I acknowledge the Traditional Custodians of Country throughout Australia and recognixe their continuing connection to land, waters, and community. I pay my respects to them and their cultures and to Elders past, present, and emerging. For our New Zealand attendees, Tēnā iwi, tēnā mana, tēnā koutou katoa. I'm delighted to say that today's meeting is the first opportunity we've had to hold an in-person meeting since the COVID pandemic. To provide shareholders with flexibility, the meeting is also being held online via the Computershare platform. Those attendees joining us virtually can hear a live webcast of the meeting. In addition, shareholders and proxies attending virtually also have the ability to ask questions and submit their votes via the Computershare platform. Virtual attendees can submit questions at any time. To do so, please select the Q&A icon at the top of the Computershare platform.
Select the topic your question relates to from the dropdown list and then type your question into the text box. Once finished, please press the send button. Please note that while you can submit questions from now on, I will only address them at the time when the relevant item of business is discussed. Please also note that your questions may be moderated or if we receive multiple questions on the same topic, amalgamated together. For those shareholders who wish to ask a verbal question via the telephone line, please follow the instructions below the broadcast. For our shareholders attending in person today, it's a much simpler process, I'm pleased to say. Those in possession of either an orange voting card or blue non-voting card are welcome to ask questions. While those with a white visitor card are kindly requested to only observe during the meeting.
If you believe you've not received the correct card, please go to the registration desk, where a Computershare representative will assist you. I'll give all shareholders who wish to speak a reasonable opportunity to do so, but please keep your questions to the matter at hand and as succinct as possible. Having said that, we really do welcome questions. We don't get an opportunity to meet with shareholders frequently and so, if you have a question, please feel free to ask. We don't bite, although some questions might bite me. The voting today will be conducted by way of a poll on all items of business. In order to provide you with enough time to vote, I will shortly open the voting for the resolutions in items two to five. The resolution in item one doesn't carry a vote.
For our shareholders attending virtually, if you are eligible to vote, once open, select the vote icon and all resolutions will be activated with voting options. To cast your vote, simply select one of the options, then press the orange end button, and the vote is automatically recorded. You'll receive a vote confirmation notification on your screen, and you have the ability to change your vote up until the time I declare voting closed. For those attending in person, if you're eligible to vote, you would have received an orange voting card at registration. If you believe you're entitled to vote and have not received the correct voting card, please see the Computershare staff at the registration desk. To cast your vote, simply complete and sign the back of the card. A Computershare representative will collect your voting card at the end of the meeting.
I now declare voting open on the resolutions in items two to five. For our online shareholders, the voting options will soon be activated, so please submit your votes at any time. I'll give you time and a warning at the end of all items of business before I move to close the voting. Joining me today is our Group Chief Executive Officer, Daniel Agostinelli, and our Non-Executive Directors, Stephen Goddard, Joshua Lowcock, Brett Blundy, Donna Player, Michael Hapgood. In addition, we're also joined by our Group Chief Financial and Operations Officer and Joint Company Secretary, Matthew Durbin, at the end on my left, and our Group General Counsel and Joint Company Secretary, Alethea Lee, on my right. A number of our executive leadership team members are also in the room, as well as the company's auditor, Deloitte, represented by partner Stephen Roche.
At today's meeting, we'll be considering a number of matters set out in the Notice of Meeting dated 10 October 2022. Before we address the resolution set out in that notice, I'll make some introductory remarks and provide an overview of our financial year 2022 results and how we are continuing to create value for our shareholders before passing over to our Group CEO, Daniel, to give his address. The operational disruption experienced in financial year 2022 and the associated impact to the financial results has been well reported. Over 50% of Accent Group's total store network, amounting to more than 400 stores, were closed between the months of July to October due to government-mandated lockdowns. Subsequently, the Omicron variant then impacted customer traffic levels and confidence.
The negative impact of this disruption on sales, gross margin, and cost of doing business was significant, resulting in disappointing financial results for the year. Despite the significant disruption, however, we've continued to invest in and maintain the focus of our growth initiatives, including rolling out new stores, strengthening our digital capabilities, expanding our customer database, growing our distributed brands, and building on our vertical brands. These investments have been targeted towards continuing the company's long-term growth trajectory that has delivered record profits and growing shareholder returns for four of the last five years. These achievements build and reinforce the company's strong and defensible market position, as well as increasing our relevance in target markets across Australia and New Zealand. The Accent Group business today is scalable with future growth opportunities through online and new store growth, our large and diverse brand portfolio, and our new businesses.
Our business is flexible with proven capability to leverage digital and online reach. To quickly respond to trends throughout our diversified portfolio of brands across footwear, accessories, and more recently, gift and lifestyle apparel. The market position of the business is also immense. Our distribution relationships provide access to global product innovation and exclusive access to product. Our vertical owned brands add to product differentiation and support underlying gross margin growth. The board wishes to acknowledge the resolute dedication, resilience, and loyalty of the Accent Group team through a difficult and highly disruptive period in delivering on these growth initiatives and continuing to build the company up from strength to strength. Turning now to the results. Total sales for the year, including The Athlete's Foot franchisees, were AUD 1.27 billion, up 11.3% to the prior year.
I'm delighted to say that we have for the first year broken through the AUD 1 billion sales barrier. Earnings before interest and tax and net profit after tax were down significantly on the prior year. As reported, the company estimated the government-mandated closure of some 400 stores for varying periods, including for the Omicron-affected period, negatively impacted total sales by about AUD 95 million. Gross margin percentage was also negatively impacted by 190 basis points due to the requirement to move through inventory while stores were closed. In spite of a disrupted FY 2022 year, since 2012, Accent Group has delivered a 23.3% per annum compounding annualized return, outstripping that of the ASX 200 at 10.7% per annum compounding annualized return.
I'm very proud to be able to say that we have delivered long-term shareholder growth over the last 10 years of almost double that, in fact, more than double that, of the ASX 200. This is something we continue to drive and strive for. I'm also very pleased to report that the Accent Group released its first-ever standalone sustainability report in 2022. This has been the outcome of an 18-month journey to define our approach across the core pillars of our people, our responsibilities, and our environment. We took care to define the initiatives and focus areas for the business in these areas. In relation to our people, we recognize that the performance of Accent Group is driven by the quality and dedication of our 6,500-strong team members employed across Australia and New Zealand.
We continue to gain insight into what matters to our team members through continuing our group- wide team engagement survey, which highlights areas in which our team considers we are doing well, as well as areas for improvement. The survey gives the company an opportunity to execute and follow up on action plans to address these opportunities for improvement. In relation to our responsibilities, some of the early work that we are most proud of is the Scan Your Feet Initiative and our associated partnerships with headspace in Australia and Youthline in New Zealand. These two organizations play an important role in providing mental health and other support to youth in the key demographics that represent Accent Group's team and customers. In relation to our environment, our association with the Australian Sporting Goods Association and their shoe recycling program is another highlight.
Accent Group has to date set up 229 recycling collection points across our store network. In FY 2022, we collected more than 58,000 pairs of shoes for recycling. We are just getting started on this journey with a range of ongoing initiatives underway and new initiatives implemented. While it has been a year of challenges for Accent Group, it has not been one without achievements. I will now hand over to Daniel, our Group Chief Executive Officer, to tell you more about these achievements and our plan for the future.
