Good morning. Firstly, I'd like to begin by acknowledging the traditional owners of the land on which we meet today, the Gadigal people of the Eora Nation, and pay my respects to the elders, both past and present. I welcome you to the Annual General Meeting of the EVT Limited. I'd also like to extend a warm welcome to our shareholders who are participating through our online platform. I've been advised that there is a quorum present and declare the meeting open. I'd like to also now introduce to you my colleagues. From my right, Mr. Brett Chenoweth, Valerie Davies, David Grant, Jane Hastings, our CEO, David Stone, our Company Secretary, Peter Coates, and Patria Mann. We also have with us today, both in person and online, a number of our senior executives.
Cameron Slapp from KPMG, the group's auditor, is also with us today and will be available to answer questions later. Every effort has been made to ensure this meeting runs smoothly. However, if any technological issues arise and it becomes necessary to provide procedural information in respect of the meeting, updates will be provided on our website and also through the ASX. We'll begin the meeting with an address from myself and our CEO, Jane Hastings. We will then go through the formal proceedings. All resolutions will be decided by poll on the resolution, and the poll voting is now open. You can vote at any time during the meeting, and voting will remain open for 10 minutes following the end of the meeting. Please note that only shareholders, proxy holders, and authorized shareholders' representatives may vote.
I'll now ask our Company Secretary, David Stone, to provide further information regarding the meeting procedures.
Thank you, Alan. For those attending using the online meeting platform, the voting icon will appear on the navigation bar. Once you click on this, the resolutions will appear on your screen. You should see for, against, and abstain options for each resolution. You can change your vote at any time until the poll is closed. For those attending in person, if you are entitled to vote, you will have received a blue voting card. Please ensure that you complete your voting card and hand in your card to one of the representatives from Computershare. If you need any assistance, simply raise your hand and one of the attendants will be with you. As Chairman, Alan holds a number of open proxies. As set out in the notice of meeting, Alan will be voting all available proxies in favor of each item of business.
Maria Dropulic of Computershare Investor Services is acting as the Returning Officer. We will answer questions and comments from shareholders at the end of the meeting after all of the items of business have been presented to you. This includes any questions directed to the auditor. For those attending online, we encourage you to start submitting written questions and comments now. If you have any difficulties in asking a question, please refer to the user guide, which can be accessed through the platform. To ask a verbal question, please follow the instructions on the online meeting platform. For those attending in person, you may ask a question or make a comment if you hold a blue or yellow card. Simply raise your hand when the Chairman starts taking questions, and one of our attendants will be with you.
Please wait for the attendant with the microphone before you begin asking a question, so that shareholders attending online will be able to hear you. To ensure that shareholders as a whole have a reasonable opportunity to be heard at today's meeting, we ask you to limit your questions or comments to two at a time, and then allow others to ask a question. Questions and comments should relate to the items of business under consideration at the AGM. Thank you. I'll now hand the meeting back to Alan.
Thank you, David. The first item of business deals with the financial statements of the Group, the Directors' Report, and the External Auditors' Report for the year ended the 30th of June 2023. These statements and the Directors' Report were approved at a meeting of the Board of the Directors of the Company in August this year, and are contained within the Annual Report. I have pleasure in presenting these statements and reports to the meeting, and in doing so, we would like to make a few comments on the Group's activities. Friends, the 2023 Annual Report, which includes the financial statements for the year ended the 30th of June 2023, was released to shareholders in September this year.
The group's total net profit after tax for the year was AUD 106.5 million, whilst the normalized result after tax, pre-AASB 16, was AUD 62.5 million. The result included record performances for our hotels and Thredbo, and a strong recovery trend for entertainment. These results demonstrate the success of the group's three strategic goals, those being to grow revenue above the market, maximize the value of our assets, and transform the business to mitigate the cost pressures that we are currently facing. Jane will comment further on the group's results, the strategy, and outlook in her address. Friends, the Board was pleased to resume dividend payments during the year, with total dividends for the year of AUD 0.46 per share. This included a AUD 0.12 per share special dividend paid in November last year.
The Board considers dividends in the context of capital requirements for future growth and a desire for continuity of earnings for both shareholders and also the Group. The Board continues to review, assess, and monitor appropriate capital management initiatives also, and desires to maintain a strong balance sheet that will support the further development of key assets and maximize sustainable long-term return to our shareholders. The Group's total cash balance at the 30th of June 2023 was AUD 207 million, with debt outstanding of AUD 469 million, which provides significant headroom in terms of the available liquidity with the Group's core debt facility running at AUD 650 million. This facility was extended for a further three years term in May this year and will mature in May 2026.
The group prides itself on the strength of its balance sheet, which is underpinned by property holdings. The board is pleased with the property strategy and progress against the goal to maximize our assets, and this is reflected in the increase in the overall value of the property portfolio to AUD 2.3 billion at the 30th of June 2023. This is an underlying increase in values of 20% since the previous valuations undertaken in 2021. Further details regarding the property portfolio were released to the ASX in August this year, in conjunction with the release of the final financial results. We are pleased with the progress on both major property developments, being 525 George Street and 458-472 George Street. Jane will provide an update on each development.
As each development milestone is achieved, the board continues to evaluate the strategy to ensure each project will deliver appropriate future returns for our shareholders. In relation to both developments, the board will decide to proceed only if market conditions are favorable and appropriate value will be created. As I've mentioned previously, the board periodically reviews the structure of the group to ensure that the appropriate structure delivers value to shareholders, and a further review of this approach, of the approach to structure, will be conducted prior to the commencement of the major property developments. The group has been guided by the fourth edition of the ASX Corporate Governance Council's Principles and Recommendations during the year, and the corporate governance statement has been published on the group's website.
This statement sets out the corporate governance practices and procedures and should assist shareholders in their understanding and appreciating the importance placed by the Board upon good corporate governance. The Board also focuses on maintaining an appropriate approach to remuneration, and details of this approach are dealt with in the Annual Report. In particular, the Group's policies are designed to, as far as possible, ensure that remuneration packages is reflective of an employee's duties and responsibilities, and structured to enable the Group to attract, motivate, and retain high-caliber executives. The Board is also mindful of the tenure of directors, and last year commenced a Board renewal process, with Brett Chenoweth appointed to the Board in December. A search process is currently underway to identify further potential new candidates.
