Good morning. I'm Mark White, the Chairman of Capral Ltd. On behalf of the board, welcome to Capral's 2025 Virtual AGM, and I hope you enjoyed the Capral video to start our AGM. To meet the requirements of Capral's Constitution, a quorum of three shareholders is physically present here at the Huntingwood venue today: Capral's Managing Director, Tony Dragicevich; Capral's CFO, Tertius Campbell; and myself. The other members of the board, you will see Brian on screen later, and Laurie Lefcourt and Kathy Austin are present online. Accordingly, I declare the 2025 AGM open, and you will now see the agenda for the AGM. Today's meeting is being held online via the Computershare Meeting platform. This allows shareholders, proxies, and guests to attend the meeting virtually. All attendees can watch a live webcast of the meeting.
In addition, shareholders and proxies have the ability to ask questions and submit votes. The Notice of Meeting and Capral's 2024 Annual Report have been provided to shareholders, and copies are available on Capral's website. The notice sets out the items to be considered at this meeting, as set out on this agenda, and will be taken as read. Online attendees can submit questions at any time. To ask a question, select the Q&A icon, type your question into the text box. Once you're finished typing, please click the Send button. Please note that while you can submit questions from now on, I will not address these questions until a relevant time in the meeting. Please also note that your questions may be moderated, or if we receive multiple questions on one topic, amalgamate it together. To ask a verbal question, please follow the instructions written below the broadcast window.
Please insert the agenda item at the front of your question to enable us to collect questions quickly. Finally, due to time constraints, we may run out of time to answer all your questions. If this happens, we will answer them in due course via email or posting responses on our website. 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 voting for all resolutions. If you are eligible to vote, once voting opens, press the Vote icon, and all resolutions will be activated with voting options. To cast your vote, simply select one of the options. There is no need to click the Submit or Enter button, as vote is automatically recorded. You will receive a vote confirmation notification on your screen.
You can change your vote up until the time I declare voting closed. I now declare the poll and voting open on all items of business. I will give you a warning before I move to close the poll and voting. Before addressing the formal items of business, I will recap on some of Capral's major activities during the 2024 financial year: capital management, safety and sustainability, and updates on the composition of the board. Tony Dragicevich, Capral's CEO and Managing Director, will also provide comments on the company's financial performance, key initiatives and strategy, fair trade, safety, ESG, key operating risks, and outlook. Taking a look at 2024, in the 2024 financial year, Capral delivered a resilient operational performance despite the more challenging economic conditions. With increasing diversification in channels that Capral operates in, the business is positioned well to perform strongly through cycles.
The robustness of Capral's performance is also underpinned by the 2019 operational restructure that permanently lowered Capral's cost base, enabling the business to better leverage the capacity utilization of its extrusion plants. For the year ended 31 December 2024, Capral delivered EBITDA of AUD 58.3 million compared to AUD 61.5 million in the prior year. EBIT fell 10% to AUD 34.5 million as compared to AUD 38.5 million in 2023. Net profit after tax of AUD 32.5 million compares to AUD 31.8 million in 2023. NPAT in 2024 was assisted by a tax benefit of AUD 3.6 million from the increased recognition of deferred tax assets. In 2023, we did not recognize any additional deferred tax assets. Revenues of AUD 650 million in 2024 were on par with the prior year. Average selling prices increased by 4% as a result of the higher global aluminum prices, and this is largely offset by the impact of 5% lower volumes.
In financial 2024, Capral delivered earnings per share of AUD 1.88, including AUD 0.21 of tax benefit compared to the prior year of AUD 1.77. Demand in Capral's key industrial sectors remained solid throughout the year, with 2024 volumes growing compared to the prior year. This was driven by recent acquisitions, retention of market share gains against imports, and strength in the transport and infrastructure segments. The residential construction segment, which contributes around 40% of Capral's volume, slowed through the year as expected. Capral's extrusion operations responded by reducing production shifts, cost reduction activities, and operational efficiency programs. Capral expects residential construction activity to improve during the second half of financial year 2025. Capral completed two further distribution business acquisitions during the year to fill gaps in its network and grow this channel. The acquired businesses have been successfully integrated into the Capral network.
