Welcome, ladies and gentlemen, to the two thousand and twenty-four Annual General Meeting of Cleanaway Waste Management Limited. My name is Philippe Etienne, and as the chairman of Cleanaway, I'll be chairing the meeting today. As there's a quorum present, I declare the meeting open. Before we begin the proceedings, I'd like to acknowledge the Jagera and Turrbal peoples as the traditional custodians of Meanjin, the lands on which we meet today. We pay our respects to their elders, past and present, and acknowledge their continued connection to the land, water, and culture of this area. We also extend our respects to any Aboriginal and Torres Strait Islander peoples joining us today. Before we start, I'd like to make everyone aware of the safety exits.
In case of emergency, the fire exits are at the double doors at the rear of the room, leading to the front entrance and the door at the front of the room. The fire alarms are constant beep. We'll only evacuate on the sound of the evacuation alarm, which is a whooping sound, or at the supervisor's request. PA announcements will be made asking guests to evacuate, and managers or supervisors will assist guests to evacuate the building, and I note the assembly point is located on the Queen Street footpath. The notice of meeting, dated twenty-third of September, two thousand and twenty-four, was made available to all shareholders, and I propose to take the notice of meeting as read. I'd like now to introduce you to my fellow directors, the general counsel and company secretary, and the CFO.
On my left, we have in the following order: Dan Last, General Counsel and Company Secretary, Mark Schubert, Chief Executive Officer and Managing Director, Non-Executive Directors, Ingrid Player, Michael Kelly, Clive Stiff, and Jackie McArthur, and our CFO, Paul Benfield. Unfortunately, Samantha Hogg and Robert Cole are unable to join us today in person, but they are attending virtually, and Robert Cole will address the meeting via video link during the items of business. I'd also like to introduce the company's auditor, Ernst & Young, which is represented today by Ashley Butler, a partner with the firm. So today's meeting is being held in person and virtually via the Computershare platform, where attendees can listen to a live webcast of the meeting, and shareholders and proxies can ask questions and submit votes online.
To provide you with sufficient time to vote, I now declare voting open on the items of business two, three, four, and five. A significant number of shareholders have already voted and appointed proxies ahead of this meeting, and we do thank them for doing so. So I'll start today's meeting by walking you through a few procedural guidelines for voting and question submissions for those in person and online. I'll deliver my address and then pass to Mark Schubert, our Chief Executive Officer and Managing Director, who will provide an update on the company's business activities and a trading update. Firstly, we'll turn to the formal business of the meeting.
In terms of voting, by joining our hybrid annual meeting today, you, as a Cleanaway Waste Management Limited shareholder or your appointed proxy, will have the opportunity to ask questions and submit votes if you haven't already done so. Voting today will be conducted by way of poll on the items of business, and Computershare will act as the independent returning officer. For those attending the meeting online and who are eligible to vote as the poll is open, a voting icon is available on your screen. Selecting this icon will bring up a list of resolutions and present you with voting options. For those voting online, you are free to submit your votes at any time. To cast your vote, simply select one of the options. There's no need to hit Submit, as the vote is automatically recorded.
Please ensure you cast a vote for items two, three, four, and five. You will receive a vote confirmation notification on your screen. To change or cancel your vote, click the link, which says, "Click here to change your vote," at any time until the poll is closed. Votes may be changed up to the time I declare voting is closed. For shareholders, proxies, and corporate representatives here in person, I'll ask you to vote once we've gone through all items of business today by completing the blue voting card that was provided to you upon admission. White cards are for visitors only who cannot vote or ask questions today. Shareholders with a yellow card are not entitled to vote on the items of business. I will provide a warning before I move to close voting at the end of the meeting.
Questions will be aggregated and addressed at the end of all items of business. It's my duty as chairman to ensure that shareholders have the opportunity to ask questions and discuss the items of business during the meeting. We do ask that all questions and comments be concise and be confined to the particular items being discussed and to matters relevant to shareholders as a whole, that they be informative and respectful. Now, given this is a hybrid meeting, I'll first take questions received in advance of the meeting, then questions from those physically present at the meeting, and then followed by written and audio questions from participants who have joined us online. If you're attending the meeting in person, only shareholders and validly appointed proxies and corporate representatives who were given a blue or yellow voting card upon entry are entitled to ask questions.
When I call for questions, please raise your blue or yellow card and state your name or the organizations you're representing before asking your question. For those attending the meeting online who wish to submit a written question, you may do so at any time during the meeting via the speech bubble icon on your screen. Type your question in the chat box on the right of the screen, and then select Send. Confirmation that your message has been received will appear above. Instructions on how to ask a verbal question are shown below the broadcast window on the online platform. If you're asking a verbal question, please state your full name before asking your question. Please limit your questions to only one or two questions at a time, then rejoin the queue to allow others to ask questions.
