SGH Limited (SGH) Earnings Call Transcript

Well, good morning, everyone. I'm John Gillam, Chairman of SGH. And on behalf of the Board, I welcome you all here today, particularly shareholders. And both those in the room and those joining us by webcast to our 2026 Annual General Meeting. This is my first AGM as Chairman after joining the Board in February and succeeding Terry Davis in June. There is a quorum present, and I'm pleased to declare this meeting open. Voting is now open on all items of business. SGH is a leading Australian operating business focused on industrial services and energy. We own and operate market-leading businesses with scale, strong competitive positions and privilege at the moment or replicate assets. Our wholly owned industrial businesses, WestTrack, Boral and coats are complemented by our energy interest through SGH Energy and our 30% shareholding in Beach Energy. We also hold a 20% shareholding in Seven Media Group. Our wholly owned businesses face into markets with strong fundamentals and long-term demand tailwinds, such as the $1.7 trillion infrastructure and construction pipeline, mining production and global LNG markets where demand continues to grow. The strength and consistency of SGH's performance over the past decade reflects more than just favorable market conditions. It reflects the disciplined execution of our SGH operating model, driving incremental gains across people, operations, assets and financials. It also reflects our active approach to evolving and growing our portfolio of businesses. Over that time, those gains have delivered compound annual EBIT growth of 18%. Margins have expanded and cash generation has funded continued investment in our businesses while maintaining a strong balance sheet. That long-run performance has seen our market capitalization grew from $2 billion to around $18 billion, with SGH delivering total shareholder returns more than 4x those of the ASX 200 Industrials Inc. Disciplined capital allocation has been central to those returns and remains the Board's core responsibility. We assess every investment on its ability to deliver long-term returns to you, and that discipline has supported stable or growing fully franked dividend since our inception in 2010. We complement those dividends with buybacks when our shares trade below intrinsic value and repurchasing them offers an attractive use surplus capital. The on-market buyback of up to $500 million, which commenced in August reflects that approach. It is accretive to earnings per share and funded from operating cash flow while preserving our capacity to invest in growth. Periods of market volatility create opportunities for companies with the financial strength to act with leverage below our target range, around $2 billion of liquidity and strong cash generation, SGH is well placed to do so, and we believe our relative strength is not yet fully reflected in our share price. Together, share price growth, fully franked dividends and buybacks demonstrate the Board's commitment to shareholder returns. SGH is a strong Board of committed nonexecutive directors with diverse experience and a deep understanding of our businesses. On stage with me are our Managing Director and CEO, Ryan Stokes; along with nonexecutive directors, Rachel Argeman, Vik Bansal, Kate Farrar, Mark Johnson, Chris MacKay; David McEvoy; and the Honorable Warwick Smith. Also joining us is Warren Coatsworth, our Company Secretary and representatives from our auditors, Deloitte. The Board was renewed during the year as part of a planned approach to succession. I would like to thank Terry Davis, who joined the Board in 2010 and served as Chairman from 2021 until his retirement this year. Over his tenure, SGO grew from a small investment vehicle into one of Australia's leading industrial companies. That outcome was built on disciplined capital allocation and engaged board and a management team that has consistently delivered strong operational performance. On behalf of the Board and shareholders, I thank Terry for his stewardship over that transformational period. The transition from Terry was orderly, providing continuity while bringing a fresh perspective. My focus as Chairman is to extend SGH's capital discipline and governance and to support Ryan and the management team as they continue to lift operating performance and deliver growth. The Board will continue to provide oversight and constructive challenge with a clear focus on long-term shareholder returns. I would also like to thank Annabel Chaplin, who retired in February after 10 years on the Board for her outstanding service including as Chair of the Audit and Risk Committee. Mark Johnson has succeeded Annabel as Chair of that committee. Vic Bancel join the Board in April following his leadership of Boral and became a Nonexecutive Director in July. Vic's operating experience and first-hand knowledge of our portfolio strengthened the Board's oversight of our businesses. An effective board must keep its composition aligned with businesses in overseas and that means the right mix of operational, financial and capital allocation experience for our interests in construction, mining, production and energy. The same discipline will guide how the Board approaches skills, independence and succession in the years ahead. Today, Vic and I stand for election and Chris MacKay and Warwick Smith stand for reelection. I sincerely thank my Board colleagues for their support since I joined SGH, and I also thank Ryan and the executive team for their leadership during the year. The Board is confident in SGH's strategy in the capability of our management team and in the people across our businesses. We have strong businesses and the balance sheet to pursue growth with discipline. And with those remarks, I will now hand you over to Ron. Thank you.