Working capital was AUD 87.7 million at the end of 2024, slightly higher than the AUD 86.7 million at the end of 2023. Capral continues to have a strong balance sheet, which enables the business to invest in ongoing operations, seek growth opportunities, and deliver to shareholders sustainable capital management strategies. Capral continued to work on anti-dumping of aluminum extrusions into the Australian market to help ensure fair competition in the markets in which we operate. This will continue in financial year 2025 and beyond. With the recent tariffs imposed by the Trump administration, it is critical that the Australian government remains committed to preventing aluminum extrusions being dumped into the Australian market. We were pleased to see the Albanese government committing an additional AUD 5 million to the Anti-Dumping Commission to reduce case time and better monitor goods and high-risk activities from overseas.
Moving on to capital management, the board is committed to ensuring that capital allocation priorities are balanced between investment opportunities for growth through acquisitions, growth and stay in business capital expenditure, working capital funding, and distribution to investors. Having prioritized the return of franking credits to shareholders in prior years and payment of the fully franked final dividend of AUD 0.35 per share for the year ended 2023, this exhausted all franking credits. Capral still has substantial tax losses to carry forward. Therefore, any dividends, which may be paid in the medium term, will be unfranked. Capral began an on-market share buyback in 2023 and commenced another on-market share buyback in March 2024, which resulted in equivalent distribution of AUD 0.36 per share in financial year 2024. In addition, Capral declared an unfranked dividend of AUD 0.40 per ordinary share, which was paid on 26 March 2025 in respect of financial year 2024.
This was paid to all shareholders that were on the register of members as at the record date of 5 March 2025. The dividend reinvestment plan was not active for this dividend. For financial year 2024, Capral returned the equivalent of AUD 0.76 per share, consisting of AUD 0.40 in cash dividends and AUD 0.36 by way of share buybacks completed during the year. This compares with the equivalent of AUD 0.725 in financial year 2023, which was made up of AUD 0.55 in dividends and AUD 0.175 in share buybacks. Capral commenced another on-market share buyback of up to 10% of its issued shares on 3 March 2025. Capral's board will continue to ensure that distributions to shareholders remain a key component of Capral's capital allocation policy. It is anticipated that, subject to share trading liquidity, share buybacks will form a major portion of value returned to our shareholders.
From a safety and sustainability perspective, Capral remains committed to pursuing excellence in its delivery of effective safety and sustainability programs across all parts of its business. While the number of reportable injuries increased in financial year 2024, Capral's injury rate remains below reported peer averages. The environment is a key priority for Capral. We have committed to net zero by 2050 of Scope 1 and 2 emissions and a 20% reduction in emissions by 2030. We are on track to meet these targets. Capral is also well advanced with its plans to meet the new climate change reporting requirements for 2025. Capral's Locale, our lower carbon aluminum brand, continues to be a focus, with volumes growing significantly in 2024.
In addition, Capral has trialed recycling mill scrap aluminum back into the billet casting process through the Rio Tinto Boyne smelter, and investigations with other smelters to recycle extrusion scrap are also ongoing. The sustainability report in the annual report details the many well-advanced initiatives in progress. Turning now to recent board updates. On 17 April, we announced some changes to the company's board. Firstly, that Kathy Austin will resign as a Non-Executive Director of the company with effect from the conclusion of this annual general meeting. Secondly, the board announced the appointment of Laurie Lefcourt as a Non-Executive Director effective 17 April, and that Laurie will replace Kathy as Chair of the Audit Risk Committee after this annual general meeting. Laurie will stand for election at next year's annual general meeting.
