So good morning, ladies and gentlemen. My name is Richard Anderson, for those of you who haven't been to an annual meeting with the company previously. I would like to extend a warm welcome to all shareholders and guests joining us today at this 2023 Annual General Meeting of Data#3 Limited. This is a hybrid meeting with in-person attendance and live streaming from the Data#3 head office in Brisbane. At the outset, I would like to introduce your board of directors who are with me today. Mark Gray, Non-Executive Director, who joined the board in 2017, and as we announced on eleventh of September, subject to the outcome of Resolution 2, Mark will assume the position of Chairman of your board at the conclusion of this annual general meeting. Secondly, Leanne Muller, Non-Executive Director, who joined the board in 2016.
Mark Esler, Non-Executive Director, who joined the board in 2019. Susan Forrester, Non-Executive Director, who joined the board in 2022. Finally, our Managing Director, who I'm sure needs no introduction, Laurence Baynham. Also in attendance here today are Brad Colledge, Executive General Manager; Cherie O'Riordan, Chief Financial Officer; Terence Bonner, the Company Secretary and General Counsel; Michael Bowser, Executive General Manager; and Hayley Hartin Moderator for the online questions today, and who is also our Chief Counsel. I would also like to welcome Jason Evans, representative from our independent auditors, Pitcher Partners, who has joined us here today. Also joining us is Tim Sayer, partner at Talbot Sayer, who is an external legal representative for Data#3. Now, for the formalities of the meeting. I note that there is a quorum present, and I declare the meeting open.
The notice of meeting was issued on 21st of September, 2023, and the meeting has been properly convened. In the notice of meeting, we set out four resolutions to consider. The board consideration for the issue of rights of LTI rights to our CEO and MD occurred in the weeks leading up to the release of the notice of the meeting, some six weeks ago. As Laurence has given notice to the company to step down as CEO and MD, and the company no longer proposes to issue rights to him, resolution to approve the grants of rights to Mr. Laurence Baynham has been withdrawn, as there is nothing for shareholders to approve. So we will, later on in the meeting, consider the remaining three resolutions. Please note that only shareholders, proxy holders, or shareholder company representatives may vote on the resolutions.
I'll start today's proceedings with a summary address and then invite Laurence to address the meeting before we move on to the formal business of the day. So ladies and gentlemen, for my chairman's address this year, at the outset, I want to mention my retirement from the board and the appointment of Mark Gray as chairman at the conclusion of this meeting. As we announced in early September, this is therefore my last address after 23 years serving as your chairman. It has been... Obviously, it has been a wonderful experience with the business, from listing in 1997 as a small Brisbane-based IT company and developing into the national leader that Data#3 is today, with over 1,400 employees.
While it is with mixed emotions that I step down, I have every confidence in the ability of the board under Mark's leadership and the outstanding management team to see Data#3 through this next exciting stage in its and the industry's evolution. Mark's extensive knowledge of the business also provides excellent continuity. He has a deep understanding of large infrastructure projects across the public and private sector, and his strong financial, operational, and governance experience continues to be highly valued by the board. I will invite Mark to say a few words later in the meeting. Yesterday, we also made an announcement regarding Laurence stepping down as Managing Director and CEO after nearly 30 years of exemplary service to our company.
The board has continued to focus on succession planning, and I'm pleased to announce that we have made an internal selection with Brad Colledge, who will take over as CEO and Managing Director from 1 March 2024. Laurence will describe this in more detail in his address. However, I would like to take this opportunity to thank Laurence for his nine years as CEO MD, during which time we have seen tremendous growth. The executive succession plan also includes the retirement of our previous long-serving Chief Financial Officer, Brem Hill, who's with us here today. Welcome, Brem. At the end of the calendar year, after a period of long service leave, on behalf of the board, we thank Brem for his outstanding commitment, loyalty, and contribution, and wish him well in his well-earned retirement.
In January 2023, we were delighted to welcome Cherie O'Riordan to the team as our new CFO. We are pleased with Cherie O'Riordan's appointment following a rigorous recruitment process, during which we considered a number of exceptional candidates. With a strong track record of financial and strategic business leadership, Cherie O'Riordan really has hit the ground running. The board has had the confidence to initiate these changes, all part of a well-planned succession program, because the company has never been in better shape. We are very confident that the new leadership team has the capability to take Data#3 through this next phase in its growth. There is significant momentum within the business. We were pleased to report that the financial year 2023 was another successful year for our customers and people.