Thank you, John, and good morning to everyone here and on the webcast. In FY '26, we delivered what we said we would. EBIT of $1.6 billion was up 1% in line with guidance and margin expanded 0.4 percentage points to 14.7%. Operating cash flow of $2.1 billion was up 6% at 99% cash conversion, that cash took our leverage down under 1.8x and lifted the full year dividend 3% to $0.64 per share fully franked. FY '27 is about execution. We aim to live to the performance in every business and build the next leg of growth through prices, our property assets and on acquisitions to deliver on our objectives. In FY '26, our lost time injury frequency rate improved 38% to [ 0.05 ] and the total recordable injury frequency rate improved 29% to [ 2.2 ] as a credit to our leaders and our people on the front line. In FY '27, our focus is on potential serious arm incidents as a leading indicator. Of our 15,000 employees and contractors ,85% are on the front line, directly creating value for customers. This is a choice. Lean structures close to customer, let us move fast and hope people accountable. We delivered 270,000 hours of training and supported more than 300 apprentices in FY '26. Our view on sustainability is simple. To be truly sustainable and initiative has to work on front, environmental, commercial and social, it must lift living standards, not undermined. At Boral, low carbon concrete is now 29% of concrete volumes Recycling is growing, and we are using more turnout fuels in cement production. Coats is growing, its low emissions fleet and battery solutions and WestTrack rebills extend the life of machines rather than replacing them. Sustainability will be won through technology, innovation and productivity, not regulation. That is where we will invest. The SGH way is how we run our businesses, and it starts from a simple test. Each business must perform better under SGH ownership or we don't deserve to win it. Cadence is critical. Every business runs the same monthly rhythm for the balanced scorecard measuring performance, deep into the organization. Each business supplies the SGH way through its own model, the West Track way, the Boral way and the Coway. It provides us a proven process to lift the businesses where wire, better service, habilization, sharper sales execution and tighter costs, small gains compounding every month for better outcomes for customers and shareholders. Now turning to our business. In FY '26, WestTrac grew EBIT 1% to $647 million and expanded margins by 0.8 percentage points despite lower capital sales, record rebuilds, strong parts volumes and higher technician productivity delivered that backed by higher production in iron ore and coal and gold. For our customers, what matters is fleet keeps running at the lowest cost per tonne. That means the right parts in the right place and skilled technicians on-site and rebuild to give machines a second life at a fraction of the cost of -- our customers are now planning new mines and expansions. Our tendering pipeline is the strongest it has been in years. Our priority is to win that work and deliveries into FY '29. Boral has Australia's largest integrated construction materials network. Around half of our upstream volume supply our own downstream operation. And that integration is our key advantage. In FY '26, Boral grew EBIT 14% to $535 million, with margin up [ 1.1% ]. It remains on track to deliver a sustainable mid-teens margin. The faraway is driving that through tighter costs, more reliable assets and better service, on-time concrete delivery of 88% is supporting daily led pricing. We are proud of Boral's progress, but there is more to do, particularly in Asphalt and New South Wales concrete and Prarie businesses. We'll continue to invest in support growth and strengthen the network in recycling and in Western Australia. It's a key focus in FY '27. Codes is Australia's largest equipment rental business with a $1.9 billion fleet and a network that covers every major market in the country. In FY '26, codes delivery of $270 million in a softer market. More of the fleet was working with time utilization up but pricing was competitive. We are investing to turn that into returns. The fleet is growing. Our hub branches are lifting efficiency and sales execution is improving win rates and pricing. Codes has already won work in solar, battery storage and transmission data centers, defense in the Brisbane 2032 program will all play in to this national network. As activity lifts, codes will capture it on a lower cost base and better pricing. At SGH entity, Codes remains on schedule, and we hold a 15.5% interest in the. First gas is expected in the fourth quarter of calendar 2027, and our LNG first cargo will be in the second quarter of calendar '28. Our share of investments is expected to be approximately billion. At plateau, that year of production will be around 4 to 6 cargoes per year for about 10 to 12 years. Marketing of our LNG is underway, and we intend to an offtake agreement. At Long term, we are reviewing the options to restart the field. The proposed domestic gas reservation scheme makes Breen gas like long term to market much higher. We hold 30% of Beach Energy, a leading mid-cap energy producer. And FY '26, beach operators safely, reducing listed its realized gas price and bought Waitsia to nameplate capacity. Its focus now is replacing and growing reserves through Otway Nesher, Waitsia and the Term trial with a strong balance sheet, and to consider future accretive acquisitions. In relation to the domestic gas reservation scheme policy, SGH sea are from both sides. We invest in gas supply through SGH Energy and Beach. And through Boral, we are one of the country's larger industrial users of gas. We support the government's objective of reliable, affordable and investable domestic market, where we differ is how we get there. There is no gas shortage in Australia today. The potential shortfall is 2 to 3 years away. Reservation does not fix