On behalf of the board, I would like to take this opportunity to thank Kathy for her contribution to Capral over the last five years and wish her all the best for the future. I would also like to welcome Laurie to the board and look forward to her involvement with Capral. Brian Tischer, an existing non-executive director and chair of the Remuneration and Nomination Committee, is up for re-election as Resolution one of the AGM, and we will hear from Brian later. Looking ahead, we expect the detached housing sector to start recovering in financial year 2025, with the benefits flowing through in the second half. The industrial sector is forecast to maintain its current level. External factors are likely to result in the continuation in the volatility of commodity prices, inflation, and other cost increases, particularly energy and labor costs, which will also have an impact.
Capral remains committed to continuing to improve its operational efficiency throughout the organization, together with its commitment to investing in growth and returning capital to shareholders going forward. The company is positioned well to perform through market cycles and the current uncertain macro environment. On behalf of the board, I want to thank our shareholders, all of the Capral team, and our other stakeholders for their strong support during 2024. Also, thank you to my co-directors for their contributions throughout the year. I will now hand over to Tony for his comments.
Thank you, Mark. Okay. First of all, we'll talk about 2024 as some of this will repeat what Mark re-emphasized, what Mark has just said. The market conditions were softer in 2024, mainly due to a slowdown in activity in the residential housing market.
Capral also experienced reduced demand from aluminum distributors as import supply chains returned to normal. Volume, however, remained solid in our industrial markets, which allowed Capral's manufacturing plants to run at good levels of efficiency. The residential housing market slowed, impacted by high interest rates and affordability. Housing starts for 2024 finished at AUD 168,270, slightly above the prior year and down 25% from the highs of 2021 and 2022. Commercial construction activity also slowed during the year. Our key industrial markets remained relatively strong, especially the transport and infrastructure segments, and we retained market share gains in the metal fabrication sector. The international price of aluminum lifted during the year, finishing at two-year highs, driven primarily by international trade and tariffs concerns post the U.S. election. Capral's average aluminum cost for 2024 was 5% above last year. This flowed through to higher selling prices and working capital levels.
Despite the slower economic conditions, Capral delivered another very good profit result in 2024, with EBITDA of AUD 58.2 million on 5% lower volume and EBIT of AUD 34.4 million compared to AUD 38.5 million prior year. A very pleasing result demonstrating how far Capral has progressed and being able to deliver solid earnings during a slowdown in the housing market. Capral ended 2024 with a net cash balance of AUD 68.9 million. Data collection performance remained very good. Inventory levels rose slightly, but higher aluminum prices lifted inventory value, leading to higher working capital levels, which will likely continue to rise in the year ahead. Capral paid an unfranked dividend of AUD 0.40 per share. Capral also completed an on-market share buyback during the year, equivalent to AUD 0.36 per share, taking total 2024 distribution to shareholders to AUD 0.76 per share. Capral has continued its on-market buyback program during 2025 under the 12/10 rule.
As advised last year, and also, as Mark has just said, Capral exhausted its franking credit balance in 2023. Therefore, shareholder distributions in the medium term will be by way of unfranked dividends and/or share buybacks. Key high-level strategies remain consistent. We build on our strengths, optimize what we do, and look to grow for the future. In the year ahead, we will continue to focus on our Smithfield and Penrith extrusion plants. Smithfield will focus on upgrading equipment to improve plant reliability and productivity. At Penrith, we completed the first stage of the plant upgrade, which replaced the main extrusion press during 2023. The second stage, which will replace the billet furnace and saw, will be completed this year, starting in June. We will continue to grow Capral's distribution operations with the objective of increasing the volume of profitability of Capral's direct-to-market channel.
During 2024, we added two aluminum trade centers to the Capral distribution footprint with acquisitions of existing businesses in Melbourne and Brisbane. This makes a total of four new sites over the last few years. We continue to seek other opportunities to expand our distribution footprint and also into other adjacent market segments. Turning to fair trade, Capral continues to lead the local industry in the pursuit of fair trade. Key points to note are: an application was submitted for the continuation of measures on Chinese imports for a further five years. China recently announced the removal of export VAT rebates, which should see a lift in import pricing in 2025. Measures against Malaysia and Vietnamese imports remain in place until 2028. While some share gains have been made over the last few years, imports still represent over a third of the total Australian extrusion market.
