tenant. We took the opportunity to renegotiate longer-term leases and negotiate rent-free periods. It saves about $1 million in rent payments, again, over about a 6- to 9-month period. Now again, it's important to say that's not rent we have to catch up. It was just a permanent reduction of cash off the back of us giving the landlords a greater commitment to our tenure with the properties. We did cancel the interim dividend that we were going to pay for the first 6 months of last year. We've now obviously paid the $0.0105 dividend for the end of the year. But all of those measures overall contributed to a $6 million saving in cash over that period. Next, Uni-span. So we acquired Uni-span in October of last year. It is a highly complementary business. It's not a bolt-on business. This was a full integration. We've now saved around about $2.2 million in OpEx through the integration of the 2 businesses. Uni-span previously, we're operating 3 depots across Queensland and New South Wales. Two of those depots, we've now relinquished and we obviously get savings in rents and associated with other costs to get us up to that $2.2 million. It is a highly complementary business, especially, from a formwork perspective and has absolutely introduced us to this industrial scaffolding opportunity that we now think is definitely going to be part of Acrow's go-forward story. Very importantly for us, we've now, off the back of Uni-span, got a relationship with ULMA, a Spanish formwork manufacturer, as their sole supplier of formwork equipment into Australia and New Zealand. It puts us down in a level playing field with our major competitors in Australian formwork being Doka, PERI and RMD; all Australian subsidiaries of European manufacturing businesses. The photo you see there is our flagship which I'll talk about in some detail a bit shortly, Sun-Metals in Townsville zinc refinery upgrade. Photo you see there is Acrow SuperCuplok equipment, propping up Uni-span MK specialist formwork equipment. We couldn't have done that job by ourselves. Uni-span couldn't have done that job by themselves. So a combination of the 2 systems of the 2 companies into that job has led to an absolutely fantastic result for the company that our customer, and the ultimate customer being Watpac, a builder of that facility, in their own internal videos are saying saved them 6 months in terms of labor on that project. So Uni-span is going particularly well in terms of the integration. I'm also extremely pleased to say that we're now seeing the fruits of the hard work of getting the Natform business properly integrated into Acrow. And the results, both at the fourth quarter of last year and going into the new financial year '21 which we're now only 5 months into, exceeding our expectations and are better than the results in the business prior to acquisition. Let's go over a couple of things. Number one, we've started in Victoria. So we've got a business in Victoria now that's still in its infancy and probably had a few months of not quite getting where we thought it would be due to the COVID lockdowns. But we now have a market inventory that we've been well accepted in. We're now seeing a significant uplift in the results in the New South Wales operations over the last 6 to 9 months. We've got great flexibility, design sort of [indiscernible] commercial approach, and we've now got a very high success rate in terms of winning new work in New South Wales, and we've got great young manager running that business and a terrific team in New South Wales. And we're just now, in this last couple of months, starting to see some really strong benefits in Queensland of the integration with the Uni-span operating, creating a very different market opportunity than what we've seen in the past. I mean in the last 6 weeks, we've got 3 new jobs that integrate screens in other parts of our offering. And now we're seeing -- we will definitely be growing our revenue streams and market share in the Queensland business. So the Natform screens business is now clearly a strong success story as an acquisition in our growth business. I'll spend some time on this. This is a very -- to me, it's a very, very important part of the Acrow story now. We are the only business in Australia that operates across Australia and the geographies that we do and across all of the markets we do. There is no other company that provides a formwork business, a steel perimeter scaffold business, an Industrial Scaffold business and [indiscernible] business across all of those geographies. And one of the keys to the growth of our business in the next few years will be the organic growth generated by the new channels for revenue that we open up across the country. For example, we've just won our first -- we've now an announcement just about to be put out, we've just won our first major contract in Western Australia using ULMA equipment. So if Uni-span is operated in Perth, we've now opened up a new channel for revenue and a significant channel for revenue by that. Obviously, we've got our screens business in Melbourne. We've got ULMA equipment in Tasmania. We've got ULMA equipment down in South Australia. We've got modular quick stage scaffold now inventory that we traditionally didn't do. So we're opening up a whole range of new channels. And I think this is one of the great -- look, I know, my focus is really strongly on how we can generate more revenue in this business and more profit by growing the range of products that we can into this new -- into all the markets