Thank you, David, and good morning, everyone. Turning to slide 14, our operational highlights. As David mentioned, total group sales, including The Athlete's Foot franchisees, are now approaching AUD 1.3 billion. In FY 2022, we opened 139 new stores across all formats in Australia and New Zealand to increase our total store numbers to 762 stores. Our contactable customers and our database has also grown by 50% from 6 million to more than 9 million customers. We're very proud of that. Accent Group's online sales grew by more than 200% to AUD 263.8 million, which represented 24.4% of retail sales in FY 2022.
Pleasingly, our vertical brands and product sales grew in line with expectations and are now at more than AUD 70 million from a standing start in FY 2019. We also continue to grow our stable of distributed brands and acquired several new global brands in FY 2022. Turning to slide 15, our digital business. Digital sales grew strongly throughout the year with growth of nearly 26%. Digital sales made up around 24% of total sales for the year. H2 of FY 2022 saw a significant pullback in promotional activities in-store and on our websites, with an associated impact on average order value as the focus for this channel shifted away from clearing inventory back to more profitable online sales. It was pleasing that online sales continued to grow in total at higher gross margins.
We anticipated the digital percentage of our sales achieved in H2 of 19% is representative of a more normal mix of online sales. We continued our investment in web stores to refine and improve their capability on an ongoing basis. Turning to slide 16, our VIP and loyalty. Through the year, we also continued our investment in loyalty and customer data platforms. Our customer data platforms went live in Q1 of FY 2023. I'm very pleased to report that our contactable customer base grew by 900,000 customers to 9.3 million customers. This continues to be the result of creating attractive loyalty programs, coupled with a strong drive to invite customers to join these programs. The Hype DC and Platypus loyalty programs launched in FY 2022, and we are now seeing the impact of our loyalty programs, including those of The Athlete's Foot, Skechers and our Merrell business.
The group is targeting growing our customer database to 10 million customers in FY 2023. Turning to slide 17, retail, wholesale and vertical owned brands. As mentioned during the year, we opened 139 new stores across all formats. We closed 15 stores where suitable renewal terms could not be agreed. The new stores are performing well and the momentum in the Blue and Star Businesses, including the new stores in those formats, continues to strengthen. We are on track to open around 50 new stores in H1 2023. Wholesale sales continued to grow in FY 2022, driven by existing brands and the addition of new wholesale brands, including the brands acquired within the Blue store. Sales of our vertical owned brands and products grew to more than AUD 70 million and continue to support the improvement in underlying gross margin.
Vertical continues to be a key strategic driver for the company and we're looking forward to delivering great results in this division. I hope this gives our shareholders a clear idea of the activity and growth the company has planned in the upcoming future on the progress that has been made and our key growth strategies through a highly disruptive period. We continue to build a defensible business in Australia and New Zealand. Our portfolio of global distributed brands, owned vertical brands, integrated digital capability and our large store network are core assets of our group. Position our company well for growth into the future. I look forward to working with our team to deliver strong results as we all run ahead into the future. I will now hand you back to David.
Thanks, Daniel. Along with our AGM presentation, we released a trading update to the ASX this morning. For the first 18 weeks of financial year 2023, and based on trade to date, total Group-owned sales year to date are up 52% compared to FY 2022. Financial year 2023 gross margin percentage year to date is up 570 basis points on FY 2022. Trade to date has been above expectations. The group's focus on driving full-price, full-margin sales has resulted in strong margin recovery from last year. As Daniel has mentioned, our store opening program is on track and we expect to open around 50 new stores in the first half of this financial year. While we provide no forward guidance, inventory levels reflect strong deliveries of exciting new product across all our banners.
The group's in-stock position, along with sales and operational plans, are well set heading into the three most important trading months of the year. We also wish to advise that the first half of financial year 2023 will be a 27-week reporting period ending on the 1 January 2023, compared to the 26-week reporting period ending 26 December 2021 in the first half of financial year 2022. Which is all a lot of accounting jargon for me to say that our accounting system is gonna catch up with the real world, and we'll be back to 52 weeks a year in FY 2023. Shareholders and attendees, that concludes the business update, and we will now progress to the formal business of the meeting.
As mentioned at the start of the meeting, voting is being conducted today by way of a poll, and voting is currently open for the resolutions in items two to five. At the end of the discussion on these items of business, I'll give you a warning before I close the voting. The first item of business is to receive and consider the Financial Report, the Directors' Report, and the Independent Auditors' Report for the year ending 26th June 2022. These documents are contained in the 2022 Annual Report and were sent to shareholders on 10th October 2022. There's no formal resolution required for this item, but I invite any questions you may have about the financial statements or about any aspects of the company or the business generally.
This is the time for any general questions, as I will restrict questions about specific resolutions to matters pertaining to those resolutions. We will take questions from the floor as well as through the Computershare virtual platform and telephone line. We'll take questions from the floor before moving to questions from shareholders here virtually. Alethea Lee, our Group General Counsel and Company Secretary, will be the moderator of the online and telephone questions for today's meeting and will receive all questions, both written and verbal, from our online shareholders. For shareholders holding an orange or blue card attending in person, if you wish to ask a question, please raise your hand. Once you're acknowledged, an attendant will pass you the microphone. Please state your name clearly and show your shareholder registration card. What is in the old days?
Are there any questions or comments on the Annual Report or the reports of the Directors and Auditors? Yeah. Right. In your mic, mate.
Oh, thanks, David. Nice to virtually be able to meet you in real life since 2019. Bit of a change. I've got three questions.
You might just introduce yourself for the benefit of the.
Oh, sorry. Yeah. Ray Paulson, I'm a shareholder of this.
Thanks, Ray.
There's quite a few too many missed things here today. I'm not speaking on behalf of the team, just that I think our members would be interested in the answers to the questions. If you don't mind, I'll ask three in a row.
Go ahead.
We look very carefully where the companies are price makers or price takers. In an AFR article on the 20th August, Daniel was quoted as saying there had not been any reticence from shoppers despite the cost of brands such as Vans, Doc Martens and Skechers all going up by AUD 10-AUD 20 a pair. He was also quoted as saying it was unlikely he would cut prices further to avoid a situation where Accent was being priced out of the market. Assuming that input costs continue to rise, how will you maintain margins without increasing prices?
Okay.
That's you.
Okay.
We review pricing all the time. In some cases, we've actually gone up higher than AUD 10 or AUD 20. In the main, our customers have accepted those price increases. We will continue to review based on what our FX covers are and so on. Don't think there's been much resistance at all.
That's probably not a proper quote, in other words.
Well, I think that it just to speak to that. At the end of the day, we can't control inflation rates.
Mm-hmm.
We can't control foreign exchange rates. All of those things have an impact on our cost of doing business, in particular the cost of buying product. Our job is to make sure that we can actually reflect the costs in the business so that we can still generate returns for shareholders. At the end of the day, when I think those kind of economic events occur, prices unfortunately go up. We will ensure that we are always in the band of the market in our competitive market. At the same time, we'll be there to ensure that our pricing structures and our cost structures are appropriately delivering returns to shareholders.
