Okay, Good morning and Welcome to the 2026 Annual General Meeting of Australian Finance Group. Thank you for joining us today, whether here in Perth or online. My name is Greg Medcraft, and I am the Chair of the Board of Australian Finance Group Limited. I would like to begin by acknowledging the Whadjuk Noongar people, the traditional custodians of the land on which we meet today, and to pay my respects to their elders, past and present. Today's annual general meeting is a hybrid meeting. It is being held physically at 240 St Georges Terrace, Perth, West Australia, on 16 October 2026 at 9:00 A.M. Western Standard Time. I extend a warm welcome to shareholders and visitors who have attended in person. The meeting is also conducted online via the MUFG virtual meeting platform. I welcome shareholders, proxies, and guests attending the meeting virtually.
As a hybrid meeting, shareholders and proxies attending online may ask questions and submit votes during the meeting. Instructions on participating in the online meeting can be found in the notice of meeting available on the ASX platform. For those present, as a courtesy to others, please turn off or silence your mobile phone now. Please. It is past 9:00 A.M. We have a quorum present, and I declare the meeting open. For those of you here in Perth, please ensure you have registered, and even if you are not a shareholder, have obtained a registration card. The meeting agenda will be as follows, introductions and housekeeping addressed by the Chair, the CEO address, formal business, and then close. In Perth, we are joined by Non-Executive Directors Brett McKeon, Craig Carter, Jane Muirsmith, Annette King, and David Flynn.
I would like to also introduce our CEO, David Bailey, our CFO, Luca Pietropiccolo, and our Company Secretary, Michelle Palethorpe at the back. We will also welcome Timothy Dachs over here, representing Ernst & Young, the company's auditors. He is in attendance and will be available to take questions from shareholders. Kate Noon, representing our share registry, MUFG Corporate Markets, is also in attendance. Are there any apologies to be noted? No. Thank you. The Company Secretary has confirmed no other apologies have been recorded. Before moving on to the formal part of the meeting, I will now provide a brief address and then invite our CEO, David, to address the meeting. AFG delivered an excellent trading result in 2026, a challenging environment for many Australian households and a period in which market conditions have tested shareholders' confidence. Those pressures have continued into FY 2027.
The Reserve Bank recently increased the cash rate to its highest level in 15 years. Against this backdrop, we remain focused on what we could control, supporting our brokers and their customers, strengthening the business, and delivering stronger earnings, cash generation, and returns on equity. The broker channel is now responsible for more than 81% of new residential mortgages in this country, with AFG brokers originating one in nine of those mortgages, which provides an important part of the financial infrastructure of this nation. For the year ended 30 June 2026, AFG reported a statutory net profit after tax of AUD 49 million, while underlying NPATA of AUD 54 million, up 33%. Group EBITDA rose 32% to AUD 74.4 million, supported by a 12% increase in gross profit to AUD 159 million. Operating leverage also improved, with the underlying cost to income ratio reducing by 4 percentage points to 55%.
Combined, these results lifted earnings per share by 33% to AUD 0.20 and increased the underlying return on equity to 23%, up from 19% last year. Importantly, this performance was supported by strong cash generation, with the group generating AUD 51 million in cash flow, an increase of 42% with cash conversion of 94%, and we finished the year with AUD 63 million in unrestricted cash. On the strength of this performance, the board declared a franked final dividend of AUD 0.048 per share, taking the full year fully franked dividend to AUD 0.095 per share and representing a 60% payout ratio and a dividend yield of 7.5% based on AFG's share price on 9th of October 2026. The board also continued to execute on market share buyback of up to AUD 15 million announced in June 2026. Together with dividends, this returned AUD 30 million to shareholders.
AFG also invested AUD 21 million back into the business, including AFG Securities, technology, and broker investments to fund the next stage of our growth. This balance reflects our commitment to disciplined reinvestment for sustainable earnings growth while delivering meaningful capital return for shareholders. AFG's financial performance reflects a deliberate long-term strategy across distribution, manufacturing, and technology. We have continued to execute a clear plan, strengthening our support for broker businesses, developing adjacent income streams, scaling AFG Securities, and investing in people and capabilities that support sustainable growth. This has progressively reduced AFG's reliance on transaction volumes in our distribution business. Today, only around 10% of our earnings is derived from short-term residential upfront commissions, with recurring income contributing to a more diverse and resilient earnings base across market cycles.