that we operate in. We're in a unique situation in the Australian market. I love being in the situation as the CEO of this business. There are so many levers that we can play with that one part is down, 1 part is up, now [indiscernible] positive direction all at one time. And sometimes that's not possible, but we've got a range of set levers that we can now play with to generate revenue across all of the geographies that we operate. So we generously guide that position on -- very acutely aware of how important that is to grow our business. And the other part of the business other than just higher -- is also now the product sales focus that we've got. Learning off the back of the acquisition of Uni-span where they were selling normal product. Acrow traditionally hasn't been a seller of new products. We've primarily been a hirer. But we can now see how selling product to primarily [indiscernible] gets them tied into using your system. And then you get repeat business in terms of repeat purchases and then top-up hire as well. It's a significant part of our business. And to that end, we've now developed an online purchasing model called Acrow Marketplace, where our customers can go online and buy Acrow products -- buy Acrow products online. And we try to make ourselves as easy business for people to do business within that product sale space. So the development of our products nationally across our geographies is a huge opportunity for us to grow further revenue streams. And then talking about our hire contracts. Hire is still the profit engine of Acrow, although, we've got other ancillary things that we can do. Hire revenue is still our profit engine. So over the course of last year, our hire contracts won in the second half of '20 compared to the second half of '19 was up 62%. And importantly, our potential hire revenue pipeline in that same period between June '19 and June '20 was up by 63%. And yesterday, you may have seen, we put an ASX release out about the current performance of the business in November. So we are in the midst of our most successful month in the company's history in terms of new hire contracts on. We put an update out that the number was $4.4 million. As of this morning, that number is $4.6 million. And I'll be disappointed if by the 30th of November, that number doesn't hit $5 million. So the biggest single month previous to this was $3.8 million and that was November last year. Our average performance is around $2.4 million to $2.5 million. So you can see having a result of $4.6 million of new work now for the month, it's a really strong indication of how well the future pipeline -- future performance of the business. This is not a be all and end all but is a lead indicator performance, it's a really strong lead indicator performance. My breakeven number per month is $2.8 million. If we get $2.8 million of new work on, I say to the Board, that's a par performance. Anything above $2.8 million is above par. So clearly being at $4.6 million and pushing towards $5 million is extremely encouraging. And the fact that it's across so many different sectors. We put an announcement out, again about a month ago about how we were going in Melbourne civil infrastructure market. And now yesterday, we've been able to talk about a significant job in New South Wales in formwork, significant job in Queensland, civil formwork on the Bruce Highway project and a significant job in Western Australia Commercial [indiscernible]. So now, it was very encouraging that nationally, we're getting some real penetration and real growth at all the markets we are now operating. Just want to talk [ about ] a few of the flagship projects of last year. Absolute flagship for us was the Sun-Metals zinc refinery expansion project in Townsville. A few photos, you can see there at the project. As I said earlier, neither Uni-span nor Acrow independently of each other could have carried out this project to the level that we did. If I go to the next page, please, you can see that we started this project with a $2.8 million contract we're awarded. By the time we finished, we had a $7 million of revenue generated on the project overall through a range of different packages. I'm incredibly proud of the efforts of our team that took on the job. And as I said, we've got Watpac, the ultimate customer, the ultimate builder for Sun-Metals in their internal video that we've seen recently say that we saved them 6 months in terms of the way that we designed that project. So absolutely brilliant effort by the team and no doubt in the 7 years I've been working with Acrow, this is a project [indiscernible] just the way it has been carried out and the results that we achieved. We've also got really great penetration on some of the other marquee civil projects across the country. Sydney Metro, we've already undertaken around about $4.5 million worth of work on Sydney Metro, the contract we announced that we -- was part of our suite of new contracts yesterday. The total revenue from that contract, including the labor and some other provisions as well as hire, is over $3 million on that Waterloo station. In Melbourne Western Distributor, we've been on the Western Distributor since start, still only about halfway through. We've had about $3.5 million worth of work to date. We're well positioned with additional contracts on that job. Melbourne Metro has actually been one of the great successes for us because just alone on the Arden Street station, right, as I speak at the moment, we're generating around $250,000 