Good morning, ladies and gentlemen. Welcome to the 2025 AGM of Acrow Limited. My name is Peter Lancken, and I'm the Non-Executive Chairman of Acrow Limited. It is now 10:30, and there being a quorum present, I declare the meeting open for business. I confirm that the meeting has been properly constituted today. First, I'd like to introduce you to our board members who are present. Firstly, to my right, Managing Jumpform and CEO Steve Boland. To Steve's right, Non-Executive Directors Rod Heale, Laurie Lefcourt, David Moffat, and James Scott.
Good morning.
Also in attendance is the company's CFO, Andrew Crowther, and Company Secretary, Lee Tamplin. Before proceeding with the formal business of today's meeting, I'd like to provide an address, a copy of which was released to the ASX prior to the meeting. I will then hand over to Steve to provide a business update. A copy of Steve's presentation was also released to the ASX prior to the meeting. Shareholders in attendance today are welcome to ask questions on the presentation or of a general nature. However, I ask that you save these until the completion of the formal business. Shareholders attending online are also welcome to submit questions at any time. To submit a written question or request to speak via the Automic platform, click on the Ask a Question dropdown on the right-hand side of your screen, and then follow the prompts. Instructions are also displayed on screen.
When you submit your question, please state which item of business your question relates to so that it can be addressed at the appropriate time. I'd also like to welcome the non-shareholders in attendance today, to whom access has been made available via Zoom. Please note that those attending via Zoom link are not able to ask questions. If you're a shareholder and have inadvertently joined the meeting via Zoom link, you are encouraged instead to join the meeting via the Automic platform so that you have access to the voting and the ability to ask questions. Instructions on how to access the meeting via the Automic platform can be found on screen and are also set out in the notice of meeting. I now turn to my address. Financial Year 2025 was a year of consolidation and continued strategic progress for Acrow.
We strengthened our position as a leading provider of smart integrated construction systems across formwork, industrial access, and commercial scaffolding. The year saw us successfully integrate key acquisitions that enhanced our industrial access capabilities, a division that now represents half of our business. This diversification continues to underpin Acrow's strategy of building a balanced, resilient, and recurring earnings base. To support this growth, we've completed the acquisitions of Brand Australia and Above Scaffolding during the year. Both businesses strengthened our presence in the utilities, energy, and infrastructure sectors and have integrated well into the group. Our expansion into the industrial access sector has also provided a greater proportion of recurring revenue from non-infrastructure, less government-influenced markets. This includes long-term contracts with blue-chip clients such as Origin Energy, Sydney Water, and BHP, which provide stable and predictability of our earnings.
Our Jumpform and screen-height businesses continue to perform strongly and have proven to be highly complementary, with Jumpform wins delivering additional screen work. We're also extending our expertise into the new industrial sectors, including bridge and ship maintenance, and have strategies to expand further into defence-related maintenance projects, which represent attractive national growth opportunities. Our formwork business experienced some timing-related challenges from project delays, particularly in Queensland. The pipeline of new work, however, remains at record levels. Major infrastructure projects such as the AUD 15.4 billion Torrens to Darlington project in South Australia and the Olympics-related projects throughout Queensland will underpin multi-year opportunities for the business. Despite these project delays, Acrow continues to deliver a solid financial performance that demonstrates the benefits of our scale and diversification.
Underlying net profit rose 4% for the year to AUD 34.3 million, and underlying earnings per share were at AUD 11.70, a modest 3% decrease due to the increased share base. We also maintained our commitment to rewarding shareholders, declaring total dividends of AUD 0.58 per share, consistent with the Financial Year 2024 Result. This represents a strong yield and reflects our focus on balancing growth investment with capital discipline. Acrow's expanded equipment-based asset pool continues to support efficient capital deployment and asset utilization across projects. Combined with our capital-light industrial access operations, which complements the more asset-intensive formwork division, this enabled the company to maintain a strong return on equity of 23.7%. With the current high fleet capable of meeting near-term demand, capital expenditure is expected to be moderate in 2026, strengthening cash generation and enhancing financial flexibility. We also continue to invest in our people, skills, and systems.
Partnerships with Queensland University of Technology and the University of Technology Sydney remain valuable sources of emerging engineering talent. Our registered training organization in Mackay and Brisbane, strengthened by the acquisition of ATEC, continues to develop skilled scaffold professionals. With skilled labor in short supply, we will further enhance these programs to breed our own talent and maintain Acrow's high technical standards. During the year, we also advanced the development of our enterprise resource planning project. The deployment of this investment will go live in 2026 and will deliver greater scalability, efficiency, and alignment across the business. Turning to the evolution of the board during the year, we farewell Melanie Alabon, Non-Executive Director and Chair of the Remuneration and Nomination Committee, and thank her for her contribution. We're also pleased to welcome James Scott to the board as Chair of that committee in March 2025.
Jane brings strong expertise in digital transformation, business strategy, and operational performance. Effective July 2025, we also welcomed Rod Hill, whose extensive experience in civil infrastructure, engineering delivery, and major project management will further strengthen the board's capability as Acrow expands its national infrastructure presence. Acrow enters Financial Year 26 with solid foundations and a record pipeline of opportunities across both Formwork and industrial access. Our roadmap for growth is clear, driven by the consolidation of acquisitions, cross-selling, and organic expansion. With the Australian government committed to more than AUD 126 billion in major projects, national infrastructure projects over the next five years, and recurring revenues from industrial access continuing to grow, we are well positioned for continued success. On behalf of the board, I'd like to extend my sincere thanks to Steve Boland and the entire Acrow team for their outstanding commitment and performance throughout the year.
I also thank our shareholders, suppliers, and clients for their continued trust and support. Thank you. Over to you, Steve.
Thank you, Peter. You're going to run the process, Steve. Okay, thank you to those that have joined us in the room today and also those who have joined us online. I'm going to quite quickly go through the first part of the presentation, which was really talking about last year and what was already in the investor presentation at the end of the financial year. I think we'll, I think probably more importantly now talk about what we're seeing in the market at the moment, what the future opportunities are for the business. I think firstly, just on our strategic principles, this has been out there for some time now. Profitable growth of the business, clearly. The second point there is one that's going to come up quite a lot today in this presentation.
Diversification of our revenue streams across the core product group and service offerings is absolutely key to the strategic growth of the business. There is also now equal importance on both our construction and industrial markets. I'm going to spend a bit of time talking about what are the distinct features of both of those markets as we are heading to the half year this year to actually do full segment reporting on construction and industrial, where it will be very clear what the profit and returns are in both of those businesses. We maintain a disciplined approach to investment in returns in both CapEx and M&A. What I like to call the Acrow way across factors and safety, people development, the cadetship programs we run in that area, engineering excellence, internal product development, and the whole management of that is vital to what's ahead of us in the next cycle.
Superior customer service outcomes and really having an attitude of we want to be the best in breed across everything that we do. Some of the key things from last year, the capital program last year, which was an accelerated program, specific really to three major areas that are all key to that diversification program. Firstly, our Jumpform business. We spent AUD 15 million in capital last year in that. I'll talk a bit more about the Jumpform business and its characteristics in a second. AUD 3.6 million in screens and AUD 6.5 million in industrial access. You can see the vast majority of what we're spending are in the three areas that are outside of what would be in our traditional formwork civil infrastructure-based businesses. It's all about opening up these new channels for revenue to give us that diversification.