This was an environment of heightened inflation, geopolitical instability, and ongoing supply chain constraints, all of which have directly and indirectly impacted the Australian economy. Our FY 2023 revenue grew to a record AUD 2.5 billion, up 17% on FY 2022. This was driven by our customers continuing to invest in digital transformation, enterprise security, networking, and multi-cloud, together with record levels of demand for our major vendors. This flowed through to net profit before tax of AUD 53.2 million, up 20.7% on FY 2022. Earnings per share of 23.96 were up 22.2%, and the board declared a fully franked dividend for the year of AUD 0.219 per share, an increase of 22.3%, representing a payout ratio of 91.4%.
Towards the start of the financial year, we were also confronted with some of the highest staff turnover the industry has ever witnessed. As the IT sector saw its own great resignation, with excess demand for staff and an under supply of candidates, we were fortunate to maintain levels of staff turnover well under industry averages, reflecting our core focus on our people. The business performed remarkably well against this backdrop, significantly outperforming IT market growth rates. This shows the resilience of the Data#3 business model and strength of our long-standing supplier relationships and customer base, particularly among large enterprise and government customers. Our success in FY 2023 was supported by the dedication and resilience of our people, who went above and beyond to help our customers during extraordinary circumstances. We thank them for their ongoing commitment to our company.
We have a wonderful culture at Data#3, which has undoubtedly underpinned our continued success. Likewise, we acknowledge and greatly appreciate the continued support from you, our shareholders, many of whom have been long-term investors in Data#3. Before getting to the formal resolutions, I would like to hand over to Laurence to address in more detail the operational aspects of the company's FY23 performance and the outlook for the current period, and his recent decision to stand down.
Thank you, Richard, and good morning, ladies and gentlemen. Great to see a lot of very familiar faces. On behalf of the board and the entire Data#3 company, I would like to thank Richard for his massive contribution and service to the company and the board. He's a foundation-foundational member of the board since the company's ASX listing back in 1997... and also served as Chairman since 2000. He's guided Data#3 business through national expansion and substantial growth in shareholder value, culminating in the recent inclusion in the ASX 200. Richard's been a pleasure to work with, and we wish him all the best in his retirement. I would also add to my welcome to today's AGM and thank everyone for making the time to join us here today.
As you're aware, this is also my last address to shareholders, but I'll talk more about that later on. As Richard mentioned, we're operating in an IT growth market for large corporate and government customers. I'm pleased to report that this was another strong year for Data#3, with yet another record financial performance. In fact, our revenue growth was three times greater than the wider IT sector, and we continue to capture market share. Our profit growth was substantially above our peers, locally and globally. We saw continual improvement in the supply chain, particularly in the second half, and the supply chain generally returning to pre-pandemic normal. We're also making strong strategic progress, focusing growth in our services and software solutions business to support recurring business, which makes up two-thirds of our total revenue.
I'm pleased to report that we've made a strong start to this financial year, and I'll elaborate further in the outlook section of my address. We continue to see demand for large IT integration projects, and our pipeline remains solid. These projects typically span multiple financial years and extend across our solutions portfolio, including infrastructure, software, and services. One of our largest multi-year projects is the integrated resort development in Queen's Wharf in Brisbane, which featured in the pre-meeting video. I'm gonna repeat some of that video because it's not part of the ASX communication, so I'll repeat some of that. So if you weren't listening to the video.
This is one of the largest Queensland infrastructure projects, and to give you an idea of the scale, it consists of 4 towers, 50 restaurants and bars, a ballroom, 2,000 residential apartments, 1,000 hotel rooms, a bridge to South Bank, retail areas, and the redevelopment of nearby heritage buildings. Data#3 is designing, building, installing, and supporting the digital network, which includes handling over 60,000 items that make up the network. One of the primary reasons we win these large projects is the extensive work we do with vendors such as Cisco and our track record of successful delivery. With the upcoming 2032 Brisbane Olympics, we're well-positioned to do more of these large-scale infrastructure projects. It's worth highlighting that we have intentionally focused on winning these larger, albeit low-margin contracts, given the significant cross-sell opportunity that our solutions portfolio and services.
Now, from an operational perspective, the 2023 financial year had many high points. We continue to drive transformation for our customers, and we're seeing rapid product development incorporating multi-cloud solutions, with plenty of upside across our services portfolio. Security continues to be our fastest-growing area and a top priority for our customers as they respond to the ever-evolving and increasing threat of cyber breaches, seen by many as their number one business and risk management imperative. One of the one of the, our strategic imperatives is to drive growth in high-margin consulting and managed services to improve our future gross margins. This year saw many contract wins in managed services, which are typically five years in duration, and we onboarded many new customers.
One notable example was the multi-year contract with Future Fund Management Agency to manage their entire IT environment, including providing services remotely and providing a growing team on-site in their Melbourne offices. To support these contracts, we increased upfront investment, particularly in our people. We are pleased with the initial revenue growth, while profitability in a five-year contract typically gets realized after the first year establishment. Importantly, our global vendor partners are increasingly shifting their revenue, their incentive programs to align with our services solutions. The overall momentum in the business is clearly reflected in our strong financial performance for the year. As Richard mentioned earlier, revenues are up 17% to AUD 2.5 billion. Gross profit was up 15%, which flow through to net profit before tax, growth of 20.7%, and net profit after tax was up 22.4%.