Now that supply chains have normalized and international trade flows are in a state of flux, it is even more important that we continue the fight to retain fair trade for the local aluminum extrusion industry, which contributes over 2,000 direct jobs to the Australian economy. Safety is the first of Capral's five key values. We continue our focus on risk assessment, training systems, and our safety culture. Capral recorded a total reported injury frequency rate of 7.7, slightly better than our peer group average. Lost-time injuries remained at 4, but medical treatment injuries increased by 5 to 9. Importantly, lost and returned to work hours fell by 38% on the prior year. Capral's journey to net zero emissions by 2050, with a 20% reduction target by 2030, is on track and progressing well.
During the 2023/2024 year, Capral's Scope 1 and 2 emissions fell by 9%, and intensity fell by 5%. This was a result of operational energy efficiencies and an increase in renewable energy sources. During 2024, Capral increased its focus on waste management and recycling by introducing various programs at key sites. These initiatives led to an increase in recycling and a 12% reduction in waste from baseline. Capral maintained its aluminum stewardship initiative certification and remains the only extruding region to secure this globally recognized certification. This enables us to offer certified lower carbon aluminum options to the Australian market through our trademark brand Locale. This is gaining traction in the market, with volumes lifting by close to four times over the prior year. Capral has considered the overall impact of ESG issues and has not discovered any resulting material impact on our financial statements at this point.
Capral is well placed to meet the requirements of new climate reporting standards by 2025. Key operating risks. Capral has a robust risk assessment process and active risk mitigation program. Key risks include significant slowdown in economic activity, particularly the new housing market, an increased level of imported aluminum extrusion, and increased competition from new entrants locally. External threats such as cyberattacks and changes in construction methodology to meet the more stringent sustainable building codes. Now turning to the outlook. Forecasts for the residential market show detached housing approvals lifting in 2025 as interest rates start to fall. Total residential starts in 2025 are forecast to be slightly higher than the past year. However, the pipeline of work, the sustained volumes over the past two years, have been completed. The non-residential market is forecast to be steady in the year ahead as are key industrial markets.
Alum is volatile and subject to international influences. The threat of tariffs by the U.S. government led to alum soaring in the first quarter of this year, 2025, to the highest level since the Russian invasion of Ukraine in 2022. In the current environment, alum is highly volatile, and based on external forecasts, Capral expects alum to be at elevated levels throughout 2025, leading to increased working capital levels. The recently announced 25% tariff on steel and aluminum by the U.S. government will not have a direct impact on Capral. However, it will influence international trade flows, and Australia must be vigilant in maintaining a robust anti-dumping regime to ensure a level playing field for local manufacturers. The overall market for Capral aluminum products is forecast to remain reasonably steady during 2025.
On this basis, at this time, and absent any unforeseen events, we expect earnings for the FY25 year to be broadly aligned with the prior year. Therefore, Capral should be in a position to continue to return capital to shareholders by way of share buybacks and unfranked dividends. The focus in the year ahead will be to deliver benefits from the recent trade center acquisitions in Victoria and Queensland, complete the second stage of the Penrith plant upgrade, and continue to grow our distribution business both through acquisition and organic growth. We plan to enhance our range, service, and capability to grow our customer base and deliver strong ongoing profitability. In closing, I wish to thank the entire Capral team for their contribution to a very pleasing 2024 result.
Capral remains in a good position to capitalize on its extensive capabilities, take opportunities as they present, and grow the business for the future. Thank you. Now I'll hand back to Mark.
Thank you, Tony. Okay. We will now move to agenda item two. The first item of business relates to your consideration of Capral's 2024 annual report. Mr. Daniel Camilleri of KPMG, Capral's auditor, is available online to answer any questions you may have about the conduct of the audit. We did not receive any written questions on the audit ahead of today's meeting, and we will now address any questions on the annual report or the audit. Just a reminder to please insert the agenda item at the front of your question to enable us to collect questions quickly.