Despite this progress, the board is acutely aware that in the current macroeconomic environment, AFG's share price has not kept pace with the evolution and performance of our business, an outcome felt across our sector. Our people and executive team have continued to build a stronger business for the long-term benefit of shareholders while delivering great outcomes for Australian buyers. We recognize this disconnect has created frustration for shareholders who have not yet seen these achievements reflected in the value of their investment. That strategy continued to deliver since the year-end. Last month, AFG Securities priced a AUD 1.2 billion prime residential mortgage-backed securities transaction, supported by strong demand from domestic and international investors. This was AFG's 21st RMBS transaction, taking the total issuance under the program to AUD 13.1 billion. More than half of AFG Securities' outstandings funding is now sourced from longer-term RMBS issuance.
The breadth of support from new investors and long-term partners reinforces the confidence in the quality of AFG's Securities loan book and its access to competitively priced funding. Together with warehouse facilities, this diversified funding base provides depth and flexibility and is an increasingly important point of difference as AFG Securities grows. This funding strength also positions AFG Securities to respond to the long-term opportunity in Australian housing finance. The fundamentals that support our industry have not changed. Australia's population continues to grow. While the shortage of housing supply relative to the population is well documented and expected to persist. Addressing that imbalance will require sustained newer supply and policy settings that support rather than discourage responsible private investment in housing. Policy settings should prioritize new supply and access for first-time buyers.
Measures that reduce investment without achieving either outcome risk constraining one of the nation's most important industries while leaving the underlying problem unresolved. In the near term, higher interest rates are likely to constrain borrowing capacity, and there remains uncertainty about whether further tightening will be required. At the same time, the periods of rate and market volatility reinforce the value brokers provide through personalized support and access to a broad range of lenders. Enduring demand for housing finance provides a clear long-term opportunity, and the board and management are focused on ensuring AFG is well-positioned to realize it. Positioning AFG for that opportunity also means operating responsibly and investing in our people. FY 2026 marked our first year reporting under new climate-related sustainability reporting requirements, strengthening our sustainability governance and transparency.
We also continued to invest in capability, training, and engagement, and an inclusive workplace while maintaining careful and deliberate investment in technology, including AI. Together, these initiatives support better decision-making, stronger execution, and long-term resilience of the business. AFG's strength also reflects the contribution of those who have built and guided the company, and this has been a year of significant change at board level, and I would like to recognize that contribution. In February, Malcolm Watkins retired as Non-Executive Director of AFG, bringing close to almost 32 years of service to the company he helped build. As an Executive Director, Malcolm was responsible for much of AFG's early technology development and national marketing capability and later served the company as Non-Executive Director through its transition to a public ASX listed company.
On behalf of the board and everyone at AFG, I thank Malcolm for his extraordinary contribution. Following today's meeting, Brett McKeon will retire as a Non-Executive Director, concluding his own remarkable career at AFG. Brett co-founded AFG alongside the late Bradley McGougan, Malcolm, and Kevin Matthews, and led the company as Managing Director. Since 2017, Brett has served on this board as a Non-Executive Director. Brett's judgment, his deep understanding of the broker channel, have shaped AFG at every stage of its growth. Brett's legacy has positioned AFG with a core purpose of enabling a fairer financial future for all by creating competition and choice for Australians, and we thank him for that. On behalf of the board, I want to thank Brett for his outstanding service to the company he helped create, and for his friendship, and we wish him well in his next chapter.
Turning to appointments, the board welcome David Flynn as an Independent Non-Executive Director in August 2026, bringing deep capital markets experience, and transaction experience to the board, and we look forward to working with David. Finally, I want to thank my fellow directors, David Bailey and the executive team, our people across the business, our network of brokers, our lending partners, and you, our shareholders, for your continued support. I'll now hand over to our Chief Executive Officer, David Bailey, who will provide more detail on our operational performance and then most importantly, our priorities for 2027.
Thank you, Greg, and good morning, everyone. As the Chair has outlined, AFG delivered a very strong FY 2026 result and has entered FY 2027 from a position of strength. In FY 2026, AFG brokers settled AUD 75 billion in residential loans, up 18%. The AFG Securities loan book grew 30% to AUD 7.1 billion, and broker services contributed a growing share of recurring earnings. That performance was underpinned by disciplined execution across our distribution and manufacturing businesses, which I will take you through in more detail. Our three strategic pillars remain unchanged. Grow our distribution business, expanding higher margin products and services, and investing in technology that helps our brokers serve their customers more efficiently and drives efficiencies within our own business. Through the year, our broker network grew to more than 4,300 brokers, supporting over 600,000 customers across Australia. Distribution EBITDA rose 4% to AUD 71 million.