Noting that the result was supported by increased interest income. Revenue growth and main product-related businesses exceeded our expectations, while the strong growth in relatively low-margin areas, such as software and multi-cloud in recent years, has reduced our overall blended gross margin. This is purely a result of the change in revenue mix, and the gross margins have remained relatively stable within each individual business unit. Our deliberate strategy to accelerate services growth has been successful, and the strong performance in higher-margin areas of consulting and managed services has helped stabilize overall blended gross margins. During the year, we continued to manage our internal staff costs and operating costs closely, and our internal cost ratio has improved from 88% in FY 2016 to 80.3% in FY 2023.
We're slightly up last year as we continued to invest in the business, especially managed services, and also expenditure, such as travel, coming back online. Longer term, we expect to continue to drive operating leverage across our business. We have a strong balance sheet with no borrowings, supporting continued investment in our business as we tap into the sizable addressable market opportunity. Digital transformation is the primary driver of growth in our industry. Every one of our customers, whether public sector or larger commercial customers, has a digital transformation agenda, and increasingly, their digital strategies are the same as their business strategies. We're still in the early days of digital transformation, with plenty of headroom for growth. Our role is to provide the foundation layer of cloud, modern workplace, data, analytics, connectivity, and security.
There are very few, if any, other organizations in Australia that have the breadth and depth of our solutions and services. Undoubtedly, artificial intelligence is becoming a major digital milestone. This year, we witnessed generative artificial intelligence truly entering the mainstream business as a, as a business priority. It is early stages for the industry, but we're assessing widespread applications across customer transformation projects. Operational technologies like robotics are becoming integral to transformational solutions, and we're already seeing AI enabling rapid product development. We're also looking at opportunities to, to apply AI within our own business to further improve operational efficiencies. Importantly, we're aligning ourselves with the global market leaders in artificial intelligence, especially our partnership with Microsoft, who are at the forefront of this change with customers enabling technology.
In September this year, we were pleased to announce our selection to participate in the Microsoft 365 Copilot Early Access Program, and we were among only 600 companies globally. In Australia, only seven companies are part of this program, including AGL, Suncorp, and NAB, and Data#3 is the only technology company and the only Microsoft partner. One of our greatest points of differentiation is our vendor relationships and leading position with Microsoft, Cisco, HP, and Dell. Leadership can be measured in many different ways. However, in FY 2023, we succeeded in winning Cisco Global Security Partner of the Year, selected from 60,000 Cisco partners globally. We also secured two Microsoft Global Awards, which is no mean feat given Microsoft's global footprint.
However, awards do not have any direct financial benefit, but they do play an important part in attracting and retaining the best talent, and our customers look to awards for validation of our skill sets. In the Australian large corporate and public sector market, we estimate that these vendors represent 70% of customer spend, which is why we focus our investments with market leaders. In addition, we have hundreds of other vendors who we work with and continually evaluate our levels of investment. One of our greatest strengths is to combine the products from multiple vendors to make a tailored and integrated solution for our customer. Our strategy remains focused on increasing customer engagement across the lifecycle. The average revenue and gross profit per customer group has increased over the years as we extend our engagement across solutions, particularly focusing on our services.
Our employee value proposition continues to be enhanced so that we attract, develop, and retain the best talent. We are proud to have been named the winner of the Five-Star Employer of Choice Award for 2023 by the HR Director Magazine for the eighth year in a row. This award is not limited to the IT sector. It covers all industries and includes many multinational entries. Looking forward to FY 2024 and beyond, our strategic framework is underpinned by a focus on customer success. The more successful our customers become, the more successful we become. The strategy revolves around having the best people, the most secure, scalable, and innovative solutions in the market, while operating our business efficiently. The market opportunity remains substantial. The IT market continues to grow domestically and internationally, as decision-makers increasingly seek automation opportunities to drive greater efficiencies.
Gartner has forecast the Australian IT spending to grow 7.8% in the calendar year 2024 and to exceed AUD 133 billion. So we've got some room for upside. We've got some headroom, and a lot of this is led by digital investment programs. Now, let's move to the outlook for FY 2024. As I mentioned earlier, we're pleased to have made a strong start to the year with a solid first quarter performance. 65% of our business is under contract, and we've continued to secure new contracts and projects while benefiting from the positive momentum from FY 2023. We certainly expect to improve on last year's bumper first half pre-tax profit of AUD 24.6 million.