This year, with around about AUD 27 million expected spend in CapEx, the absolute vast majority of that is again going into those three systems: Jumpforms, screens, and industrial access. Talking about industrial access now, look, this has been a massive success story for us over the last few years. You can see in FY23, we did AUD 40 million of revenue. We're hopefully pushing up towards AUD 200 million in this space this year, off the back of both organic and M&A activity. Over the last two years, we've bought MI Scaffold in Mackay, Benchmark Scaffold, which is Townsville and south-east Queensland-based, Brand Australia, which is primarily in Muswellbrook in the Hunter Valley with a smaller depot in Gladstone, and Above Scaffolding, which is a Sydney-based business. All of those are going very, very well.
All of them are going better than we would have expected them to at the start. I think the other major thing in this business over the last 12 months was winning the Pertamina contract for the development of the Urea plant in Karratha, our first major contract in Western Australia that is generating at the moment somewhere in the vicinity of AUD 12 million-AUD 15 million a year of revenue and going very, very well. We now, I'll talk more in the future prospects. We've got ambitions to grow significantly more in South Australia, in Western Australia. I'll talk a bit more specifically about that a little bit later on. I mean, this is a good business. Growing rapidly, we'll continue to grow in what's actually a very large market across the country.
The two other systems that we're investing in, in Jumpform and screens, and that's really interesting at the moment if you consider what's going on in the broader construction industry. Again, I'll talk about that later, but both of these systems significantly reduce the requirement for labor on jobs. If you think about what there's been a lot of publicity around, the amount of jobs in the construction industry that are short going forward in this next, as we have a lot of things, a tsunami of work ahead of us over the next five years. Both of these systems are designed to reduce labor and are both going to be really important in terms of that process over the next sort of three- to five-year period. Jumpform, we started from scratch. We've now got 33 projects and 47 systems in place.
You can see on the chart that the revenue went from AUD 3.6 million to AUD 10.4 million last year, and we won AUD 11 million with the work. In the screens area, which these two systems actually work hand in hand and are being cross-sold very aggressively. We've got 95 jobs going in screens across the country. We are by far the market leader in New South Wales in this space. We bought right from the start seven years ago, we bought a business called Natform that was doing about AUD 6 million of revenue in this business. We'll do 20-plus million in revenue in screens this year, including being up in WA, where within 12 months we'll go from zero to probably AUD 3 million of revenue in the Western Australian screens market. Great growth and again, very important in terms of their labor-saving characteristic going forward.
We get this quickly to the other areas. We mentioned about training. Peter mentioned ATEC. Very important for us now to developing our own scaffolders, to develop our own engineers in both training and development. The product development supply chain piece again becomes really important as we go into the significant uplift in the construction activity that we are going to undertake. Firstly, developing products, not just the screens and Jumpforms, but other formwork products that are about saving labor requirements on jobs. I think clearly the management of the supply chain and the ability to get gear into the country quickly is going to be a huge advantage for our business as we go into that next three to five-year period. We are investing in a new enterprise resource management project. We have quite outdated systems in that regard.
We've got a lot of different systems that have come on board with acquisitions. By hopefully this time next year, we'll have one new enterprise resource management project system. Quickly go through the FY25 highlights. Our safety record is very good in an area where it's becoming more complex given the number of industrial scaffolders we now employ. I think two or three years ago, we probably only employed 100 odd people in this space. Some weeks now, we have up to 700-800 scaffolders working for us. It's an area we have to be absolutely sharp on. If you think about the client base, the BHPs, the Origin Energies of this world, you don't get working for those companies unless you've got a very strong safety reputation and record. The key achievements for last year, I mentioned about the growth in industrial.
I mentioned Pertamina. We renewed the BMA contract at Hay Point, primarily for Mackay, which was a great thing to do. It is a very large contract over a three-year plus one-year option period, two industrial acquisitions. We won our biggest ever Jumpform contract with Meriton on the Gold Coast on the Cypress project. It is going to be very interesting. I think in the next six months, we will be talking a lot about that project because it is incredibly innovative what we are doing there with the Jumpform. I will not go into all the detail of that now, but I would say when it comes to the full-year results and presentation, that is a game changer for that industry. We were up 27% in hire contracts secured last year. We are flat this year, as I put in our forecast, but the pipeline is massively up.
Financial metrics, up in revenue, up in EBITDA, up in NPAT. NPAT stat was down for a range of reasons, mostly to do with the acquisition work that we did. We were flat in EPS, as Peter said, off the back of more shares being issued and the dividend Peter announced. We've still got a very strong growth record in all of the revenue, EBITDA, return on equity, dividends, earnings per share. They're all pretty much double-digit increases since the company increases on a KGAR basis, or far more than double-digit. Now, going into more about where we are today and some of the dynamics that you're going to see differently about Acrow, firstly, we're now going to start talking about two very distinct markets. We service the construction market, and we service the industrial access market. They are very distinct markets. They have different characteristics.
They are equally important to us. You will see as we get into the half year that we will be doing segment reporting about those two sectors. Firstly, talking about construction, to give you just a flavor of what that business does and what it services. We have a formwork business, a commercial scaffold business, Jumpform screens. We sell hardware and consumables. That is not a complete list, but they are the sorts of services and products that we offer across those sorts of markets: health and utilities, civil infrastructure, which is the biggest one for us, and then high-rise commercial, high-rise resident, low-rise resident as well. One of the big diversification reasons or strategies is we became, probably over about a two or three-year period, by far the biggest provider of formwork sales and hire equipment into the civil infrastructure market.
That is a cyclical market, as much as I'd like to say it's not, it is. Right? We saw two or three years ago that we needed to diversify the revenue stream so we weren't just a one-trick game in terms of civil infrastructure. That market is about to go through a significant uplift over the next period of time. You can see the performance in this business. You can see from 2021 through to 2024, we had very, very significant revenue and profit growth in this business. It flattened last year. The first half of this year, it's flattened again. Okay?
I think when I go through, you'll see I'll be able to explain why we've got significant revenue growth in the business and yet flat EBITDA because our industrial business is going off the chart and our construction-based business is actually still going back from where it was over the last six months. We know that that's absolutely a short-term issue. Industrial access. This business, we hire gear out. We provide labor in a big way, project manage our training, and we do sell equipment. Again, not a list of everything we service, but to give a flavor, power generation, oil and gas, refineries, and then the growing ones for us that are going to be really important going forward, marine defense and asset maintenance. Off the back of the Above Scaffolding acquisition, we've now got an end to defense.
They do most of the work at Garden Island when they're providing access for the maintenance of the naval fleet. They're doing HMAS Adelaide and HMAS Sydney at the moment. Asset maintenance, the core capability that they bring to the business is bridge work. They have a very big contract with the Sydney Harbour Bridge for providing access for maintenance of the bridge. They just won, again, a really significant contract on the Narrow Bridge, which was the Narrow Road Bridge, which is now getting converted to a pedestrian bridge. They have won the contract for providing the access while that bridge gets moved from a road bridge to a pedestrian bridge. You can see the financial performance of that business. It's grown. You can see revenue and sales contribution.
I think the important thing there is you can see in that really rapid growth we have had between 2022 and 2025, margins have remained consistent. Going into the outlook, short-term observation. I think straight up, the strategy to diversify the revenue streams is delivering stable earnings to this business when the construction industry is actually going through a downturn. There was a downturn, especially in Queensland, over the last 18 months to two years that we will talk about in a second about the medium-term position for that because that is about to go the complete reverse. The Industrial Access division will continue to grow. We will approach AUD 200 million this year in revenue in that business. It will be a larger share of revenue.