Thanks. That's good to hear. I've got a lot of questions. One I came across that said, I'll just quote again, "Trend Imports is a multi-brand international distribution and wholesaling powerhouse, offering a diverse range of highly sought after local and international brands to the Australian and New Zealand markets." Does this business supply other retailers and distributors?
Yes. Trend Imports was the import distribution business that was part of the Glue Store when we acquired Glue.
Yeah.
That's the reason why you might not have heard of it before. It is responsible for a number of the brands that Glue Store had exclusive rights to, and that's now been integrated into the distribution and wholesaling business that we have in the other parts of the Accent Group. As a result, yes, there are some of those, some of the brands that we distribute are also sold to other retailers.
Okay. Thanks for that clarification. Just the last one from me. At the last in-person AGM, with the company's board paper, and I think it was fine, I was advised that Pivot had been partly established to target a lower price point, which would assist during a slowdown in high-priced brands during a recession. Similarly, we don't have a recession. With Pivot closed, how will Accent respond during such a period, having sort of moved on from Pivot?
Well, first of all, you know, we trial a number of new concepts in the business, and you would expect us to do that in order to innovate and find new areas for expansion. Unfortunately, Pivot was one of those experiments that didn't come off the way that we wanted it to. There are all those reasons for that. Despite that, we still have very strong businesses across all of the banners that we run. Those businesses operate day in, day out, whether the economy is moving up or whether the economy is moving down. It's our job, the job of management, ultimately, to ensure that we've got product that is suitable for the market circumstances at the time.
If you go into any of our stores, you'll see a range of products with different prices so that consumers have the opportunity to select the one that's most appropriate to them. In certain times, they may select product A, and in other times they may select product B. Our job is to make sure we've got a selection that attracts them irrespective of what's going on in the economy.
That's all from me.
Great. Thanks, Ray.
Mr. Chairman, Peter Richardson, shareholder. I'll try and keep a couple of questions related to the report. Firstly, in relation to the remuneration report.
Yes.
LTI-based Earnings per Share in vesting, it quotes something called adjusted EPS.
Yes.
There's no definition of what EPS .
Right. Okay. I might just hand it over to Matt to explain that.
No problem. Adjusted EPS is adjusted Earnings per Share. It's defined as adjusted, not because we intend to adjust it. However, the rules of the plan allow board discretion to adjust that if required. Typically, it hasn't been adjusted.
Okay. That allows the board some discretion to,
For instance, to give you an example, okay. If we locked in what was simply the statutory Earnings per Share, but some extraneous events occurred, like for instance, if we were gonna acquire a business and it required more capital to do that, then we would take into account that in terms of looking at the Earnings per Share that is used for the purposes of rewarding management.
I understand those reasons, but sometimes, we adjust for the negative and we don't adjust for the tailwinds that sometimes management gets.
Yes.
in achieving those targets.
Yes. We're acutely aware of that.
Okay.
May there be more tailwinds.
We hope so as investors. Yeah. Just from the Financial Report, maybe this is another question for Matt. Your debt has gone up from AUD 61 million last year to AUD 149 million. At the AGM last year, you said that you expected a reduction in debt that obviously has been affected by business conditions. Can you give us an update on the debt position and your expectations?
Sure. Well, we are, as you know, historically a low geared business. We haven't taken on large amounts of debt in the past. We don't anticipate having a highly leveraged business in the future. Circumstances over the last couple of years have been a little bit unusual, and so predicting has been somewhat more difficult. We have debt arrangements in place which are there to provide flexibility and funding for us for the ebbs and flows in our working capital position. Over and above that, you know, there are times of the year when we have excess cash, and we will use that excess cash in one of two ways. One would be to reduce debt or the other would be to provide dividends to shareholders.
So
I don't wanna try and predict what our debt position is gonna be at some stage in the future, but what I will tell you is it'll be prudent.
You need to.
We'll look it up and see.
Yeah.
So.
Thanks. I have another question. Matt, can I ask you a question about the trading update?
You go on.
Yep. It's just a simple mathematics one. You have 762 stores now. You say you're gonna open 50 stores in the first half, which you forecast for the full year is only 812. Does that suggest no new stores in the second half?
I don't know. Matt, go ahead.
On that.
Yeah.
On that we haven't done any forward projection on stores for the second half. When we update at the full year, certainly we're looking at least 50 this year. In the update today, we're on track to open 50 in the first half. You can anticipate that we may give an update in February. However, we know
You're telling me that 812 half-year, and then.
Indeed. The question of store openings is not one that we like to forecast. I mean, the world is a volatile place, so we're more than happy to say what we've done. We expect that. It's actually, I think by the end of December, we will have approximately 50 stores, maybe a touch over, opened. If you recall in past periods, the November, December period is a period of lots of store expansion for us, obviously in advance of the key trading periods. It's not to say that we don't open stores in the second half of the year. I would be surprised, indeed stunned, if that was the case.
Good. I'm not gonna ask more questions which are more general in nature, so I'll stay close for that.
Perfect. Okay. Give someone else a chance. We're more than welcome to come. We're happy to come back to you. Please.
Good morning, Chairman, board. It's a good opportunity once again in front of yourselves in person. Thank you very much for that opportunity. My name is Chris Love. I'm a volunteer representing the Australian Shareholders' Association here this morning. Today I hold a constituency of 55 members who hold just in excess of 840,000 shares in Accent Group.
Great.
Just a sort of general question to kick off at this point in time. In relation to, as disclosed in your Annual Report, you note that digital sales comprise 24% of total sales in financial year 2022, in what was an interrupted year for your retail stores due to the pandemic. In terms of financial outcomes, is there an optimal mix between digital and in-store sales you would like to achieve?
I don't think that it's a case of saying there's an optimal mix. Digital sales have been increasing over the last five years. As you know, we invested very heavily in digital at an early stage, and so we've achieved the benefits of having a sophisticated digital network. At the end of the day, our job is to be there for customers irrespective of how they wanna deal with us. They wanna walk into a store, they wanna call us up, they wanna use the internet. We're completely ambivalent about the way in which we're there for customers. It's not for us to determine the mix, it's for customers to determine how they want to deal with us. Our job is to make sure that we're open for business across all of those channels.
Thanks very much. I just had another question.
Sure.
Just a bit of clarification in relation to the customer database that you're holding.
Yes.
Like 9 million climbing to 10 million. Is there any duplication? Like, if you need different brands, does that mean you have to sign up for the individual brands and is that how you accumulate that number or is that-
Currently, each of our brands run individual customer databases and loyalty schemes. There is likely to be some overlap. Obviously, people who shop in one then shop in another and sign up for both. The experience that they have in shopping, let's say at a Platypus store and being a Platypus customer may be different to the experience they have in shopping at a Athlete's Foot store and being an Athlete's Foot customer. We have not yet got to the stage of amalgamating or looking at how we might combine and use those that customer database on an aggregate basis. I suspect that there will be some duplication.