a month of hire revenue just on the Arden Street station at the moment. CBD North and CBD South haven't even started yet. So again, we are the predominant formwork contractor now on both Melbourne Western Distributor and Melbourne Metro from being nowhere 18 months ago. Snowy Hydro is really about the future. We have provided the first formwork equipment on that job. We've actually [indiscernible] that is being used from a former perspective to drive the tunnel boring machines. Now we won't see much more revenue out of Snowy Hydro for probably another 12 to 18 months. But being the first contractor with any gear on-site and already having great recommendations for the team down there, Snowy Hydro is definitely one that works for us for the next couple of years. So in terms of trading update, just to give you a picture of where we are at the moment, we're actually now nearly 5 months into the new financial year. Our EBITDA from the business is definitely exceeding our original expectations. We are well ahead of the previous corresponding period, and we are well ahead of our budget at the moment. The Victorian formwork business is up 97% from the prior corresponding period. And I'm so proud of the team down there despite the personal difficulties that they have been going through with the lockdown, their application to the job has been absolutely tremendous over this last 6 months. Natform has already secured 65% of its budgeted revenue for the year as at the end of October. Industrial Scaffold business recently renewed the Origin Surat Basin contract. That's a $13 million contract over 5 years. I mentioned earlier that I think we're in a bit of a 2 speed construction sector between publicly spend projects -- funded projects and private. However, since the Melbourne lockdown came out of action 2 or 3 weeks ago, we've actually seen a lot of the private projects kick back into gear very, very quickly. So again, I'm going to call that uncertain. I'm not going to say it's soft, I'm not going to say it's going to be [ true ]. But I think the privately funded construction sector, I'm not sure how that's going to roll. It could be far better than we think. However, [indiscernible] government funds are just going to be the place to be, and we're in a very good position to capitalize on that. We are definitely on track to achieve over 25% year-on-year uplift in new contracts secured in the first half, I think it will be close to 30%. And our previous comments around being comfortable with the FY '21 EBITDA consensus broker forecast, I think we will do a little bit better than that as our current position on that comment. So just closing, I want to just take you through just the wheel of what our organic growth opportunities are within Acrow and the way we see things. Expanding and promoting our former capabilities and expertise in the new markets, it's a no brainer for us. Developing a natural footprint industrial scaffold, it's no brainer for us. Focusing on the sale of product to complement our hire business and they're on the back of our online platform. Again, it's a great opportunity for us. We're going to monitor commercial scaffold opportunity because I'm not subscope about commercial and residential. However, I believe we could well be in a situation where in the group of last men standing, providing services to the commercial and residential markets. Given that we don't focus on a number of businesses -- just -- businesses in scaffold, just focus on commercial, residential are under a lot of pressure. We see that scene every day, unfortunately, there are some businesses that will go to the wall in that space. I think we can pick up some market share because we don't rely for the vast majority of our income. Continuing to develop our engineering team, both in terms of technical expertise and capability, internal training, getting as many of our people accredited with the highest degrees of engineering degrees that they can do. We're highly focused on this. And we are still focused on employing high-caliber professionals into the business, been very successful on this area over the last couple of years. I've said a number of times versus the Board. I've never worked [indiscernible] 30 years of being involved in management, but has bright and has good young group of managers in the business, both in engineering and general operations that I'm seeing in Acrow at the moment. Succession planning and development of the talent we've got in the business is very much on the forefront of my thinking at the moment. I'm very excited about what some of these young people can do in the next 10, 15 years of their careers. So finally, I want to thank our shareholders, please, for the support that you -- which you give our business by being a shareholder of Acrow. I want to thank the Board for their ongoing guidance. It's a very constructive Board. It's a pleasure to work with all the people that I do here. And finally, for the over 200 men and women who work in Acrow, their commitment to our business over the last 12 to 18 months has been absolutely tremendous despite some of the difficulties, clearly, involved with people certainly in Victoria have gone through in their personal lives. I'm so proud of the efforts they've put in to get the results that grow the business, and I'm very enthusiastic and very -- I see a very rosy future for the business as primarily off the back of the great people we've got working in. So thanks very much to everybody involved in Acrow for a great year.