No questions received. Okay. Thank you.
As we do not have any questions on this, we will now consider the items which require voting. As indicated in Capral's notice of meeting, voting on each of the resolutions being put to the meeting will be conducted by a poll. The majority of shareholders who submitted proxy forms appointed the Chair of the meeting as their proxy. As indicated in Capral's notice of meeting, the Chair will vote undirected proxy votes in favor of all resolutions. Agenda item three, which is resolution one. The first voting item is the re-election of Brian Tischer as a director. The wording of the resolution is shown on the screen. Before we consider the re-election of Brian Tischer, I will hand over to Brian to address the meeting.
Good morning, shareholders. Thank you for giving me the opportunity to say a few words prior to my re-election for Non-Executive Director.
I thought I would provide you with some details of my qualifications, work experience, and skills that are relevant to the Capral non-executive director role. Firstly, my qualifications. I have a bachelor's degree of civil engineering with first-class honors from Monash University in Melbourne, a master of business administration from Harvard Business School in Boston, Massachusetts, and I'm a graduate of the Australian Institute of Company Directors. My work experience covers Rio Tinto, Boral, Orica, and Legend Corporation. At Rio Tinto, I worked on mine sites in Mount Isa, Broken Hill, and Kalimantan, Indonesia, and gained experience in large commercial transactions on joint ventures and M&A. At Boral, I was divisional managing director of the Boral Building Products division, and at Orica, I led the Asian business covering 14 countries in Southeast Asia.
My current role is CEO of Legend Corporation, which is a private equity-owned business supplying electrical, data, power, and industrial products into Australia, New Zealand, and the Pacific Islands. These work experiences allow me to bring a number of skills to the Capral board. Firstly, experience as a CEO and Managing Director in asset-intensive integrated manufacturing and distribution businesses operating in multiple countries. Secondly, extensive M&A and transactional experience. Thirdly, deep operational experience and workplace health and safety in harsh operating environments such as underground mining, timber harvesting and sawmilling, and commercial explosives. Finally, I've had a long relationship with the Capral business throughout my career. In 1995, when Comalco sold its downstream aluminum business to Capral. In 2000, when Boral sold its Angaston extruder to Crane, which Capral later acquired in 2005.
When I ran the Boral Building Products division, Capral was a key supplier to the Boral Windows business. Capral is a terrific business, and I'm very proud to be representing Capral's shareholders on the board. I'd be honored to represent the shareholders for a further three-year term. Over to you, Mark.
Okay. Thank you, Brian. The total number of valid proxy votes received is now displayed on the screen. Do we have any questions?
No questions in relation to this resolution.
Okay. With no further questions, we will now move to agenda item four. The next item of business is a non-binding resolution on the adoption of the 2024 remuneration report. The wording of the resolution is shown on the screen. The total number of valid proxy votes received is now displayed on the screen. Do we have any questions on this?
Nothing on this resolution.
Okay. Thank you.
With no questions on this, we will now move to agenda item five. The next item of business seeks shareholder approval to issue share rights under Capral's long-term incentive plan to Tony, Capral's CEO and managing director, and subject to the vesting of those share rights on the 1st of March, 2028. The wording of the resolution is now shown on your screen. The total number of valid proxy votes received in relation to this item is now displayed on the screen. Do we have any questions on this?
No questions on this resolution.
Okay. Thank you. With no questions, we will now move to agenda item six. With agenda item six, we will now respond to any additional questions submitted in relation to the matters above. Do we have any questions?
We have received a number of questions.
First question from Mr. Stephen Main. How much time is the CEO spending in his new role as a non-executive director of struggling Auckland-based building products company, Fletcher Building? Could you please explain the nature of the agreement in terms of the CEO's time, allocation, and commitment to both roles?
I'll answer that, Mark.
I think so. It's probably your role.