However, the extent to which we do this remains dependent on opportunities that need to be realized in the second quarter and the timing of product deliveries and project deliverables. Our current first half projection is to deliver pre-tax profit in the range of AUD 27 million-AUD 29 million, which is in line with our full year objective of delivering sustainable earnings growth. This range includes increased interest income earned from FY 2023 revenues. As in the past, we have a skew to the second half, and our fourth quarter is again expected to contribute significantly to our annual profit. The first half results and interim dividend will be announced on the fifteenth of February 2024. It's also our intention to maintain our usual dividend practice....
Our performance continues to be underpinned by our leading market position, unrivaled vendor relationships, long-term customer base, and highly experienced and committed Data#3 team. I would like to thank all our people for their incredible commitment and support during the last year, and look forward to reporting on our progress in months ahead. Now, turning to the management changes announced yesterday. Following 29 years of service, I've given notice to the Data#3 board that I'll be stepping down from my position as CEO and Managing Director, with my last day to be 1st of March 2024. We've had a succession plan in place for several years, and the board has worked on the plan in great detail in recent months.
I'm pleased to say, that following my notification to the chairman, the board has confirmed the appointment of Brad Colledge as CEO and Managing Director from March 2024, after a four-month transition period. Now, Brad joined the company in 1995, just one year after I did, and Brad has extensive knowledge of the business. He actually started the software licensing solutions business way back in the nineties, and started our relationship with Microsoft. And in 2014, he expanded his remit to the infrastructure solutions business, and more recently, to the services lines of business. Brad also represents the company on key global partner advisory councils, in particular, Microsoft, and executive engagements, and he's highly regarded across the business and by the rest of the senior leadership team and board. Brad has my 100% support as my successor.
Well, from my perspective, I believe it's the right time to hand over the baton. Going back nine years, I was fortunate to take on the role from John Grant, one of the great leaders in our industry, who in turn took over from Terry Powell, one of the founders of the business, who's here this morning, from 40 years ago. The point I'm making is that Data#3 is built on great experience, tenure, and culture. Each leader will progress the business in different ways, but no one person is greater than the Data#3 company. Personally, the most memorable aspect of my tenure has been growing the fantastic Data#3 team to 1,400 people, while maintaining our unique culture with core values of honesty, excellence, agility, respect, and teamwork. Since my appointment as CEO, you'll be aware that the business has seen significant financial growth and return to shareholders.
Now, we've made calculations as well, and I was surprised by these numbers. It's the first time we've done these calculations, going back nine years and comparing where we were. I'm pleased to report that we've grown revenues by more than 300%, from AUD 833 million to AUD 2.5 billion. Profit by nearly 500%, from AUD 7.5 million to AUD 37 million. And we've grown our market capitalization from AUD 107 billion to over AUD 1 billion today. I'm also pleased on a, to report that my tenure as, as CEO represented total shareholder return, which includes the dividend payout of 1,781%. And I thank all the shareholders that have been with us on that journey.
I'll be following the company's progress during this exciting next phase of growth, and going forward, I look forward to spending some more time with my family and the joys of my grandchildren. In addition, I will look to utilize my experience with perhaps a couple of different organizations in a non-executive capacity. I would like to extend my thanks to the board and their support and insights over the years, which have been most valuable to our successful growth. I'd also like to thank the wider Data#3 team for their professionalism, dedication, and hard work over the years. Our people are truly the heartbeat of our business, and when I depart on the 1st of March, I'll miss being part of the team.
Finally, I'd like to thank all our shareholders for their support during last year and during my time as CEO. Thank you. Back to you, Richard.
Swap glasses. Thanks, Laurence. Before we consider each item of business, I would like to outline the procedural matters for the meeting. For those participating virtually, at the bottom of the webpage, under the webcast and presentation, there are three boxes which allow you to, first of all, get a voting card, secondly, ask a question, and thirdly, download the AGM documents, being the notice of meeting, the annual report, and the virtual meeting online guide. Questions. Shareholders will have the opportunity to comment on and ask questions in relation to the resolutions. I will hold comments and questions until the item of business has been introduced. For those shareholders using the online platform, you can ask your questions during the meeting by clicking the Ask a Question button and following the prompts.
For each item of business, we will address questions received from shareholders attending in person first, then from those shareholders participating virtually. Voting. I would like to briefly summarize the voting procedures which will apply to this meeting. Voting on each resolution will be conducted by a poll. Shareholders who are attending the meeting in person will have been given a voting card on registration, and the completed voting cards will be collected at the end of the meeting. Shareholders who are participating virtually in this meeting can register to vote by clicking on the Get a Voting Card box at the top of the webpage or below the presentation slides, and following the instructions. Following discussion of all items, shareholders will be given a further five minutes after the meeting is closed to submit their votes via the online portal.