I and the board acknowledge the outstanding efforts of our CEO, both in responding to the impact of COVID-19 on our operating businesses and the management of our businesses, in this, the recovery phase. I'm confident that the actions of Jane and her team have provided a strong platform for the future. To the rest of the executive team and all group employees, I extend our thanks for their collective and personal efforts. We are proud to have such a depth of experience and recognize the contribution you have made, which has been and will continue to be invaluable as we embrace the opportunities that arise in the future. Friends, I'd like to also thank my co-directors for their efforts during the year, and in particular, thank our 6,500 shareholders for your ongoing support. I may ask Jane to say a few words. Thank you.
Thanks, Alan, and good morning, everyone. Look, we're very pleased with the strong growth that the group delivered in the 2023 financial year, with underlying group revenue up 34% to AUD 1.2 billion, only 7.5% below the pre-COVID year, ended 30 June 2019. Group normalized EBITDA was AUD 187 million, up AUD 111.7 million, excluding prior year German bridging aid income, with record EBITDA results for hotels and Thredbo. All divisions contributed to the strong growth achieved on prior year. The underlying entertainment result was supported by the combination of more films and our premiumization strategy. The release slate was better than prior year. However, there were still fewer films released in FY 2019 due to post-COVID studio production challenges delaying global release dates.
EBITDA for the entertainment group of AUD 76.6 million was up AUD 70.9 on prior year, excluding bridging aid. The hotels and resorts result was a standout, with EBITDA of AUD 87.4 million, a record for the division, after adjusting for the closure for upgrading Rydges Melbourne for much of the year. The Thredbo result was also a record, with the new business model delivering EBITDA of AUD 39.8 million, up AUD 23.5 million on the COVID-impacted prior year, and up AUD 10.8 million on the pre-COVID FY 2019 year. The property EBITDA result was marginally down to AUD 7 million, primarily due to the successful property divestments of Canberra Civic and Double Bay in the prior year. Despite unprecedented cost pressures, each of our businesses continued to find ways to ensure costs were well controlled, while still investing in capabilities to drive future growth.
At a corporate level, underlying unallocated costs were below FY 2019. The cost of compliance continues to grow, and we are also increasing our investment in our sustainability initiatives. Individually significant items represented net income of AUD 41.4 million net of tax, and included the completion of the sale of Rydges North Sydney and Darwin Cinema Centre, and the previously announced settlement with Vue in relation to the CineStar transaction. Normalized PBIT was up 83% on the prior year. Reported net profit was AUD 106.5 million, up AUD 53.2 million on the prior year, and only 1% below the reported net profit for FY 2019.
As Alan mentioned earlier, the independent valuations for the majority of the group's property portfolio were updated this year, with the overall portfolio value increasing to around $2.3 billion and like-for-like valuations up 20% on the previous valuations in 2021. Given we also completed the divestment of $282 million of non-core property assets since 2020, this is a very pleasing result. We have a few other properties that have been identified as non-core assets and we will seek to divest these when market conditions are right and when we can achieve a good outcome. We acquired a number of properties in the year aligned with our strategy to invest in key city locations that are or can be converted into operating assets.
Acquisitions in the year totaled around AUD 60 million and included 54 Cook Street in Auckland, which is our flagship LyLo location, the Limes Hotel in Fortitude Valley, Brisbane, which will be the first LyLo property in Australia, which will open later this year. The Alpenhorn Lodge in Thredbo, which is essential for staff accommodation, and we also increased our ownership interest in Rydges Latimer, Christchurch to 85%. It is important to reinforce that our property portfolio is unique in the fact that we operate the majority of these assets as hotels and Thredbo. The fact that we continue to deliver strong operating results from these properties is a key contributor to the growth and overall value.
The group's net debt at 30 June 2023 was AUD 262.6 million, below pre-COVID net debt levels, and we completed our refinancing process in May with a core facility of AUD 650 million retained for a further three years. The combination of our strategic initiatives, improved trading, and the sale of over AUD 250 million of non-core property assets over the past three years has placed us in the best position to invest for growth and capitalize on opportunities as they arise. Looking at future growth initiatives for hotels, shareholders will be aware that our hotel expansion strategy has evolved over the past few years to provide more opportunities.
We now have a hotel solution that meets the needs of the entire hotel market, from premium to budget experiences, from leveraging one of our own brands, or maintaining an independent brand and leveraging our capabilities. This year, we grew our hotel network by eight hotels, and the results from our hotel strategy have more than offset the divestment property earnings relating to the recent non-core property sales. Hotel network expansion included the 414-room Rydges Hunter Valley Resort, a great win, a great property for the group, and this was achieved in conjunction with an extension of key management agreements for the Rydges World Square and Rydges Sydney Central properties.
As part of our goal to maximize our assets, we have completed the complete transformation of Rydges Melbourne, which sets a new standard for Rydges, including the introduction of 25 apartment rooms and the expansion of our conference facilities by over 1,000 sq m. The QT Gold Coast upgrade of rooms was completed in the first half of 2023, and the conference space upgrade was completed in the second half of the year. The upgraded property has already been recognized at the recent Queensland Hotels Association Awards as the best meeting and events venue in Queensland. We also introduced qt QT, a new cabin accommodation concept in a previously non-revenue generating area of the hotel. Early results from both the QT Gold Coast upgrade and Rydges Melbourne transformation are exceeding expectations, with a growing pipeline of business and excellent customer feedback.
Our entry into the budget lifestyle segment of the market with the development of LyLo is also performing really well. LyLo Auckland opened in December 2022 to rave reviews, and we've seen very strong demand for that property. We will complete the conversion of the Limes Hotel in Brisbane to Australia's first LyLo later this year. During the current financial year, we will also aim to commence an upgrade of the rooms at QT Wellington, convert conference space at Atura Adelaide into a new micro room concept, and continue our planning for QT Canberra and the Rydges Queenstown upgrades. Turning now to future growth initiatives in cinemas. During FY 2023, we upgraded several key cinema locations, including Chermside and Innaloo in Australia and Queensgate in New Zealand, with our new premium cinema concepts, which continue to demonstrate an immediate improvement in average admission price and spend per head.