Also, please note that while you can submit written questions from now on, I will not address them until the end of the items of business. We will ensure that there is a reasonable opportunity for shareholders to ask questions and make comments at this meeting. However, there may not be time for this morning to answer every question or comment received. Questions will be moderated to avoid repetition, and if questions are particularly lengthy, we may need to summarize them in the interest of time. Questions should relate to the items of business under consideration at today's meeting. I'll now address the meeting with an update on Cleanaway's financial and strategic progress in financial year 2024. So, fellow shareholders, welcome and thank you for joining me today here in Brisbane or online.
For the two thousand and twenty-four financial year, your company delivered another year of double-digit earnings per share growth and improved returns. These pleasing results reflect the benefits realized from addressing the challenges of the previous two years, as well as the continued rollout of our strategy. This disciplined execution has strengthened Cleanaway and is building a solid foundation for sustainable growth in the years ahead. Importantly, our financial year twenty-four performance and progress provides confidence in our ability to deliver on our midterm EBIT ambition of more than four hundred and fifty million in financial year twenty-six, alongside improving returns. But before I go on, I'd like to pause here and acknowledge two tragic accidents that occurred in the new financial year and resulted in the death of two members of the public.
One was in Victoria, involved a municipal collections truck, and the other was in New South Wales at one of our sites controlled by a contractor. Every loss of life is profoundly heartbreaking, and we are committed to taking every possible step to learn from these incidents. These tragic events serve as a powerful reminder of the critical need for our continued focus on safety. At the beginning of financial year 2024, we deepened our commitment to health and safety as we embarked on a five-year strategy and roadmap to drive improvements in our health, safety, and environment performance and culture. Our operations are varied and complex, and as such, the strategy is multifaceted with a focus on risk prevention, capability building, and cultural transformation. The roadmap outlines how everyone at Cleanaway will work to keep each other, the environment, and our communities safe.
Our total recordable injury frequency rate, or TRIFR, for two thousand and twenty-four financial year was 4.6 versus 3.7 in financial year twenty-three. Looking at our performance over time, it has significantly improved from 12.6 in financial year fourteen, but plateaued over the past five years. Our industry benchmarking shows that our safety performance remains competitive against our waste fleet and logistics peers, but we're always seeking improvement. Consistent with our focus on critical risks and controls, we've added serious injury frequency rate, or SIFR, to our short-term incentive measures. Adding this metric also aligns with evolving industrial best practice.
Turning to financial year 2024 performance, we reported net revenue of AUD 3.195 billion, up 7.7% on financial year 2023, and an underlying net profit after tax of AUD 170.6 million, 14.8% higher than the previous year. Underlying EBIT grew at a record rate of 18.9% to AUD 359.2 million ahead of financial year 2024 EBIT guidance. Cleanaway's EBIT margin was 11.2%, up from 10.2% in the previous year, reflecting management's delivery on plans to address the challenges of the past few years and the benefits flowing from Blueprint 2030 initiatives.
This led to underlying earnings per share growth of 15.2% and a stronger return on invested capital of 5.5%, up 60 basis points on financial year 2023. The board declared a fully franked final dividend of AUD 0.0255 per share, which was paid on the seventh of October, 2024, taking the total partially franked dividends for the year to AUD 0.05 per share. This was 2% higher than the previous year and represents a payout ratio of 65.9%, in line with our stated policy of paying out 50%-75% of underlying profits.
Our business remains in strong financial health, with AUD 276.4 million of undrawn debt facilities and an average debt maturity of 4 years as at 30 June 2024, with our next refinancing not due until August 2025. Our net debt to EBITDA ratio of 1.89 times, as at 30 June 2024, was in line with 30 June 2023, and we continue to remain comfortably within our debt covenants. Over the past 2 years, Cleanaway has deliberately transitioned its focus away from EBITDA to EBIT. For a capital-intensive business like ours, this shift ensures we maintain capital discipline and our focus on financial returns, strengthening alignment with shareholders. Shareholder feedback has reinforced the board and management's belief that this transition was the right move, and it's been integrated into management's short-term incentives.
For long-term incentives, we have moved away from revenue targets since they don't necessarily reflect profitable growth, and we now focus on earnings per share and return on invested capital, as evident in the CEO's LTI plan that shareholders are being asked to vote on today. In financial year twenty-four, our focus on earnings before interest and tax, coupled with enhanced capabilities from our investment in data and analytics, led to a further evolution in our growth CapEx frameworks and processes. This refined approach to capital allocation reflects our disciplined and strategic path for future growth. Cleanaway has a central role in Australia's transition to a circular economy by supporting businesses reduce their environmental impact and government deliver on their commitments to sustainable outcomes.
In June 2024, we announced the agreement to acquire the AUD 110 million acquisition of Citywide Service Solutions' waste and recycling business, along with a 35-year lease for the Dynon Road Transfer Station near Melbourne's central business district. This transition, subject to a range of customary approvals, is an investment in our growth beyond financial year twenty-six. Citywide's planned redevelopment would double the site's capacity, enabling future earnings growth and support volume expansion in our metropolitan Melbourne post collections infrastructure network. As an area of capital allocation, I'm often asked about the board's thinking on energy from waste. Energy from waste will be a vital part of Australia's future waste infrastructure, playing a critical role in meeting landfill diversion targets and supporting the transition to a circular economy.