There'll be duplication across the group, but there won't be duplication in the case of how many people are dealing with The Athlete's Foot and how many people are dealing with nail fungus.
Thank you for that clarification. One operating in that space, no pun intended.
Yeah.
We know that from your Annual Report that one of the key risks that you had identified is that of cyber security.
Yes.
In light of increasing reports of data breaches occurring within Australia, can you outline any further steps the company is currently taking to protect against the hacking systems or data of online companies?
Okay. Well, first of all, let me start by saying that it is a highly relevant topic and obviously one that's on the front of every board's analysis at the moment. We as recently as yesterday had our last board meeting. I'm sure it was well and truly a topic of discussion. I'm a little loath to talk about specifically the things we do because there are very sophisticated people out there who then try and find a way to get around everything that we do. Ultimately, it's a question of balancing cost and outcome. We believe that we have appropriately invested in our cyber security, which is not to say that we aren't continually reviewing it, because we are.
Obviously, as a result of recent events that have taken place with other companies, we, as I'm sure a lot of businesses in this country are reviewing, you know, what systems we have in place. The issue therefore of the size of the wall and the thickness of the wall that we can put up is one aspect of it. At the end of the day, we're a retailer. We, I can tell you somebody's name, I might be able to tell you their email address, and the most critical information I can give you about them is their shoe size.
We don't believe that is the sort of information which will rank comparatively with the information other businesses may have. We are vigilant. We will remain vigilant. Unfortunately, it means that there's more and more that goes into investing into technologies to protect us to the greatest extent that we can. That's what we're doing.
Thank you.
Thanks. Are there any other questions in the room? Yeah, please.
Good morning. My name's David Hooper, also a Teami nvest member and shareholder.
Okay.
Given the disruption in business over the last 12 months, has the company made any changes in the way it handles logistics, and also has it made any changes to the way that it manages its inventory?
Absolutely, yes. In terms of managing the logistics, I mean, we've got an automated shed in New South Wales. We actually have a couple of different distribution points, but all of those distribution points will end up being in our main shed, being Toll Holdings. And that's giving us a lot more efficiency in terms of accepting stocks in and stock out. And in terms of protection from what, you know, what's been going on, it's largely back to some normality at the moment. I wouldn't say it's exactly 100% where it was pre-COVID, but definitely back to some normal trading patterns in terms of the products that we're receiving in and out.
Thank you.
Thank you.
Thank you. It's good to be here in person, I must say.
You're welcome.
Hi, Chris.
Hi.
Yeah.
You might just need to introduce yourself.
Oh, yeah, sorry. I'm Kevin Robinson, member of Teaminvest and a shareholder in my own right as well.
Right.
Some reports that I've seen indicate that Accent Group is selling 25% of all shoes in Australia. I'm not sure about the accuracy of those reports, but I'm sure it's a significant proportion. In terms of the long term, Australia is not a big market and companies often hit the edges of the Australian market fairly quickly and you know have difficulty going overseas. Can you outline long-term strategy in terms of continuing the growth?
Sure. The first is a secret plan to ensure that everyone has three feet. Look, I won't comment on the proportion of the market that we have. I'm sure there are various ways of calculating that, and there are different markets. At the end of the day, everybody does have, you know, two feet. The population in Australia and New Zealand, and we operate in both markets, obviously, you know, presents an opportunity for us as well as there's a cap on the number of people that are in each country. One of the things that we benefit from is a shift, though, in consumer habits.
If I ask you all to think about what your closet looked like 10 years ago and the sort of shoes that you had and what your closet looks like today, I think you'd find that there's a significant change in the mix.
Yeah.
It's not just the number of people, it's also the type of footwear that they're wanting to wear, and also that footwear may be more specific for different sorts of things that people might do in their lives. I don't wish you to think that we're somehow running out of the capacity to sell shoes to people in Australia and New Zealand. There's a lot of opportunity there. It's also the reason why we have already started a business of expanding the sorts of things that we do.
Our acquisition of Stylerunner and our acquisition of Glue Store and the growth of those businesses and other things that we're doing that I won't speak about right now are all designed to enable us to grow the addressable market that we can sell to. It was also a matter of public record that we have looked at markets outside of Australia and New Zealand, and we'll continue to do that. We still believe that there is enormous growth opportunity for us in the market of Australia and the market of New Zealand, and we don't plan on reaching a cap anytime soon. Thanks. Okay. Are there any other questions from the floor? If not. Okay.
As there are no more questions from shareholders on the floor, I'll ask Alethea if there are any questions from shareholders online via the telephone line about the financial statements or the business generally.
Yes, Chairman. There are several questions from our shareholders online. The first is from Lindsay Shervin. My friend who works for a high-end men's fashion label with large online sales to North America, has seen a 30%-50% decline in sales in the last four months. Do you see a similar downturn for Australian retail sales on the horizon?
Well, I have no better crystal ball than anybody else. All I can tell you is what we're experiencing. I mean, we said to the market as recently as today that our sales year to date are up 52%. So I'm not sure that I can say much more than that. You know, we have been selling, we've been in our industry for many years through times when things are good and times when things are bad. As I said before, it's our job to ensure that we're delivering value accretion to shareholders no matter what happens, and that's what we aim to do. Thanks, Lindsay.
Thank you, Chairman. The second question is from Mr. Stephen Mayne. There are several in relation to the proxies. Did any of the five main proxy advisors, ACSI, Ownership Matters, Glass Lewis, ISS, and ASA, recommend a vote against any of today's resolutions? Which of the proxy advisors are covering us, and has there been a material proxy protest vote against any of today's resolutions? Will you disclose the proxy votes before the debate on each resolution so shareholders can ask questions about the reasons if there have been any protest votes? Also, why not disclose the proxies to the ASX with the formal addresses like others now do?
Yeah. Well, welcome, Stephen. I think this is your first of our meetings. We welcome you as a shareholder. There are a number of questions there. If I don't get them all, Alethea, please remind me. First of all, I should say that we will in fact be showing you the proxies before each item of discussion. It'll come up on the board behind me, and it'll come up on everybody's screen. I agree it's an important piece of information for people to know. Which proxy advisors cover us and what their reports are? Well, the proxy advisors are private businesses, and they have their own clients. If they publish their reports, then people can read them.
I don't think it's for me to try and anticipate or disclose who does what. We obviously have a number of institutional shareholders and some of them use proxy advisors, and there are a number of proxy advisors in the market. You know, their positions they take on our resolutions are matters for them. We, like all businesses, engage with all of our shareholders, including the advisors to those institutions. We respect that everybody has the right to vote as they wish to. As the proxies that will come up on the screen before each item of business will show you exactly what our shareholders are telling us in relation to each of the resolutions that we have for all shareholders today.
What I can say, because obviously, you'll see in a moment, is that, you know, there's an overwhelming level of support for all of the resolutions that we're putting to shareholders, which I'm obviously very pleased about, and everyone can draw their own conclusions from that.
Thank you, Chairman. Another question from Mr. Stephen Mayne. The chair is a very good operator and well invested in this business, but he's been in the role for a number of years. Why hasn't this board have a deputy chair to lead independent director who can be directly responsible for leading the annual performance review of the chair? How was the Chair Performance Review conducted this year, and does the chair believe there are multiple potential successors as chair currently serving on the board? Could the directors up for election today also comment on this issue?
