Felix Group Holdings Ltd (FLX.AX) Earnings Call Transcript

Good morning. My name is Dominic O'Hanlon. I'm the Chair of Felix Group Holdings Limited, and I'll be chairing today's meeting. On behalf of the Board of Felix Group Holdings, it is a pleasure to regress you our shareholders at our 2026 Annual General Meeting. I wish to thank you for your ongoing support and for your attendance to today. In attendance with today are fellow Directors, George Rolleston, Joycelyn Morton; CEO, Chris Atkin; Company Secretary and CFO, Stephen Hunter; and Rob Phillpot, another Director, is attending virtually. Nigel [indiscernible], the company auditor from BDO is also in attendance [indiscernible]. As set out on the Notice of Meeting, the meeting is being conducted in person as was virtually the registration details for which were included in the notice. Shareholders will be given a reasonable opportunity to ask questions to make comments and vote on the management of the company, the annual report, the remuneration report and the resolutions. Only verified shareholders may ask questions and vote. However, as time is limited, it's possible to questions will be a be answered today. If there are unanswered questions on that is not substantially recover in today's meeting, please feel free to contact us directly. All resolutions today will be signed on a hold at the appropriate time. I will ask Computershare to collect the voting cards. As set out in the Notice of Meeting, the company endeavored to respond on to all relevant questions submitted by e-mail by shareholders before this meeting. The company's constitution requires at least 2 members to be pressed within 30 minutes after the time appointed this meeting to constitute a quorum. I note that virtual attendance and attendances by way of proxy may be counted for the purposes of calculating the quorum. I'm informed by the company's Secretary that the quorum requirements are satisfied, and I declare the meeting now open. I note other proxies have been received from 26 shareholders, representing approximately 45% of total shares on issue. As Chairman, I am holding open process and I confirm my intention to both open proxies in favor of the resolutions as stated in the notice of meeting. So the meeting will proceed as follows. Chris Atkin, speaking on my left, our CEO and I will both present and I will deal with the business of this meeting, which is to vote on the resolutions as they have set out in the company's Notice of Meeting. A brief backdown will provide on some of the resolutions prior to voting. And I will consider any other business as making you lawfully put forward in accordance with the constitution of the company. Attending are eligible to vote, we've given a reasonable opportunity to ask questions in relation to each resolution and submitted by fee resolution. If you are attending in person and we should ask a question or make a comment, please raise your hand and wait for meetings. If you are a verified online shareholder and wish to ask a question, please let the Q&A icon. To ask your question hit the text box and what you finished typing please hit the Send button. You may also ask a verbal question by following instructions written below in the broadcast. Please note that while you can submit questions from now on, I will not address them until the relevant time in the meeting. Please also note that your questions may be moderated or if we receive multiple questions on 1 topic, amalgamated together. Finally, due to time constraints, we may run out of time to answer all your questions. If this happens, we will endeavor to respond to all roles and I answer questions after the meeting as appropriate by e-mail trusting sponsors via website. If there are no objections, I will take the Notice of Meeting as read. Voting today will be conducted by way of poll on all items of business in order to provide you with enough time to vote, I will shortly open voting for all resolutions. Voting will close at the end of the meeting, and results will be announced to the ASX after the meeting. After discussion on each resolution, I will advise you the proxy votes for that resolution. If you're align to vote this meeting once press both icon and all resolutions will be activated with adding options for you. There is no need to head to submit or enter button as the vote will be automatically recorded. You do, however, have the opportunity and the ability to change your vote up until the time I voting closed. I now declare voting open on [indiscernible] of business, and I will give you a warning before I move to close the voting. Each resolution will be put in boson separately. Resolutions 1 to 9, including each of Resolutions 7a, 7b and 7c are ordinary resolutions and require more than 50% of the votes cast to be in favor. Resolution 10 is a special resolution, which I will address later. Right. To the first item on the agenda and the Notice of Meeting is to receive and consider the company's 2026 annual report, which compromises the report of the directors and the auditor and of the annual financial statements and reports for the financial year ended 30th of June 2026 of the company and its controlled entities. The company's 2026 annual report has been made available to shareholders on the company's website and on the ASX website and is accompanied in the Notice of Meeting. The first of this agenda item is to provide an opportunity for shareholders to raise questions on the report and on the performance of the company generally. I now invite discussion and questions in relation to the company's 2026 annual report. And as were provided an opportunity to ask the company's auditor for BDO questions relevant to the content of the its report and the conduct that its audit of the fine report to be considered at the Annual General Meeting. By submitting recent questions to the audit of price to this meeting by [indiscernible]. Nigel Bates from BDO is present today. I will now pass over to Mr. Vadis to respond to the relative questions if we have received any before this meeting. Are there any questions?