That growth reflects the quality of our broker network, the value brokers continue to provide to borrowers, and the depth of AFG's lending relationships. Behind those numbers is our clear focus on helping brokers build more successful businesses and deliver better outcomes for their customers. During the year, we continued to invest in technology, compliance, support, professional development, and access to a broad range of lenders and products. These capabilities help brokers work more efficiently and respond to an increasingly complex lending environment. More than 4,400 users now use our BrokerEngine technology to manage their workflows and improve productivity. Nearly 20% are brokers from outside of AFG, demonstrating the platform's appeal across the industry. We continue to invest in BrokerEngine to help brokers grow their businesses and capture new opportunities with new features launching soon to further strengthen its capabilities and support its continued growth.
Alongside our technology and marketing services, we provide a strong compliance program to help protect brokers and their customers. This includes support for brokers operating under AFG's credit license and services such as Comply365. We also enhanced the technology behind Partner Connect, making it easier for brokers to access AFG-endorsed providers within their day-to-day workflows. The program connects more than 15 providers offering customer services such as conveyancing, utility connections, and adjacent products like asset finance, and also personal and property insurance through AIA and Allianz. It also provides access to business services from businesses including Co tality and Equifax, helping brokers streamline their operations and strengthen their own businesses. We will continue to expand the offering as brokers' needs and customer expectations evolve. This ongoing investment supported eight consecutive years of broker services income growth.
These services now contribute 23% of our distribution gross profit, which is up from 20% at the half of 2025, and we aspire to grow that contribution to 30% by FY 2029. That growth reflects the value brokers place on our services and provides AFG with a growing, high-quality source of recurring earnings. Our broker investments program is another important part of our growth strategy. During FY 2026, the portfolio grew from two to six investments, providing capital and support to ambitious broker businesses while strengthening their alignment with AFG. The portfolio is performing well, broadening our earnings base and helping those brokers' businesses scale. Our focus is not simply on the size of the network, but on helping brokers improve productivity, grow settlements, and build sustainable businesses. Alongside the growth of our distribution business, we continue to build scale in our manufacturing business.
The loan book for AFG Securities grew 30% to AUD 7.1 billion during the year, supported by combined term issuances of AUD 2.2 billion during FY 2026. At September 2026, including our latest term issuance, 71% of the book is now funded on improved terms. Net interest margin expanded by nine basis points over the year to 125 basis points, with an exit NIM of 128 basis points. Credit quality remains sound, reflecting disciplined underwriting and through the cycle performance of the portfolio. Our latest AFG Index shows that this first quarter broker lodgements of AUD 26.8 billion occurred, our second highest quarter one on record. Activity remained well above historical averages, although below the extraordinary level of activity of a year ago. Looking more closely at the data, lodgement activity has rebuilt since a brief pause around the federal budget, with September our strongest month since May 2026.
As we anticipated, upgraders showed a significant lift in activity, accounting for 46% of all lodgements and an even higher share in September 2026. Reflecting the nature of this segment, the average loan size was also the highest since May 2026. Refinancing at 15% represents a clear opportunity, and we expect that activity to lift as borrowers respond to interest rate rises and the gap between front book and back book pricing widens. These trends underscore both the underlying strength of housing demand and the value brokers provide as borrowers navigate affordability, serviceability, and a changing interest rate environment. The changes in the May 2026 federal budget were primarily intended to bring first home buyers into the market, and first home buyers' share of our lodgements has remained steady at 12%.
More broadly, the changes have reduced the contribution of private investment to one of the nation's most important industries, both for national growth and for personal wealth creation, and we are yet to see any evidence that they are meaningfully reducing the housing supply shortage. The AFG Securities loan book grew to AUD 7.3 billion at the end of September, up from AUD 7.1 billion at 30 June and 28% higher than a year earlier. Quarterly lodgements were approximately AUD 1.1 billion, 18% below the same quarter last year and consistent with the broader market conditions. While retention remained steady with runoff consistent with FY 2026. This loan book growth is important when assessing the earnings trajectory of the business. As the 28% increase translates into additional full-year earnings, assuming a NIM is maintained at our longer-term average of 120 basis points.
At year-end, we noted a number of warehouse facilities were due for renewal in the first half of FY 2027. I am pleased to report that one has already been renewed below existing pricing, and our recent AUD 1.2 billion term transaction was priced inside existing warehouse costs. Both outcomes support our NIM ambitions and provide the optionality around book growth and retention. They also provide flexibility to manage temporary movements in funding costs, including the timing effects of RBA rate changes. Credit performance has improved over the year. At the end of September 2026, loans 90 days or more in arrears represented just 0.58% of our loan book, which is 56 loans, which is down from the number reported at 30 June of 0.74%. The business remains focused on disciplined growth, credit quality, and maintaining a resilient, diversified funding base.
