land on which we're meeting today, the Gadigal people of the Eora Nation, and pay my respects to elders, both past and present. I welcome you to this meeting of shareholders of EVT. I would also like to extend a warm welcome to our shareholders who are participating through our online meeting platform. There is a quorum present, and I formally declare the meeting open. I'd like to introduce those of my colleagues who are on stage, starting from my right. Mr. Peter Coates, Valerie Davies, Mr. Brett Chenoweth, Jane Hastings, our CEO, Mr. David Stone, the Director of Strategy and Risk, and also company secretary, Mr. David Grant, and Jenelle Webster. Friends, we also have with us today, and I'd like to introduce Madelaine Nott. Madeline, if you'd stand up. Madeline was appointed company secretary in May this year, and I'd like to welcome her to that role.
We also have with us today, in both person and online, a number of senior executives. Michelle Jobson from KPMG, the group's auditors, is also with us today and will be available to take questions later. Although every effort has been made to ensure the meeting runs smoothly, if any technological issues arise and it becomes necessary to provide procedural information in respect to the meeting, updates will be provided on our website and through the ASX. All resolutions will be decided by a poll. Voting on the resolutions is now open, and you can vote any time during the meeting, and voting will remain open for 10 minutes following the conclusion of the meeting. Please note that only shareholders, proxy holders, and authorized shareholder representatives may vote. I'll now ask our company secretary, David Stone, to provide further information regarding the meeting procedures.
Thank you, Alan. The AGM is being conducted as a hybrid meeting. This means shareholders may participate in person or through our online meeting platform. 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're entitled to vote, you will have received a blue voting card. Please ensure that you complete your voting card and hand your card to one of the representatives from Computershare. If you need 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 this AGM. Thank you. I will now hand the meeting back to Alan.
Well, thank you, David. The first item of business deals with the financial statements of the group, the Director's report, the sustainability report, and the external auditor's report for the year ended June 30, 2026. The financial statements, the Director's report, and the sustainability report were all approved at a meeting of the Board of 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, would like to make a few comments on the group's results and activities. The 2026 annual report, which includes the financial statements for the year ended June 2026, was released to shareholders in September 2026. The normalized result after tax was AUD 54.3 million.
This was up AUD 15.9 million on the previous year, whilst the reported net profit after tax for the year was AUD 50.7 million, an increase of AUD 17.3 million. Group normalized revenue was AUD 1.3 billion, up 6.3%, and group normalized EBITDA was AUD 174.4 million, up AUD 13.6 million, with every operating division contributing to this growth. The results included another record performance for our hotel division, with growth in Thredbo and also an entertainment result that demonstrated the full effects of management strategy of driving exceptional operating levels, with group admissions up 3.6%, whilst group EBITDA was up 45.8%. Jane Hastings will comment further on the group's results, strategies, and outlook in her address. Your board was pleased to increase dividend payments during the year with a total dividend for the year of AUD 0.41 per share, fully franked. This was an increase of AUD 0.03 per share when compared to the prior year.
This included a fully franked dividend of AUD 0.23 per share, which was paid in September. The board considers dividends in the context of capital requirements for the future growth, and a desire for a continuity of earnings for both shareholders and also the group. The group prides itself on the strength of its balance sheet, which is underpinned by property holdings. The group's net debt at June 30 was AUD 476.1 million, comprising a total cash balance of AUD 64.9 million, with total bank debt outstanding of AUD 541 million. In March, the group completed the refinancing of its core debt facility for a further three years. This resulted in an overall limit of AUD 750 million being available, and I now thank our banking partners for their continued and ongoing support.
Following a detailed review by management and the board, the highest and best use of the group's property assets, we announced in August a capital recycling program, targeting a further AUD 800 million of non-core property divestments over the next three years. This includes 525 George Street and also The George and Market Street precincts. As I said last year, we will only divest assets if we can achieve the best returns for shareholders. That position has not changed. The program will be conducted on a value-first basis and will only proceed where value, timing, and structure are appropriate. We have a strong balance sheet, and there are no obligations to sell assets. Proceeds will be recycled into the hotel group and growth. We will reduce debt, and the board will continue to consider the potential for any special dividends in recognition of the asset sales.
The management team, supported by the board, continues to recognize the opportunity for growth in hotels through recycling capital, future acquisitions, and with investment in platforms for growth of the group's asset-light hotel management business. The group and its shareholders have again seen the benefit of this focus with another record hotels growth in 2026, and with EVT now the second-largest hotel operator in Australia and New Zealand. The board was also pleased to see the acquisition of Pro-invest Hotels completed in December. Connect Hospitality was established as a second pillar for the hotel growth. It has to date performed at the upper end of the earnings range indicated at the time of acquisition. We continue to review and assess and monitor appropriate capital management initiatives and strategies. As I've noted previously, the group had a material level of asset upgrades to catch up on.