No questions.

Are there any questions from the floor in relation to the annual report? Okay now, I'll move to the next item of business. It's a pleasure to be here with you today, and I welcome you again to this Annual General Meeting. It has been a momentous year for Felix. We've seen change in [indiscernible], our new Chairman, a new CEO, CFO and Chief [indiscernible] Officer, following the departure of our previous Chairman, CEO founder, and our long-standing CFO and CRO. We've also just completed our first year with next year as part of the Felix Group. This is a lot of change in a short period of time. I want to recognize the commitment of our people that have continued to support customers and move the business for which we're at the transition and to our customers, vendors and shareholders, thank you for your continued confidence and support in the business. Felix continue to grow through FY '26 and our last update shows group contracted annual recurring review of $13.5 million at the end of September and 11% growth on the prior year, including next year. We've also reset our strategy and the strong support from our shareholders through the recent capital raising, gives us room to pursue the opportunity ahead and to fulfill the long-held promise of the business. Over the past few years, Felix has built a valuable relationships with leading enterprises and a large distinctive network of vendors. Together, these are power foundation for the next stage of our growth while building an intelligent open procurement platform for those involved in owning building, managing and maintaining assets. Our focus is now to build on what we already do well, to serve our customers better, connect our capabilities through an open platform and create more value across the network. By building from our established position in Australia and New Zealand, we can give enterprises greater access to relevant suppliers, create more commercial opportunities for vendors and expand the business over time. There's plenty of work ahead, but I'm excited about the journey and confidence that in before. Finally, as announced to the market in our most recent business update, just more will retire from the board of feelings. I want to thank Joycelyn for her 5.5 years on the Board and the leadership of the Audit Risk Committee. Joycelyn has made a value contribution to Felix for a period of significant change. We are grateful for her commitment and counsel and wish her all very best. Thank you so much, Joycelyn. I'd like to now hand to our CEO, Chris Atkin, to give us the CEO [indiscernible].

Thank you very much, Dom. The annual report sets out the FY '26 is in detail, I want to take a little bit of time today to talk about the work that we have ahead and what it will take for us to succeed. As I mentioned, Felix has valuable foundations. We have strong enterprise relationships, a substantial vendor network and complementary capabilities across the group. Today, where these assets sit alongside a ship in a disconnected way, hence, they did not deliver their full value. The opportunities to bring them together more effectively to our customers and vendors can get more from Felix, so the business can perform more strongly over time. And that will require a focus on 4 areas. We'll grow deep in our enterprise business, spent on existing relationships, winning the right new customers and making Felix more useful to cross-screen and vendor management activities. Australia and New Zealand are a key focus to this work as they are across Apple strategy. We activate our existing network. Net value is not in size, which is substantial, both from the connections people make through it. We want to make it easier for enterprises to find relevant to them the capability and proteins to see and participate in more commercial opportunities. We will deliver our express product strategy by improving how people discover, assess and match suppliers with a new vendor products as well as using technology and AI to reduce manual work. The [indiscernible] connected and useful experience for customers and vendors built on a platform that can scale. I will improve our operating performance. That means careful choices on what we invest and where we invested as well as a stronger focus on developing operating leverage and better [indiscernible]. These priorities depend on order plans and products. They depend on how we work together. Felix has been substantial internal change in the past 6 months with the aim of building a high performance culture. To me, that means being clear about matters, giving people the responsibility that and high ourselves accountable [indiscernible]. It should be account where people can do their best work and where we take real pride in delivering for customers, vendors and [indiscernible]. We have a strong foundation and a significant opportunity my to on helping teams bring the team together, and I look forward to sharing our focus with you as we go forward.