Given that EFW timeline is shaped by state government policies and decisions, we are strategically navigating the considerable opportunities this sector presents. As Australia's largest waste management company, we are uniquely positioned to originate these projects, leveraging our extensive waste supply, strong customer relationships, and proven track record in environmental stewardship. To ensure Cleanaway is well-prepared, the board continues to oversee the long lead time work required to advance EFW projects. Our capital-light approach is providing Cleanaway with the optionality to secure competitive long-term access to EFW facilities for our customers, while allowing us to make informed decisions consistent with our capital allocation approach. That balance balances risk and maximizes value for our shareholders. Turning now to board renewal, in March 2024, we appointed Robert Cole as a non-executive director.
Robert serves on the Audit and Risk and Human Resources committees and brings over thirty-five years of experience in energy and resources, infrastructure, and law to the board and the committees. He's standing for election today, and I'd like to acknowledge the valuable contribution he has already made to the Cleanaway board since joining. I'd also like to take this opportunity to thank Terry Sinclair, who retired from the board earlier this year. Following his appointment in April 2012, he was an active and engaged non-executive director and made a significant contribution to the Cleanaway board during his time. Shareholders, Cleanaway has performed well during the financial year '24.
We delivered a strong financial performance with significant progress in executing our Blueprint 2030 strategy, while addressing the challenges of financial years 2022 and 2023. The strength of our business, combined with the opportunities we see ahead, underpins the board's confidence in our ability to deliver sustainable growth for our shareholders. In closing, thank you to everyone who's contributed to Cleanaway's success this year. To our customers, for relying on us to provide safe and responsible waste, waste solutions. To Mark, the executive team, and everyone at Cleanaway, thank you for your dedication and hard work. To my fellow directors, for their commitment in guiding our business, and to our shareholders, for your ongoing support. I'll now ask our CEO and Managing Director, Mark Schubert, to address the meeting.
All right. Good morning, everyone. Thanks, Philippe. And also good morning to everybody here in Brisbane, but also everybody who's online. I am incredibly proud of the Cleanaway team's achievements this year. Financial year 2024 was defined by a number of things: by progress, by execution, and by delivering record underlying EBIT growth, along with an increase in return on invested capital. Importantly, we stayed true to our commitments by taking a disciplined, methodical approach to addressing challenges and executing our Blueprint 2030 initiatives. We finished FY 2024 as a stronger company, solidifying our foundations, our operations, and our growth outlook. The 18.9% increase in underlying EBIT was driven by robust revenue growth across all segments, supported by our restoration and operational excellence initiatives.
Net revenue in solids or Solid Waste Services grew by 6.3%, driven by a combination of price increases and volume growth. Solids EBIT increased by 18.3%, driven by the restoration of Queensland, a strong performance in New South Wales, and a positive contribution from commodities. Our Liquid Waste and Health Services reported revenue growth of 13.3% and EBIT growth of 38.7%. This reflected the increased activity in our liquids business, the transformation of our health services business, and the growth in our hydrocarbons business as it expanded its customer base. IWS, or Industrial Waste Services, saw a 7.7% increase in net revenue, with EBIT in line with FY 2023, and that was due to an economic slowdown in the second half, which offset first half growth.
Our growing strength as an organization is evident in the 100 basis point expansion in our group EBIT margin, supported by the advance of our Blueprint 2030 strategic pillars. On safety, I too would like to mention the two devastating deaths that have occurred recently. On behalf of the entire Cleanaway team, I offer my deepest sympathy to the family, friends, and colleagues of the deceased. Our workforce does face varied and ever-changing conditions daily. A core part of the five-year strategy is building a strong safety culture that fosters a learner's mindset, enabling our workforce to stay vigilant and in constantly changing conditions, and we see this as key to continually mitigate, minimize, and eliminate the diverse risks our team face as we work to keep everyone safe.
Our safety culture goes beyond operational safety and includes addressing sexual harassment, racism, and bullying in our workplace, and while we still have more work to do, we are making progress on our commitment to provide a safe, inclusive workplace culture where everyone can be themselves and bring their best to work every day. Our Respect at Cleanaway program was launched in August 2023 and will be a perennial program foundational to who we are. The launch of the new Guiding Principles in June 2024 was an important milestone on our cultural journey. It's been really encouraging to see the engagement across the business in what are a connected set of guidelines that shape how we work and behave every day.
Collectively, we believe they will foster a culture of collaboration, of care, of connection, courage, and forward-thinking, creating a Cleanaway culture where more than three hundred branches are driven by empowered leaders and an engaged frontline. During the year, we introduced a new stretch performance incentive for more than five hundred leaders. That's aligned to delivering AUD 500 million of EBIT in FY 2026. This performance incentive is designed to create an owner's mindset among our branch-based workforce and provide an incentive to deliver an outcome beyond our already ambitious midterm ambition. The internal stretch target does not replace our ambitious midterm goal of more than AUD 450 million of EBIT in FY 2026, which we are on track to deliver.