Okay. Great questions. I'm gonna suggest, though, that they relate to my appointment as a director, and we'll deal with them at that stage. Over to you, Alethea.
One more from Mr. Stephen Mayne. In terms of the Australian operation, how many enterprise agreements does Accent Group have across the business? Are we worried about those proposed changes to federal industrial relations law? JB Hi-Fi and Domino's both said at their recent AGMs that they pay award wages, have no enterprise agreements, and virtually non-existent union membership among its workforce. Is our situation the same? If so, what are the risks of a Chemist Warehouse situation happening after they got hit with a big union campaign and large across-the-board pay increases a couple of years ago?
Well, the answer to the first question is yes, we're in exactly the same situation. We pay award wages. We don't have an enterprise bargaining agreement. We have very low levels of union membership among the 6,500 people that we employ. As far as implications of changes in government policy, I'm not sure that I'm in any better position to comment on that than anybody else. Like all issues that we face as a business, we're hugely aware of what could change and what implications it might have, and we have, you know, lots of people doing work on those things. I can't tell you as a matter of fact that there's anyone specifically working in relation to that particular change.
If it comes up, then we will deal with it as part of all the other things that we deal with as a business. We have a very large and vibrant team that work in our stores and in our support centers. As I've said on many occasions, we place enormous value on our people. They're the most important assets that we have in the business, over and above everything else. The way in which we interface with those people, the way in which we mutually respect each other and the culture of the business is all focused on our people. I think that's in large part why we've been able to achieve the results that we have over such a long period of time.
Thank you, Chairman. There are no more questions for now.
Great. Well, that's fine. Are there any other questions? Did you have a question for you on the floor?
No, that's mine.
Okay. Thanks. In respect of the remaining items of business, I'll put the resolution to the meeting, then invite discussion and inform the meeting of the proxies received. Item two is the Remuneration Report. It's the adoption of the 2022 Remuneration Report, and I note that in accordance with the Corporations Act, the vote on this resolution is advisory only, and the outcome will not be binding on the board. The financial year 2022 Remuneration Report outlines the group's remuneration strategy and framework and decisions taken by the board in relation to the remuneration of senior executives. This report sets out how the board has approached remuneration in the context of the continuing COVID-19 impacted environment in Australia and New Zealand, the strategies and initiatives taken by management to maintain profitability and growth, and the financial results achieved in FY 2022.
Throughout the challenging FY 2022 period, Accent Group continued to invest in the strategic priorities of the business for future growth and transformation to become a regional leader in the retailing and distribution of performance, lifestyle and athleisure, footwear and apparel. While the board continues to be pleased with the strategic progress made over the last financial year, the FY 2022 year was significantly impacted by the well-reported disruption experienced due to the pandemic and the related consumer impacts, including significant government-mandated store closures and the other COVID-19 related consumer impacts, all of which led to disappointing operating results. Having regard to the challenging trading conditions, resultant financial performance and shareholder outcomes for the FY 2022 year, the board determined the following remuneration outcomes.
No FY 2022 short-term incentive will be payable despite several of the strategic outcomes required for 20% of the STI to be paid having been achieved. No increase will be applied to the fixed remuneration of the non-executive directors, the group's CEO and the group's CFOO. No change to either of those, no change to fixed remuneration and no short-term incentive payment. In relation to the company's long-term incentive plan, the board still considers that a single metric program using EPS as the measure is the best approach for the delivery of the scheme that is easy for the Accent Group team to understand and thus creates real incentive during the year, and that aligns management performance with shareholder value creation.
Your directors unanimously recommend that shareholders vote in favor of adopting the remuneration report for the financial year ended 26th June 2022, as set out in the Directors' Report. I now put the resolution to the meeting as an ordinary resolution as shown on the screen and open this item for discussion. I now invite shareholders on the floor to ask any questions relating to this item of business. Are there any questions?
Under the AUD 60 million award.
Good morning, Chris. Welcome.
Not so much in terms of the report at issue, but we'd like to make a change. Yes. In terms of improving disclosure with the coming future renewal, remuneration reports disclose the take-home pay award to the CEO. We hope, while this is not mandatory, the majority of ASX 200 listed entities provide this information to shareholders so they can better understand what monetary benefits the CEO has actually received in any particular year.
What sort of benefits are you referring to?
What we're talking about here is at the moment it's all statutory disclosure.
Yes.
Statutory disclosure, of course, ensues elements of fair value in terms of the Long-Term Incentive plans.
Right.
As I noted, what a lot of listed entities now do is they actually equate that to its monetary value as at the year, rather than taking the statutory value so that shareholders can get a better understanding of what the actual CEO is being paid in any one year.
Okay. All right. Well, let's take that on notice then.
Yes.
Consider it. Thanks. Are there any other questions on the floor?
Under the AUD 60 million, Chair. Do anything with that?
All right. Well, if there are no more questions, I'll ask Alethea, are there any questions from shareholders online or via the telephone?
No, Chairman, there are no questions from online shareholders.
All right. There being no further discussion, I will now move on to the next item of business. Item three concerns the re-election of directors, the first one being myself, and I therefore hand the chair to Stephen Goddard.
Thanks, David, and good morning, everyone. Item 3-A on the agenda is the re-election of Mr. David Gordon as a non-executive director of Accent Group. David is considered an independent director in accordance with the ASX Corporate Governance Principles and Recommendations. In accordance with the ASX Listing Rules and Accent Group's constitution, David retires from office at this meeting and being eligible for re-election, puts himself for re-election as a non-executive director. I now invite David to address the Chair.
Thanks, Steve. I've got a few notes here, and I may deviate from them because I joined the Board of Accent Group in 2006, and I've had the role of Non-Executive Chairman since 2017. I was then, and I remain today, passionate about the business, and I have a great belief in the vision and capability of the management team to continue to grow this business from strength to strength. With my experience gained on boards in both public and private companies, and a 30-year-long career in corporate advisory roles, I hope that I'm well equipped to continue to add value to the Board of Accent Group.
Given my longer tenure, my fellow directors are regularly asked to assess my continued independence, which they have confirmed, and I take great care to exercise all due diligence in ensuring that I conduct myself at arm's length in my engagement with the company. I remain committed to serving as your director and chair as we navigate the ever-changing retail landscape.
Thanks, David. Your directors, Mr. Gordon, have stated unanimously recommend the shareholders vote in favor of re-electing David Gordon as a director of the company. I put the resolution to the meeting as an ordinary resolution and is showing on the screen, and open this item for discussion. I now invite shareholders on the floor to ask any questions.
Thank you for reminding me. We recognize the considerable value that Mr. Gordon brings to the board of Accent with his leadership and significant business acumen. However, despite his current tenure as a non-executive director of 16 years with the company, he exceeds the ASA guidelines of 12 years in terms of retaining independence. Can you provide an update on David's intentions to continue as chairman of the company in the context of ensuring an independent non-executive director holds this position?