Thanks, Steve. It's a great summary of where things are. I'd like to remind shareholders that there will be an opportunity for any informal Q&A at the end of the meeting. So please save any questions of the general nature until then. We'll now move to the formal part of the business, as said in the notice of meeting. The notice of Annual General Meeting was mailed to all registered members on or about the 26th of October 2020, and it is to be taken as read. Voting on all resolutions will be conducted by poll. For the purposes of the poll, I appoint Michelle Lorens of the Automic Group, the company's share register, who have now examined and prepared summaries of the proxy forms received to act as our returning officer and to conduct the poll. As advised earlier, shareholders in attendance by Zoom that already have submitted a vote by proxy, should note that your votes will already be counted towards the poll. You do not need to lodge another vote unless you wish to change your proxy structure. Those shareholders that do not wish -- that do wish to vote can do so through the registry's online portal as per the instructions that were included in the notice of meeting. A summary of these instructions can again be seen on the screen. Please ensure that you've selected your voting instructions for each resolution prior to the submission of your votes. The online voting portal is now open and will remain open until the poll is declared closed. Your votes must be submitted prior to the call being closed for them to count. For those shareholders, proxy holders and representatives physically in attendance [indiscernible] will have received a blue voting card. If any physical attendants believe that they are totally available on this poll and do not have a blue voting card, please raise your hand now and a member of our share register team will assist you. At the appropriate time, I will ask you to mark your vote for the resolution on the blue voting card by placing a mark in either the for or against or abstain box next to the resolution. If you're a proxy holder, a summary of the votes to which you're entitled has been attached to the voting card. If the summary of the votes includes discretionary votes, these are yours to cast to your discretion. If you wish to cast the discretionary votes, please mark -- place the mark in the corresponding for or against or abstain boxes. If your summary of votes does not have any discretionary votes, you do not need to mark your voting card and simply need to hand it to returning officer at the end of the resolutions. After all the resolutions have been read and voted upon, please place them in one of the ballot boxes that will be circulating in the room. Are there any questions related to the voting process? Thank you. Proxies have been inspected and all those validly lodged have been accepted. Proxies have been received representing 127,490,128 shares or 57.9% of the issued capital of the company. All underwritten proxies or open investor invested, nominate the Chairman of the Meeting as a proxy will be cast in favor of each resolution in the notice of the Annual General meeting. We'll now proceed to the resolutions set out at the notice of the Annual General Meeting. The first item of business is to receive the company's annual financial report for the year ending the 30th of June 2020. The financial reporting and the [indiscernible] represent the order now laid before the meeting. There will be no vote on this item, and it is in discussion at the moment. The company's audit for the 2020 financial year is Kate Bonner of Grant Thornton Audit Pty. Ltd and is present to take questions relevant to the conduct of the audit and presentation and the preparation and content of the independent auditor's report. Are there any questions or comments on the financial reports or the reports of the directors and the auditors? Thank you. Are there any questions or comments on the management of the company? Are there any questions relevant to the conduct of the audit and the preparation and content of the auditor's report to be put to the auditor? Okay. So we'll now proceed to the resolutions set out in the notice of annual General Meeting. Resolution #1 is to consider and if thought fit to pass resolution 1 as an ordinary resolution that for the purposes of Section 250R Subsection 2 of the Corporations Act and for all other purposes, approval is given for the adoption of the remuneration report as contained in the company's annual financial report for the financial year ended the 30th of June 2020. If you wish to discuss this resolution, please raise your hand or attending virtually, please submit questions by your Q&A. The proxies received in relation to this resolution are on the screen. I now put the motion. Those physically in attendance, please raise your voting instruction. Please mark your voting instruction on your blue voting card. Those attending virtually can vote via the online portal. However, you're reminded not to click Next until you selected your vote for all the resolutions. So that's the end of the Resolution 1. Resolution 2 is to consider and if thought fit to pass resolution 2 as an ordinary resolution, that Gregg Taylor, a director who retires by rotation in accordance with the company's constitution and ASX listing rules 14.5 and being eligible offers himself reelection as a Director of the company effective immediately. If you wish to discuss this resolution, please raise your hand or if attending virtually submit your questions by Q&A. The proxies received in relation to this resolution are on the screen. I now put the motion of those physically in attendance, please mark your vote instruction on your blue voting card. Those attending virtually can via vote by the online portal. However, I remind you not to click Next until you have selected you vote for all resolutions. All right. Moving to Resolution 3. The reelection of Margaret Prokop as Director. Resolution 3 is as follows, to consider and if thought fit to pass resolution 3 as an ordinary resolution, that Margaret Prokop, a Director who retires by rotation in accordance with the company's constitution and ASX listing rule 14.5 and being eligible offers herself for reelection as a of the company effective immediately. If you wish to discuss this resolution, please raise your hand or if attending virtually submit get your questions by Q&A. Proxies received in relation to this resolution are on the screen. I now put the motion. Those physically in attendance, please mark your voting instructions on your blue voting card. Those attending virtually can vote by the online portal. However, I remind you not to click Next until you have selected your vote on the resolutions. Resolution number 4, to consider and if thought fit to pass resolution 4 as a special resolution that for the purposes of ASX listing Rule 7.1A, and for all other purposes, shareholders approve the issue of equity securities up to 10% of the issued capital of the company at the time of issue, calculated in accordance with the formula prescribed in ASX listing rule 7.1A.2. And otherwise, on terms and conditions set out in the explanatory statement, which accompanies and forms part of the notice of meeting. If you wish to discuss this resolution, please raise your hand or if you if you're attending virtually submit your questions by Q&A. The proxies received in relation to this resolution are on the screen. I now put the motion. Those physically in attendance, please raise your voting instructions. Please mark your vote instructions on your blue voting card. Those attending virtually vote via the online portal. However, I remind you not to click Next until you have selected you vote for all resolutions. Resolution #5, ratification of prior issue of performance rights under the rights plan. Resolution 5 is to consider and it thought fit to Pass resolution 5 as an ordinary resolution that for the purposes of ASX listing rule 7.4 and for all other purposes, the shareholders ratify the allotment and prior issue of 15,109,000 performance rights issued on the 10th of August 2020, pursuant to the right split, and otherwise, on the terms and conditions set out in the explanatory statement, which accompanies and forms part of the notice of meeting. If you wish to discuss this resolution, please raise your hand or if attending virtually, submit your questions via Q&A. The proxy is received in relation to this resolution are on the screen. And I now put the motion that those physically in attendance, please mark your voting instructions on your blue voting cards. Those attending virtually can vote via the online portal. As a reminder, not to click on Next until you've selected your votes for all resolutions. Resolution #6 appointment of auditor. To consider and it thought to pass resolution 6 as an ordinary resolution that for the purposes of Section 327B, subsection 1 of the Corporations Act and for all other purposes, Grant Thornton Audit Pty. Ltd. having been nominated by shareholders and consented in writing to act as audit of the company, be appointed as auditor of the company effective immediately. If you want to discuss this resolution, please raise your hand or if attending virtually, submit your questions via Q&A.