What it does internally is it shows courage by acting as a light on the hill, inspiring our people to work towards achieving exceptional financial outcomes for the business. Shareholders may wonder, and we are often asked, what drives the difference between delivering AUD 450 million of EBIT or AUD 500 million of EBIT in FY 2026? Both the targets are based on detailed plans and risk-weighted scenario analysis. Both plans reflect the delivery of the AUD 50 million in EBIT benefits realized from the restoration pillar, or bucket, as I typically say, as well as the delivery of the AUD 50 million in EBIT from our strategic infrastructure growth initiatives.
The key difference between AUD 450 million and AUD 500 million is the scale of efficiencies delivered by our operational excellence initiatives, which are the combination of branch-led and centralized programs that help the business work smarter. Our FY 2026 midterm ambition of over AUD 450 million includes AUD 50 million of operational excellence initiatives. Achieving our internal stretch target of AUD 500 million will require us to build on this momentum, going beyond AUD 50 million as we continue to realize greater efficiencies and productivity gains. Our FY 2024 performance has reinforced our confidence in our ability to deliver on our strategy. The confidence stems from the success of the plans and processes implemented in the restoration of our Queensland Solids business, as well as the transformation of the capacity and cost base of our health business.
Additionally, it reflects the initial benefits we're seeing from the adoption of our branch optimization operating cadence and routines across the network. These are built on the same principles and processes that drove our performance improvements in Queensland and health services, and this cadence standardizes common practices across the network, creating the time and space for our leaders to focus on making each branch per branch perform at its best. Additionally, in FY twenty-four, our financial results were the first full year of leveraging our data analytics capability. Our enhanced capabilities have sharpened our focus on returns, enabled the development of tools that support branch managers to drive efficiencies and optimize cost, and this has been especially impactful in areas like our fleet transformation program. As we work towards our FY twenty-six goals, we are working towards another year of double-digit EBIT growth in FY twenty-five.
Importantly, our FY 2025 guidance remains unchanged, and we expect underlying EBIT to be between AUD 395 million and AUD 425 million. Trading for the first three months of FY 2025 has been in line with management expectations, despite the challenging operating environment driven by a softer economic activity. To bring that to life a little bit, in our solid waste services segment, commercial and industrial collections have delivered price and volume growth, though at more moderated levels compared to FY 2024. This moderation has been largely driven by reduced volumes from those customers most exposed to household discretionary spending. In our landfill operations, our ongoing price discipline has underpinned New South Wales profitability despite softer volumes. While in Victoria, at Melbourne Regional Landfill, or MRL, as we call it, operating cost pressures have persisted, offsetting the benefit from a stabilization of volumes.
As mentioned at our August results, we are progressing with MRL's performance improvement and will provide further updates in due course. Elsewhere across the group, the liquid and technical services, health services, and hydrocarbon businesses remain on track and are performing in line with expectations. Over in IWS, and as expected, the weakness in the second half of FY 2024 has persisted into the current half. Now, pleasingly, the previously announced restructure is now largely complete. The streamlined East Coast operations are operating from a lower cost base, and the reshaped West Coast operations are better placed to capitalize on emerging opportunities from which we are seeing a healthy pipeline developing. The medium to longer term outlook for this business remains attractive, and IWS is central to our decommissioning and remediation strategy.
We remain on track to complete our restoration program in FY twenty-five, with the final third of the AUD 50 million EBIT target delivered from the completion of the health services turnaround and the stabilization of our workforce. As part of our strategic infrastructure growth program, we are currently commissioning the Western Sydney MRF, while Eastern Creek Organics, otherwise known as GRL, or previously known as GRL, transition to FOGO processing capability is on track, and to be completed by the end of this calendar year. Within our operational efficiency program, we continue to see pleasing progress. If we take fleet transformation, for example, we have transitioned from planning to execution. Our fuel procurement strategy has led to reduced fuel costs, and following a comprehensive assessment of the fleet requirements at each location, we are now moving into the right-sizing phase of this initiative.
In closing, I do want to acknowledge that our achievements and progress in financial year '24 are a result of the hard work and dedication of 7,900 employees across Australia, who serve 170,000 customers from 330 branches. As you know, Cleanaway's purpose, and the reason that we exist, is in making a sustainable future possible together. As I talk to new employees about, every word in that sentence is important, and the job is never done. That's because how we do it tomorrow will be different to how we do it today. Who we do it for is also important. We do it for our teammates, for whom it means sustainable jobs. We do it for the communities and the customers we serve, and we do it for the planet.
And finally, we do it for our shareholders in the form of sustainable and growing returns. And I look forward to updating you on the continued progress of your company in February next year when we release our first half results for FY twenty-five. I'll now hand back to Philippe for the formal parts of the meeting.
Thank you, Mark.
No worries.
All right. Thank you, Mark. Transcripts for both my address and that of the CEO and Managing Director, Mark Schubert, are available on our website and the ASX company announcement platform. So, ladies and gentlemen, we'll now continue with the formal business of the meeting. As I mentioned earlier, voting is being conducted by way of a poll at the end of the meeting. You may vote at any time. I will introduce each item of business and then take questions together at the end of all items of business. Prior to commencement of today's meeting, valid proxy votes have been received, totaling, it's a big number, one billion seven hundred and ninety-one million, four hundred and ninety-seven and twenty-two shares, which represents approximately 80.3% of Cleanaway Waste Management Limited's issued capital.