As I mentioned about the recently acquired businesses, they are giving us a lot of cross-selling and growth opportunities in things that are really important areas like marine defense and asset maintenance. At the moment this year, we're pursuing growth in that business both off the back of the new capabilities we've got, but certainly targeting new geographic markets. We've just made a very significant hire of a new chap in South Australia. We started with this about three weeks ago. He was very senior in one of the major providers in this space in South Australia. We're tendering on some very major projects at the moment, long-term projects in the South Australian market at the moment. We'll continue to grow both Jumpforms and screens nationally. WA is going to be a real cracker for us in that specific space.
I've mentioned softness in the general formwork market in the first half, especially in Queensland. The second half, the conditions will definitely improve, but mostly in the last quarter. We've got a very good, I guess, look at how does the high revenue, especially look over sort of a three to four-month period. It's definitely that sort of March, April, May, June period where it's going to kick off for us in quite a large way. South Australia and Western Australia are growing. South Australia, we're doing incredibly well at the moment at the very early stages of the Torrens to Darlington motorway project. The month we've just gone through was the biggest revenue and profit month we've ever had in South Australia, and that project's just in its infancy. As I said, I mentioned this at the half year, sorry, the full year.
We are pausing M&A activity for this financial year. It doesn't mean we're not still exploring opportunities because we absolutely are, but we're just pausing at the moment so we can consolidate the two that we've done. I'd say into the new financial year, you may see an activity in that space. I think, look, the medium-term outlook is the thing that we're really focused on at the moment. The pipeline at AUD 248 million is up 25% same time last year and is the biggest number we've ever had in the company's history. Medium-term industrial access will continue to be very strong and will be a larger contributor to group revenues. I mentioned about the organic growth that will come via both scale, new geographic industry-specific markets, and I believe next year we'll see the recommencement of M&A.
In the construction side of the business, there's going to be probably a tsunami of work, as I mentioned earlier. I think all of the reports that we read, and such as Acrow, will tell you that the country is about to go through a very large increase in construction activity. I have put in here about the Infrastructure Australia report that was well publicized in the press a few days ago saying there will be a shortage of up to 300,000 construction jobs by FY2027. That's a good thing for us. That's a massive opportunity for Acrow given the products that we provide that market, saving labor. That's where our Jumpform screens and other formwork products absolutely come into our own. Number one, the fact that there's going to be that much of a shortage in workforce means there's going to be a lot of work on.
Secondly, our ability to provide products that reduce the requirement for labor on major projects is going to be a massive advantage for our business. In Queensland, obviously, everyone's talking Olympics. It is probably FY2027. You will start to see some revenue and opportunities come out of that. I have got a page separately here about what I think the broader opportunities are around the Olympics. It is not just about the Olympics. The graph that I have got on the other side of this page is put out by the Queensland Major Contractors Association. They are seeing an increase from AUD 10 billion to upwards of AUD 30 billion worth of infrastructure work outside of the Olympics being carried out within the next three to five years. Now, given the fact that we have got 71% market share in formwork in Queensland, again, massive opportunity for our business.
In Victoria, we are the go-to guys in civil infrastructure. We'll continue to be that. It's a controversial subject in the state, but the big build continues. Northeast Link, we're doing a lot of revenue on that. We're starting to see revenue on Suburban Rail Loop, and we will be very strongly focusing on the airport rail link. I mentioned South Australia. It's not just the Torrens to Darlington. All of the Orcas work. All of the infrastructure required to service the defense requirements in South Australia presents a huge opportunity for our business. I think we're going to see market share growth as our main focus is both in New South Wales and Western Australia. I've just got this page on the Olympics just to give it flavor. I'll go into this in detail.
Look, we've given some thought to where are the things that we're, where are the areas that we'll be able to generate revenue. In the lead-up to the games, there's a whole range of venue constructions. I've said this a few times. Winning the contract for the main stadium, you almost don't want it. You won't knock it back if it's for the right price, but you don't need the project that's going to sit on the front page of your annual report. Let somebody else do that to a degree, and then you pick up all the work around it at far higher rates. I'm not saying we won't want to do it, but I've got experience off the back of the Sydney Olympics, and that wasn't where the money was.
Athletes' Village is really right in our sweet spot given that it's going to be a series of high-rise constructions for our Jumpforms and screens and other things that I've mentioned in there. During the games, we have a part of our business that provides all the temporary facilities, temporary grandstands, camera towers, etc., our Benchmark business. They had the contract for the Commonwealth Games on the Gold Coast, and that was like an AUD 5 million contract. We've got a specialty in that area during the games. There is a whole range of other things to do with just, I think, the tourist surge, the Queensland Hospitals program, the national defense stuff, all this stuff going on at the same time as the Olympics. I experienced this in Sydney. It will not be about what's your price to supply. It will be, can you supply?
I'm absolutely positive for that. It will be no different to Sydney. In fact, I think it'll be worse given the profile of work around that. The work that we've done on our supply chain and our ability from order to supply, getting gear into the country within a six- to eight-week period, will be absolutely vital and put us in a really strong strategic position come that period where, again, it becomes, have you got the gear rather than what's your price. In terms of our guidance, I mean, look, the guidance number is clear. We're well up in revenue and we're flat in EBITDA. It's indicative of, as I said earlier, a very strong industrial access result for the first half and an average result in the construction market. We know going into 2027, there's going to be a seismic shift in that.
I think at the moment, I would say that our construction-based business for that half to what I would consider normally a par result is probably AUD 4 million-AUD 5 million down in EBITDA to par. You put AUD 5 million more on that number and it starts to become pretty attractive. Now, that's the par. We'll get back to par by probably the end of this financial year, and then we're going to go massively above it in the next two to three years in the lead-up to the games and all the other things that are coming into play. The other thing just to mention there, just to get, I guess, to condition people around the shift, clearly the more revenue that comes out of industrial, this half, it'll be about 58% of the group revenue, up from 50%.
Fifty-eight percent of group revenue for the half, the EBITDA margin and the sales contribution margin, because the margins in industrial are less than they are in formwork and construction, so that will shift the margin down from 54% to like 49% when you have that kind of mix. Now, I do not get too excited about that, to be honest. My focus is on making sure the margins in both the divisions are stable, and they are both in a position where they can grow, which we know they will within the next two to three, well, within the next 12 months. Peter?
Over to Leo, I think.
Thanks, Steve. Good morning, everyone. We move to the formal business of the meeting. A reminder that if you have any questions on Steve's presentation or of a general nature, we will take them at the end of the formal business.
Today's meeting is being held as both a physical and virtual meeting. Shareholders and proxy holders attending in person can ask a question on the items of business by raising their yellow or blue card at the appropriate time. Shareholders and proxy holders online can submit their question or request to speak by clicking on the Ask a Question dropdown on the right-hand side of your screen. Instructions are once again displayed on your screen. A reminder to please include the item of business to which your question relates so that your question can be addressed at the appropriate time. The notice of annual general meeting convening this meeting was dispatched to registered members on or about 15th October 2025 and is to be taken as read. Voting on all resolutions will be conducted by poll.