No questions.

The proxies received in relation to this resolution are now on the screen. I now put the motion that those physically in attendance, please mark your voting instructions on your blue voting card. Those attending virtually, can vote via the online portal. As a reminder not to click Next until you selected your vote on all the resolutions. Resolution #7. Resolution #7 is as follows, to consider and if thought fit to pass resolution 7 as an ordinary resolution, that for the purpose of ASX listing 7.2, Exception 13 subsection B and for all other purposes, the shareholders of the company approve the adoption of the rights plan on the terms and conditions set out in the explanatory statement, which accompanies the form and forms part of this notice of meeting. If you wish to discuss this resolution, please raise your hand or if you're attending virtually submit your questions by via Q&A.

No questions.

The proxies received in relation to this resolution are on the screen. I now put the motion. Those physically in attendance , please mark your voting instructions on your blue voting card. Those attending virtually can go online on the IR portal. As a reminder, not to click Next until you selected your vote for all resolutions. Resolution #8, the issue of performance rights Steve Boland, Director of the company, under the share -- under the rights plan. Resolution #8 is as follows, to consider and it thought fit to pass resolution 8 as an ordinary resolution for the purposes of Section 208 of the Corporations Act ASX listing rule 10.14 and for all other purposes, the shareholders of the company approved the issue and allotment of 2,204,000 performance rights under the rights plan, Steve Boland, Director of the company and otherwise on terms and conditions set out in the explanatory statement, which accompanies and forms part of the notice of meeting. If you wish to discuss this resolution, please raise your hand or if attending virtually, please submit your questions via Q&A.

No questions.

The proxies received in relation to this resolution are on the screen. And I now put the motion those physically in attendance, please mark you voting instructions on your blue voting card. Those attending virtually converted by the online portal. A reminder not to click Next until you selected your other resolutions. All right. So that now concludes the resolutions. People can push click. [indiscernible] That concludes the resolutions to be voted on today. As stated, we are conducting the poll on all resolutions, and I know that the polls are already opened. All shareholders voting online, please ensure that they have submitted their votes, I will allow another minute before the poll is closed. If you have any questions in relation to submission of the online votes, please send them through on Q&A now. We'll just wait for a minute. [Voting]

I don't think there's any blue cards to pick up. So I will just [indiscernible]. So I'll invite Michelle to come and click those cards, please. So all people who [indiscernible] their own cards have done that? That's great. Is there any Q&As come through?

No questions.

No. So being no further questions, I will declare poll closed. Thank you. The staff of Automic will now process the polls, and the results will be announced to the ASX once they are available. Okay. We can now go to any other business. Is there any other business that can be locally brought forward? Nothing comes through. There being no further business or now end the full part of today's meeting and declare the meeting closed. I'll now invite shareholders to ask any questions of a general nature. And you can do so by submitting them through the new Q&A function.

Yes. Peter, so one general question. Can you comment on the opportunities that may arise for Acrow from the announced Victorian [indiscernible]?

I'm going to try Steve to answer that, if that's okay.