Thank you, Chris. Much appreciated. We're now going to move on to the resolutions, if you put to the meeting today, beginning with Resolution 1, the adoption of the remuneration report. In the course of Section 250R(2) of the Corporations Act, the company must with remuneration report to the vote of shareholders. The director report contains the remuneration report, which sets out remuneration policy for the company and the remuneration arrangements in place with executive directors, executive employees and nonexecutive directors of the company. I believe the resolutions are on the screen. Or coming on the screen. Thank you. For the first resolution to be considered is the adoption of the remuneration report for the 2026 financial year ended 30th of June 2026. Under the Corporations Act voting on this resolution is advisory only and not binding on the company or the directors. The Board will take into account any discussion on the resolution and outcomes of the vote when considering the future remuneration policies and practices of the company. The Board considers Resolution 1 to be in the interest of the company and its shareholders and unanimously recommends that shareholders vote in favor of Resolution 1. The attention should be given to the valuing restrictions in the notice of meeting for key management personnel because the remuneration is reported the remuneration report and the related parties, including the permitted proxy inversion. The proxy votes received in relation to this resolution are announced late on the screen. Are there any questions from the floor? Stephen, are there any questions on the line? I now demand a poll on Resolution 1. Please cast your vote on Resolution 1 now if you have not already done so. And we will now move to Resolution #2. [Voting]

Even the Resolution 2 relates to my own reelection, I would like to hand the chair of the meeting over to George Rolleston [indiscernible].

Thanks, Dominic. Mr. Dominic O'Hanlon was appointed as Director of the company by board resolution on the second of February 26. The Australian retires from office in accordance with ASX and clause 63.7 of the Constitution and being eligible offers himself for election. Mr. Dominicans points to be approved by an ordinary resolution of members in accordance with 63.2 of the constitution and as listing Rule 14.4. Mr. Dominic O'Hanlon as an independent director of the company. The Board, with Mr. Dominic O'Hanlon is abstaining recommends that shareholders were in favor of this election. The proxy rights received in relation to this resolution are now displayed on the screen. Are there any questions on the floor? Stephen, any questions online? I now demand a poll on Resolution 2. Please cast your vote on Resolution 2 now if you have not already done so. [Voting]

Thank you. I'll now pass back to Dominic and we'll move to the next resolution.

Thank you, George. So Resolution 3 is the reelection of Mr. Robert Phillpot as Director of the company. Mr. Robert Phillpot was elected as a Director of the company on the 2024 Annual General Meeting. Mr. Robert Phillpot retires of a rotation in accordance with ASX listing was 14.4 and 14.5 and clause 64.1 of the constitution and being eligible of himself for reelection. Mr. Robert Phillpot is considered the independent director of Felix. Mr. Robert Phillpot's appointment is to be approved by an ordinary resolution of members in accordance with clause 64.1 of the constitution and ASX listing rules 14.4 and 14.5. The board with Mr. Robert Phillpot is abstaining recommends that shareholders state in favor of this resolution. The Chair of the Annual General Meeting intends to vote undirected proxies in favor of this resolution. The proxy votes received resolution are now displayed on the screen. Are there any questions from the floor? No? Stephen, are there any questions online?

No question.

No questions. I now demand a poll on Resolution 3. Please cast your vote on Resolution 3 now if you've not already done so. [Voting]

Thanks, Luke. We'll now move to Resolution 4. Resolution 4 is the ratification under ASX Listing all 7.5 prior issue of transplantsizing shares issued on the ASX listing rule 7.1. The company refers to the background information related to the placement contained in the notice of meeting and the letter from the chair. Resolution 4 seeks shareholder ratification for issuance ASX listing will 7.4 for the prior issue of 38,088,844 change 1 placement shares issued under ASX listing rule 7.1. If approved, those shares will no longer reduce the company's 15% placement capacity under ASX Listing Rule 7.1 restoring that capacity. If not approved, those shares will continue to reduce that capacity for the applicable period. The Board considers resolution for to be in the best interest of the company and shareholders and [indiscernible] recommends the shareholders to favor of Resolution 4. Attention should be given to the voting exclusion statement in the notice of meeting. The proxy votes received in relation to this resolution are now played on the screen. Are there any questions from the floor? Stephen, are there any questions online?

No questions at all.

No questions. Thank you. I now demand a poll on Resolution 4. Please cast your vote on Resolution 4 now if you've not already done so. Thank you. We'll now move on to the next resolution. [Voting]

Resolution 5 is the ratification under ASX Listing Rule 7.4, a prior issue of Tranche 1 placement shares issued under ASX with 7.18. The coming year affairs refers to the background information relating to the placement contained in the notice of meeting and letter from the chair. Resolution 5 seeks shareholder ratification for Assurance ASX looking the prior issue of 29,850,074 tranche 1 shares issued with the company's 10% limit on ASX Listing Rule 7.1, which was approved by shareholders at its last Annual General Meeting which convened in November 2025. If approved, those shares will no longer reduce the company's 10% placement capacity. If not approved, those shares will continue to reduce that capacity for the applicable period. The Board considers Resolution 5 to be in the best interest of the company and shareholders and unanimously recommends the shareholders vote in favor of Resolution 5. Attention should be given to the only explosion statement in the notice of meeting. The proxy votes received in relation to resolution are now displayed on the screen. Are there any questions from the floor? Stephen, are there any questions online?