For the purposes of the poll, I appoint Automic, the company's share registry, to act as Returning Officer and to conduct the poll. Once I've declared the poll open, shareholders attending online that registered their intention to vote are able to do so by selecting the voting dropdown on the right-hand side of your screen. Once selected, choose whether you wish to vote your full entitlement or allocate your votes, and then follow the prompts. Instructions are also currently displayed on your screen. If any online shareholders encounter any problems with the online voting process, you can call the support number shown on the screen. Please note that for your votes to count, you must submit your votes prior to the poll being declared closed. Once votes have been submitted, they cannot be changed.
For those attending in person, all those eligible to vote on the resolutions are those shareholders or proxy holders that received a yellow voting card at the registration desk. If anyone believes they are eligible to vote but did not receive a yellow voting card, please raise your hand now, and a member of our registry team will assist you. At the appropriate time, I'll ask that you mark your vote for the resolution on the yellow voting card. If you wish to cast all of your votes for a resolution, please place a mark in either the for, against, or abstain boxes next to that resolution. If you wish to split your votes, please write the number or the portion of votes that you wish to cast in the corresponding for, against, or abstain box.
Please note that the sum of the split votes must not exceed your total holding. If you are a proxy holder, a summary of the votes to which you are entitled has been attached to your voting card. If the summary of votes includes discretionary votes, those are yours to cast at your discretion. If you wish to cast the discretionary votes, please place a mark in the corresponding for, against, or abstain box. If your summary of votes does not have any discretionary votes, you do not need to mark your voting card. Simply hand it in to the Returning Officer at the end of the resolutions. After all resolutions have been read and voted upon, please place your voting card in the ballot box that will be circulating the room. Proxies have been received and recorded and are open for inspection.
Proxies received from shareholders totaled 124.7 million shares, which represented 40% of the company's issued capital. All undirected proxies or open votes that have nominated the Chairman of the meeting as their proxy will be cast in favor of each resolution set out in the notice of meeting. Are there any questions in relation to the voting process? No questions. Oh, sorry. Yes.
Can I ask a question about the addresses we've had already at this time?
If you wouldn't mind saving them, we'll address all kind of general questions at the end.
I'm fascinated with the optimism that's been shown, which is very fine and great. A couple of questions I had.
Sorry. Can we address them at the end of the meeting? We're just going to go through the resolutions.
All right.
Then at the end, we'll do general questions.
We've received the number online as well, so we'll go through them all.
That's fine.
Thank you. Okay. The first item of business is to receive the company's annual financial report for the year ended 30th June 2025. The financial report and the reports of the directors and the auditors are now laid before the meeting. There will be no vote on this item as it is a discussion item only. Representatives of the company's auditor, Grant Thornton, are present to take questions relevant to the conduct of the audit and the preparation and content of the independent auditor's report. Are there any questions or comments on the financial report or the reports of the directors? No questions. Are there any questions of the auditors relevant to the conduct of the audit and the preparation of the auditor's report?
Yes.
I submitted a written question asking if they could expand on the payment of their fees. The audit was about AUD 700,000, but the other services were about AUD 600,000, and we had no justification for it. For two words, paying out AUD 600,000, I want to know a bit more about it.
Andrew?
I can answer that one. We had, so Andrew Crowther, CFO, we had three acquisitions successful during the year, so ATEC, Brand, and Above. We also had one other acquisition that we basically did full due diligence for, and we pulled out for a number of reasons. We used Grant Thornton advisory to do that. It is not the audit part, it is their advisory.
The reason we, there's a few reasons we do that is it makes it easier when they make a call on revenue recognition and so forth that they've already made the call on it, so we don't have to go again. That was very, I mean, that's quite expensive. That was about, that was almost, that was almost AUD 500,000 alone for the acquisition expenses. That actually breaks down all of it. Yeah. I actually did see you do that. It's probably in post. We also had some other ad hoc projects that sometimes it's just easier to get your auditors consulting to do it. Some GST things and everything.
Okay. Any other questions? There being no further questions, we'll now proceed to the resolutions set out in the notice of annual general meeting. Resolution one is as follows.
To consider and if thought fit to pass with or without amendment, adoption of the remuneration report as a non-binding resolution. The proxies received in relation to this resolution are on the screen. If you wish to discuss this resolution, please raise your hand or submit your question online. No questions, but we did receive a written question prior to the AGM from shareholder John Ferguson. John's question was, why does the board use fair value rather than market value when calculating the number of share performance rights on offer to KMP? Market value determinations are clean, simple, transparent, and make it easier for shareholders to understand what is happening. I think James, as chair of the Remuneration and Nomination Committee, I'll hand to you to respond to that one.
Thanks, Lee.
I think the key goal with any executive REM is to make sure that there's alignment between how we reward management and alignment with shareholder value. We are always looking to make sure that those metrics around total shareholder return and earnings per share are relevant as part of the mechanism that we use. Fair value is effectively market value. Fair value is a prevailing five-day VWAP where we take away any of the inconsistencies that you see in day-to-day trading, and it provides, I think, still a very transparent measure for how we calculate that value. As I say, it is a five-day prevailing VWAP of volume-weighted average price of the share price. Happy to take any questions on the broader REM structure.
Okay. There being no further questions, I now put the motion. Those shareholders in attendance, please mark your voting card.
Those shareholders online, please provide an election for this resolution before you submit your final votes. Resolution two is as follows. To consider and if thought fit to pass with or without amendment, the re-election of James Scott as director as an ordinary resolution. I think, James, you wanted to just say a few words.
Thanks, Lee. First time sitting here. Thank you, shareholders, for your support and confidence to be considered for election. Just a little bit about myself. My 30-year exec and non-exec career as an engineer is a mix of technology and industrials, which includes founding my own business. I was a partner at Accenture. I was a partner at KPMG. I think of most relevant to Acrow shareholders is the five-plus years where I was with SGH, Seven Group, formerly known as Seven Group Holdings, where I was the COO.
I was a Director of WesTrac, a Director of Coates. I also was nominated by my peers to chair the Caterpillar Global Technology Council. Whilst part of the SGH family at Coates, obviously had very direct involvement with the ERP data technology use that we bring into that industrial sector. The ERP program that we are conducting here at Acrow actually uses the same platform that we had a very active investment in whilst at Coates. Looking to bring those insights and learnings here to the Acrow business as well. In my other roles, I've been a non-exec now for 11 years. I am a non-exec of another industrials business. In my day-to-day role, I chair a technology fund within a private equity vehicle, which again has an ERP data and the topic of the day, AI, feel to it.
Looking forward to bringing those insights and learnings into the industrial sector here at Acrow.
Thanks, James. The proxies received in relation to this resolution are on the screen. If you wish to discuss this resolution, please raise your hand or submit your question online. Okay. There being no questions, I now put the motion. Those shareholders in attendance, please mark your voting card. Those shareholders online, please provide an election before you submit your final votes. Resolution three is as follows. To consider and if thought fit to pass with or without amendment, the re-election of Rod Hill as Director as an ordinary resolution. Rod, hand over to you to introduce yourself as well.
Thank you, Lee. It's an honor to be here today. I've been in the construction contracting industry in Australia, Southeast Asia for 43 years. I'm a qualified civil engineer.
I also have a Master of Law in Construction Law. I've worked for most of the first-tier contractors throughout Australia. I've been a Director of John Holland, CPB, Leighton, AT&T/ Subsidiaries. Most recently, CEO of Decmil, an ASX-listed contractor based in Perth that was acquired by Macmahon Holdings last year. I've had exposure to many large civil engineering infrastructure projects throughout Australia. It's an honor and a privilege to serve the board and the shareholders of Acrow. I look forward to working with the business to increase and improve shareholder value over the next few years. Thank you, everyone.