Well, if I can just start by saying that, David has a great deal of experience, as he outlined in his discussion. He brings those skills to the board and is a very as a director who delivers considerable guidance to management and the company. Just in terms of the length of tenure, if I could perhaps add some context about that as well. That includes the time prior to 2015 as a director of RCG Group. In 2015, the company merged with Accent. We're talking about the period from 2015 onwards, where David has been a director and chairman since 2017. The CEO, the CFO, and the vast majority of senior management team have been new to the business or with Accent.
You know, you can also look at it in terms of David's tenure with the business of Accent begins from 2015. Although he's been a director of the company and The Athlete's Foot board and other brands that existed with the RCG Group. I think there's a bit of context that people just need to consider when making comments about independence. As a board, we regularly review David's performance and the independence that he delivers and as an arm's length review of his contribution to the business, we believe that he is independent, he's valuable to the business and sometimes through volatile periods, and we've certainly had that over the last three years.
Experience and knowledge of the market, knowledge of the business is extremely valuable to the business, and we believe to shareholders as well.
Thanks, Stephen. I'm happy to also just to address. As Stephen pointed out, you know, the RCG business merged with the Accent business in 2015, and it was a fundamental change, and I became chairman in 2017, so that's now five odd years ago. I'm a strong believer in having a mix of directors with skills sitting around a board table. We're always looking at those skills and the nature of the business changes, and therefore, the nature of the skills required changes. Board renewal is an important aspect of bringing new ideas. At the same time, as Stephen mentioned, it hasn't exactly been a stable period in the last few years.
You know, we have, I think, withstood the ups and the downs of the pandemic and the market much better than could otherwise been expected. I don't claim any personal responsibility for that, but I will say that the combination of people around the board table has been stable and strong, and I believe that has had a significant impact on our ability to deal with issues. I'm not gonna make any statements about sort of future intentions because, you know, things change. I will say that, at the end of the day, I serve at the pleasure of the shareholders, and it's for shareholders to determine, you know, if they believe that I should move on.
It's equally something for me in terms of the amount of time that it makes sense for me to remain on the board. That's something which I assess and discuss with other directors on a regular basis. That's really where I'm at. Thanks.
Thanks, David. Other questions from the floor?
Thanks, David. This is amazing because I don't understand your discussion with having independent directors. Even got a lot of the big institutions just recently in strife they've got into. Yeah, they're all independent. They don't understand the business. They haven't been in them either. As far as I understand, and I'm pretty sure this is across all AGM, there's a couple. We would rather have people who know what they're doing, not just have a rule that says, "Someone's been there too long, time to move on." As you said, when you go through times and business all the way through, sooner or later, having independent directors is not going to help.
Thank you for your comments. I can assure you the remainder of the board feel that David certainly knows what he's doing, if that's out there. Any other questions for the board?
My name is Evan Karambas, shareholder, and also a member of Clean Invest. Not specifically on this item, but just as a probably an observation. There's nobody on the board, and with all due respect, there's nobody on the board that seems to represent your target demographic, which is substantially younger. If you can talk to that and explain that to me.
That is a very good question. It challenges me often. What I will say is, there are considerable responsibilities that come with being director of a public company. I have often wondered, you know, people talk about diversity and typically that people think about gender, and that is a very valid consideration. There are many other aspects of diversity that are important. The one you focus on, age or demographic is absolutely important. I'm loathe to expose someone too young to the responsibilities of being a board director when they haven't really had enough time to experience life. You know, every one of the people that are a director of this business particularly have their assets on the line because they don't have personal liability.
Having said that, we have a spectacular group of young people in this business, and I can assure you that very few of them are reticent to come forward and tell us what they think. That's a great thing sometimes. No, in an organized way it is a very good thing. I believe that we get much of the benefit of the familiarity with our target market from the people that we employ. If you go into one of our stores or if you look around this office for those that are in the room today, I think you'll see a plurality of people in terms of not just gender, but background and age. Many of them.
The average age of people in our support center or across our group is, I believe, 23.
A little older than that, I think, across the group. Yeah, in the twenties.
20s. Yeah.
Yeah.
That's 6,500 young people participating with us in the growth of the business. I've often thought of the idea of having a younger person on the board, but what we do instead is we have some very talented, lots of very talented people that are involved in the business. They've made presentations to the board, and they did as recently as yesterday. That's the halfway house that we've employed. You know, if there are young people out there who are looking for to embark upon board careers in their future lives, then I think that's a great thing and I really want to encourage it. I think it's also important to get a little bit more life experience beyond the age of sort of 23 or 27.
Thanks, David. Any other questions from the floor? Alethea, do we have any questions online?
Yes, we do, Chairman. To repeat your earlier question from Mr. Stephen Mayne, which has already been answered, but I'll repeat it again for process. The chair is a very good operator and well invested in the business, but he has been in the role for a number of years. Why doesn't this board have a deputy chair or lead independent director who can be directly responsible for leading the annual performance review of the chair? How was the chair's performance review conducted this year? And does the chair believe there are multiple potential successors as chair currently serving on the board? Could the directors up for election today also comment on this issue?
Look, I think we've had plenty of discussion on that. I'll just say that the rest of the Board considered David's independence and capabilities, and I think we've covered that in some detail. Nothing more to add on that. Are there any other questions online, Alethea?
Yes, there are. Another from Mr. Stephen Mayne. The likes of Telstra, Brambles, NAB, JB Hi-Fi, Origin Energy, Viva Energy, and many other companies have all disclosed their proxy votes to the ASX before their latest AGM started, along with the formal addresses. Will the directors up for election today commit to do this next year so that interested shareholders and other stakeholders, including institutional investors and proxy advisors, have an early insight into the proxy position before the AGM debate commences? Why wouldn't polls open the voting day or slides from the presentations lodged with the ASX when it can easily be disclosed at the time of the company's choosing during the meeting itself, without disrespecting those participating in the debate?
Stephen, if I could just interrupt one second. Shareholders and attendees, today, as you all know, is Remembrance Day. As it is the eleventh hour on the eleventh day of the eleventh month, we'll now observe one minute's silence in honor of those Australians and New Zealanders who served so selflessly in protecting this nation. We will remember them, lest we forget. I think so. Yeah, that's right. Yeah, sure. This question about disclosure of proxies. You see that we disclose the proxies before the discussion on every item. I think that's appropriate. I think Stephen asked whether we would disclose the proxies in the announcement goes to the exchange in advance of the meeting, and we'll take that on notice. Thanks, Philippe. Are there any other questions online? Stephen Mayne again, online.
Yes. One more from Anne Hatzakis, and a TeamInvest.
Stephen Mayne.
Anne Hatzakis. I would like to take this opportunity to congratulate the board and management on their performance over the last two years. In response to an earlier question on the length of the service of the chairman and other board members, I am always uncomfortable with the view that board members be retired purely based on length of service. I, and most Teaminvest members, place great weight on the quality and experience of management and feel that change must be made when considered appropriate by the board and not purely on the length of service. Surely we have seen the rewards of experience and depth of board when navigating what must have been one of the most difficult periods for any retailer in recent years.
Thank you for your comments, Anne. Any other questions online, Alethea?