Management strategy has to be to limit catch-up capital expenditure, where shareholders would not earn a reasonable return. This would be achieved by divesting of those assets, targeting cinema premiumization and prioritizing key hotel upgrades, including the current projects at QT Queenstown and LyLo on the Gold Coast. This approach has ensured that capital is being allocated effectively and efficiently. Shareholders should note that the independent valuation of Thredbo decreased from AUD 292 million to AUD 143 million on the last revaluation cycle. The previous valuation followed the outstanding 2022 winter season, and subsequent winters have not yet had the conditions to replicate that performance. The valuation also reflects the near-term capital investment requirements in chairlifts and snowmaking. This is necessary to ensure alliance with compliance obligations and to protect earnings over the remainder of the lease.
This means more of our capital will go to Thredbo's infrastructure in the near term, because season reliability underpins the long-term value of the asset. This, however, does not mean we can't deliver hotel growth. Part of our hotel growth strategy is asset-light, with new hotels delivered through management and franchise agreements with third-party hotel owners. In August, we announced the appointment of Rothschild & Co to independently assess management's recommendations on the group's future structure. An independent committee of the board, comprising of Mr. Brett Chenoweth, Mr. Peter Coates, and David Grant, has been formed to oversee this process. Friends, I'd like to reiterate the CEO's previous statement that the review has been considering all options that could deliver increased value for shareholders. We are pleased with the progress being made towards completing this review within the financial year 2027.
This has previously been communicated, and we will update the market as is required. As a progress update, we can confirm that hotels remain the group's priority for growth and capital deployment. This is consistent with management's long-term strategy. While cinemas and Thredbo are not strategic priorities of the group, they remain high-quality businesses with strong market positions. While the review is ongoing, we will continue to invest in cinema and Thredbo. In cinema, that means targeted premiumization, where we can deliver a solid return on invested capital. In Thredbo, that means investment required to maintain the quality and the compliance of the resort. Brett Chenoweth, as Chair of the independent committee, will take shareholders' questions on the group structure later in the meeting.
We have been guided by the ASX Corporate Governance Council's principles and recommendations during the year, as we have in the past, 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 understanding and appreciating the importance that the board places on good corporate governance. We also focus on maintaining an appropriate approach to remuneration, and details of this are dealt with in the annual report. In particular, the group's policies are designed to, as far as possible, ensure that remuneration packaging is reflective of an employee's duties and responsibilities, and to enable the group to motivate, retain high-quality executives. In assessing the group's remuneration arrangements, the board is mindful of the challenges and complexity of our group. Three operating divisions, substantial property portfolio, and multiple geographies.
We have commissioned external benchmarking for the CEO and key executives based on relevant and appropriate peer companies and have set remuneration at an appropriate level per the peer group. As part of our board renewal process, Brett Chenoweth has recently been appointed as our new Lead Independent Director and Chairman of the Nomination and Remuneration Committee. He replaces Peter Coates, and I would like to thank Peter for his 13 years in these various capacities, where he has made a tremendous contribution. Peter will continue to serve as an Independent Director. Furthermore, I and the board acknowledge the outstanding efforts of the CEO, and I am confident of the actions of Jane and her team in providing a strong platform for the future. To the rest of the executive team and to all group employees, I extend our thanks and appreciation. Your collective and personal efforts are appreciated.
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 in the future. Friends, I would also like to thank my co-directors for their efforts during the year and, in particular, thank our 6,200 shareholders for your ongoing support. Friends, I will now ask Jane to present her address. Thank you, Jane.
Thanks, Alan, and good morning, everyone. FY 2026 was a year of earnings growth and strategic progress, guided in every division by three goals: grow revenue above market, maximize assets, and transform the business. Group normalized revenue was AUD 1.3 billion, up 6.3% on prior year, with every division growing. Hotels up 5.1%, Thredbo up 10.6%, and Entertainment up 7.7%. Group normalized EBITDA was AUD 174.4 million, up AUD 13.6 million or 8.4%, with growth again across every operating division. Reported net profit after tax was AUD 50.7 million, up AUD 17.3 million or 51.9%. We delivered this against quite a mixed backdrop. Hotels grew solidly for the first eight months before the Middle East crisis created more challenging conditions in the fourth quarter. Entertainment carried a weaker first-half film lineup, followed by a materially stronger film lineup in the second half.
And whilst Thredbo enjoyed a much better winter 2025, we had a slow start to the winter 2026 season. In each case, our strategies mitigated the impact, and we continued to grow share. Despite continued cost headwinds, underlying costs remain very well managed and only marginally above pre-COVID levels. In terms of maximizing assets, our property portfolio was independently valued at around AUD 2.25 billion at June 30. Updated independent valuations were obtained for Thredbo and for three hotels, being Atura Adelaide Airport, LyLo Auckland, and LyLo Brisbane. All three hotel values increased following strong operating performance and strategic investment. As Alan mentioned, the independent valuation of Thredbo decreased from AUD 292 million to AUD 143 million. The previous valuation was prepared following the outstanding 2022 winter season, and subsequent winters just have not yet had the conditions to replicate that performance.