Thanks, Rod. Proxies received in relation to this resolution are on the screen. If you wish to discuss this resolution, please raise your hand or submit your question online. Okay. There being no questions, I now put the motion. Those shareholders in attendance, please mark your voting card.
The shareholders online, please provide an election before you submit your final votes. Resolution four is the re-election of Laurie Lefcourt as a Director. Resolution as an ordinary resolution. The proxies received in relation to this resolution are on the screen. If you wish to discuss this resolution, please raise your hand or submit your question if you're online. Okay. There appear to be no questions, so I now put the motion. Shareholders, please mark your voting card. Shareholders online, please provide your election before you submit your votes. Resolution five is as follows. To consider and if thought fit to pass with or without amendment, re-election of David Moffat as a Director as an ordinary resolution. The proxies received in relation to this resolution are on the screen. If you wish to discuss this resolution, please raise your hand or submit your vote online. Okay. No questions.
I now put the motion. Please mark your voting card. Or if online, please provide an election before you submit your votes. Resolution six is as follows. To consider and if thought fit to pass with or without amendment, the adoption of a rights plan as an ordinary resolution. The proxies received in relation to this resolution are on the screen. If you wish to discuss this resolution, please raise your hand or submit your question online. Okay. There being no questions, I put the motion. Shareholders, please mark your voting card. Those online, please provide an election before you submit your final vote. Resolution seven is as follows. To consider and if thought fit to pass with or without amendment, issue of performance rights to Steve Boland or his nominee as an ordinary resolution. Proxies received in relation to this resolution are on the screen.
If you wish to discuss this resolution, please raise your hand or submit your question online. I will note that there was an online question under this resolution. However, it seems to be of a general nature, so we'll cover it at the end. I now put the motion. Those shareholders in attendance, please mark your voting card. Those shareholders online, please provide an election for the resolution before you submit your final votes. Resolution eight is as follows. To consider and if thought fit to pass with or without amendment, the provision of financial assistance by the recently acquired entities for the purpose of the acquisition of those entities as a special resolution. The proxies received in relation to this resolution are on the screen. If you wish to discuss this resolution, please raise your hand or submit your question online. Okay.
There being no questions, I put the motion. Please mark your voting card for those shareholders in attendance. Those shareholders online, please provide an election before you submit your votes. Resolution nine is the renewal of proportional takeover provisions, as set out in the company's constitution and is a special resolution. Proxies received in relation to this resolution are on the screen. If you wish to discuss this resolution, please raise your hand or submit your question online. Okay. There are no questions. I put the motion. Those shareholders in attendance, please mark your voting card. Those shareholders online, please provide an election for this resolution before you submit your final votes. That concludes the resolutions being put today. As noted, all resolutions are being conducted by poll, and the poll is already open.
If you have any questions in relation to the poll process, please either raise your voting card or submit your question online. I think possibly an appropriate time now to address the question that I mentioned previously, which was when disclosing the outcome of voting on all resolutions, please advise the ASX how many shareholders voted for and against each item, similar to what happens with a scheme of arrangement. This will provide a better gauge of retail shareholder sentiment and insight into the chronically low retail shareholder participation rate. Others such as ASX, Qantas, Tabcorp, Suncorp, and Maia have already blazed the trail. Automic has the data. Why not let the sun shine in? If you do not mind me responding, Peter, I mean, we are guided by, obviously, the Corporations Act and the requirements that we are required to announce.
We are provided with a sort of format template from our registry, which does not contain that info. I guess if we—it is a conversation that we could have. We note the comment. Okay. Can those shareholders attending online and registered to vote please now ensure that you have submitted your vote. A reminder that once submitted, you cannot change your vote. Your vote must have been submitted before I declare the poll closed for them to count. Can those shareholders attending in person please ensure your voting cards have been completed and submitted into the ballot box that is now circulating the room. I will allow another minute for cards to be collected and online votes to be completed. Okay. Are there any cards that have not been submitted? No. There being no questions and no cards outstanding, I now declare the poll closed.
The results of the poll will be released to the ASX once they are available. As mentioned earlier, we'll now have an opportunity for questions of a general nature. However, before doing so, I declare the formal business of the meeting closed at 11:20 A.M. Are there any questions of a general nature from the room? Sorry, sir. Now's a good time.
[One question only, thank you very much ] Chairman referred to, I thought, delays in Queensland, which affected, I guess, profits and everything else. Could you please give me some idea of what the nature of those delays were? I suppose that may come back to industrial situations. I don't know. Could you give us some idea of what your workforce is? I mean, most of the work done through contractors, or do you actually have a large number on your books of a workforce?
I'm a new shareholder, so I'm just interested to understand that situation a bit better.
Maybe I can leave in, Steve, and then throw to you for more color. No, look, in terms of the nature of the hold-up in work, we do not have a large direct workforce actually installing formwork. It is very much what I call a dry-hire type business. We provide the componentry to generally formworkers or the major contractors, and they then engage the labor to build it. We engineer the applications. No, I guess you are, I guess, angling as to whether we have had to make changes in adjusting our workforce because of that slowdown, we do not directly employ a lot of labor. I guess the slowdown in working, and particularly Southeast Queensland, it has come off the back of particularly a slowdown in some of the government-funded projects.
Steve, I think the hospitals is a good example of that.
Change of government in Queensland 12 months ago was the stimulus for this. Labour government changed to Liberal Government. Labour government had in place a policy called BPIC, which was best practice industry conditions. Correct. Which effectively meant if you're doing a government-funded job in Queensland, you had to use CFMEU labour at like a 25% premium. I think, officially, I think it's at the 1st of January or now, or is it like it's actually been kicked out by the new government? It is. As of now, it's gone. Yeah. So BPIC's gone now. Which basically means that it's been a very important time for that to happen given the profile of work that's going to happen in Queensland's going to be government-funded.
A lot of the major delays was in the hospital sector. There is a AUD 9 billion program of work for upgrading and building new hospitals in Queensland. When the Liberal Government came in, they stopped the whole process wherever they had not been [tendered] or awarded, and went back to the market and said, "Okay, you now can re-attend it without having to use CFMEU rates." That is work. We won contracts probably two years ago that we would have expected to see most of the revenue already completed. We are only just starting to see that kick in now in that hospital sector. That is one of the major areas in Queensland. I think, look, there is a lot of, I guess, a lot of national publicity around the CFMEU issues. A lot of it seems to focus on New South Wales and Victoria.
I can tell you from our experience, Queensland's the worst. Queensland, in terms of lost days on jobs, etc., Queensland's actually been—look, it doesn't directly affect us because we don't, as Peter said, we don't employ labor on those civil infrastructure jobs. We employ all our labor on industrial work. It has a downflow effect because effectively, there's a lack of confidence. There's been a lack of confidence in investing in getting projects going in Queensland where you've got to pay this premium, and you know you're going to lose 25% of your working hours with strike action. That's been the whole issue in Queensland. I mean, you could speak to that if you—[Rod], we're sort of in the middle of a lot of that in different parts. It's been a real issue.
Now, I think we're coming out of the—we're coming out of the back of that with the action. I think the—I mean, the Queensland State Government's trying to deregulate the union. They're trying to basically disband the CFMEU from what I understand. Yeah, it's interesting times.
It's an adverse effect upon the company, presumably, because you don't get paid or you're—
No, project delay. It's a project delay. Jobs and revenue that we would have expected started just delayed in starting. I think the thing—we don't have any influence about when a job starts. This is the frustrating thing we've been going through over the last couple of years.