No more questions, Chairman.
There being none for the discussion, I'll hand back to David.
Thanks, Stephen. Item three B concerns the re-election of Mr. Stephen Goddard. Stephen is considered an independent director in accordance with the ASX Corporate Governance Principles and Recommendations. In accordance with the ASX Listing Rules and Accent Group's constitution, Stephen retires from office at this meeting and being eligible for re-election, offers himself for re-election as a non-executive director. I now invite Stephen to address shareholders. Thanks, David, and good morning again. I was appointed to the board in November 2017, having more than 30 years of retail experience. Over that time, I worked in many different areas in a number of retail businesses, which I think has given me a good sense of the competitive environment in which we operate and what a retail business needs to do to be successful.
I was on the board with David Jones for 10 years as finance director. Along with my other public company experience, which includes being chair of JB Hi-Fi, I feel this equips me well for my role as non-executive director and chair of the Audit and Risk Committee. Look, I have great respect for the business and its achievements over time and the high quality of the CEO, the CFO, and the senior management team. I think it's a terrific business to be involved with, and I look forward to supporting the company as it grows and prospers.
Thanks, David.
Thanks, Stephen. Your directors, Mr. Goddard, abstaining, unanimously recommend that shareholders vote in favor of re-electing Stephen Goddard as a director of the company.
I put the resolution to the meeting as an ordinary resolution as shown on the screen, and open this item for discussion. I now invite shareholders on the floor to ask any questions. Are there any questions? 200 million share. 270 million. All right. There appears to be no questions from the floor. Alethea, are there any questions from shareholders online or on the telephone?
Yes, Chairman. There is one question from Mr. Stephen Mayne.
Oh, fantastic.
Thank you for offering shareholders a Hybrid AGM this year. Will the directors up for election today commit to keep doing this in future years to maximize shareholder participation? Big companies like Altium, Argo Investments, AVZ Minerals, Australand, Queensland, Beach Energy, Origin Energy, Premier Investments, Ramsay Health Care, Reliance Worldwide, Retail Stores, Seven West Media, Washington H. Soul Pattinson, The Star Entertainment Group, The Reject Shop, Whitehaven Coal, and Worley all banned online questions and voting in 2022. Well done for showing them up. What was the experience like from your end?
Is Stephen Mayne here? We encourage shareholders to attend our meetings and to ask questions. Personally, I know my fellow directors value the opportunity to hear from our shareholders formally in the meeting, informally afterwards. I'd like to see as many people as possible attend our auditorium and, you know, fill up all the seats. We formed the view that it was appropriate to continue and to have a hybrid meeting this year, and I see no reason why that's gonna change. It's difficult for some people in other parts of the country to get here. It's difficult for some people who may always also be in Melbourne to get here, and that should not deter them from being able to participate.
Yes, I see no reason why that won't continue, Stephen, and thank you for the compliments.
Thank you, Chairman. There are no more questions on this item.
Great. Well, there being no further discussion, I'll now move on to the next item of business. Item four concerns variations to tranches two and three of the company Performance Rights Plan, the long-term incentive scheme for management. The background to the Company's Performance Rights Plans, tranches two and three, the proposed variations and the reasons for the variations are set out in detail in the Notice of Meeting. In summary, subject to meeting relevant conditions, the performance rights under tranches two and three were due to vest immediately after the release of this year's financial results, the FY 2022 results. For a number of reasons, the board is proposing to exercise its discretion in making the proposed variations to tranches two and three to do three things. One, to waive the Earnings per Share performance condition for 50% of the performance rights.
Two, to extend the assessment period of the remaining 50% of the performance rights by 12 months to the date immediately following release of next year's financial results. In other words, adding 12 months on. Three, to extend the exercise period of all tranche two and three performance rights by up to 18 months from the date of vesting. Which means that if and when rights vest, then executives have 18 months to elect if and when they want to convert those rights into shares. The board considers that the tranche two performance rights allocation has been extremely effective in driving shareholder value, with the company achieving 21.1% per annum compound adjusted EPS growth in the first four years of the Performance Rights Plan to 27 June 2021.
This growth was significantly ahead of the required growth of 10% per annum compound at that time, and represented a considerable achievement by the company's management and others, particularly having regard to the relatively short period of time over which it was achieved. The company's management accounts at that time supported the view that the company would likely have achieved and even exceeded the Earnings per Share hurdle required to satisfy the condition had it not been for the materially disruptive impact of COVID-19 on the company's operations.
Therefore, in recognition of the impact on the company's business and operations, which was beyond the reasonable control of management, coupled with the freeze on fixed remuneration and the non-payment of any short-term incentive component for key management personnel in relation to FY 2022, the board is seeking shareholder approval to exercise its discretion under the plan rules to vary tranches two and three, as explained earlier. Your directors, Mr. Agostinelli, abstaining because he's a member of management and participates in the plan, unanimously recommend that shareholders vote in favor of the board's exercising of certain discretions in relation to tranche two and tranche three of the company's Performance Rights Plan. I put the resolution to the meeting as an ordinary resolution as shown on the screen and open this item for discussion. I now invite shareholders on the floor to ask any questions.
Does anyone in the room have any questions on this item?
Yeah. I do.
Please. Yes, Chris.
Yes, Mr. Chairman. Can the board outline its reasons for why it sought to use its discretion to vary these performance rights initially in December 2020 and again earlier this year, without which they would have lapsed?
Yes, I'd be delighted to actually. So shareholders may recall that in 2018 we issued a large number of performance rights to a number of senior executives, Daniel included. Those were to run over a 5-year period and vest at the end of 2022, financial year 2022. Those performance rights required two things to occur. One was that the particular executive remained with the business over 5 years, so it was designed to allow for retention. Also, that the business achieved this adjusted Earnings per Share growth of 10% per annum compounding over the full 5-year period. We set as the target that there needed to be a minimum of 10% per annum compounding increase in shareholder value in order for the executives to receive the benefit of that incentive.
Now, that began on the first of July 2018, and up until the 30th or 31st of December 2020. Two and a half years into a 5-year plan, the management team were shooting the lights out in relation to performance. I can't remember the number exactly. I mentioned it a moment ago, but it's way in excess of 10%. Now, if you cast your mind back to December 2019, it was very shortly after that, in late February 2020, that the pandemic hit. We were all exposed to something that none of us had ever seen before. There's no one alive today that I know of anyway that has experienced a pandemic like this one.
There were a whole lot of issues that were going on, including the fact that we were being required to close all of our stores. 6,500 people or whatever number it was then were suddenly finding that their place of employment was, you know, the door had been shut. We, as a business and a board, were highly concerned about a range of things, including the retention and continued incentivization of our team at a time when we didn't know what was going to happen. We felt that it was appropriate to reflect that there'd been spectacular performance by the management team over the first half of the incentive plan. What we said to the team was that we would exercise our discretion to vest on a pro-rata basis half of their rights.
They knew that if they remained with the company for the remaining two and a half years of that plan, that they would be entitled at a minimum to half of the incentive that they had been offered. To reflect the fact that for half of the five-year period, they had done a fantastic job and with a view to ascertaining and ensuring that we could keep the team together at a time of maximum dislocation. Frankly, no one knew it was gonna happen. We announced that at the time, and we did that.