The broker channel is used by a clear majority of Australian borrowers and now accounts for more than 81% of new residential lending. As Greg noted, the long-term thematic for housing finance in Australia remains sound, whilst an increasingly complex market reinforces the value of broker support. Together, these results demonstrate the strength and breadth of the business and the value brokers continue to deliver for Australian borrowers. Our first quarter performance has been resilient through a more complex market and provides a solid foundation for the balance of FY 2027. Recently, I've been asked commonly what the market may be missing about AFG and its business model. In short, I believe the market's view of our business has not kept pace with how the business has evolved. When AFG listed in 2015, it was arguable that our business was a proxy for the Australian residential mortgage market.
Much has changed since then. Our plan has always been to broaden our income base while increasing our focus on recurring earnings. Over time, the composition of earnings has shifted. Our AFG Securities business continues to grow. Broker services income has grown for eight consecutive years, and our broker investment program is building a different income profile. As Greg noted, residential settlements are no longer the cornerstone of our earnings. Today, a 10% change in settlements translates to an impact on NPAT of 3%, which demonstrates the resilience of our diversified earnings base.
During FY 2026, we invested in growing the AFG Securities loan book, expanding broker services, and acquiring stakes in broker businesses. Together, these investments are expected to deliver an additional annualized AUD 13 million in EBITDA in FY 2027. This result assumes the AFG Securities book remains flat at AUD 7.1 billion and NIM is 120 basis points.
These assumptions are conservative, as the AFG Securities book has already grown to AUD 7.3 billion. Against that backdrop, we remain confident of our FY 2029 aspirations and the strategic pillars that underpin them. Our priorities are to help broker businesses improve productivity and grow settlements, expand AFG Securities, scale our investments in high-performing broker businesses, and increase the contribution from technology and recurring income.
This plan has already delivered stronger outcomes and moved AFG further from a volume-dependent model towards a more diversified and resilient earnings base. Our experience across the market cycle allows us to maintain the focus and invest for a long-term growth, while remaining responsive to the evolving interest rate environment. Delivering on our ambitions requires disciplined capital allocation. We will maintain a strong balance sheet, invest where we see sustainable returns, and return surplus capital to shareholders where appropriate, while committing those decisions clearly and transparently.
I would also like to add my personal thanks to Brett and Malcolm. The broker-first culture and spirit of ambition they established continues to shape how we serve our network and grow the business today. Both have been generous with their time and counsel, and I have greatly appreciated their support and belief in what AFG could become. Before I finish, I want to acknowledge our brokers, whose trust and hard work underpin these results, our board, and our people across the country who are focused on delivering great outcomes for our brokers and our shareholders. Thank you.
Thank you, David. Before I open the floor to questions, I would like to outline the question and voting procedures. Each person who signed in today will have received a yellow voting card, a blue card, or a red card. If you are holding a yellow voting card, you may vote and ask questions. Those holding a blue card may ask questions but cannot vote. Red cards are for visitors who may neither ask questions nor vote. Shareholders and proxies attending the meeting online who wish to ask a question through the virtual meeting platform, please click the Ask Question button and type your question and click Submit. Due to time constraints, we may not be able to answer every question, but if this does happen, we will be in touch as soon as possible to answer your question after the meeting.
I propose that the order for taking questions will be as follows. First is pre-submitted questions, which will be read by our company secretary. Secondly, the questions from the floor. Please state your name and whether you are a shareholder in your own right or an attorney, proxy, or a corporate representative of a shareholder. Finally, I will take questions from holders who have asked questions online during the meeting. With regard to voting and further the information for the shareholders in the notice of meeting, in the interest of equitably representing the views of our shareholders and in accordance with the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations, we intend to call a poll in relation to each of the resolutions considered at this meeting. The poll will be conducted at the end of the meeting.
Results of the poll will be released to the ASX after the votes have been counted. We refer you to the notice of meeting for details of voting exclusions. Copies of notice are available at the front of the room in Perth and online on the virtual meeting platform. The proxy results for each resolution will be shown on the screen behind me and online in the virtual meeting platform. To the extent that an open proxy votes are held by the chair of the meeting, those proxies will be cast in favor of the resolution. Our company secretary will now read any questions from shareholders submitted prior to the meeting. Michelle.
Thank you, Greg. We have a couple of questions from shareholder Malcolm Watkins.
Could the board provide commentary on the latest AFG Index and explain how these figures might translate into the company's trading performance for the last quarter, as well as the expected trajectory for first half of FY 2027?
David.