When you're going through a cycle where the big projects are finishing, like in Queensland, the Cross River Rail project's finished, the Bruce Highway upgrade is finished, the Coomer Connector, the stage one project is finished, the major commercial work, the Queens Wharf project is effectively finished, and you're waiting for that next iteration of major projects to start. They're just not starting because of the lack of confidence in effectively the cost of labor.
Right?
I think we're coming through the back of that now. Clearly, as we go into this next cycle in Queensland, the one thing I've been saying about the Olympics is that date's not changing. There are plenty of other commercial and civil infrastructure projects that always seem to get pushed out and delayed, delayed, delayed. There's a date when that thing's happening, and it's not changing.
Everything's going to back up towards that, and you've just got to get the work done. I can't afford to have all this industrial disruption leading into that kind of cycle.
The second question I had is, who are the major competitors in the industry, particularly in the scaffolding sort of area? And who do you pick up the most often?
Look, it's only—we're really only focused now on industrial access. We do very, very little commercial scaffolding around high-rise construction. 98% of our scaffolding work is done in industrial land. Right? That's our whole—that's on shutdowns, on maintenance, like the BMA contract for Hay Point, the Origin Energy contract we do. We're currently doing our biggest, probably, industrial contract at the moment at Snowy, the Snowy Hydro development. We've got about 60 blokes there working full-time, etc.
We are not the biggest in that space. We are by far the biggest in the formwork, sale and hire space in the country. We're not the biggest in the industrial space. We're growing rapidly. It's a very big market, that market across the country. Our major competitors are mostly multinational type guys. There's Altrad, [CIFA]. These are big organizations that do what we do, but they also do a range of other things. They do all the electrical or mechanical, etc. Some of you guys will be familiar with SRG, Tasminia. These are people that are in that space that we don't directly compete. We compete a little bit against SRG. We don't against Tasminia, but it's that kind of space. Now, we specialize in access in that area. We don't want to do the trade work.
We might do a small amount of trade work with sort of painting and lagging, but it's only very small. We want to concentrate on being the expert in access provision in that space.
Can I ask another bit? A lot of your business, presumably, is governmental business or quasi-governmental. They get paid on time, or do they delay it forever and have you hanging out? A lot of people seem to find that.
A lot of interesting ones that seem to—they sort of themselves. I won't go into gory detail about that, but there's one particularly large government-funded project that was a bit interesting for a while to get paid on time. No, look, pretty good in that space.
In that industrial, which is where the government exposure is sort of in some of the big industrial projects and the civil projects, if you're working directly for the governments, you're fine. If you're working for the formwork or who's working for the builder who's working for the government, that can be a challenge. That's not the issue of the government paying. It's the issue of getting the subcontractor to pay.
Any other questions in the room?
My question more is a coward one. Why is it necessary to charge AUD 1,800,060 for amortization charges of intangible assets in a statement of profit and loss? Statements have been written that the add-ons have exceeded forecasts, highly successful, easy yes, decreased security. So the amounts paid for goodwill and intangibles were warranted and have not diminished, but the value, if anything, has increased.
If we look at the figures in the state of the financial position, the balance sheet as I used to know it, we see that the worth of the company is AUD 149 million, comprising of AUD 53 million goodwill and intangibles and AUD 96 million of tangible assets, let's say AUD 100 million. If we look at the worth of the company, and this is something we mentioned earlier, we know that the stock market of the company is 310 million shares or a dollar each of AUD 310 million. Now, if we take the intangibles of AUD 100 million from the AUD 310 million, we arrive at about AUD 210 million as the market value or as I would retain the correct value of goodwill. That is four times the book value of AUD 53 million. There is no need to further reduce the book value of goodwill and correspondingly reduce the company's earnings.
It's nice to know that the Acrow way, which has been expressed in the accounts as goodwill, valued at AUD 200 million. The question to the board of directors is, will we cease to write down the value of goodwill? I know we have Rod and James here, two new directors. I welcome you very much. It would bring a bit more light and maybe think of these questions at a board level.
Thank you. Yeah.
You can cut in if I'm mistaken, but goodwill does not get written down. The intangibles are the items that we have collected on. The other intangibles are things like our customer relationships and our contracts as part of our acquisition. Those are the only things that we can actually write down over time.
As long as our goodwill is demonstrating that we have the value still sitting there through our annual review of the valuation of the businesses that we purchased, then we do not touch goodwill. The other intangibles are things like our ERP system, the customer contracts that we acquired when we acquired businesses, the customer relationships that we have. There are a number of things that we have to adhere to as part of the accounting standards. With an intangible, you have to write off the value of those particular types of intangibles over what you assume to be the life of those intangibles.
They are only acquisition related. Yeah. The goodwill in the business is only acquisition related.
I write it down.
It is a requirement. It is a requirement under the accounting standards.
Not the goodwill. Not the goodwill. We do not write down the goodwill.
We do not write down goodwill. Yeah.
You have my point of view. Yep. It is an—
sorry, just to reiterate. It is an accounting standard.
It is a requirement under the accounting standards.
We do not set the accounting standards.
Yeah.
They change precedents over the practicality.
Yes, correct. Yes, it does.
Yes. The world's gone mad. Okay? Just quickly. We buy a business, and we have to value what the customer relationships and other things are as an intangible. Then you have to write off, have a 10-year's entry. Do you not? Yeah, and have a good day with school bill. Yeah. Yeah.
Thank you.
A few questions online as well. I think you probably covered this one, but just in case there was more to add, I will read it anyway.
On the Queensland market, could you provide an update on how the capacity expansion program review is progressing following the removal of BPIC and the implications for timing and scale of upcoming work in FY26?
Twenty-six is a—so it'll be a last quarter thing this year. We'll start to see that upgrade, but it's 2027 and 2028 where you really see the significant uplift that's going to come when the work kicks in, 2027 and 2028.
Okay. Another question. There's been a lot of media over the past two years about the criminal infiltration into the CFMEU and the construction industry more broadly. Have we noticed any criminal elements operating in parts of the scaffolding industry? Also, who are our biggest credible national corporate competitors?
I think you covered that one. I think that's got to be in our comment, doesn't it? Yes.
I think you covered the—I think you covered the competitors in an earlier question. I mean, look, the commercial scaffold industry, which is the one we do not participate very much in these days, is very fragmented. There are 30, 40, 50 scaffolders in every major city, and we choose not to play in that market for a whole range of reasons. One of them is the fact that it is a race to the bottom on price. That is not our growing.
I think you raised this in Victoria a few years ago.
Yeah. We do not want to touch it.
Yeah. Okay. How many full-time equivalent staff do we currently have? Is this likely to fall over the coming 12 months with the rapid rollout of AI?
Which part—oh, sorry, second and a follow-up. Which parts of our business and operations are the most prospective for AI productivity gains?
Maybe you can talk to the AI thing, but let me just talk about the numbers of staff. The vast majority of staff that we have, the numbers in our FTEs now are industrial scaffolders. It's like 75-80% of our total FTE number are industrial scaffolders. And growing because we're growing our business. And we want to keep growing it because the availability of labor gives you a massive advantage in that market. I don't think AI is going to help us there anytime soon, but James, you can talk probably to other things to do with AI.
I think the key point here is that it's fair to say that the industrial sector hasn't been at the forefront of use of technology, similar to what financial services or telco or other industries have been.