that. It does not create one more molecule of gas and it risks less investment and less supply. As drafted, the scheme undermines domestic gas producer by forcing exporters to sell against them. In footfall, giving 110% figure -- this bill would make it law, targeting domestic supply at 110% of forecast demand. That means 1 unit of gas in every 11 will be reserved for a customer who does exist. The bill's aim is to protect customers from price spikes. Oversupply may deliver a short-term sugar hit for buyers, but pushes down the prices, producers need to justify drilling new wells. Less investment today means less gas tomorrow. And that brings the very price pipes, the bill is meant to prevent. The long-term consequences would decimate the domestic gas sector and the jobs that go with it, only to give short-term pricing power to multinational and foreign-owned wholesale users. Of the 31 manufacturers that would benefit only 4 are not for owned or multinational companies and Boral is one of them. On paper, this scheme is designed for us, and we saw think it's the wrong answer. The only way to get more gas to market is to encourage investment, not mandate sales. Our surplus property portfolio covers around 3,700 hectares across more than mostly for borrower carries and plants near major cities. Our strategy is to develop each site for its highest and best use. Ravenhall is the first, a joint venture with Dexus over 630 hectares in Melbourne's West with a potential for around 2.5 million square meters of lettable area. The model is capital light. We contribute the land, our partner funds are build and we keep the interest into complete assets and the associated income. Other sites will follow. Over time, this program will release significant value for shareholders. We hold 20% of Seven Media Group. We formed through the merger of Seven West Media and selling Cross Media in January 2026. It brings together leading television, audio and digital audiences are privileged and hard-to-replicate media asset that engages and entities more than 20 million Australians every month. A few businesses have its reach and influence across Australia. SHG's priorities are delivering the cost program and growing revenue from integrated and deliver growth and returns. We have 2 strengths that position us well for growth. Our proven ability to lift operating performance and the balance sheet and cash flow -- we will use them with discipline because most of the value in any acquisition is made by buying well. We were unsuccessful with BlueScope, but its share price sets showing the value we identified. Every opportunity is against our 7 criteria and every investment, organic or required base is the same test to ensure it delivers on our return on capital hurdle. We also see value in our own shares. And since August, we have bought back $9 million under our $500 million buyback at an average price of $39.58 and a return well above our hurdle. We retained the capacity to buy more when our shares trade below our view of intrinsic value. In FY '27, we are taking the SGH weight deeper into each business and closer to the front line. That means better service, more wins and better pricing on a tighter cost base with AI lifting productivity across the group. First quarter trading was in line with our expectations, and we reaffirmed our FY '27 guidance of flat to low single-digit EBIT growth. We have clear milestones ahead. Our first Fox Cargo in 2028 and Ravenhall unlocking value from our property. Privileged assets, strong demand execution. That is SGH. I think our people across SGH for their work this year and their commitment to our customers and the executive team for their leadership and John and the Board for their support. And finally, I thank you, our shareholders, for your continued support and confidence in SGH. Before I hand back to John, I want to announce an important change to our leadership team. Richard Richards is stepping down as Group CFO after more than 13 years, set Fankhauser will succeed him effective 1 December following a planned succession process overseen by the Board. Richard will support a seamless transition over the coming months and continue to assess SGH portfolio evolution. Richard has been at the center of SGH's financial journey including the 4GA acquisition of Nexus, the sale of WesTrac China and the acquisition of the remaining 50% of Coats and Boral. The also unification of our capital structure through the Telis, consolidation, raise capital 3x and effectively manage debt to enable our growth using innovative financing in financial instruments, including convertibles, exchangeables and structured derivatives. Richard has been an incredible force driving the performance of SGH. It is also developed a team with the capability to deliver demonstratable outcomes across M&A, tax, treasury, insurance, reporting and governance. What makes Richard exceptional is not just the numbers, it's his judgment, his integrity and the stand as he said for himself and for our finance teams. When something has to be right, Richard make sure it's right. Our Board, financers and investors trust his word and he has earned that trial. Stephane is currently the Borough CFO. Prior to Borrell, the CFO of Babcorp; and before that, Sinek, giving him deep experience in complex operating environment and disciplined capital allocation. Stephan knows our businesses and our operating model from the inside and has played a key role in betting it at Boral and driving its transformation. His appointment reflects the depth of talent we deliberately built across the Board and I look forward to working with him as he leads our financing structure through SGH's next phase of growth. Richard, and we ask you the stand, Richard. We have an ongoing -- Richard will have an ongoing involvement supporting SGH, and I'm pleased we'll continue to have his counsel. Richard, thank you very much for your contribution. With that, I'll hand back to John. Thank you.