We're currently planning to upgrade around 40 auditoriums this year. This includes the recently opened IMAX Darling Harbour, Sydney, with 325 seats and a stunning 692 sq m screen, with state-of-the-art dual laser projection, complemented by EVT premium seating concepts. The response to this opening has been very positive. Other exciting new concepts include ScreenX, a 270-degree immersive cinema experience in Robina, and we have one other ScreenX auditorium and two new 4DX auditoriums also planned this financial year. We've made good progress on the Thredbo premiumization growth plan. Construction of a further three mountain biking trails in the Cruiser area was completed in FY 2023, and we're progressing a further three for the summer, which will take the total number of trails to 15.
Upgrades to the snowmaking system include six new fan guns on the Super Trail, which were completed prior to last winter, and we have more snowmaking upgrades planned now. We're aiming to complete the installation of the new Alpine Coaster, a year-round attraction, which is expected to open in time for winter 2024. We have also submitted a development application for a new accommodation subdivision at the Thredbo Golf Course, which will release 19 building lots for up to 186 new beds. This will be the first new accommodation division in Thredbo in 30 years. Of course, we'll still maintain the high-altitude nine-hole golf course, which has been a question that's been asked. Other major developments continue to progress. As previously indicated, we expect the first of our major property developments to be 525 George Street, the building in which we're located today.
This development will be a mixed-use 43-story development with a truly integrated hospitality and entertainment offer, which will be unique to Australia, if not internationally. The development is comprised of prime George Street retail space, a premium Event Cinema, a QT Hotel with around 280 rooms, conference space, a bar, a restaurant, and residential apartments. We were very pleased to achieve the approval of the Stage 2 D.A. application in May 2023, which was a major milestone for this project. In the current financial year, we'll prepare to go to market for construction pricing, which we'll aim to complete by the second quarter of FY 2025. In relation to the 458-472 George Street property development opportunity, we previously secured the D.A. approval for the podium component, which is the extension of the QT Sydney Hotel.
We made the strategic decision to withdraw our Stage one D.A. for a commercial office tower above that podium. Aligned with our property strategy to own operating assets in key city locations, we have instead commenced planning for a hotel tower above the podium and aim to prepare a D.A. submission this financial year. This is a prime location, and we're very pleased with how the hotel concept is progressing. Shareholders approved a change of name of the company at last year's AGM to EVT. As a reminder, E is for entertainment. We have an extensive portfolio of experiences in the eyes of our customers. This includes indoor and outdoor cinemas, restaurants, bars, any of our businesses seeking customer discretionary time and spend. V is for ventures, from hotel management opportunities, media partnerships, to property developments. T is for travel, covering our luxury to budget accommodation options in Thredbo.
Our three strategic goals that guide the group are to grow revenue above market, maximize our assets, and business transformation. You can see from the full year results that we've been able to grow revenue above market, driving higher yields through smarter pricing and utilization of capacity, whilst measuring and acting on customer feedback. We continue to maximize our assets and grow property values through the divestment of non-core properties, acquisitions, and recycling that capital to invest in priority locations and through premiumization upgrades across each division. Business transformation initiatives have assisted in offsetting unprecedented cost increases. For example, wage growth over the last five years in New Zealand and Germany for the minimum wages has been around 40%. Energy costs in Germany were up AUD 8.7 million in financial year 2019, and insurance costs up AUD 10 million on FY 2019.
We've achieved this whilst also delivering material improvements in our culture, community, and environment initiatives. We've made strong progress with our environment initiatives this year, including completing waste audits for each division to set a baseline for waste reduction this financial year, obtaining NABERS ratings for our Australian-owned hotels, and completing our Scope 3 boundary assessment. Pleasingly, despite the growth in our hotel portfolio, our Scope 1 and 2 carbon emissions for FY 2023 remain below our FY 2019 baseline. These initiatives we are working on this year focus on taking appropriate steps to achieve what we can at various levels across each division. I'll now comment on the current year and performance over the first quarter.
On a normalized basis, excluding the impact of AASB 16 leases, the group's EBITDA was AUD 73.4 million, up 4% on the comparable first quarter result and up 37.6% on the first quarter of financial year 2019. This represents the best quarter one EBITDA result in the company's history. The entertainment result was driven by the release of good films, including Barbie and Oppenheimer, driving record results across the Australian, New Zealand, and German cinema circuits, including a record market box office for the month of August. Post-COVID, we've seen three of the top five films of all time released in Australia and New Zealand, which demonstrates that when good films are released, we can deliver record results. Our premiumization strategy continues to deliver growth and average admission price spend per head across each of our territories.
In Australia, average admission price and spend per head were up 27.9% and 57.7%, respectively, on the first quarter of FY 2019, and up 4.5% and 2.8% on the prior comparable quarter. Overall, the Entertainment Group EBITDA was AUD 29.2 million, up AUD 19.1 million on the prior comparable quarter, and up AUD 24.4 million on the first quarter of financial year 2019. I'd like to highlight that this result has been delivered with 12 fewer cinemas as part of our fewer, better strategy. The Hotels division continued to deliver strong results with a first quarter EBITDA record result of AUD 22 million, up 3.3% on the prior comparable quarter, and up 9.2% on the first quarter of FY 2019.
Our hotels continue to outperform their competitor sets. Average room rates have softened marginally from a record high due to discounting on shoulder days, and occupancy has marginally increased, as we're yet to see the full impact of a recovered international market due to airline capacity constraints. The weather conditions at Thredbo this season were the worst we've experienced since 2006. Winter had a late start, and the season continued with warm weather patterns and an unusually high number of days with strong winds that resulted in ski lifts not operating. 50% of snow runs were able to open this year, compared to 100% in the prior year. We then experienced unprecedented warm temperatures in mid-September that resulted in the closure of the resort two weeks earlier than planned.
Despite these conditions, Thredbo delivered EBITDA of AUD 25.3 million, only 15% below the first quarter of financial year 2019, which had significantly more favorable snow conditions. This was still the fifth-best EBITDA result on record. This result, in very difficult circumstances, reinforces the benefit of Thredbo's new operating model and the dedication by the team to deliver experiences and results in all conditions. In closing, I want to touch on the outlook for the financial year. The Entertainment Group's performance will be subject, as always, to the overall appeal and volume of good films released. Assuming the current film release dates hold, we expect financial year 2024 to track ahead of the prior year box office. The resolution of the writers' strike was announced last month, and we anticipate progress will be made between the parties in relation to the actors' strike.