It is also fair to say that there is very strong evidence for industrial companies that embrace the use of technology in their day-to-day decision-making, how we use data across businesses. There is a huge opportunity for us, and that might be asset management, asset utilization, inventory management, how we price, how we quote on the complex solutions. When I came onto the board from the outside, the question is, Acrow is a scaffolding company. What is the use of technology? Acrow, and I have said this to Peter and Steven, from my perspective, Acrow is an engineering solutions business. What we are doing in Acrow with the implementation of the Baseplan ERP is we are consolidating data into the industry-leading platform. We designed, built, and developed that platform through the investment that we made at Coates and Kennards. Acrow is going to benefit from that.
The use of AI is really about how you expose data. How do you expose data for day-to-day decision-making, automation of processes? They might start in the HR and the finance sector rather than the core operations. It is about us defining which key processes in our business can we use data in to expedite our decision-making.
Thanks, James. Steve, just on the Jumpform business, are we still on track to deliver around AUD 20 million in revenue this financial year? Have you seen any changes in project timing?
We will not do AUD 20 million in revenue in Jumpform this year. I would say it will be somewhere between AUD 10 million-AUD 20 million, I think.
Look, no, I think one of the critical things for us now with our Jumpform business is we're getting the first iteration of, we want a lot of work, we'll gear in and out, now gear is starting to return. And so it's about the capital management of the Jumpform business is actually at the moment, in my view, the most important part of that. To make sure the projects that we are winning, we can service primarily with the kit that we've already bought, rather than every new job requires more gear. I think we're going through that kind of cycle now.
I really want to make sure that we're getting that right so that we're not taking more projects on that we don't have to at the moment, which would mean more capital when two to three months down the track, the vast majority of the kit in play at the moment will be coming back and be able to be reutilized. That is one of the day-to-day issues that we're managing the business today. Look, we're growing a really, really good Jumpform business. I mentioned briefly around the job we're doing for Meriton on the Gold Coast. Again, I won't go into the detail, but it's industry-changing, Peter, isn't it? I mean, that job, when we do it and when we get it right, has a lot of opportunity to open up a whole different kind of market for Jumpforms. It is very innovative.
I do not think we will do AUD 20 million this year. I think we will do somewhere between—we will probably do between AUD 10 million and AUD 20 million.
To be fair, Steve, part of that is linked into project delays. I mean, we are kitted up with the capacity, with the capital capacity to do AUD 20 million of work, right? I think it is really interesting as we do recycle. I mean, probably the biggest job that has recycled so far is the Cross River Rail project, Albastro. I think that had, what, close to 20 jacks on it at its peak? 25 jacks on it. Those jacks have all come back. They have been serviced and recycled, and they are actually the ones that are on the Meriton job now. I think the Meriton project has got 40 jacks on it. It is not just lifting the core of the building.
We're lifting the external columns, and we're lifting the screens, all with the same jacking system.
It's never been done before.
It's a computerized sort of jacking system. Talk about labor saving. The form workers will be sitting around watching all this formwork raise up to the next level. They won't be out there doing work. They'll be watching it happen, Steve. I think that's the exciting part of that project. Steve, I think you mentioned that we're really well positioned to deal with labor shortages because we'll be the go-to for sophisticated engineering-led solutions that actually chop labor out of projects. That's the benefit of Acrow.
Sure. Yeah. Screens, jump forms, all the other formwork products that make the development. Yeah.
We do have a couple more questions that are kind of registry-related, so I wonder if there are any other questions from the room on general business. Sorry.
Trading and Queensland, you said you got the ATEC. Yeah. When will that
be rolled out in Sydney? Yeah, I think my next—I think the next one will be actually in Muswellbrook, right? So the business we bought, Brand Australia, is based in Muswellbrook. I think that will be probably the next training facility that we have in the country. I mean, that's just my thinking. I mean, there's no let's-do-it-in-three-months-time stuff, right? I mean, we've got to get the accreditations. Our accreditations are Queensland-based at the moment, with a registered training organization for Queensland. So we need to roll that up.
Certainly, I think that that Muswellbrook location would be the ideal place, given it's industrial heartland up there, to have this next training
with industrial scaffolding. The drug and alcohol policies that are going to be implemented.
Yeah. I know it's absolutely religious, right? You can imagine we're working for BMA, working for BHP on Hay Point. You don't get any—there's no leeway here.
The higher the standards, the better for Acrow. Oh, the higher the standards. Because we do meet those high standards, right? It keeps the riff-raff out, Steve.
You've got to be highly accredited to go and work on some of these big fixed installations. It's why that industrial access space for scaffolders is so different to the commercial space.
Yeah, because funding's a throw-off the job.
Correct. Absolutely. Yeah. Did Acrow develop Jumpform, or did you get it under license? No.
The heart of jump form is the jacking system. It's an electric jacking system that is controlled via a computer synchronised system. Basically, our system is—yeah, our system is, sorry. The uniqueness of our system is, in fact, the jacking system and the computer side that basically drives the whole thing. In terms of a system, it basically is still normal shuttering going around, holding wet concrete, but the technology that goes into our jack and our computer system is unique to us. We bought the rights to that, what, Steve, about three years ago? Three and a half years ago.
Yeah.
I think the reason we are becoming so successful in penetrating and gaining market share is the technology that Acrow has. It's best of breed.
There have been various jump form systems in place for—go ahead and long, David—25 years. Yeah. Yeah.
The other little twist for Acrow is we've also—all of the shuttering systems and all of the, I guess, the steel yokes and framework is all—it's modular, it's recyclable. We galvanize everything we can, so it's long-lasting. We put a lot of engineering sort of work into making sure that we've got the best technology in everything we do.
Look, all of the competitors, I mean, they've got yards full of boilermakers, right? Because the gear, basically, it's not reusable as it stands.
Boilermakers and carpenters.
Carpenters.
They're building a lot of stuff just out of old timber and plywood. You go in and you say, "Wow, this is a junkyard." You go into our setup, and our jacks are all beautifully set up. All of the shuttering system is modular. It's quite a different approach.
The jacking system as well, which we mentioned in the Meriton job, we see applications for the jacking system outside of just the core. The core is where it's the stairs and lift. It's the spine of the building. On Meriton, we're using it for the column system. We're using it for the screen system. It's not just a high-rise residential or commercial opportunity. One of our projects at the moment is a vent shaft on the Northeast Link. One of the biggest jobs we're creating at the moment is actually a dam, right?
The first time you use a Jumpform system on a dam, but it looks very promising. It has applications outside of just that traditional 10, 20, 30, 40-storey high-rise construction.
You talk to the thesis of what's happening with labor in this modern engineering world now.
Anything we can move with hydraulics or electrics or move vertically, move horizontally, if we can take the human toil out of any element of a construction project, it is gold, right?
That is what improves health, it seems. Yeah.
We put quite a lot of engineering talent into our innovation phase of our products. Anything we can find that improves the labor productivity on site, we know we are going to do very well with.
Do you have exclusivity for that sort of—
for that system, yes.
Everything we have invented ourselves, we have patented and we own it. Potentially, and I do not want to sort of get anyone excited, including my CEO, but some of these products have international opportunity. There is no reason why some of the Acrow products that we have developed could not be exploited in the Middle East or Southeast Asia.
At the moment, though, I think we've got plenty to do with Australia. There's plenty of stuff out there, and then we'll think about other stuff. Is that okay?
Yep. Anything else?