Thanks for the question, Malcolm. Probably call out that, as I've just mentioned, the AFG Index is a good indicator of general market activity. Hopefully you've seen over since listing, we've been able to evolve our business so that it's no longer as relevant to our financial performance as it once was. A 10% reduction translates to a 3% reduction in NPAT for the business. As you can see, the shape of the P&L is moving over time. Having said that, what I would say about the latest mortgage index is the back half of the September quarter showed signs of stabilizing. All lenders in the residential mortgage space would say that 2026 was probably one out of the box. If you compare where we are right now, despite FY 2026 being the current year being a little softer than FY 2027 being softer than FY 2026.
Let me get my numbers right. Never been good with those. It's still demonstrating growth over the short-term average over the last couple of years. It demonstrates that the business continues to grow. There's three drivers that matter most from AFG perspective of our earnings profile. The first is the loan book, and I've just demonstrated the loan book has demonstrated growth and continues to grow into FY 2027. The other piece is our NIM and our cost of funds. We have great visibility of our NIM in the short term on the back of the term transaction and also the place that we've ability for us to renegotiate pricing of those warehouses, which are beginning to roll over. The other point it would be broker services income, which demonstrates 23%.
That's grown over time, so it gives us a great level of confidence as to what our outlook is. The final piece would be broker investments. We will be bringing on broker investments, and they will continue to grow and add additional income to the business. So they are the three drivers that matter most for us. Again, I'm going to point to the FY 2029 aspirations. Nothing has changed in our outlook there, and our ability to meet those aspirations. I think that's probably an important point. Despite the noise in the market, we are steadfastly focused on those aspirations to continue to grow the business.
Yes. There's a couple of further questions from Malcolm.
AFG generated approximately AUD 49 million in NPAT last year and aims to more than double that over time. However, the stock currently trades at a market capitalization similar to ASX 300 companies, generating only AUD 5 million-AUD 15 million in NPAT annually. How does the company assess this valuation gap? What actions are being taken to ensure the market properly understands and values AFG's business strategic position and growth potential?
The recent share pricing performance has been very challenging given the outlook we have for our own business. We cannot obviously control market sentiment or the interest rate cycle, but we can respond to the interest rate cycle. 30-odd years of operating through many cycles has reinforced the importance of diversifying our income base, and as highlighted earlier, our investments made in FY 2026 means we entered into FY 2027 with an annualized AUD 13 million uplift in EBITDA. We do not provide guidance on doubling earnings, but we do keep a close eye on consensus and in accordance with ASX rules, if we felt there was a divergence, we would disclose this. Having said all this, if we accept that we deliver our FY 2029 aspirations, earnings will be materially higher than they are now, than we are currently experiencing.
One further question.
Has the board considered hiring East Coast based investor relations resources to strengthen engagement with current and prospective shareholders, particularly institutional investors?
I'll probably just make a couple of points there. We are happy to consider all things, but I will note the following. We have trialed external advisors in the past with very limited success. As a small-cap, institutional investors do want to hear directly from the executive of the business, whether it be the CFO or the CEO. For retail investors, we have more recently introduced direct communications via InvestorHub, which allows a more direct access point.
Ultimately, what moves valuation over time is the execution of our strategy and growth in earnings together with a supportive macro environment. In FY 2026, we grew EPS by 33%, and our focus is on our FY 2029 aspirations, continuing to diversify our earnings base and the responsible allocation of capital. That is the most direct way to build investor interest as to narrow the gap you have just raised.
Thanks, Dave. Thank you, David. I will now open the floor to questions. We had no further questions. I will now open the floor to questions from the floor. Are there any questions from the floor?
Thank you, Chair. Cameron McNeillages is my name. I am acting as a proxy today. I am sitting next to a 10-year plus shareholder who is attending for the first time because he is a bit curious about where the share price is headed. A lot of your commentary and the CEO's commentary talks to that disconnect between the market and the company. Putting the specific financial language and whatever aside, can you address my partner here and give him some confidence that the business is in great shape in the language that would make sense to him?
Dave, would you like to take that on?
As mentioned, there is a disconnect between the market's interpretation of all things which are mortgage related in the current environment. What I can say about the business is it generates exceptionally strong cash flow. It operates in a cycle which over the last 32 years demonstrates that the business is resilient and can grow over each of those 32 years. From an allocation of capital perspective, we are very discreet in terms of how we allocate that capital to ensure our minimum returns on capital are maintained. I will point to the distribution business, which generates a return on capital of 40%. The manufacturing business demonstrates a double digits return on capital as well. So combined, the return on capital being experienced by the business is strong.
Our history with the cycle of the business and in the industry is that it is very much interest rate market-related, and when it moves down, it moves down. When the interest rate environment changes, we generally enjoy a stronger period. But in the interim, the business continues to grow, as demonstrated by the numbers and the activity that we are experiencing.