Whilst we believe this will have a greater short-term impact on television and streaming services, it is too soon to predict any significant impact on the future film lineup. Towards the end of the year, CineStar Germany will be impacted by the Euro 2024 football tournament, which Germany is hosting next year. However, the return of local films in the German market has been pleasing and has recovered to pre-COVID levels. We're expecting another record year for our hotels division. Inbound arrival numbers continue to grow, and this trend will only gather pace as airline capacity increases in major international markets, such as China, return. These positive trends will be partially offset by softening in domestic leisure demand, but overall, we expect to see occupancy grow during FY 2024.
Corporate travel continues to grow, with direct in-person contact increasingly seen as a commercial imperative, particularly for small and medium-sized enterprises, which are a key driver of our hotels. In addition, our conference and event inquiry and booking volumes are encouraging and trending well. Looking ahead to the Thredbo summer, demand for mountain biking is expected to be good, again, subject to weather conditions. We have a clear pipeline of premiumization projects to support future growth, and we expect capital expenditure this financial year to be around AUD 165 million, excluding acquisitions. Overall, we expect growth in earnings in FY 2023 and potential for recovery towards FY 2019 levels. I'd now like to take the opportunity to thank Team EVT. The positive results we are experiencing from our growth strategies and transformation initiatives are an absolute credit to you all.
Your commitment to ensuring the best possible outcomes for shareholders and customers, whilst contributing to ensure EVT is a great place to work, is second to none. I am exceptionally proud of our team and know we have the right people and capabilities to achieve our goals. I'd also like to thank all of you for your support and interest in attending, and to those participating online in this morning's meeting. Thank you.
Thank you, Jane. There is no call for a resolution on this matter. I will now move to the resolutions that are being put before us today. The first resolution relates to the adoption of the Remuneration Report, as set out on pages 29-40 of the Annual Report. Shareholders will notice that this report explains the structure of, and the rationale behind, the Group's remuneration policies and the links between remuneration of senior executives and the Group's performance. It also sets out remuneration details for each Director of the Company and for each member of the Group's Senior Executive Team during the year, and makes clear that the basis for remunerating Non-Executive Directors is distinct from the basis of remunerating executives, including the CEO.
Accordingly, I now move that members adopt the Remuneration Report for the year ended 30th of June, 2023. The next item of business concerns the election of Mr. Brett David Chenoweth, who, having been appointed as a Director since the last Annual General Meeting, retires in accordance with the Constitution. Mr. Chenoweth's background and qualifications have been outlined within the explanatory notes to the Notice of Meeting and on page four of the Annual Report. I will now, however, ask Brett just to say a few words before I put the resolution. Brett?
Thanks, Alan. Thank you for having me. I just thought I'd say a couple of things. One is that, look, I've had a career in media, leisure, entertainment, sort of technology businesses, so certainly crossing over everything that EVT does and will continue to do. My observations over the last nine months on board, the quality of the asset base, the unique nature of these brands, the strength of this business has really delighted me, actually, and I feel really proud to be a part of that. Secondly, and really importantly, the quality of the people that I've managed to meet, staff, executives, Jane's team, this board, have been really, really high quality, and I again feel very privileged to serve alongside them. You know, I'm an active user of all of the products.
I've spent a lifetime in media, content creation, you know, film. I spent a lot of time in the hotels. I do a lot of skiing. All of the assets of this business I use as an active user, and again, couldn't be prouder about the asset base this company has. I'm glad to be here, and I look forward to continuing to serve, and thank you for putting me up for election today.
Thanks indeed, Brett. Friends, in putting this resolution, I must say that the period we've already spent with Brett has been a very encouraging one. He's been a great contributor, and I am sure he's going to be a solid Director into the future. I now move that Mr. Brett David Chenoweth, having been appointed as a Director since the last Annual General Meeting, and who retires in accordance with Rule 8.1(c) of the Constitution, and being eligible, is elected a Director of the Company. Fourth item of business concerns the re-election of Valerie Anne Davies, who retires by rotation in accordance with the Constitution. Ms. Davies' background and qualifications have been outlined within the Explanatory Notes to the Notice of Meeting on page five of the Annual Report.
Friends, I now move that Ms. Valerie Anne Davies, being a director who retires by rotation in accordance with Rule 8.1(d) of the Constitution, and being eligible, is re-elected a director of the company. So moved. The next item concerns the renewal of the proportional takeover provisions. These provisions were initially introduced at the AGM in 1991 and are required to be renewed at least every three years. Most recently, in 2020, the provisions now require renewal. Full details are included in the explanatory notes to the notice of meeting. Accordingly, I move that the proportional takeover provisions in the form of Rule six of the Constitution of the company, be renewed for a further period of three years from the date of this meeting. The next item relates to the award of performance rights to our Chief Executive Officer.
The performance plan provides an incentive for executives to achieve above-average performance over the medium- to long-term in the Group's business, which will then be reflected in higher Group earnings and growth rates. The plan enables the Company to grant rights to executives and senior managers, each right representing a right to receive one fully paid ordinary share in the Company. The rights vest and ordinary shares are allocated to the participant upon the satisfaction of the performance criteria as set out in the Notice of Meeting. Your Board considers that incentivized management under a plan to be an important tool in attracting, motivating, and retaining employees and executives.
Accordingly, I now move that approval is given for all purposes, including ASX Listing Rule 10.14, for the award of up to 200,000 performance rights as a long-term incentive award to our Chief Executive Officer, Ms. Jane Megan Hastings, on the terms set out in the explanatory notes to the notice of meeting. So I move. Friends, that was the last item on the notice of meeting. I'd now like to invite questions and comments relative to any of the items of business under consideration at this AGM. You may also ask questions of the auditor about the conduct of the audit, the preparation and content of the auditor's report, the accounting policies adopted by the company in relation to the preparation of the final financial statements, and also the independence of the auditor in relation to his conduct of the audit.