The proxy votes received prior to the meeting will be displayed on screen for each resolution. Where the chair of the meeting has been nominated as a shareholder's proxy, all open and available proxies will be voted in favor of items two, three, four, and five. There are voting restrictions for some resolutions, as outlined in the notice of meeting, which apply to those who have an interest in the resolutions and certain of their related parties or associates. As you're aware from the notice of meeting, items two, three, four, and five require a vote. Finally, I appoint Jesse Germer of Computershare Investor Services, as the Returning Officer. I'll now move to the first item of business so item one is the financial report.
The first item of business is the receipt and consideration of the company's financial report for the year ended thirty June two thousand and twenty-four, and the directors' report and the auditors' report, which are now before the meeting. Please note, there is no vote on this item of business. Ashley Butler, a partner at Ernst & Young, Cleanaway's auditors, is also present to address any questions you may have in relation to the conduct of the two thousand and twenty-four audit. Any questions for Ashley should be directed through me, as chairman, and must be relevant to the conduct of the audit, the preparation and content of the auditor's report, the accounting policies adopted by the company relevant to the preparation of the financial statements, and the independence of the auditor in relation to the conduct of the audit.
Item two on the agenda is to consider the company's remuneration report for the year ended thirty June two thousand and twenty-four, as it appears in the two thousand and twenty-four annual report, and to pass a non-binding resolution to accept the report. You will see from the screen the number of proxies received for the resolution. In accordance with the Corporations Act, the company will disregard any votes cast on this resolution by any key management personnel of the company, including the directors and closely related parties of those persons. Item three A and three B relate to the election and re-election of directors. A separate resolution will be put for each director. Item three A relates to the re-election of Ingrid Player as a director. Ingrid retires in accordance with the company's constitution, and being eligible, offers herself for re-election.
The board, in the absence of Ingrid, unanimously supports her re-election. Ingrid has been an independent non-executive director since March two thousand and twenty-one. The number of proxies received for this resolution is displayed on the screen, and I now invite Ingrid to address the meeting.
Thanks, Philippe. Good morning, everybody. I'm delighted to offer myself for re-election as a non-executive director of Cleanaway. Since joining Cleanaway in 2021, I've been an active contributor to the board and to the Human Resources and Sustainability Committees, of which I'm a member. I also serve as a non-executive director of two other ASX-listed companies, Integral Diagnostics and Cogstate, and I'm a member of the board of a not-for-profit hospital group, Epworth Foundation. My most recent executive role was as a member of the executive team of Healthscope, where I led the legal, sustainability, and governance teams, and prior to that, I worked as a corporate lawyer in private practice, both in Australia and in Europe.
I bring to Cleanaway more than twenty-five years' experience in governance and risk management across a variety of highly regulated industries, together with experience in leveraging complex corporate transactions and major capital projects to achieve strategic outcomes. I hold degrees in economics and in law, and I'm a member of the Australian Institute of Company Directors. I'm passionate about Cleanaway, and I'm honored to have served on the board for the last three and a half years. With your support, I look forward to serving for another term and to helping to support Cleanaway in making a sustainable future together, possible together. Thank you.
Thank you, Ingrid. So item three B relates to the election of Robert Cole as a director. Robert retires in accordance with the company's constitution, and being eligible, offers himself for election. The board, in the absence of Robert, unanimously supports his election. So the board has conducted appropriate checks into Robert's background, experience, and is satisfied that he's an appropriate person for election to the board. Robert's been an independent non-executive director since March 2024. The number of proxies received for this resolution is displayed on the screen, and I now invite Robert to address the meeting via video link.
Thank you, Philippe, and good morning, shareholders. I'm honored and delighted to be joining the board of Cleanaway, and I look forward to continuing to make a contribution to the board over the term of my appointment. I have significant experience as a non-executive director, spanning almost a decade. I'm currently the non-executive chair of Iluka Resources Limited and Perth Airport, and also Pro-Chancellor of Curtin University. I look to bring the benefit of the skills and experiences from those and prior roles to my appointment to the Cleanaway board. Before commencing my career as a non-executive director, I had an extensive executive career across a range of industries, including oil and gas, and as the partner in charge of law firm King & Wood Mallesons in Perth.
I have more than thirty-five years' experience in commercial operations, business strategy and planning, obtained primarily in the energy, resources, infrastructure, and legal industries. I hold Bachelor of Science and Bachelor of Laws degrees from the Australian National University, and I've also completed the Harvard Business School Advanced Management Program. Since my appointment earlier this year, I've very much enjoyed my role as a non-executive director of Cleanaway. I believe that our company is very well positioned to continue to grow and create value for shareholders over the long term as we execute our Blueprint 2030 strategy. I believe that I can continue to make a contribution to the Cleanaway board through my experience in leadership roles on other boards and the skills and experience from my executive career.