Yeah. Okay. As you can understand, most of the majority of meetings these days are held virtually, so I'm not hopping over to Auckland every week. I would think that between one to two days a month, working days that is, per month, I would spend on the Fletcher Building role, a non-executive role. For that time, I do take leave from Capral to perform that function. Relatively modest time commitment during the working week.
Next question, also from Mr. Stephen Main.
Australia is currently in the midst of an unprecedented deluge of takeovers that has contributed to listed entities on the ASX dropping in 26 of the past 27 months for a net reduction of 211 or 9.2% to 2,083 in April 30, 2025. There were a record 29 major takeovers above AUD 200 million completed in calendar year 2024. There is a clear mispricing between public markets and private markets. Why are public markets not valuing ASX-listed companies like yours more highly, and what are we doing to avoid being gobbled up?
Okay. So probably I can't really answer why public markets are not valuing ASX-listed companies, but what I will comment on is what we are doing really in relation to acting in the best interest of the company and its shareholders, which is really primarily around shareholder value.
Our primary responsibility is to ensure the long-term success and sustainability of the company. We believe the best way to do this is to deliver strong earnings through the cycle and strong share price performance. I think with the result of financial year 2024, we've demonstrated that Capral has produced strong results through the cycle. We have a really good team. We have a solid strategy, which Tony has outlined previously and again today, and that is really delivering. That strategy does encompass building on our strengths, optimizing what we do, and growth for the future. In terms of delivering, the Capral share price hit a high of AUD 10.88 on Tuesday this week and closed yesterday at AUD 10.73. We believe this is now delivering value for our shareholders.
Thanks, Jen. One more question, also from Mr. Stephen Main. It's on general business.
The five most valuable US big tech stocks, Microsoft, Apple, Amazon, Alphabet, and Nvidia, are together worth more than $15 trillion, largely because they have enormous pricing power and are overcharging customers the world over. Could the CEO comment on which of the big global technology companies we are most reliant on, and what would we do if they suddenly put their prices up by 30%?
That is a question off the cuff. Look, I think of those companies, the one that we're most reliant on is Microsoft, which we use for all of our email and servers, etc. Unfortunately, I'll probably share Mr. Main's frustration about having to deal with these large multinationals, but there's no other unless we go back to pen and paper, which I don't think we're going to anytime soon.
They do have us by the I won't say it, but yes, we are reliant on them. As far as Capral is concerned, a 30% increase or whatever increase they put up is immaterial to our earnings. We would not want to see a very minimal cost, minimal spend that we have with those companies. It would not have a material impact on us at all.
Sure. That was the last of our questions.
Okay. Thank you.
With no further questions, ladies and gentlemen, that concludes our discussion on the items of business. In a couple of minutes, I will close the poll and voting on all resolutions. Please ensure that you have cast your vote on all resolutions. I will now pause to allow you time to finalize those votes. While these votes are being finalized, we will show you a crafted with Capral video featuring PLP Australia.
I do not want to be a high-volume manufacturer. We have a footprint in most states. Around 6,000 trailers we have produced in the time the company's been in operation. In most trailers, there is a two-and-a-half-ton of aluminium. We have a lot of exclusive sections that we have worked with Capral engineers to give us a unique and distinct footprint in the market. If you look at a musket, you will see the ripples in the side of the extrusion, and that is unique to us. It is like our tattoo. Capral has been a very integral part of our product pretty much from the beginning. We have built a really good long-term relationship. Working with your suppliers to have the ability when you need them to be adaptive for them to make some changes, Capral are good at that.
So it gives us the ability to forecast and plan our work and knowing that the material is going to be there when we need it. I just love the hands-on approach to manufacturing and building a good product. We just want to make quality trailers. It's really that simple.
Okay. Welcome back. That was not on PLP Australia. It was actually on Musket Trailers. A great video nonetheless. I hope you enjoyed that one too. I now declare the poll closed. The provisional results of the voting indicated that all resolutions passed, and this will be verified and released to the stock exchange later today. There being no further business, the 2025 AGM of Capral is closed. Thank you all for your attendance.