We do have a number of questions online, so I might ask one of those, and then we can come back to questions in the room i f there are any. A question from a shareholder, Stephen Mayne . The question is: The Chairman owns more than AUD 700 million worth of shares in the company. Did he really need a AUD 10 thousand pay rise to AUD 204 thousand in the latest year? Why doesn't he work for free, like James and Kerry Packer did when serving on public company boards? Also, isn't it more tax effective to receive fully franked dividends rather than paying the top rate of personal income tax?
Well, for a start, I'm not James or Kerry Packer. I can assure you of that.
Yes, I'm pleased to comment, Chairman. Look, I'd like to just start by saying the Chairman makes an enormous contribution to the business, which far outweighs the cost of his salary. As a major shareholder, his interests are totally aligned with the business, and I think that's a very important aspect of the company. In comment on the actual dollars, I think there's one pertinent fact that is worth mentioning, and that is that in 2019, pre-COVID, the Chairman's annual salary was AUD 328,000 per year, which was appropriate in terms of the market, conservative in terms of the market. In 2023, it is AUD 204,000 per year, which is still well below it was pre-COVID.
You know, the Chairman is certainly, the salary he's being paid is certainly very conservative.
Thank you, Peter.
We have a question in, a couple of questions in the room.
Yep.
Thank you. My name is Ronan. I'm long-term shareholder. Alan, you're doing a great job. Continue doing a great job. Whatever they're paying you, it's not enough. Just continue doing it. Thank you.
Thank you, Ronan. I do have the desire to have the bulk of my income through dividends to be aligned with people like yourself. Thank you.
Was there another? Yeah, another question in the room?
Thank you. My name's Alex Carrodus. I'm a shareholder. Oh, sorry, through to you, Mr. Chair, to Jane. In relation to Thredbo, how are you set if we have another set of bushfires coming through Thredbo? Because now we're moving into El Niño type weather patterns. I'm just wondering how we're set for that, and also how we're set for if during winter, we have a repeat, an ongoing repeat of the winter effect on the Thredbo asset.
I'm gonna open by saying I am not an expert, but we do have experts in our team focused on exactly both of those things. In relation to the bushfires, of course, we're considering what the future weather patterns look like. There's actually been a lot of rain in the Thredbo area. It's actually quite damp. A lot of the dryness is further out, and that is part of the prevention strategy as we head into that season. There, you know, we still have quite a lot of surrounding damage from the original bushfires, which acts as a break as well.
I'm very happy to connect you with someone who is our expert on that, but we do have teams working on making sure that we are kind of looking after the environment as much as possible, naturally, in order to protect from these things coming ahead. From a winter perspective, look, we look back at every single season for the last 10, 15 years and what it looked like, and I think I alluded to in my speech that this season was like 2006. We're seeing quite a consistent trend of you hit that low season, it comes back up, it builds back up. There's quite a seasonal trend which is happening at Thredbo. Some of our mitigation strategies include our snowmaking, which we're investing more in.
From a wind conditions perspective, the gondola's gone in. We've got a chairlift replacement plan, et cetera, over a period of time. We have a number of things that we can do to make sure that we are able to operate in warmer environments. I think that's the message there. Alan, you're also a long-term Thredbo-
Well-
Do you want to comment on that?
No, I support those comments, Jane, and I think in terms of the people we do get through in winter, the initiatives that the team has undertaken to improve yield, to improve customer experience.
Mm.
Have all gone a long way to sustaining our earnings. I think we should not lose sight of the fact that Thredbo is not just a ski resort.
Mm.
There are a couple of other aspects to the company. I mean, when I first got involved in this business, I remember Thredbo used to virtually close in summer. Now we've got sensational summer revenue that's been brought about by management's initiatives. It evens out the approach. We have a significant real estate income.
Mm
Further real estate development to come on board in the coming years to ensure a year-round resort is really what we have.
Thank you. Second question, if I may. Can you outline if you have a expansion strategy overseas, you know, across the various business units?
I can answer that. Yeah. In hotels, yes. You know, we believe there's still more growth for us because now we've expanded our hotel strategy from budget to luxury. We can see still very good growth for us in Australia and New Zealand, but we are looking to assess offshore markets where we could see our brands moving to. We're really in the phase of exploring what those markets are and learning more about those markets and brands. We would like to see in the future our brands, our hotel brands, offshore.
Yeah. Beyond New Zealand.
Well, I call New Zealand Australia.
Well, yeah.
Yeah, beyond Australia and New Zealand, I should say. We're keeping our options open at this point in time because our brands can relate differently in each of the markets. But, you know, we are tending to look at English-speaking markets as the priority focus.
We do have an online question regarding the resolution regarding Valerie Davies' re-election again from Stephen Mayne . Question is: It's very unusual seeing independent female directors serving for more than 10 years, and far more common for male directors to resist retirement. Having served for 12 years since 2011, wouldn't it have made more sense for Valerie Davies to retire? As the longer you serve, the more you become a prisoner of your past decisions, undermining your independence. Could the Chair and Valerie both comment as to whether this will be her last three-year term, and whether she intends to serve a full term?
Well, I'll make the opening comment and say that I don't believe there is any difference between the male and the female directors on this board, nor should there be any difference between the male and female directors on any board. Valerie's been a valuable contributor and continues to be. I really do not accept the premise that mere tenure on a board compromises anyone's independence. I think if anything, the corporate history over a number of years can make directors more penetrating in their questions, more understanding of the businesses, and in fact, more valuable to the company. Valerie's next re-election will be looked at at the time it is due. At this stage, I certainly don't see any reason if we, Valerie willing, we would not be supporting her re-election.
Thank you, Alan. I'd like to say a few words as well, if I may. It's always been a privilege to serve the board of EVT, and no more so than at this time of transformation, as Jane described so eloquently in her address. I've always valued being an independent director. I've had a long directorship career, and I think the longer you serve, the more you learn, and you're never ready for the next situation that comes out of the blue that you haven't experienced before. I believe that independence is critical. I've served this board diligently and faithfully, I believe, and I serve at the will of the shareholders and also at the will of my board, my Chair, and my colleagues. Again, just to reiterate that it is a privilege, and I thank you for your words, Alan.
Thanks, Valerie.
I've got a question in the room.