If elected, I look forward to working on behalf of Cleanaway's shareholders through the next phase of the company's development. Thank you.
Yeah. Thank you, Robert. Item four is the next item of business and relates to the granting of rights to the CEO and Managing Director, Mark Schubert. Item four A of the notice of meeting seeks approval for the granting of seven hundred and fifteen thousand eight hundred and six performance rights to Mark Schubert under the terms and conditions of Cleanaway's Long-Term Incentives Plan, as set out in the explanatory statement to the notice of the meeting. Item 4B of the notice of meeting seeks approval for the granting of a hundred and thirty-six thousand and four deferred equity rights to Mark Schubert under the terms and conditions of Cleanaway's Deferred Equity Plan, as set out in the explanatory statement to the notice of meeting. The number of proxies received for resolutions 4A and 4B are displayed on the screen.
Item five, renewal of proportional takeover provisions, is the next item. It's a takeover provision in the company's constitution. The proportional takeover provisions are expiring on the thirty-first of October, two thousand and twenty-four. If this special resolution is approved, the provisions will apply for a further three years, up to the thirty-first of October, two thousand and twenty-seven. The directors consider that renewing this provision would be an advantage to shareholders, as it provides the opportunity for shareholders to consider and vote on any proportional takeover bid. The number of proxies received for resolution five are displayed on the screen. I will now take questions on each of the items of business.
As noted earlier, I'll first take questions received in advance of the meeting, then questions from those physically present at the meeting, and then followed by written and audio questions from participants who have joined us online. For those shareholders present in person today, if you wish to ask a question, please move to a microphone, and show your blue or yellow admissions card to the attendant, who will note your name and introduce you when it is your turn to speak. Please limit yourself to one question at a time to give other shareholders a chance to ask questions. For those attending the meeting online who wish to submit a written question but have not yet done so, please submit your questions now via the speech bubble icon on your screen.
I will now ask Roger Chong, Deputy Company Secretary, if we have any questions from shareholders who submitted questions in advance of the meeting today. Roger, do we have any questions submitted?
We do not.
Thank you. So, the purpose of today's meeting is to deal with items that are on the notice of meeting. Sorry, we'll skip forward to that bit. I'll now take any. Just bear with me one second. Can I now open for questions from the floor? Please, just state your name, and wait till the microphone comes to you. Are there any questions?
Oh, this blue card. Good morning. My name is Meredith Clark, and I'm tongue-tied. I'm a volunteer for the Australian Shareholders Association. Today, we hold proxies for forty ASA members for approximately four hundred and eighty-five thousand shares. I'd firstly like to thank Cleanaway for having the meeting as a hybrid meeting, because it does allow maximum participation of shareholders, and it's something that the ASA strongly supports. Now to the questions. The ASA prefers that the board skills matrix be included in the annual report rather than the corporate governance statement, which is a separate document tendered to the ASX. As not all shareholders will receive or choose to download this report, would Cleanaway consider holding, sorry, including also this, this report...
Sorry, including this in the annual report so that it's easy for shareholders to access or, at the very minimum, to do so as it does with the ESG report and to make a note to visit by putting a link in the document? This is because the shareholders, one of the things that they actually do vote on, is the board itself.
Thanks, Meredith, and thank you for your question and for joining us today. Each year we consider matters such as this, and we'll definitely do that again, but we will certainly include a link, as you suggest, to make that connection easier for shareholders. Do we have any other questions from the floor? If not, back to you, Meredith.
Okay. Following on from the previous question, as has been discussed, the ASA prefers that the board's skills matrix identifies the skills and experience of individual directors, as this assists shareholders in their voting decisions. Will the company consider an update to the board's skills matrix?
Again, thank you for the question. And like your previous question, we consider the format of our information provision to shareholders each year, and we'll definitely consider the matter you raise. Having said that, I do think there's utility for shareholders to understand what their board as a whole looks like in terms of its strength and strength gaps. But we'll definitely take that on consideration. Any other questions from the floor before I know Meredith's got one more, so.
Well, yeah.
Yeah.
Okay, my last question concerns the remuneration report. We note and welcome the continued improvements, including the increased STI deferred portion from 20% to 33%, and inclusion of the deferral service condition. The ASA would still encourage the company to lift the deferred portion of the short-term incentive to 50%. Would the company consider this?
Would the company consider it? We do run our eyes over this issue each year. I would say, though, that, and thank you for acknowledging the change that occurred from last year to this year, which was a very complicated set of adjustments, which involved STI and LTI levels, consideration of tax flow implications - sorry, not tax flow, cash flow implications for employees for changes to the deferral rates, et cetera, and we were very happy with the end balance of what we achieved, which does sit within the range of like company spectrum around the deferral rate, but it's a matter that it gets consideration every year, and we'll definitely run our eyes over that again in the coming year. Thanks, Meredith. Please.
Thank you, Mr. Chairman. George Bompas, Director of Fair Cause. I bring this point up while you were talking about the deferred things there. I just wanted to know what the policy was with directors' shareholdings in the company.
Yes.