Thank you, CEO, and thank you, Chair. Look, second question, returns to shareholders. Good dividend. Thank you. Buyback seems successful in approaching both its limit and its closing date. You mentioned in your presentation, CEO, that prudent returns to shareholders will still be considered. Is that about the right mix of buyback versus dividend as far as you are concerned?
Do you want me to or?
Yeah, sure.
Yes. The short answer is yes. We've demonstrated an ability and a desire to return capital to the shareholders at the appropriate moment. We are conscious that we want to continue to grow the business, which does require an allocation of capital to allow us to grow. The securities business and the broker investments are the main areas where we allocate capital, together with investment in technology, which is important for brokers. That dividend policy of 50%-70% of cash earnings has been maintained over that period. The outlook for the business, particularly as it still generates strong cash flow, is that that will continue.
Sorry, I'll have one more, please. It's really an opportunity to reflect from Mr. McKeon, if that's okay, Chair. He's been at the company since its early days. I think given Malcolm's retirement and Brett's retirement, it's a pertinent time to get reflections, if that's okay with Brett, on just some of the stories from the early days.
Well, actually, I have suggested that he write a book, actually. I think that is a very nice thing. Brett, would you like to comment?
Gosh. Yeah. Thanks, Cameron. It is nice to have a non-financial question and non-share price-related question. We started in 1994, and the market really didn't want us to exist back in those days. The first four years were really difficult, because the big banks were truly entrenched across the country. They still had large branch networks. Deregulation of the financial markets had only recently happened, and they were fighting it at every turn. We were like a mechanism for that change. For all the new banks to step into the market without branches and distribution, we were critically important to them. We were a little bit of an enemy to the incumbents, as you can imagine. A lot of interesting conversations in those early days with the big banks. A lot of hostile bankers as well that didn't really like us.
But look, the thing that sticks with me really is that this sector is the biggest part of Australia's GDP. Banking, insurance, super. A lot of the best minds in the country are attracted to our space. Over the last 30-odd years, I have got to meet tens of thousands of people. A lot of them are friends. A lot of the friends are in this room. They are broadly very bright, very driven. That across our staff, across our broker network, and across the banks and our other partners. For me, the biggest highlight has been really those relationships that I have built over the journey. Hopefully, a lot of those friendships will be friendships for life. I can't really share a lot of the stories. I would love to. I couldn't even put them in a book, Cameron.
We will watch the book.
I'd probably get sued. But thank you for the question.
No, thank you. Very good.
I think that was a great question, actually. By the way, we feel like you about the share price, I can assure you.
Yeah.
Very much. So do the staff, actually. But we are focused on what we're doing, building a more resilient business, and that's certainly the case. Any other questions from the floor? Do we have questions online?
Yes, we do. I have a couple of questions from Stephen Mayne.
Stephen, hi.
The first question is, Ernst & Young has been our external auditor since 2007. How many competitive tenders have we run over that 20-year period? When are we next planning to run a competitive tender for the external audit service? Does the Chair expect EY will be our external auditor in 2030? I am not sure that is entirely correct about the 20 years, but
No.
It seems correct, yeah.
Look, the audit and risk committee assesses the auditor's independence and performance each year. The lead audit partner rotates in line with the Corporations Act. Our current lead audit partner is retiring, so rotation will be happening next year. The committee will continue to consider the timing of a tender. I do not know. We actually have the Chair of the audit committee. Would you like to add anything, Craig?
Oh, if-
Do you want to. Sorry.
If we heard the question correctly, it is not correct. The terms of the question is not correct. EY have been with us how many years, Tim?
I believe it's seven.
Yeah, seven. Prior to that, it was Deloitte. There was a tender at that stage. Within that 7 years, we've rotated the partners, and we'll rotate them again very soon. It hasn't been a long period of time. Anything else, Luca or Tim? No. Okay. Thank you.
Thank you, Craig.
Thank you. Next question is for you, Greg. It's a question on regulation.
I knew that that would happen.
From Stephen Mayne again.
Could Chair Greg Medcraft comment on how well he believes ASIC is currently regulating our sector? Has much changed since when he was Chairman of ASIC?
Oh.
Is ASIC even our most important regulator, or is that APRA? Do we have any engagement with state-based consumer affairs departments?
Well, look, when you leave the job of being Chairman of ASIC, you leave the job, and I don't believe, as some do, commenting on my successors, because it's a very, very difficult job. The most important thing is you handed it over in a strong fashion, and I believed I did in terms of its funding and in terms of increased powers. I believe that, for example, I think Joe Longo did a great job, and I think Sarah will do an equally great job, and we'll shape it in the best way possible. So, look, as I say, and it is a very challenging role, especially now with tech, et cetera. In terms of their view on our sector, specifically the mortgage brokers, they've just handed down a report. I thought the report was very fair.