We told the team that if they stayed with us until the end of the FY 2022 year, and obviously everybody worked together to deal with the pandemic, that they would be guaranteed at least half of their long-term incentive. Which I thought at the time, and which I remain of the view today, is decidedly fair and frankly, the best possible thing we could have done for shareholders to ensure that our spectacular management team remains together and working through one of the most difficult periods I've ever encountered in my business career.
We then get towards the end of this financial year 2022, despite a spectacular effort in four out of five years, the circumstances were such that the Earnings per Share were not going to reach the 10% growth number that we had fixed. Now, I'm not a believer in simply giving things away. From the shareholders' perspective, all of the directors supported the thought about this issue from the perspective of the shareholders and what's fair for the team. We wanted to ensure that, again, we could create an ongoing incentive for management to remain with the business and to give them a fair opportunity to achieve the target in circumstances where the pandemic denied them that opportunity. It wasn't their fault that we had to close 400 stores.
It wasn't their fault that we ended up with the consumers didn't turn up in many places over a long period of time. We determined that the fairest thing to do was to give the management team another 12 months to reach that target. At the end of the day, they are the two significant things that are covered by this resolution.
Now, as it turned out, despite legal advice that we got at the time, when it came to this AGM, or in the lead up to it, the stock exchange. We had to ask the stock exchange what approvals they wanted us to get, and eventually they came back to us and said that in addition to seeking approval for the variation to extend by 12 months, we needed to go back to shareholders and get after the fact approval for the discretion that we exercised in 2020 at the peak of the pandemic. Irrespective of whether you think that's a sensible thing or not, that's the circumstances that we're in.
The resolution today is there for shareholders to consider, and I'm hoping approve, that we give our management team the opportunity to earn what we hoped they'd earn when we set the scheme up in 2018. That over the next 12 months, if they can achieve the Earnings per Share target that was originally set, then the other half of their performance rights will vest. Additionally, that irrespective of what happens in the 2023 year, that they know that at least half the performance rights have vested and they're entitled to exercise them to shares. Now, there are many different ways we could have approached this, and the board gave extensive consideration to weighing up the interests of shareholders and the interests of management. I believe where we've come to is a fair and reasonable outcome which is achieving.
has achieved and continues to achieve the objective of keeping our management team together during difficult circumstances. As is reflected in the results here to date that I announced at the beginning, I think is also reflected in the performance that we are seeing already, rebounding within the business. That's what the resolution is all about. I can see that you had a question.
No.
No. John, behind you.
Thank you, Chairman. I do enjoy seeing you talk so passionately about supporting the management team. I agree with all of your comments, particularly the one about not giving away shareholder funds, necessarily. My only comment, I guess it's not really a question, but the comment is that the AUD 10.94 doesn't allow for any growth for the 2023 financial year, which, you know, if business is back on an even keel with this period of time opening stores, I would have preferred to have seen that extra 10% growth included in the EPS note.
I understand. That is a perfectly valid approach. I mean, every shareholder's got a right to determine how they allocate their dividend. Yes, we did consider it, but we determined that the approach of not moving the goalposts, notwithstanding what you say is economically absolutely correct. It does mean that there is a small difference. I'm hoping that our management team are gonna show us that they achieved not only the 10% return, but the increased return over the additional year anyway, in which case, it will be a moot point. It's a very valid point. Yes, we did consider it. Are there any other questions from the floor? If not, Alethea, are there any questions on the phone or on mic?
Yes, Chairman, there is from Mr. Stephen Mayne.
Oh, Stephen.
When disclosing the outcome of voting on all resolutions today, including item four, could you 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 on all resolutions and was a disclosure initiative adopted by the likes of Metcash, Altium and Dexus last year, and Webjet and Tabcorp so far this AGM season.
No. We won't do that. I don't believe that it is fair to say that a shareholder with 100 shares should have the same voice as a shareholder with 10 million shares. We have a certain number of shares on issue, and we have shareholders big and small, and all shareholders are absolutely entitled to do their votes and to make their views known, and those votes should be reflected on a one- vote- per- share- basis. I see no reason for any deviation from what the Corporations Law requires and the stock exchange requires, and frankly, what I think is sensible. Thank you for the suggestion, Stephen, but we won't be doing that.
Thank you, Chairman. There are no more questions on the mic.
Great. Thank you. As there are no more questions on that item, I'll move on to the next item. Item five concerns the approval of the Company's Performance Rights Plans, the background and detail of which is set out in the company's Notice of Meeting. The ASX Listing Rule 7.1 restricts the number of equity securities that a listed company can issue in a 12-month period to no more than 15% of the number of securities on issue at the start of the period without shareholder approval. ASX Listing Rule 7.2 allows certain issues of securities to be excluded from the 15% limit, including issues made under an employee incentive scheme, if within three years before the date of issue, the terms of the scheme were approved by shareholders.
Companies, ourselves included, every three years regularly seek this approval from shareholders so that the 15% rule does not apply to the shares that are going to management, but would apply to shares that were issued for other purposes. Shareholders last approved the Accent Group Performance Rights Plan in 2019, which was three years ago. The board therefore now seeks shareholder approval again for the issue of securities under the Performance Rights Plan over the next three years from the date of this meeting, such that those securities issued will be excluded from the 15% limit. I put the resolution to the meeting as an ordinary resolution as shown on the screen and open this item for discussion. I now invite shareholders on the floor to ask any questions. Are there any questions from the floor? This is not the most exciting of resolutions.
Sure. Okay. If there are no more questions from the floor, how about the telephone and online?
There is one question from Mr. Stephen Mayne. Given the interesting discussions across a range of topics today, including item five, could the Chairman Undertake to make an archived copy of the webcast plus a full transcript of proceedings available on the company's website? The likes of Nine, AGL, ASX, ANZ, Domino's, and Cineworld all produced their first AGM transcripts in 2021. Will you follow suit today? This is something IAG has been doing since 2003.
I think it makes sense. As long as it's not gonna cost a lot of shareholder money to do, we will do so. Take it on notice and I hope that we can. I have no idea about the way in which the technology works, but if we can, we will.
Thank you, Chairman. There are no more questions on this item.
Excellent. All right. Shareholders and attendees, that now concludes all the items of business at today's meeting. I will allow shareholders a few moments to complete their voting before I close the poll on resolutions in items two to five. There'll now be a few minutes where we'll let shareholders in the room complete their forms and shareholders online complete their vote online. All right. Ladies and gentlemen, and for those in the room and those online, I will now declare the poll closed on the resolutions in items two to five. A Computershare representative will now collect your voting cards in the room, and the voting online will now close. The results of the poll on all resolutions will be announced to the ASX as soon as they are available.
That concludes the formal business for consideration at today's meeting, and I declare the meeting closed. On behalf of the board, I sincerely wanna thank you for your attendance and for your ongoing support of Accent Group. The directors would now like to invite all attendees present to join them for a refreshment, and I'd like to also thank all of those on the phone and online for their participation today. Thank you all.
Thank you.