Well said, Ryan, and can I add on behalf of the Board deep gratitude and thanks for the tremendous contributions you've made, Richard, to the modern SGH. And we are very much looking forward to your continued involvement in portfolio role. And Stephane, congratulations on your appointment. We're looking forward to working with you. So a smooth succession and long-term planning for executives as a crucial skill and congratulations to the Board and to all of those in executive team who have helped to support this. Now let's move to the formal business of the meeting. The Notice of Meeting has been available to shareholders for some time, and unless there is an objection, I will take it as read. Shareholders, proxies and authorized representatives may ask questions on each resolution as it is considered. General questions will be taken at the end of the meeting. Please direct all questions to me as Chairman, wait for a microphone, show the red or yellow card you received at registration and state your name. Before each resolution, the proxy votes lodged by the deadline in the notice of meeting will be shown on the screen. And as Chairman I intend to vote all available undirected proxies in favor of each resolution. As set out in the notice of meeting, all resolutions will be decided by a poll. So let's turn to item 1. The first item of business is to receive and consider the financial report, the director's report and the sustainability report and the auditor's report of the company and its controlled entities for the year ended 30 June 2026. No resolution is required on this item, so there will be no vote. Are there any questions on the annual accounts and reports for the year under review.

Good morning, Chair, David Kingston K Capital. Look, congratulations on some excellent results. It's been a great decade. So undoubtedly, well done. I was interested to share in your annual report, your address, you stated that the TSR had outperformed the Industrials Index by more than 6x. But in this morning's address, I think you've corrected that to 4 times. I think 4x is the correct one. Is that correct? I think you'll find the timing of the different statements make both anyway. Either way, it's an outstanding result. So let's run with 4x, which is what you've said this morning, great result. Look, I really admire the culture here. It's got a terrific ownership culture. Love the annual report referring to compounding excellence, probably came from Chris Maco. Love the comment. We are relentless operators. Not many companies are and that you drive your assets and performance improvement is continuous. So they're great words Boral was mediocre for many years, terrific credit to Vic Vancel and SGH for a terrific turnaround. FY '22 EBIT margin 3.6%, 4 years later, 14.1%. Congratulations. Chair, let's look at future growth because it's probably going to be a little bit more challenging to replicate off such a high base. But you all letter states, the Board has widened where it looks for growth. quite Australia remains the core focus, but domestic productivity challenges means consideration of acquisitions in selected developed economies will occur. As Ryan said, I think BlueScope was a great target. I think you exhibited discipline. It was a good target, but they defended it strongly. So move on to the next one. But my first question, Chair, could you please amplify on what you see as the domestic productivity challenges? And can you please provide some color on whether you expect organic growth or acquisitions will provide the majority of future growth? That's my first question.