Good morning. Sorry if I arrived late, so if it's been covered already. Just a question, Charlie Kingston on behalf of Ocean Capital. Just a question on how the Board views the return on assets of the company now. I think the market value that you think the property assets are worth is around about AUD 2.3 billion. I believe the target going back to 2019 for your earnings on a pre-tax, pre-interest basis was around about AUD 160 million. That's therefore about a 7% return. Now, I appreciate, you know, there are some operating assets. There are some leasehold assets. You manage some hotels.
It's a very simplistic way of looking at it, but I suppose if you look at, you know, some REITs, some property, just passive landlord collecting assets, I think, Jane, you described them recently on a call as not zombies, but ghost property owners. They're in no position to actually increase the value of those assets or get a better return out of those assets. If you look around some of the property, just passive rent collectors, it's very easy today to get a sort of a 6% or 7% yield on those assets. Now, given that EVT owns most of your assets, and again, I appreciate some of them aren't necessarily income producing yet, but again, some aren't reflected in that AUD 2.3 billion figure.
Just trying to get a sense of whether or not EVT equity owners are getting paid for that additional risk of owning and operating those assets, given that if we were just a passive rent collector, you know, a lot of these assets are getting 6%-7% yield. If you go back to your original target of 2019, the return on those assets is circa 7%. I just wanna understand the Board's, if there is a target return on your assets, which I would hope that is well and above some sort of passive rent collectors, given that we are taking a lot of additional risk with owning and operating some of these assets. Thank you.
Sorry, we're just gonna try and summarize your question because it's harder to hear off the microphone. Dave, do you want to summarize?
Yeah, look, I think the question, just to summarise the question, I think you referenced profit before interest and tax circa $150 million pre-COVID. We've now got $2.3 billion at fair value of property, which we disclosed at 30 June 2023. I think the question is, are shareholders getting appropriately paid to have the risk of the property ownership?
Yeah.
Does that capture it?
Is there a targeted return on those assets that the board hopes to achieve, given that, clearly, it's not reflected in the share price? Again, the share price is volatile. You know, if you're a passive rent collector, it's pretty easy to get a 6%-7% return without taking that operating risk. Just trying to understand if the board has an internal target, sort of through the cycle, given that you think the properties are worth AUD 2.3 billion, what's the sort of return on those assets that we should be expecting as an equity owner?
Yes, look, we do not evaluate the total portfolio on a return basis. We do, however, look at individual assets, and we look at the return being achieved from those particular properties. Of course, the key driver in our portfolio has been the ownership of hotels. Over recent years, we've suffered greatly in hotels and also in cinemas, so the return has not been very hot. However, with the work that we can demonstrate now in terms of property improvements, hotel refurbishments, we will be able to significantly improve the overall earnings out of those assets. A classic case is the Rydges Melbourne, and also a further example is QT Gold Coast. We have to spend the money to improve the properties to get the yield back.
Okay, just looking at the share price, I think it's, call it AUD 10.50, whereabouts we're trading. I think the pre-COVID distribution was around about AUD 0.50 odd. Please correct me if I'm wrong, but, you know, that's, call it circa 5% odd yield if we get back to those levels. We are taking considerably more risk by operating and owning those assets. I'm just trying to understand if you think, you know, if you own a passive REIT where you don't take any of those risks because, you know, a lot of the thesis of owning EVT is there's a lot of assets there. I think that if you accept the market value, it's circa AUD 12.80 per share.
Just trying to get a sense of if all goes to plan and we're operating those assets to full potential, what's the sort of target return that the board hopes to achieve off those assets? You know, should it be a 10% return, given we're owning and operating? Should it be a 12%? Just trying to get a sense of, or making sure that the equity owners through the cycle, I appreciate you've been through a lot, are going to get paid for that extra risk, please.
Yes. Look, as I mentioned, we don't have an overall target. I believe that the ownership of assets is good overall for the shareholders and for the company, particularly where those assets are disposed in the hotel business. I think, look, we take your comments on board, and I assure you that we will have a discussion down the track along these lines. Company structure is an issue that has been on the agenda for the board for a couple of years. Whether there is an increase in overall benefit to the shareholders of some restructuring of assets, that's an ongoing evaluation that we're undertaking, and I can't comment on that at this stage.
That's fine. Just one more, just be interested as to the board's views on free cash flow because obviously hotels, you know, they're a very capital-intensive business. You know, I think this year you're expecting to spend $160 million on CapEx. Last year, I think it was $190. I appreciate there might be some asset purchases within that but obviously there's a lot of CapEx that needs to go into these assets to essentially stand still. And I know you don't split out the maintenance versus growth and again, it's a very vague categorisation. Some would say that you need to spend certain amounts of money just to stand still, otherwise you go backwards.
Off the top of my head, again, sorry, I don't have the numbers in front of me, but I think last year, the operating cash was about AUD 240 million. If you take off the AUD 120 of lease payments, I think roughly. Apologies if those numbers are incorrect, but so you've got AUD 120 million of operating cash flow coming out of those assets. If you then say you've got to spend, you know, AUD 190, and some has gone into new assets, but it doesn't seem like there's much free cash flow left post making all those investments. So I'm just hoping to get the board's thoughts on sort of what the true free cash flow that this company can deliver, sort of through the cycle, you know, on a standstill basis.
We're not going to go into the detail, quite frankly, of, you know, what our evaluation of true free cash flow is. We've presented the accounts to you. You've obviously done your homework, and you can see what the picture is at this stage. We raised how many million in property sales, Jane? Just over-
280.
AUD 210 million in real estate sales. We have more real estate to dispose of, as Jane mentioned in her report. Plus, we have some very, very profitable high cash flow businesses, not least of which is Thredbo. We're confident about being able to maintain our commitment to capital expenditure in the future.
I guess, I think, just, it's important to highlight that our premiumization strategy is very targeted, and when we're investing, we're getting a good uplift. We're not investing to stand still. I think that's, and you've seen that in our numbers. A good example of that would be that, you know, admissions are back in quarter 1 versus 2019, but EBITDA is well ahead, and we've got substantially less cinemas. That's part of that, is investment in premiumization and bringing it up to standard and parts of pricing strategies, et cetera. There is no project that comes to the Board that does not have a growth aspect to it. That's also part of our maximizing assets.