No questions online.

I now demand a poll on Resolution 5. Please cast your vote on Resolution 5 now if you have not already done so. Thank you. We will now move on to the next resolution. We're getting there. We have a lot of resolutions. [Voting]

Resolution 6, authority issue tranche 2 placing share under ASX Listing Rule 7.1. The company refers to the background information relating to placement contained in the Notice of Meeting and the letter from the chair. This resolution seeks shareholder approval to [indiscernible] ASX listing rules 7.1 for the proposed issue of 77,982,135 tranche 2 placement shares. If this resolution is past the company we have to receive the issue of the Tranche 2 placement shares. In addition, the issue of traction shares will be excluded from the calculation of the number of equity issues that the company can issue without shareholder approval under ASX listing rule 7.1. If this resolution is not passed, the company will not be able to proceed with the issue of the Tranche 2 Placement shares. The Board decided Resolution 6 to be the best interest of the company and shareholders and unanimously recommends that shareholders vote in favor of Resolution 6. Attention should be given to the voting slip statement in the notice of meeting. Proxy votes received in relation to this resolution are now displayed on the screen. Are there any questions from the floor? All right, Stephen, are there any questions on line?

No questions online.

I now demand a poll on Resolution 6. Please cast your vote on Resolution 6 now if you have not already done so. [Voting]

Thank you. We'll now move to the next resolution. Resolution 7a, authority issue tranche 2 placement shares to plant investments PC and associated with Mr. George Rolleston under ASX was enrolled 10.11. Despite of tranche 2 placing shares at a number of those shares are proposed to be issued to 3 of the directors in the company. Resolution 7a seeks shareholder approval of Assurance ASX listing rule 10.11 for the issue of total up to 26,315,789 transplant shares under the placement at Investments PTY Limited, or its nominee and associate of Mr. George Rolleston. If Resolution 7a is passed, the company will be able to proceed with the issue of those tranche 2 placement shares the same investment limited or it's nominal and associated with George Rolleston. In this issue, the issue of those transplant shares will be excluded from the calculation of the number of equity securities that the company can issue without shareholder approval under ASX Listing 7.1. The Board with George Rolleston abstaining considers Resolution 7.8 to be in the best interest of the company and shareholders and unanimously recommend the shareholders to payment on Resolution 7.7a. Attention should be given to the value closed in the notice of meeting, including the exceptions of permitted proxy, attorney and studio votes. The proxy votes received in relation resolution are now displayed on the screen. Are there any questions from the floor? Stephen, are there any questions online?

No questions online.

Thank you. I now demand a poll on Resolution 7a. Please cast your vote on Resolution 7a now, if you've not already done so, and we'll now move to Resolution 7b. [Voting]

Resolution 7b is authority issue tranche 2 placement shares to gravel road nominees 100, a related party of the company under ASX listing rule 10.11. As part of the Tranche 2 placement shares a number of our shares are posed to be issued to 3 of the [indiscernible]. Resolution 7b seeks shareholder approval to assure ASX listing 10.11 for the issue of a total of up to 1,315,789 Tranche 2 placement shares under placement to railroad nominees PTs or its nominee and industry controlled by Mr. Robert Phillpot. If Resolution 7b is passed, the company will be able to proceed with issue of those transit placement shares to Gramalote Nominees Pty Limited or its nominee NSG [indiscernible] Robert Phillpot. In addition, the issue of those tranche 2 shares will be excluded from the calculation of the number of equity securities that the company can issue without shareholder approval under ASX Listing Rule 7.1. The Board with Mr. Robert Phillpot abstaining considers Resolution 7b in the interest of the company, the best interest of the company and its shareholders and unanimously recommend the shareholders vote favor of Resolution 7b. Attention should be given to the voting exclusion statement in the notice of meeting, including the exception of committed proxy, attorney and fiduciary votes. The proxy votes related -- received in relation resolution are now displayed on the screen. Are there any questions from the floor? Stephen are there any questions online?

No questions online.

I now demand a poll on Resolution 7b. Please cast your vote on Resolution 7b now if have not already done so. Thank you. We will now move to Resolution 7c. [Voting]