The valuation also reflects some near-term capital investment required in chairlifts, snowmaking, and infrastructure to meet compliance requirements and continue to offer a premium year-round alpine resort. In August, we announced a capital recycling program targeting approximately AUD 800 million of non-core property divestments over three years on a value-first basis. Since then, we have sold the Arawa Park Hotel in Rotorua for NZ$18 million, AUD 5 million above book value, and LyLo Fremantle for AUD 8 million, which was in line with book value, where we've also secured a LyLo management agreement. Where we sell hotels, we seek management agreements as we have for LyLo Fremantle, Rydges North Sydney, and Rydges Geelong. We are preparing to take further assets to market within the program.
CBRE continues to be in discussions with interested parties on 525 George Street, and we're preparing to take The George and Market Street precinct to market later in 2027, subject to market conditions. That precinct includes QT Sydney, the State Theatre, the Gowings retail property, our head office, and the development sites of 458-472 George Street. As Alan's mentioned, proceeds from these divestments will support future hotels growth, pay down debt, and we will consider special dividends. In terms of hotels, as mentioned, we delivered another record result, and we now have established two complementary growth platforms. The first is our owned brands under EVT Hotels & Resorts. That includes QT, Rydges, Atura, LyLo, and The Independent Collection. The second is Connect Hospitality, which manages hotels for owners who franchise a third-party brand and draw on EVT's operating capability.
Together, we are now the second-largest hotel operator in Australia and New Zealand, with more than 100 hotels and 16,000 rooms. Full year FY 2026 occupancy edged up to 79%, the average room rate rose 2.2% to $233, and RevPAR reached a record $184, up 2.8%. Each key brand contributed. Rydges RevPAR was up 6.7%, Atura was up 2%, and QT was flat, reflecting the temporary works at QT Gold Coast and Queenstown, and up 4.9% when you adjust for those two projects. Our owned portfolio, EVT Hotels & Resorts, is growing. In March, we acquired QT Auckland, partially funded by recycling capital from the sale of Rydges Geelong and securing a flagship hotel in New Zealand's largest city. Our two priority investment projects are progressing well. At QT Queenstown, the first 65 upgraded rooms are outperforming expectations, and the new conferencing space is a standout for the market.
We expect the project to complete around October 2027. LyLo Gold Coast is being developed on underutilized land, EVT land at the back of QT Gold Coast, and will deliver 296 pod rooms and 46 private rooms, and we expect completion of that project in the second half of the 2028 calendar year. When these two projects are done, our major owned hotel investment program will be largely complete. Our asset light pipeline is building also. Atura Oran Park, a high-quality lifestyle hotel, opens next week. QT Parramatta is on track for early 2027, Rydges Tauranga for late 2028, and Rydges Resort Wailoaloa Beach in Fiji for 2029. In The Independent Collection, we added The George in Brisbane and the Radisson Flagstaff Hotel in Melbourne, which will become a Rydges, and we also signed our first airport hospitality agreement at Wellington Airport.
We are also taking our EVT Hotels & Resorts brands offshore. Following the success of QT Singapore, Rydges will enter Bangkok under a 15-year management agreement for a new 165-room hotel opening in 2028, and LyLo has secured a 387-bed property in Sukhumvit, Bangkok, our third brand to enter Southeast Asia. Harry Thaliwal has joined as Executive Vice President Asia, based in Bangkok, to lead that growth. Our second growth platform, Connect Hospitality, has started very well. RevPAR across the managed portfolio is up 11%, and gross operating profit is up 20%. We have also secured two more hotels, the Sage Hotel James Street in Brisbane and Country Comfort in Perth, and we are seeing interest from major hotel brands. We also welcomed Brett Forer as Chief Development Officer to lead our hotels development team and program, and we are already experiencing an increase in demand inquiry.
We have great confidence in our hotel growth strategy and our ability to execute this. In terms of entertainment, I think it does demonstrate what fewer, better can do with a good film lineup. Group admissions rose 3.6%, while EBITDA rose 45.8%. Under fewer, we ended the year with 11 fewer cinemas than at the start of FY 2025, and we have around 13 more locations to exit or renegotiate over the next three years. If we exited all 13, that would add around $10 million in EBITDA uplift, mostly from FY 2030. In terms of better, premium screens now make up around 40% of our Australian circuit. We expanded our IMAX and ScreenX footprint. Our upgraded Bondi location reopens in November, and we have more ScreenX auditoriums and IMAX experiences planned. Our return on invested capital on premium seats is above 20%.