After this time, the polls for each relevant item of business will close. Your board supports all resolutions put to the meeting for your consideration today and recommends shareholders vote in favor of each resolution. Where undirected proxies have been given in favor of the chairman, the chairman will vote in favor of the resolution to the extent permitted. The number of proxy votes received on each resolution will be displayed on our slides as we move through the resolutions. The results of each poll will be announced by the ASX as soon as possible after this meeting and will also be displayed on our website. If you experience any difficulties using the online platform, the helpline number is displayed at the top of the page. You can also refer to the virtual meeting online guide, which is accessible via the online platform.
We will now move to the formal items of business for this meeting. Item one, financial statements and report. The first item of business for discussion today is to receive and consider the financial report, directors' report, and independent auditors' report for Data#3 and its controlled entities for the year ended 30th of June, 2023. Jason Evans of Pitcher Partners, down here at the front, is available to answer questions relevant to the conduct of the external audit and the preparation and content of the independent auditors' report. Ladies and gentlemen, I would now like to invite questions for this item of business.
Thank you. Ray Tollefson, long-term shareholder and member of Teami nvest. It relates probably more to ongoing finance than last year's report, if that's okay? How does or will Data#3 monetize the Copilot Early Access program?
I think that's-
Yeah, sure.
Appropriate to the Chief Executive.
Is my mic on? Yeah, it is. Magic. That's exactly what the early access... One of the goals of the Early Access program is not only for us to understand the technology and understand how we, how we gain use cases for the technology, but it's also the commercial aspects as well, which we will be learning. So it's early days. What we can say is that, there's... Without putting numbers on it, the operational efficiencies that we'll gain internally, that would be one aspect of artificial intelligence and Copilot. The second one, which will be a lot larger than the operational efficiencies internally, is the solutions that we sell our customers and incorporating that in the solutions that we sell our customers.
Then the third aspect, which again, is difficult to quantify, but artificial intelligence is definitely driving IT investment as a whole. And so there has been some analysts that have used the term that we're providing the picks and shovels in a gold rush, in that the communications technology, security, cloud, are all necessary to enable that gold rush to actually take place. We may not be the experts in artificial intelligence, but we can certainly provide all the picks and shovels.
Thank you.
Good morning. My name is Paul Donohoe, and I'm assisted today by Richard Hemphill. We're here to represent the Australian Shareholders Association, and I'm holding 355,000 proxy votes from 13 shareholders. My first question is about software solutions. So the annual report included a lovely chart showing that Software Solutions division is an increasingly important part of Data#3, and now contributes roughly 65% of total revenue. And it says that this is, this includes traditional volume licensing and more modern cloud subscriptions. Can you provide a rough split between those two categories?
Again, Laurence?
We can't provide that easily, and it's one of the things that we don't disclose. We're happy to provide some rationale on why we don't disclose it, but the answer is we've made a decision not to disclose it.
Okay. So I'll try a follow-up question then. The report also goes on to talk about cloud subscriptions and gives examples of Office 365 and Dynamics 365, and then a big cloud of Azure. But there's no detail about what it is in Azure that is providing the most revenue for Data#3. Are you able to give any insight into that?
Yeah. This is commercially sensitive information, not only from a competitive point of view, but it's also relevant for the relationship and the contractual relationship that we have with Microsoft, where we don't disclose that information, the breakdown of that information. But as you can see from the numbers, it is very significant, and it's a very significant component of our portfolio.
Okay, thank you. Could I ask a second question? Sorry. This is about the board skills matrix. So last year, Data#3 did not publish a board skills matrix, 'cause that information was deemed commercial in confidence. I note that a matrix has been included in this year's annual report, which is a welcome development. However, it adopts the collective skills style, where it shows the skills of the board collectively rather than individual directors. While the ASX does not prescribe a format for the matrix, it will be more useful, it will be more useful for shareholders if the directors' skill levels were disclosed in some way, and at the very least, the rating scale could be explained. It just says there's a low, medium, high rating scale.
There's no explanation about how you get a high for everything except for one category. Is it all directors are high or a majority of directors? So maybe a bit more clarity in that would be useful.
I might ask Mark Gray if he would like to make a comment on this particular one.
Thanks. Thanks, Richard. Am I on? Yeah. So, thanks for the question. As you noted, we didn't have anything in last year's annual report, so, this year's annual report is a step forward. So I suppose it's baby steps. So we wanted to put that out first, and see what reaction there was to that, and then consider what we might do further next year. We're obviously conscious of the fact that, yeah, some companies do put it, director by director. And that's something we'll consider in the lead up to next year's annual report, but this was sort of a first step in the process. Certainly, we gave consideration to that, and we'll consider it further.
I would point out, of course, though, that in the annual report, the CVs and skills and experience of individual directors is outlined, so I mean, you can actually sort of put the two together and, and work it out. But, but I do understand your point, and we'll look at that for next year.