Thank you.
Yeah, thanks, George. Dan, or was it in two thousand and twenty-one that we-
Yeah.
Two thousand and twenty-one, we introduced a guideline that suggested that directors should seek to build their shareholding over five years to one times their base remuneration. Obviously, that five-year period is not yet over, and shareholders have been building their shareholding over that time. A number of shareholders have already achieved it. Different individuals will have different personal circumstances, but I hope that answers your question.
Yeah.
Any other questions from the floor? If not, Roger, do we have any written questions via our online portal?
Chairman, yes, we do. I will read you the questions in order. We have five questions from shareholder Stephen Mayne.
Okay.
Okay. The first question is this... And they are quite lengthy, and in some parts, you might have multiple questions within one question. Okay?
Okay.
The first question is: I spent four years as a City of Melbourne councillor from two thousand and twelve until two thousand and sixteen, and was chair of the Finance and Governance Committee, meaning I was effectively the shareholder councillor for Citywide, and would have periodic catch-ups with their chair, John Brumby. I pushed internally for a potential sale a decade ago, but got no traction with anyone and was therefore stunned when the Financial Review, Australian Financial Review column reported in July twenty twenty-three that we were in negotiations to buy Citywide, sorry, Citywide Waste business, with the AUD 110 million acquisition announced the following day. How on earth did we pull off that deal with City of Melbourne, not even consulting with their ratepayers or the public on whether we should investigate divestment, let alone sign a binding agreement?
Well, thank you, Stephen, and thank you for being part of the meeting and for your question. The processes within City of Melbourne that they followed to put Citywide up for tender is really a matter for them. We don't have any particular insight into that. But the process was an open process. It was a contested process. There were other bidders, and we were part of that and feel fortunate to have won it.
Mr. Chairman, we've got a second question from Mr. Mayne.
Mm-hmm.
The question is: The ACCC commenced a review of the proposed AUD 110 million Citywide acquisition on August twelfth, 2024, and after some delay, are expected to announce the outcome of this review in November. What has been our level of engagement with the ACCC, and have we been asked to sell any assets or make any undertakings in order to receive approval to proceed with the acquisition? How large is Citywide's market share in the Victorian local government waste collection market? And why didn't we buy the freehold of the Dynon Road Waste Transfer Station, as opposed to entering a 35-year lease?
Yeah. Again, thanks, Stephen.
Yeah, and sorry.
I'm sorry.
I'm sorry, and the second-
There's more
... sorry, yeah, second part to the question. Is it because a land sale would have triggered a public consultation process, and the City of Melbourne didn't want the public to have any idea it was exploring a controversial divestment, which would trigger an ACCC investigation into market concentration in the waste management industry? Which it had completed successfully since Citywide's creation in 1996.
Again, thanks for the question, Stephen. So we've had very good engagement with the ACCC, and that's continuing. We expect further feedback in November. I don't want to preempt what that decision or that feedback might be, and also, we don't comment on the market share of individual business elements, so I won't comment on that. Now, the form of the sale wasn't dictated by us. It was dictated by the City of Melbourne, so that was the offer on the table. But it certainly wasn't designed in any way to divert or affect the ACCC's process.
Chairman, the next question from Mr. Mayne is the following: The Citywide and City of Melbourne announcements in July both said we were paying AUD 110 million for the Citywide Waste business, but the disclosure was pretty threadbare beyond that headline figure. Because City of Melbourne has the highest paid local government workers in Australia, the Citywide enterprise agreements have always been relatively generous compared with private operators. The redundancy provisions are usually generous, and many of the Citywide staff have spent decades with the council-owned business. How big is the redundancy entitlement liability triggered by the Citywide divestment, and does the liability sit with council or Cleanaway? Next part. Is the cost of the redundancy payments included in the AUD 110 million figure? Approximately how many Citywide staff are expecting to transfer across to Cleanaway?
What is the total rent payable for the Dynon Road transfer site? Has it been priced at a discount or nominal figure to increase the headline or sale price, or was it market priced?
Is that it?
Correct.
Thank you, Roger. I think I might ask Mark to talk to those matters.
All right. Thank you. So there's a hundred and sixty-eight employees coming across from from Citywide, and as part of the agreements with Citywide, we've committed to offering all those existing employees roles in Cleanaway, and you have to do that with existing terms. So that's, that's simply how it works, so there's nothing, there's nothing more or less behind it than that.
Thank you, Mark. Roger, further questions?
Yes, Chair. The next three questions are not about Citywide, and they're the following. The first of that is: 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, including the remuneration report? If so, what reasons did they give, and we will disclose... Will you disclose the proxy votes before the debate on resolution, so shareholders can ask questions, about the reasons there have been any protest votes? Please don't say they're confidential. It is standard for companies to be across this detail on the voting recommendations and to inform shareholders where relevant, without publishing the full proxy advisor reports, of course.
Thank you for the question, and despite the plea, I probably am going to say it's confidential. It's important to understand that proxy advisors are commercial enterprises whose business it is to write reports for their clients, who pay to receive those reports. The information contained in them is proprietary information, and we're not at liberty to then on communicate that. That one or two other companies do so is a matter for them.