I just want to ask about the dividend policy. Most people might pick up the ears here. Does the policy of not paying 30%-50% of the operating costs still operate? I wrote to the board in April suggesting this could be raised so that we get a bit more dividends. I didn't hear—I wasn't expecting to hear an answer. It's a pretty low target, isn't it? 30% to 50%, but we could go up to 70% or 80%.
The business is trying to grow as quickly as we are with capital.
It's something like gradually trim it up. I think there's a couple of reasons.
I think the operating profit is depressed because of this amortization, which I mentioned before. I think we can also improve it. All companies balancing the credit is due to pay their dividends close to three months later. It possibly happens in late September or early October. Acrow does not follow this pattern, but makes shareholders wait for another two months, namely the end of November. Still has not been paid. That is 150 days instead of about 90.
Pay at the same time every year.
The fourth part was the last dividend you are about to be paid. It has gone from AUD 0.03 in the current period to AUD 0.029, not AUD 0.095. That was pretty poor from our shareholders' point of view. It is not half a cent off our dividends when the profits have been pretty good and the outlook was so wonderful for this wonderful company of Acrow.
Yeah. Oh, I think they're all good questions. I mean, the dividend, and I wouldn't call it a dividend policy because I think that that is short-sighted in terms of how a company, a public company, should operate. I think that the uses of our cash are really—there's three main uses, right?
Number one, you make a profit, you've got to pay the tax man. That is not negotiable, okay? Number two, you've got to look at where you do apply the cash. In terms of Acrow, we've got to look at what opportunities there are within the business to recycle that cash and to grow it. I think Steve's explained some of the really important opportunities we have in front of us. In a company like Acrow, the way you grow opportunities is you've got to capitalize into equipment. That's what we are.
We have to actually look at capitalizing into growth. I think, Steve, in your pack, you have said that we are really well positioned with our capital, and we are really building the business now to take advantage of what I think is going to be, and I will use the word, an unprecedented boom in construction activity in the next three or four years. We cannot participate in that unless we have the assets within the company to do that. The third choice then is obviously rewarding our shareholders, and we definitely want to do that, right?
It gets to the balance between what is best for the shareholders overall, to leave some of that money in the company, to actually, I guess, get the advantage of what that capital can be deployed into in the future, or pay it out of cash from the company when it's gone forever. They're the decisions we make as a board. How do we balance all of that? We have a healthy debate before we declare the dividend every year.
Right. You did say you had AUD 40 million of headroom in a cash situation at the end of June. I thought you could have actually scraped an extra AUD 0.005 for the shareholders. We'll dig hard for you, but look,
the last thing I would want to do would be to patch up dividends through borrowing more money from the bank.
I think that's a really—that's an awful spiral to get into, okay?
We'll take a look at that before we're on the basics. Thank you.
Thank you. Anything else from the room?
Yeah. This is more direct to Steve. In 2022, in your public announcement for Acrow, you told us we had about 90,000—sorry, 60,000 tons of equipment. We spent another AUD 36 million in 2023, another [AUD 30] in 2024, another AUD 41,000, so up to AUD 211 million of equipment. And in that time, the 60,000 hasn't changed. 60,000 tons hasn't changed in your announcements.
Where is that in the announcement? Sorry, it doesn't go into my announcement. Where is that?
Where is that, Andrew? Do you know where that is?
[Crosstalk]
[Crosstalk]
we told you that last year when I raised this question.
I don't remember you raising it last year, did you? Right. Okay.
You're doing it this year.
Yes.
That will leave that reference to tunnels completely.
Yes.
I think you don't increase the number of depots.
Yes.
This has arisen last meeting, and I think
it's not accurate. We're going to fix that.
It's a conspiracy, Steve.
We'll fix it. Okay. Okay. Don't have anything.
Okay. We have a question online. Can we please get some update on the T2D Torrens to Darlington project in South Australia? Has work started on this project?
Look, you might want to call me broad that to start with, and then I'll jump in.
I mean, you've got pretty good knowledge of that in terms of the broad, I guess, the scope of that project. Then I'll sort of give an Acrow flavor to that.
That is the largest project ever in South Australia. It is in the order of AUD 15 billion. It is even larger than the mega projects in Victoria. The head contractors are mobilized. They are well through the design. They are into the enabling works. I understand the TBMs have all been ordered. It will hit full throttle probably in the next maybe nine or twelve months. In the meantime, Acrow's got substantial—
Yeah. As I mentioned earlier, we just had our biggest ever month in South Australia. A lot of that was to do with that project.
The vote and Rod knows the contractor or the lead sort of project managers that worked on the Westgate project in Milton have gone to Adelaide. A lot of the subcontractors that we worked on Westgate have now gone to Adelaide. We're extremely well positioned, and I know what the revenue was at Westgate at its peak, and we're probably at 20% of that at the moment in Adelaide. It will be by far the biggest project we'll ever see in Adelaide. Adelaide's not been a big business for us. This is going to make a very big difference. You've got some head-arts reference to that too, Peter.
A lot of—they're in the early mobilisation stage, and it's just unbelievable the work already coming off that project, Steven. Look, I think when it hits its peak, it will be the biggest revenue-earning project for Acrow. Civil
Infrastructure project.
It'll be the number one job for Acrow when it gets to its peak invoicing.
We're doing AUD 250,000-AUD 300,000 a month at the moment, and it's nothing. Really, the thing is only just—it's nothing, scratching the surface.
Adelaide, I mean, sleepy old Adelaide, this is quite remarkable for them to have a project.
You put Orcus on top of that as well. It is a whole different profile in South Australia.
Anything else from the room?
I guess it's a comment. One of the reasons that attracted me to Acrow was, I think I'm right on the maths, is that a better return on capital than the Commonwealth Bank.
I do like the strategy of announcing the dividends well ahead of payment, despite some people thinking, "Oh, it does not matter when you announce them, if they are there." I think it is good to keep the dividend in front of the public. I think it will attract more interest in the company.
Thank you.
Maybe that is the strategy they have all got. Anything else?
There were a couple of sort of shareholder registry-related questions, so just to cover those. Did any of the proxy advisors cover us this year, and did any recommend a vote against any of the resolutions, including the REM report? If so, what reasons did they give? Has this translated into any material protest votes? After strong support on all resolutions last year, I suspect it will be the same this year.
In which case, well done for being a well-governed company, which is not going over the top on remuneration. I think I'm not aware of being notified that the advisors do cover us. I think you can see from the results that there was obviously no negative sentiment to fills. The second one was NetWealth appears in our top 20 as the third biggest Acrow shareholder with 4.25%. The shares are held on behalf of hundreds of retail shareholders. Do you know if the NetWealth clients are counted separately amongst the 6,500 shareholders mentioned in the annual report, or if it is just one shareholder? I'm concerned NetWealth are not passing on notices of meeting to clients, which leads to poor voter turnout at AGMs. I can confirm it would definitely only be one shareholder in the annual report.
Whether they pass on the info is their duty to do so. I guess it's something we can note and take on board and follow up. Oh, and another one has just come in. More a comment than a question, but given a choice between seeing the business grow faster versus higher dividend, I'd lean towards the former.
There's competition there, isn't there? A little bit of healthy stress. Healthy stress. All right.
Is there anything else? Okay. No more questions in the room, and there are no more questions online. There being no further business, I'd like to thank shareholders for attendance. As advised earlier, the results of the poll will be announced to the ASX once they are available. The meeting is now closed. Thank you.
Thank you all, ladies and gentlemen.