In Melbourne, the 25 apartments, the dusting off the back of house and turning it into revenue-generating conference space. We're looking at growth every time we're looking at upgrading assets. When we look at an asset and go, "You know what? We don't believe this is right for us," thus the cinemas we've divested, we're out. We're being very targeted, and we do look for growth in every Australian dollar that we are spending. It's not just maintaining to stay still.
Thank you.
We've got another question online from Stephen Mayne : The auditor, Cameron Slapp, notes in the key audit matters that property valuations are a major issue. Why do we claim that our property portfolio has appreciated by 20% for the year to AUD 2.3 billion without booking this to profit or disclosing the individual valuations? If even Harvey Norman is now disclosing the specific valuations of its top 20 properties, will we commit to do this in next year's annual report in order to provide maximum transparency to investors? Why release a 30-page property compendium like a property trust without disclosing the valuation data? We need more than pretty pictures. Could the auditor and Chair please address this issue?
Cameron?
Thanks, Chairman. Thanks for the question, Mr. Mayne. Other than one investment property, the remainder of the owned properties in the group are operating sites, as Jane explained. That means they're classified as property, plant, and equipment, and they're carried at the lower of cost or recoverable value. You don't revalue them up, period in, period out, like you would an investment property, and you also don't have to disclose all those details that were suggested in the question, unless they're an investment property. I believe that answers the question.
Okay. Thanks, Cameron. As far as the issue of valuation of all other properties, we'll just take the question on board and discuss the appropriateness or otherwise of such disclosure. Thank you.
We've got an answer, Greg.
Oh, hi. I would like to point out, though, that in that, as Stephen mentions, there's a glossy document with all the photos of the properties. If you go beyond the photos on the last page, there's actually quite an extensive table, and I think it's probably 14 years since Stephen asked the last question, and he would have known in that 14 years, there's been considerable uplift of the information we've provided. On that table at the back of that document, I think we've got about 35 properties, and we've split it out into 12 subcategories geographically. You can sort of see what the property values are in CBD Melbourne, CBD Sydney, Regional New South Wales, Regional Victoria, in Germany, Regional Germany. There's four properties in Germany.
I'm not really sure what Stephen will get out of knowing what the four properties are worth in Stade, Mainz, Düsseldorf, and Neumünster. But I do think that you can derive a lot of information if you go beyond the photos. Thanks.
Thank you, Greg.
Mr. Chairman.
Sorry.
Hi, it's Simon Conn from Investors Mutual. I'm a personal shareholder and been a long-standing institutional investor as well. I feel like I'm at a REIT AGM more than an entertainment group AGM. Obviously, a lot of the discussion about the structure of the group, Alan, I'm pleased to see that the board's called out of the AGM, you're talking at the structure. Can you just please give us some clarity on what the options might be in terms of that outcome and what the likely timing of the conclusion of that is?
Clearly, the strong asset backing of this business puts it in good stead and should only be underpinning for the share price. Yeah, I would argue that if the share market trades the stock at AUD 10, it's not clearly seeing the value. Really, I think the structure at this point, you know, it is a high priority to be looked at. You know, and I encourage the board in their purveyance of that, to understand that the share market needs greater clarity on the asset backing. I understand, you know, that the business operates a large property asset backing. There is the potential for passive income, potentially to be streamed to shareholders and not taxed.
The company's accumulated a huge level of franking credits, which may be obviated in the future and streamed directly to shareholders in a more appropriate structure. I'd also like to, you know, applaud the board and Alan in particular, for standing against the banks through COVID and not having to do a diluted capital raising. I think the asset backing of the business and your, you know, the strong position you put the business in through that period and staring them down and selling those assets through that period highlighted the value of the property of the business. The need, no need for doing a capital raising through COVID was, you know, something that's really, I think, rerated, to help rerate the stock.
Look, it's a double-barreled question, but I really would just understand the options that are available for coming out of this strategic review of the property.
Okay. Well, thank you for your comments regarding the financial management. Jane and Greg did do a good job with our banks, and we're in a very solid position. Concerning capital strategies, it is too soon to make any commitment publicly on where we might go. I would make the comment that we see a very, very synergistic benefit of a company such as ours, both owning and operating hotel businesses. Our focus for any divestment or any expansion or development of other assets would predominantly be along the lines of assets that we are not actually operating. It's too soon to go into any details.
Yeah, we do have another question online from a shareholder, Mr. James Lampoglie. On the 13th of September 2023, The Australian newspaper broke a story that there was a consideration of a breakup to release value. Is there any color you can add to this today? Along similar lines to Simon's question, but would you like to comment further?
There is no validity in that.
Yeah.
I think you're talking about the article-
Yeah.
In The Australian, there was no validity in that, except to the degree that the board has, under continual review, the issue of property and real estate disbursements.
Another question from the same shareholder online. Has your outlook for the macro environment changed since the Israeli crisis began? Are you more pessimistic in outlook, given geopolitics, and more importantly, the rate rises in Australia and high household debt?
Certainly, you know, we see the significant possible impact on rate rises. Regarding the current conflict, we've seen the detriment of the Russian invasion of Ukraine, where our electricity costs increased some 11-fold, I think. It's too early to tell, but we do see the possibility of some impact maybe on the travel industry. Yes, watch this space. Jane?
From a consumer discretionary spend, you know, we take our advice from external experts, the likes of Quantium, CBA, et cetera. What we're seeing is that the discretionary spend share of wallet is relatively flat on prior year, and people are making different choices. Fortunate for us, at this point in time, and it's what we've always seen at times like these in the past, for entertainment choices, cinemas typically benefit in times like these, because it is a more affordable entertainment option for a family or a couple to spend a night out. The data that we're seeing to date is supporting that, but we keep a close eye on it.
I think there is also a theory that there are more people spending about the same level as prior year with immigration returning to Australia, which is helping to underpin that. In our metrics, as I've highlighted to you today, we're seeing growth. We keep a close eye based on external sources, and we'll adjust as necessary. At this point in time, we may even be benefiting from the pressure on the consumer wallet and the household across our entertainment and leisure businesses.
Another online. Oh, sorry, we've got a question in the room.