Chairman, the next question from Mr. Mayne. Could the CEO summarize his past LTI grants as to whether they have vested or lapsed? Also, has he ever sold any ordinary shares in the company or bought on market without relying on an incentive scheme to build his equity position in the company? Please don't say, "Look in the annual report or through ASX announcements." It's complicated, and the CEO could factually summarize the situation in sixty seconds.
Do you want to factually summarize it in sixty seconds?
I'll certainly do it factually for you, Philippe. Okay, all the grants, all the LTI grants are actually in the notice of meeting for the AGM. I'm not gonna spend the meeting's time reading out five paragraphs to summarize it, when you can read it and analyze it for yourself. It's all there on page 10, to draw your attention to it. In terms of disclosure around purchasing or selling shares, I haven't purchased any shares on market, but I have sold shares on market. We disclosed that on the second of September. Approximately AUD 300,000 worth of shares were sold.
They were sold to cover the tax associated with receiving shares, and to satisfy that personal tax obligation, and obviously, following the sale of those shares, my shareholding is still well in excess of Cleanaway's minimum shareholding requirements.
Roger, do we have any further questions?
Yes, the final question from Mr. Mayne, and I apologize it's lengthy. I'll read it. Australia is currently in the midst of an unprecedented deluge of takeovers that has contributed to listed entities on the ASX falling by 170 or 7.4% to 2,124 since June 2022, including 20 straight months of decline. There have already been 27 major takeovers above 200 million completed so far this calendar year, with another 10 deals announced and in the works. The ASX is losing long-standing names such as CSR, Boral, Blackmores, Newcrest, and Crown, which have all disappeared over the past three years. There is a clear mispricing between public markets and private markets.
Why are public markets not valuing the ASX-listed companies like Cleanaway more highly, and what are we doing to avoid being gobbled up like many other companies? Does the chair and candidate, Robert Cole, agree that this is a problem for the nation, particularly with so few new floats replenishing the ASX ranks? And do we have any takeover protections apart from the FIRB and ACCC? Also, while discussing takeovers, what did the CEO think about the New Year reports that Seven Group wants to buy us? And could he describe the history of the relationship with Vik Bansal, our former CEO, who now runs Boral for Seven Group?
Look, it's a complex question, and markets go through their own cycles with peaks and troughs. I'm not sure I'm in a great position to comment on the public-private shifts, although I note the observation that Stephen's made. Personally, I think the role of your board and your management is to run this business to its maximum potential and deliver the best results we can, and ultimately, that's that achieves two things. That it achieves great results for shareholders, and it also guards against any discount sale of the business, were that to happen.
We've noted the media comments about other companies and, you know, possible interest in us, but we also note that both organizations were very quick and absolute in responding to that media and refuting its veracity. I don't know, Mark, whether you wanted to add anything else? No. Yeah, I mean, you know, people go, and they go from one job to another, and so we wish Vik all the best in his role at Boral, and it's really. I don't think it's a matter of it should be of any particular interest to shareholders. Certainly, we're not losing any sleep over it.
Chairman, there's no more written questions.
Thanks, Roger. So Roger, do we have any verbal questions received via our online portal?
I'll check with Chorus Call. I don't believe we have any audio questions. Nope. That is all.
So are there any more questions submitted, Roger?
No, there are not.
Okay. So there being no further questions, this concludes our discussion on the items of business, and we do thank you for all the questions. As indicated at the start of the meeting, a poll will be taken on all resolutions. Cleanaway's constitution requires that proxies must be lodged at least forty-eight hours before the meeting. Proxies lodged after that time are not valid. If anyone is here under power of attorney, you may only vote if the power was lodged with the company at least forty-eight hours before the meeting. Anybody holding a power of attorney in respect of shares in the company that has not previously been lodged may not vote using it. So the poll will be conducted by our share registry, Computershare Investor Services. Jessie Ymer from Computershare, Computershare, will act as the Returning Officer.
We will announce the results of the poll and advise the ASX as soon as the results are determined. In-person attendees entitled to vote would have been issued with a blue voting paper at registration. The process for in-person shareholders and for proxy holders and attorneys who have received a blue card is as follows. Firstly, shareholders, if you wish to vote for a resolution, please mark the "for" box next to the corresponding resolution. If you wish to vote against, mark the "against" box next to the resolution. If you wish to abstain from voting, mark the "abstain" box next to the resolution. Secondly, if you're a proxy holder or attorney, you must comply with any specific voting direction of the shareholder if you wish to lodge a valid vote. The voting direction is shown on the schedule attached to the voting card you have received.
If you have any questions, please ask one of the Computershare representatives before lodging your voting card in the poll boxes. So please now complete your voting cards and place them in the poll boxes being carried throughout the room by Computershare. So if the voting cards have now all been collected, I now declare the poll closed. The results of these votes will be released to the stock exchange and on Cleanaway's website later today. So ladies and gentlemen, that completes the business of today's meeting. I now declare the meeting closed, and thank you for your attendance. Thank you.