Thanks, Mr. Kingston. I think Australia is overinvested in conformance rather than performance. and that's how I size the challenge we face as a domestically or entreated. I'm sorry, it's a microphone not picking it up -- sorry, I'll just repeat. I think Australia is challenged by an overfocus on conformance, and an under focus on performance. We're a very performance-orientated business and the challenge we face is to minimize the cost of the conformance so that we can provide employment and growth. And we had a strong focus in terms of where growth will come. In challenging times, the strong have a chance to grow more share than others because weaker businesses can't defend and distracted businesses don't understand they need to defend. So this is a time we think that is very productive for organic and adjacent and bolt-on growth our core businesses, and we also have a very active scan on opportunities that would add to our industrial and energy profiles.

Is there any more color on the domestic productivity challenges? Like a lot of people, and I think Ryan has been quoted as saying he has some concerns with fair work, I do. I have some small businesses myself much smaller, but I think fair work is at times unfair on employers. But any more color on that, please?

Look, I don't think it's wise to get into a commentary on all the minutia that goes towards impacting productivity in Australia. We are overfocused on conformance and underfocused on performance. And that is a challenge that -- we can't change on our own. We're active in lobbying directly and being involved in other forums where we can get -- where we see we can get changed, but what we've got to do is deliver performance in the environment.

Any color on which overseas areas you're looking at? Is it America, Europe, Asia?

It's developed.

Okay. All right. My second question is beach. Unlike SGH, its 10-year performance chair is poor. Its share price was about the same 10 years ago. It represents around about a $600 million shareholding, which is not huge in a $17 billion company. But having struggled with beach for 10 years, 0 share price growth over that period goes up and down. Could you please clarify whether it's part of the long-term framework of this company?

Thanks, Mr. King and this is more of a general question. I will take it, but this is more of a question for when we get to open. Ryan made some strong remarks in his address on Beach and on domestic gas, until there is a resolution on the domestic gas reservation proposal. It's difficult for us to have anything other than an immediate view Beach. We do like the long-term fundaments of energy assets like Beach, if there is the right investment settings for them in Australia. And you can see the lobbying we're doing is very much aimed at things that will, we think, be very positive for Australia's long-term interests. And it's difficult to comment otherwise, while there's such a significant regulatory overhang that's unresolved. Are there any other questions on the financial statements? Warren, anything that was written in.

No other questions online.

Any other questions? We do have, yes.

Okay. Good morning, everybody. There was speculation about the Cleanaway purchase. Did that -- or what happened with the purchase?

And sorry, your name is?

My apologies. Lindsay Somerville.

Mr. Somerville. It's a purchase being made of a company we have contractual positions with, and we're not the acquirer. So I'm commenting on why the business is. I think the wish global private equity is looking to acquire a cleaner one.

And just on BlueScope, we've given up on BlueScope completely?

I don't think we give enough. Any further questions on Item 1? Okay. Thank you. We'll move to item 2 and the next 4 items all relate to the election and reelection of directors. And just note for the record that no other nominations were received. And item 2 relates to my own election. So I'll now hand over to Loric Smith.

Good morning. Thank you, John. The first director standing for election is John Gillam, who having been appointed by the Board since the last Annual General Meeting is eligible. Tyson's being able to want to offer himself for election. John Gillam brings an extensive executive leadership experience across diversified industrials, retail and consumer-facing businesses. his 20-year career with Wesfarmers included 12 years as Chief Executive Officer of Bunnings. He is currently Chairman of Lend Lease and Nufarm and was previously Chairman of CSR. John Gillam also brings expertise in capital allocation and portfolio management gained across a range of ASX-listed companies, which is a particular relevance to SGH's diversified operating structure. John has been a director since February 2026 and Chairman since June '26. He is a member of the Remuneration and Nomination Committee and Chair of the Independent Related Party Committee. Are there any questions?

My apologies, sir. John has worked as a very studious worker and there's also a Chair of Lendlease and Nufarm. What's the history of his relationship with the Stokes family? And what was the process by which he was recruited where other candidates considered, did he make workload commitments such as giving up his aspiration to Chee Cricket Australia?

Cricket Australia -- he's very judicious and -- he's very judicious. in his selection, Mr. Somerville. Here's a Western Australian know into the Stokes family. There was an external review. Ryan might add to this later, but there was an external review done by the Board, a range of different candidates were considered. It was an interview process following recommendations and he is buried his workload to be able to provide as his #1 priority between us and others that is involved with that -- yes -- there you go. Any other questions? I see someone standing at the back, but I can't see if you've got your hand up, no, no, you're waving the wrong way. Okay. No other questions. I now will hand -- thank you all so -- can you please let us know your name.