Thank you.
I think it's appropriate just to remind shareholders that Mark has been the chairman of the Remuneration and Nomination Committee as well, so has a particular interest in the topic that you raised. Any other questions from the floor? Peter.
Thank you. Peter Storer, long-term shareholder. Firstly, I'd like to take the opportunity to thank Laurence and Richard for such long service to Data#3. You're leaving an amazing legacy, having taken us from a micro cap to an ASX 200 company, and Brad and Mark have big shoes to fill. My comment is about guidance, and it started as a compliment and has turned into a criticism as to what's happened today. Traditionally, Data#3 has not provided guidance, and I would encourage the board to maintain that position despite likely pressure from institutional investors. The process is fraught with danger, as exemplified by the events of the 22nd of August, when the FY 2023 results were announced.
With a 22% increase in EPS, most shareholders were probably expecting to hear the sounds of champagne corks popping, yet the share price fell 19% by close of trade, as if the company had made an unexpected loss. I was totally perplexed at first, but soon, soon learned that the fall was because the company failed to meet analysts' forecasts, not company forecasts, analysts' forecasts by a few percentage points. I hope those analysts who pressed the sell button have learned a painful lesson and will get a grip on reality.
Thank you very much. We obviously struggled with the experience at the time as well. If... Are there any other questions from the floor? Any comments?
My question is about diversity. So Data#3's gender diversity is above industry average, which is commendable. And last year, the ASA noted that the diversity targets existed and had been exceeded for the entire workforce, the management team, excluding the SLT and the board. But there were no targets for the board and, which was 100% male at the... Sorry, not the board, the SLT, which was 100% male at the time. And I noticed this year that, Cherie O'Riordan has replaced Brem Hill as CFO, which is fantastic. So perhaps it's time to include the SLT in those diversity targets.
I recognize that it's hard with such a small team to have a target, but maybe you could expand the definition of the management team to include the SLT, so it's not an outlier in diversity targets.
... Yeah, look, I'm happy to comment on that. We're conscious of improving diversity, and I think over the last 18 months or so, we have made significant steps in that direction. You mentioned Cherie O'Riordan's appointment, which certainly is a big step forward in terms of the management team. Also, and this occurred early last year, we appointed a new non-executive director in Susan Forrester, and that has obviously improved the gender balance on the board. We'll continue to look at those diversity targets over time, but with a relatively small size of the board and a relatively small size of the management team, as you say. You know, one person either way shifts the percentages pretty dramatically.
I mean, obviously, with Brad moving into the role of CEO and MD in March next year, he will look at the OMT as it stands and look at any potential changes in the composition of that, and we'll discuss that with the board at the appropriate time. And Brad is very conscious of those targets and those diversity perspectives, and we'll bring that to his consideration in informing his own management team. Thank you.
Yes, I actually forgot to mention before a personal thanks to Brem for his assistance over many, many years of answering questions that I've emailed. It's been very, very much appreciated and something that I think all Team Invest members are very happy to have had that relationship, and we've already engaged with Cherie, so I'm sure that will continue.
Thank you very much.
Yeah. Laurence-
Obviously, we agree entirely with your comments.
And I suppose I should add both yourself and Laurence to that, too. I haven't had the interactions with both of you, but clearly, the long-term stability in the company is, I expect, very much what's delivered the results, rather than a chop and change every few years to match some organization's idea of renewal. Anyway, getting to the question, and Laurence talked about large scale integration projects and multi-year extension of them. How does Data#3 cost or price the contracts when they're running over such a long period of time? And there must be unknowns, and there would certainly be increases in Data#3's costs. Thanks.
Laurence?
The short answer is we price them very carefully. Particularly in the construction industry at the moment. And what we've also got in the contracts is the ability to negotiate increases in CPI increases as well. But it is a skill and an experience that we have in-house in terms of understanding how to price those, and our track record has been very favorable. Has been... As our track record is, gives every confidence going forward, we'll continue to get it right.
Because the big contracts are the risks, isn't it?
Yeah. We're very keen to make sure that we're not associated with the same level of risk that the prime contractors are under. And we concentrate very much around the expertise that we provide.
Hayley, are there any questions online?
No, Chairman.
Thank you very much. This item of business does not require a vote of shareholders, so we will now move to the next item of business, which is to adopt the remuneration report for the financial year ended 30th of June 2023. Please note that the vote on this resolution is advisory only and does not bind the directors of the company. However, when reviewing the company's remuneration policies each year, the board considers the level of shareholder support received and matters raised by shareholders. Voting exclusions apply to this resolution as set out in the notice of meeting. As in previous years, targets have been established to produce earnings growth, and the management team's remuneration is structured in line with these targets, with a significant proportion comprised of short-term and long-term incentives.