It did point out some areas where perhaps a little bit of better documentation, but generally, I thought it was a very good report. Look, I think at the end of the day that with brokers, like for AFG as an aggregator, we do a high level of compliance checking in terms of the best interest duty ourselves. Then we have this further oversight from ASIC, surveillance. I think that outcome was, as I said, very, very fair. In terms of engagement with state regulators, well, I guess I know very well because consumer law was taken over while I was at ASIC from the state offices of fair trading. So, they've exited the space. I'm not sure, Dave, we have anything much to do with the state offices of fair-
It's generally run through the Mortgage and Finance Association of Australia.
Yeah, it's run through the mortgage-
We are. We deal with-
Which they deal with the offices of fair trading.
We have a board seat on there, and they cover it.
Right. We do. There is some work through the industry group with it, but the offices of fair trading did, with a lot of consumer credit, move to the national regulator. But then there is that liaison that occurs with offices of fair trading. But I am a believer in what we have as national regulation, so that we have equal treatment and resources for all.
Thank you. And final question from Stephen Mayne.
Australia is currently in the midst of an unprecedented deluge of takeovers that has contributed to listed entities on the ASX dropping by 11% since January 2023 to 2,044 on September 30, 2026. There were a record 27% major takeovers above AUD 100 million completed in 2024, 2025, and this rose to 30% in 2025, 2026. Why do the Chair and CEO believe this is happening? There is currently a flood of private equity takeover bids. Have we wargamed how we would respond to a bid, and do we have advisors in place if that happens?
I'll let David respond to that. Well, look, if I go back as a former regulator, there was always this debate about private markets versus public markets, and I've always had a view that it's a matter of the venue you choose is really a matter of looking at whether you need that liquidity that comes from a public market, whether it's the right business model for a public market versus a private market. As we know, the private markets have continued to grow in their depth of market and liquidity, and I think that's an evolutionary process. It's going to continue to evolve, and it's matter of, I think, how the public markets pitch themselves to people for them as a venue.
From an AFG perspective, I don't think at this stage we can really comment on that. We're focused on our business and making sure that we deliver the best resilient result we can for our investors, and we leave it to the market to judge that, and I think that's what we'll continue to do. As Dave said, we're going to focus on what we're doing and try and achieve those FY 2029 objectives, and which we're well on the way to achieving.
No further questions.
Hold and buy more. Oh, that's not a recommendation.
No
As a personal thing, I must say. As financial advice, you must consult. Oh, sorry. I've always got to add that in, of course, everyone. Okay, any further questions?
No further questions.
And comedy.
No further que-
Okay. Thank you. Okay. As there is no further questions, we will continue on to the formal proceedings of the meeting. I have been advised by the Company Secretary the notice of meeting has been properly circulated, and if there are no objections, I will take the notice of meeting as read. I have received confirmation that the presentation of materials for today's annual meeting have been lodged with the ASX in accordance with the listing rules, and all directed proxies will be voted as directed. A copy of the minutes of the last AGM of the company held on 17 October 2025 are available at this meeting if any shareholders wish to inspect them. The first item on today's agenda relates to the financial report of the company for the financial year ended 30 June 2026, together with the Directors' Report and the Auditors' Report.
It is not necessary to formally pass the 2026 reports. However, as shareholders have gathered here today, it is a convenient time to ask shareholders whether they wish to address any matters in those documents. I will now invite shareholders to comment or ask questions on the reports. Questions may be also asked of auditors in relation to the conduct of the audit and the content of the audit report, accounting policies adopted by the company, and the independence of the auditor carrying out the audit. If any shareholders on the floor have a question or comment, please raise your yellow or blue card. Again, please begin by stating your name. Have any questions been submitted online?
No.
Okay. Are there any questions on the floor? No. Okay. If there are no questions, we will move on to the next item of business. As I advised earlier, we will conduct a poll in relation to each of the resolutions considered at this meeting. For those physically attending or in person entitled to vote on this poll, they are holding yellow cards. Mark either for, against, or abstain for each resolution on your voting card for your vote to count, and place it in one of the ballot boxes circulating the room after all resolutions have been read. For those attending virtually, click on Get a Voting Card, enter your shareholder credentials per instructions, and click either For, Against or Abstain, and then the button that is appropriate for your vote to count and select Submit.