[indiscernible]. Mr. Gillam has been a member since February and his chairmanship took up in June. Have you had any opportunity to take up shares in the company itself. I mean I know it's a tough gig and you have small windows of opportunity. Are you planning to take up shares in the company so that you have skin in the...

I will ask, given this personal question, and I'll ask him if he could respond to that.

Thanks, Warrick. Yes, I wasn't able to buy shares until after the annual results and I bought them in that window of opportunity. And I think the ASX filings will show that it was at the time of it maybe $1 million in face value.

And given it's the emergence of artificial intelligence. I don't wish to cast any explosions on any of the directors. Have any measures been taken to bring them up to date or have teams advising in the artificial AI and decision-making or indeed enhancing the capacities of directors as such. Do you have an ongoing program, for example? As I assume you do for all your workers -- on the coal phase.

We do. We have very, very extensive activity and an internal Board on AI, its application, both internally and the availability and capacity of Board Directors, but both the Chairman and the CEO can have that be assured. We are all very focused on the impact positive and the challenges of AI and all its manifestations, face for companies like us.

Okay. I now will hand you back to John Gillam.

Thanks, Warwick, and thank you, directors and shareholders for your support. We'll now go to item 3, which is the next director standing for election, Vik Bansal, who was appointed to the Board since the last Annual General Meeting and retires and being eligible offers himself for election. As we've said before, Mr. Vansal, the Chief Executive of Boral from October 2022 to March 2026, and he brings extensive operational and executive leadership experience across industrials, waste management and infrastructure. Under Mr. Bansal's leadership, Boral embedded the Borrow operating discipline, which continues to deliver significantly improved financial and operational performance, and that experience brings direct operational insight to the Board's oversight of Boral and the wider group. He's been a Director since April 2026 and is a member of the Audit and Risk Committee and the Remuneration and Nomination committee. The proxy lodged for this resolution appear on the screen. Are there any questions on this matter? Mr. Kingston.

Look, Vic has a fantastic career bodies achieved Boral is great and also more recently in Orica. So I think the institutions love him. And so I think he's a fantastic addition to the Board. But I'd just be interested in your view as given your experience, Page 26 to 31 of the annual report lists 6 pages of risk factors. I won't go through them, but one that stands out, which I've known for a while, is that the WesTrac business is subject to a 90-day termination regime. I'm not a melodramatic person. You won't be terminated. It's just not the way things happen if the business is going well. But I'd just be interested in Vic's view. Is there a chance of the terms of that arrangement being changed, given that SGH is making a pretty nice margin out of it. the Americans can potentially change the terms? Is that a risk or not really?

Thanks, Mr. Kingston. I think we're going into a quite sensitive and commercial, these sensitive areas. So I don't think it's possible for us to comment specifically. The relationship with the CAT dealership is critical to WesTrac. And West track in all its forms, and now owned as it is by SGH has done a very good job of managing that relationship, growing the business and servicing CAT customers, the service to CAT customers is one of the strongest elements within the WesTrac businesses. So I think that provides a very, very strong counterbalance to this 90-day element. Like all of the businesses in our portfolio, we take a long view on what their prospects are versus our need to deliver returns, and it strongly passes that test at the moment. but we continue to keep very close. There's been changes in leadership in recent time. I don't know if you wanted to add any color to that, Brian?

Yes. Happy to. And I appreciate the question. It's a relationship that's lived for 100 years. If you look at Caterpillar, they celebrated the 100th anniversary last year. The business was formed through the merger of holt and best. Both businesses had dealers at that point in time and some Caterpillar's preexisted Caterpillar. That core has been there since I get go, it's on a document we refer to. It's an appropriate risk to call out in this document. So shareholders are aware of it, but it's not an issue we consider. And at the end of the day, our relationship to with Caterpillar and the value we add to customers will ensure that we have a role to play that is not a risk factor we are concerned about, and we think the relationship is one that for us exists more than 35 years, many dealers have a century relationship. So as long as we're adding value supporting our customers, we have a strong role to play working with catapult to deliver value.

Are there any questions relating to Vic's appointment. Yes, please. Welcome back, Mr. Kaeser.