These are awarded based on the achievement of appropriate financial and operating targets. We measure remuneration every year against industry benchmarks to ensure it is set competitively. During FY 2023, we engaged with an external remuneration consultant to review the remuneration of the directors and senior executives, and we intend to repeat that exercise in FY 2024 to ensure that the structure and levels of remuneration are in line with the market. I would now like to answer questions for this item, invite questions for this item of business. Are there any comments or questions?
... My question may be in view of Laurence's resignation, but it was about the percentage of CEO remuneration at risk. So reading the REM report, it seems that the at-risk components of the CEO remuneration, i.e., the short and long-term incentive schemes, represent roughly 43% of the total. Last year that was 42%. And I recall a comment at last year's AGM that the at-risk component would increase this financial year. I thought it was to 47%, but maybe I heard that wrong. Did I hear that wrong, or has there been a change in policy? I don't recall exactly what we said at the AGM last year. Certainly, it's our intention to increase that at-risk proportion.
That was certainly a recommendation from the consultants last year, and we'll be, as Richard has indicated, we'll be getting further independent advice next year, and I suspect there'll be a further move in that direction. Okay, and a follow-up question, maybe with the handover to the new CEO, might be an opportunity to examine that? Yes. Yeah, that's obviously the situation with a new CEO, MD, starting from 1 March. There will be a package. There's a package which we'll be announcing in the next week or so to the market.
But that will be part of a review during H2 of this financial year, with a view to incorporating that in a remuneration review for directors and for the executive team leading into FY 25. Thank you.
Any other questions from the floor? Any comments from the floor? Hayley, are there any online questions?
No, Chairman.
Thank you. The proxy votes received in relation to this resolution are now showing on the presentation slide in front of us, or behind me, in front of you. It's over there as well. Yeah. Shareholders may wish to cast their votes for Resolution 1 now. The third item of today's business is to approve by ordinary resolution that Mr. Mark Gray, who retires by rotation in accordance with Rule 18.4(b) of the company's existing constitution, and being eligible, be re-elected as a director of the company. I'd like to just say that Mark brings valuable experience and insight to the board, and his qualifications, experience, and responsibilities are summarized in the explanatory statement, which forms part of the notice of meeting. Mark is also, as I've already mentioned, chair of the Remuneration and Nomination Committee.
The directors, with Mark abstaining, recommend that shareholders vote in favor of the resolution. I would now like Mark... to invite Mark to the podium just to briefly address the meeting.
Thank you, Richard. As outlined in the explanatory statement to the AGM notice, I joined the Data#3 board in August 2017, and I've been the chair of the Remuneration and Nomination Committee since 2019. Richard and Laurence have already made reference to the success of the company over a long period of time. Laurence, I think, had some pretty impressive figures over his period as the CEO. Over the six years that I've been on the board, revenue and profits have more than doubled, and the share price has almost quadrupled. I'm proud to have played a small part in guiding the strategic direction and governance of the company in that time. In standing for re-election today, I seek your support to continue to represent you further as a director.
I believe that I have significant value to add to the board, and I'm honored to have been selected by my colleagues to be the chair-elect. I bring to the board a wealth of skills and knowledge in financial, operational, and governance matters stemming from my long experience as a senior executive in both the public and private sectors, and more recently, as a non-executive director with a diverse range of companies. I've spent about half of my working life in government, primarily in the Queensland Treasury Department, where I rose to the position of Under Treasurer or Chief Executive, for those of you who don't understand what Under Treasurer means. Over my years in government, I've sat on many IT project management boards for government agencies.
From a treasury perspective, I've seen the good, the bad, and the ugly, and I bear the scars of rescuing many large ICT procurements that have gone off the rails. So I understand the challenges of these projects, both from vendor and customer perspectives, perspectives which are invaluable around the Data#3 board table. In the commercial world, I was the office head for Macquarie Bank in Queensland in the early 2000s, and subsequently, I've also worked with major accounting firm, BDO. My experience largely spanned corporate finance, M&A transactions, and funding of large-scale infrastructure projects. Since my retirement from executive roles, I've built a portfolio of non-executive roles, which currently includes Sugar Terminals Limited and several other government and community boards. This may sound like a heavy workload, but let me reassure you of my full commitment to the role of Data#3, especially as the new chair-elect.
I will be progressively reducing my involvement on other boards as from next year. Firstly, after 10 years, I'll be stepping down from my role at Queensland Cricket, following the forthcoming 2023-2024 summer season. Thereafter, I'll be stepping down from several other boards during 2024 and 2025 as my current terms of appointment expire. These changes will give me substantial additional capacity. I'd like to say just a few words about my approach to the chair role. As part of the board over the last 6 years, I've been heavily involved in the development and evolution of the company's strategic plan, so I have a strong ownership of and commitment to that plan. I certainly don't see the need for significant change in our strategic plan. Any change is likely to be incremental rather than substantive.