My name's Ken Barry, retail shareholder. I have two questions, one historical. I guess I was just curious as to the reason why the North Sydney property was considered to be non-core. Secondly, I'm just interested in how you view, going into the medium term, the mix of revenue between the three different operating businesses, whether you think that will be the same or there's gonna be significant change to that.
I think that.
Thank you.
The first, Rydges North Sydney being non-core, is because it was in North Sydney, and, as we've highlighted in our major development projects, we have the opportunity for two prime key city assets. That was the choice on the North Sydney property. Mind you, we have maintained the North Sydney property as a management agreement, so it stays within our portfolio, and we still operate that hotel. That was beneficial for us in terms of capital management. The other... Sorry, the other...
The other question was on the mix of revenue from the different divisions and whether that will change going forward.
I think that, look, the mix of revenue from-- We're always going to be weather dependent at Thredbo, even though in worse conditions, we are delivering much higher returns. We're always going to be film dependent in cinema, even though with less films and fewer admissions, we're delivering much higher returns. And we do see continued growth in hotels. We would like to see our hotel segment expand further. I think my answer, and I have a few of our key operators in the room, is every segment needs to grow.
I might just add, in relation to North Sydney, one of the proposals we considered for that property was a refurbishment.
Mm.
Total refurbishment, rebuild. I think the figures on that were about AUD 55 million-AUD 60 million, higher, AUD 70 million, AUD 70+ million versus the possibility of selling that property. For what did we get for that? AUD 74 million.
Mm.
That's about an AUD 140 million turnaround in our cash flow. Coming back to what the gentleman was asking previously, I think it's those initiatives where we look at where we put our money and then determine what real estate is excess, is how we're gonna manage our cash going forward.
You have a few more questions online. Another question from Stephen Mayne : Since private equity firm BGH took over Village Roadshow, have we noticed any difference in the competitive environment in the cinema business? Also, what's the point of staying in the German cinema market? Has our German adventure added net value to shareholders over the years? Have we ever considered selling this business? Given the disruption from streaming services, shouldn't we have exited the cinema business years ago?
I think the best way to answer that is we should probably have a meeting to bring him up to date and what we considered across all of those businesses, which we'd welcome, no problem.
The VRL?
The BGH, have we seen a difference in the operating environment?
The competitive environment.
No. I think I need to highlight to shareholders that we are the operators of the large majority.
Yeah
of the joint venture assets. BGH or Village operate the cinemas within Victoria, and we basically operate the joint venture everywhere else across Australia. No, there's been no
Yeah
Change in the competitive market dynamics with that ownership change.
Have we ever considered selling Germany?
Have we considered selling Germany?
Yes, we've considered selling Germany, and we were well down the track of a very successful transaction until COVID hit us on that. We have outlined on a number of occasions that Germany is a non-core asset, and when we see market recovery in that segment, we would look to divest that at the right time for a good price.
The impact of streaming on cinema?
The impact of streaming on cinema, I think that pre-COVID, that was probably the greatest theme that we were tackling or battling out there. COVID happened, cinemas closed, streaming had the time to shine. I think that's the best thing that happened to the cinema industry, because the time to shine proved that the returns from those models were not enough to deliver what the creators of that content required. Cinemas reopened. We've had three of the top five films of all time. We're returning better returns from every customer that walks through the door, and we have probably more confidence in the lineup of films coming to cinemas than ever before because it's simple.
If you're a creator of content, you need to make as much money from every channel to offset that and get into green and cinema is a very big part of that mix. And so we've seen all studios, and you can read that publicly as well yourselves, but we've seen all studios return to cinema. They even held back big films to wait for cinema doors to open. So streaming is complementary. Our top cinema goers are the highest streamers of content, as well as the most frequent cinema customers. They are complementary. One is a stay at home decision and one is I've decided to go out. So we're quite happy with how that business is progressing.
Another question from Stephen Mayne . Alan Rydge is now into his 70s and has been Chairman of our company since 1978. I think it's 1980. Like the late Paul Ramsay, Alan is a billionaire who doesn't have any children. Could Alan comment on the leadership transition plans and ownership structure he has in mind for his controlling stake in EVT over the longer term? Is the Ramsay Health Care situation something we are likely to see at EVT?
Look, the comments I'd make would be related directly to this board. I have great faith in the board and my colleagues sitting around me. I believe when succession planning for myself is undertaken, which is undertaken by companies, listed companies all across Australia all the time, I have confidence that there will be an appropriate structure put forward by the board and appropriate decisions made to ensure continuity. Thank you.
Two more questions online from Stephen Mayne . First one is: After Soul Pattinson took over Milton in 2021, could Chair Alan Rydge comment on whether we explored an all-scrip merger with Carlton Investments? Wouldn't that make sense? Also, why do both Soul Pattinson and the Charles Goode Foundation appear in the Carlton Investments top 20 shareholders list? Is there some sort of clubby arrangement between the leadership of the major listed investment companies, whereby they invest in each other's vehicle?
The question relating to a merger, no, we have not considered that at all. Questions related to Carlton Investments are best put to that particular board, and I'll leave it at that.
One more from Stephen Mayne : Given the interesting discussions.
Sorry.
Sorry.
I could just add, there was a word clubby, I think, used. I don't indulge in that approach.
Given the interesting discussions across a range of topics today, could the Chair undertake to make an archived copy of the webcast, plus a full transcript of proceedings available on the company's website? The likes of Nine, AGL, ASX, ANZ, Domino's, and Lendlease all produced their first AGM transcripts in 2021. Will you follow suit today? This is something IAG has been doing since 2003. Shareholders who did not attend live should not miss out on the benefit of accessing today's interesting debate. Also, many thanks for offering a hybrid AGM, and will you keep doing this to maximize retail shareholder participation?
Look, thank you for the question. We will take that on board as a Board and give consideration to the suggestion.
No more questions online.
Any more questions from the floor? Right. Firstly, I'd like to thank Jane and the Executive Team for their efforts during the year. To you, the shareholders, I again thank you for your ongoing support. That would conclude the business of the meeting. Voting will conclude in 10 minutes' time, and the formal results will be announced to the ASX and on our website later today. During this period of time, we will now present a video showcasing our strategic initiatives across the Entertainment, Ventures, and Travel of our company. Thank you very much indeed for your attendance, and I declare the meeting closed, subject to the finalization of the polls. Thank you.