Mr. Ryan, thank you, congratulations for doing a great job. And to Mr. Bansel also getting better value from Boral. Mr. Ryan has opening addressed mentioned future growth, sustainability, recycling and environmental issues. Although balancing this in a way that gives the company opportunities, it also imposes some restrictions in a sense that in sensitive areas where it might conflict with the community interest. And I'm thinking of the Montrose quarry. Now if you're going to be doing recycling and using alternative product, is it possible for you to be able to keep the Montrose quarry limited in that it doesn't have an adverse effect on the community that surrounds it. Would you like to add anything to that?

Yes. Firstly, I live in Melbourne, Power West Australian, but I know of the site of the sensitivities that surround the site. It is -- has operated for a very long time, and it's met always been demanded of it. And one of the really pleasing things is how engaged in the community the Boral business and the Boral Montrose team, they're a very proud member of the local community. They do a lot to support, not just operating a way that's environmentally and community sensitive. So I think these concerns are from a minority not a majority, but we are very conscious of being a good corporate citizen wherever we are. Ryan, did you want to add any more on Montrose?

Just a little bit for the content I think if you look at the role of Boral plays in the community, I mean, we're active from a community, a participant perspective, but also what we provide is critical to growing the community. So if you think about what Melbourne will go through have $10 million in population by 2050. That quarry asset is critical to support that. So when we think about contribution to community, we have to look at in that context, the jobs, investment. We know it's been operated since 1947. It has a long history, and we operate the quarry, the asphalt plant, the match plant out of that site and are very conscious of the environmental impact that we have and the contribution we make. So I think it is an appropriate site, if you think look at where it is on a map where we're looking to expand is going is the international park is not going across anywhere near residents, but that quarry has an important role to play to support the broader growth in Melbourne.

I raised this question because I remember reading a case of silicosis. And I said, well, if it keeps expanding at the rate it may cause environmental issues as well as very strong operational standards. And is recycling, and I assume that's talking about recycling concrete and new ways that hadn't been used before. Will that keep the control of the Montrose Pori output -- in recycling of concrete worsen thought of because it was going into dumps or whatever. But now it can be broken down and be reused.

It's an opportunity to continue to reuse that product as alternate aquarian -- aggregate product, but we material, and that's what Montrose will supply. The DAS management is a key part of the operating procedures within the site monitor extremely closely. There's no concern in that context.

And luckily, Melbourne's whether does aid in dust management rerate more days than not.

We've drifted a long way from the vote on Mr. Vancel, but...

On the responsibilities, the mantra is close -- come within this jurisdiction, I thought you might like to add to how circumstance strategic circumstance applies for the new potential of growth.

That's a good context. If there's no further questions relating to Vic's appointment. Yes, please?

I was going to raise later about the Montrea's quarry. There's -- are you aware that one of the employees did contract silicosis. And it is very close to a lot of schools. And I know Melbourne is expanding. But are we doing the best with our money in keeping that quarry going given the expansion of Melbourne and the possible damage to people in that community schools, communities and so on.

The short answer to your question is yes, we're very, very sensitive to our obligations to provide a safe workplace. Silicosis is a big challenge. So all parts of Australian operation. I get particularly worried when I watch trades on an individual site cutting books with no mask scares -- what we're doing in our plant and what we do across all our plants for this is exactly where it needs to be. And in terms of the wider community, it's exactly what the wider community would expect and we are very pleased to be able to meet those standards. So yes, but it's a very sensitive issue and it requires ongoing focus and ongoing focus comes from the Board's oversight -- and the SGH team's oversight of Boral and the way Boral operates and its oversight and the challenges to itself. So I'm comfortable we have it well managed, but it's not going to go away as an issue for all Australian companies. If there's no further questions on the election of Mr. Bansal. We'll note the proxies and move to item 4. The next director standing for reelection is Mr. Chris McKay, who retires by rotation and being eligible, offers himself for election. Mr. Mackay has a deep knowledge of business management, capital allocation, risk management and investment. He co-founded Magellan Financial Group where he was Chairman and Chief Investment Officer and previously served as Chairman and Chief Executive of UBS, Australasia. He brings this mindset and expertise to his role on the Board and its committees. Having served on the Board since 2010. Mr. McKay has acquired valuable insights into SGH in the diverse industries in which we operate. He is a member of the Audit and Risk Committee and the Independent Related Party Committee. Are there any questions on this matter? The proxies are now being shown as well. Thank you for the support. So if there are no questions...