In my experience, problems tend to arise in the execution of a plan, not in the plan itself, and there are certainly areas where we can improve in execution. However, the plan is fundamentally sound, and there is enormous value in continuity, stability, and consistency of our strategies. I certainly intend to uphold the fine legacy that Richard leaves behind as our long-serving Chair, and to honor and respect both the origins and the future of our company. In conclusion, I'd like to congratulate Richard as he steps down from his role as Chair of the Board. He has led the Board with distinction and decorum, always balanced and measured, calm, steady and resolute, and firmly focused on the success of the business.
As Laurence has announced, he will step down next year after a suitable handover period to allow Brad Colledge to settle into his new role as our incoming MD and CEO. Laurence, too, has made an enormous contribution to Data#3's success with his outstanding leadership and management of our business and its people. The changes we have announced are all part of a carefully developed succession plan, evolved over a period of several years, and is to ensure continuity and confidence in the business going forward. In short, the company is in excellent shape to achieve even bigger and better success in the future. Thank you. Back to you, Richard. I think I've taken my stuff away.
Thanks, Mark. So questions on this item of business. First of all, from the floor, any questions or any comments on Mark's re-election to the board of Data#3? Nothing from the floor. Hayley, anything from online?
No, Chairman.
Thank you, Hayley. The proxy votes received in relation to this resolution are now shown on the presentation slide on the screens in front of you. Shareholders may now wish to cast their votes for Resolution Two. I'll now move on to Item Four: Amendments to the Company's Constitution. Item Four of today's business is to approve, by special resolution, that in accordance with Section 136(2) of the Corporations Act, and for all other purposes, Data#3 Limited's constitution be amended in the manner set out in the explanatory statement, effective from the day on which the resolution is passed. Voting exclusions apply to this resolution as laid out in the notice of meeting. This final item of business seeks shareholders' approval to amend the company's constitution by way of a special resolution.
The existing constitution was adopted at the 2014 Annual General Meeting and has not been amended since that time, as there have been a number of developments in law, corporate governance, principles, terminology, and general corporate and commercial practices for ASX-listed companies since that time. The company is proposing to make changes to the constitution through the adoption of an amended version of the constitution, which is available on our website. Please note, we have not proceeded with any changes that would permit the company to convene a virtual-only annual general meeting. Any questions on this item of business? Please.
At last year's AGM, there was a similar resolution that was rejected, 38% against. And I did read the old and new constitution last time, so you'll forgive me, I haven't done it this time. I'm assuming that it's basically the same changes, with the exception of the virtual-only meetings?
Yes, that is-
Building and development in Australia is evolving rapidly, and technology is becoming a critical element of the infrastructure mix. Data#3 is at the forefront of this transformation. We're not just adapting, we're leading the way. Only a few years ago, we saw large developments concentrate on the traditional design and build. Once completed, technology companies were called in to retrofit networks and data centers. In other words, technology was an afterthought. Today, however, technology is at the forefront of design for smart digital buildings and infrastructure. At Data#3, we understand that technology is the backbone of modern developments. We also understand that providing technology solutions on a construction site is very different to working in a carpeted environment. We've been successful in winning the technology phase of major construction projects because we offer more than just technology products.
We offer expertise and a full life cycle of solutions that suit a range of different scenarios. We have a specialist team that have many years of experience working with large developers and prime contractors. Recently, we highlighted our commitment to delivering the digital future of Queensland through the Queen's Wharf project. It's a massive undertaking, and Data#3 is proud to play a crucial role. We're delivering the digital infrastructure that will make this precinct a global icon of innovation and excellence. To give us a little more insight into the technology transformation at Queen's Wharf, here is our lead project manager, Paul O'Regan.
Queen's Wharf is a new world-class integrated resort development that will put Brisbane on the map as a tourism, leisure, and entertainment destination. This development will transform Brisbane CBD, featuring 4 luxury hotels, over 50 bars and restaurants, a sky deck, revitalized heritage buildings, premium retail, entertainment facilities, a pedestrian bridge to South Bank, up to 2,000 residential apartments, and a new world-class casino to replace the existing Treasury Casino. Our network consists of over 60,000 items, including 2,200 switches, 2,000 wireless access points, and 140 communications rooms. Enough fiber and copper to run around Australia, twice.
In closing, Data#3 is excited to bring together the Queen's Wharf project with a full life cycle of solutions that includes consulting, technical expertise, industry partnerships, market-leading technology to help deliver this critical infrastructure project. Furthermore, Data#3 is excited about the opportunities for major infrastructure developments and the growing use of technology to both power the projects and deliver Australia's digital future.