We now move to the adoption of the Remuneration Report for the financial year ended 30 June 2026. Under the Corporations Act 2001, listed companies are required to include as part of the Directors' Report a remuneration report which includes specified information. Directors have prepared a remuneration report for the period ended 30 June 2025, and it is included on pages 40- 55 of the 2026 annual report, which has been made available to shareholders. The Corporations Act also requires companies to put to shareholders a non-binding vote to enable shareholders to vote their opinion on the matters included in the remuneration report.
I remind key management personnel and their associated party that voting exclusions apply to this resolution under the Corporations Act, and excluded parties should not vote. I move the following resolution: That the remuneration report for the company for the year ended 30 June 2026 be adopted. The proxies received for the resolution are displayed on the screen and show a majority in favor of the resolution. Are there any questions or comments from the floor? Yes.
Nothing controversial, Chair. Cameron again. Just thank you very much for showing the proxies and the number of holders who have actually voted for those. It gives us a lot of transparency that there is a lot of retail investors out there who are quiet. Okay.
Thank you, Cameron. That is a comment.
It is a comment.
Thank you. We take it. Thank you.
It was a thank you.
Yeah. Thank you. No, appreciate it. Have any questions been submitted online?
No.
Okay. Thank you. If there's no further questions, I'll now put the resolution to a poll. Please complete your voting card or submit your online vote for this resolution. I'll now refer to item three of the agenda, the election of David Flynn as a Director. As stated in the notice of meeting in accordance with the company's constitution, a Director appointed by the board under Rule 8.1B of the Constitution holds office until the conclusion of the next AGM following his or her appointment. David Flynn was appointed as a Director by the board on 4th of August 2026 to fill a casual vacancy. Mr. Flynn will hold office until the conclusion of the 2026 AGM, and being eligible, offers himself for election to the board.
All directors' details are set out in the directors' report on pages 32 to 33 of the 2026 annual report, and Mr. Flynn's details are on page nine of the notice of meeting. I will not repeat those details. I move the following resolution: That David Flynn, who retires as a director of the company in accordance with Rule 8.1D of the company's constitution, and being eligible, be elected as a director of the company. The proxies received for item three are shown displayed on the screen and show in favor of the resolution. Are there, again, any questions or comments from the floor? Yes.
Thank you, and this will be the last time I speak. Thanks, Chair.
No, sorry. It's fine.
Okay. Look, with regards to Mr. Flynn, obviously a background in capital markets and M&A, and so on, so a good skill set to add to the company.
I tend to agree with that.
Yeah. AFG now holds minority stakes in eight broker businesses from the annual report. Interests acquired in four more this year. These are incremental transactions, and no doubt fit into a long-term strategy. Can we read into Mr. Flynn's appointment that the company is interested in larger scale consolidation, along the lines of the foiled activities of five years ago?
I cannot really comment on that. You have seen the broker investment program is a part of our three core strategy. If you think about it is quite logical. It is vertical integration, right, and taking more of that share. Beyond that, Dave, I do not think we really comment. We often look at acquisitions, but it is always something we do, right?
I'd just add that the business, as I mentioned before, is very focused on the allocation of capital.
Yeah
Ensuring the right investment decisions are made, whether they be small or larger. David's skill set supplements that desire as well.
Sorry.
No, but I'm sorry. I think there's two things about David's background. His capital markets background, because clearly, and even my background, we're a massive user of particularly debt capital markets. Also, his equity capital market background and the M&A just makes it a great And he's based in Perth. Just makes it a good And we did quite a search, and we were very happy that David, we found him. It is part of a team and a mix of skills, and yeah, sure, we will grow through organic growth, and if need be, if the right thing is there, we will look at acquisition, right? But we need to look at that, sort of the price. Okay. That's important. Okay. Are there any other questions from the floor? Are there any more questions online?
No, Chair.
Okay. If there are no further questions, I will put the resolution to a poll. Please complete your voting card or submit your online vote for this resolution. Now that all the resolutions have been read, please ensure that you have properly completed your voting card and kindly lodge it in the ballot boxes circulating in the room. If you have not done already, shareholders and proxy holders participating via the online virtual meeting platform, if you could now submit your votes. We will have a five-minute countdown, which will now appear on your screen. We should sort of play music or something. We will just wait for that five minutes to pass.
That is all right.
Sorry?
Vote again. Both been voted.
We don't.
Yeah, because it's just online.
Okay. All right. Okay.
That's why. 11 now.
It appears actually that all persons have now voted, therefore I will declare the poll has closed. Rather than adjourn the meeting, I will ask our share registry and our Company Secretary to calculate the poll results and to announce them to the ASX when it is completed. That concludes the formal business of the AGM. Thank you for your attendance and participation today at the meeting. We look forward, most importantly, to your continued support in the coming year. I will now declare the meeting closed. Thank you, everyone.