In Australia, revenue was up 4.4% and EBITDA up 14.5% with seven fewer locations. We also grew market share on a like-for-like basis. In New Zealand, we cycled a very strong local title and absorbed the partial closure of Manukau, which is a top five site. With tight cost control, EBITDA still improved on the prior year. Germany shows the leverage most clearly. Admissions were up 9.5%, revenue was up 17.2%, and EBITDA was up 254.8%, the best result for that circuit since FY 2018, with 11 fewer locations. Across the industry, film production has stabilized, and release windows have settled, with the major studios committing to 45 days in cinemas. As we've stated, the audience never went away. They needed the right films, and with fewer, better cinemas, more of every admission now converts into earnings. In terms of Thredbo, we grew revenue 10.6% and EBITDA 13.7%.
Winter 2025, as mentioned, brought much better conditions, and summer trade started strongly, with November and December revenue up 17.9%. However, January visitation was affected by bushfire concerns in the region, and winter 2026 season started slowly due to conditions. That is where our investment in the all-weather snow factory proved invaluable. It enabled us to open Friday Flat from opening weekend and offer a viable product for beginners. We are proud that Thredbo became the first destination in Asia Pacific to achieve EarthCheck Platinum accreditation, and that for the ninth year in a row, Thredbo was named Australia's best ski resort. In terms of business transformation, one of the clearest expressions of transformation this year has been AI. We've put AI into the hands of our people. Every general manager now has an AI goal in their FY27 incentive, rewarding adoption and measurable productivity gains in day-to-day operations.
In our support functions, AI is automating hotel back-office processes, room allocation, room orders I should say, finance and night audit. It's strengthening cyber threat detection and response, and powering our sustainability analysis and reporting. But the bigger opportunity for EVT is how AI can work in our customer segment. It's how customers search, book, and share feedback. We're deploying AI chat and voice agents for bookings and dining, advancing AI search and generative engine optimization, and working to make sure EVT brands are recommended inside AI conversations. We were the first hospitality group in Australia to launch EVT Hotels & Resorts in ChatGPT, and this week, we launched the Event Cinemas app in ChatGPT, the first cinema operator in Australia to do so. AI is the biggest change to our business in recent times, and we're embracing it with real excitement.
In terms of the group structure review, Alan has already covered the appointment of Rothschild & Co. to assess management's recommendations on EVT's future group structure and has updated you on the review so far. We are confident in the growth opportunities in hotels across both our owned and managed platforms and in the options available to accelerate the growth. We are not considering acquisitions of additional alpine resorts or cinema businesses in other territories. Our fewer, better strategy continues to deliver, and premiumization continues to generate strong returns. Thredbo and Cinemas both offer growth, but the greatest opportunity for material growth lies in hotels. Our goal is a group structure that is aligned to unlock that growth and grow value for shareholders. As Alan said, we'll update the market as required. Now let me comment on our first quarter performance and trading. We had a strong first quarter.
Group EBITDA was AUD 72.5 million, up AUD 10.7 million, or 17%, on the prior comparable quarter on a normalized basis, excluding the impact of AASB 16 leases. The entertainment group achieved its second highest Q1 box office result ever with around 30 fewer locations than pre-COVID, delivering significant growth on the prior comparable quarter due to two strong blockbuster films, "The Odyssey" and "Spider-Man." Q1 admissions were up 19% and EBITDA was AUD 32 million, up AUD 20.2 million, or 171%, demonstrating the strong operating leverage the team has built. The Christmas slate looks strong on paper with "Avengers: Doomsday," "Dune: Part Three," "The Hunger Games," and "Jumanji: Open World" among the titles. We anticipate a strong first half subject to film performance, and the second half film lineup is still taking shape.
Hotels quarter one EBITDA was AUD 23.9 million, marginally down 2%, which was a good result given the prior year included the British and Irish Lions tour. This is a cycling effect, not a demand signal, and our hotels continue to outperform the market. The first half also cycles the Ashes tour and carries a short-term impact from the LyLo works at QT Gold Coast, but these are timing effects. Conditions will build as they roll off. We expect another record year for hotels, including around AUD 13 million of incremental EBITDA from Connect Hospitality into QT Queenstown coming back online, offsetting the Geelong and Rotorua divestments. We are also working to secure business for the Rugby World Cup in October 2027, go the All Blacks, which will be a significant boost for hotels early in financial year 2028.
Thredbo quarter one EBITDA was AUD 20 million, down AUD 9 million, reflecting the worst snow conditions in more than 40 years. Compared with prior poor seasons, yield growth and cost control still delivered a relatively solid result. Subject to summer and June 2027 conditions, we currently expect a full-year Thredbo EBITDA of between AUD 16 million-AUD 20 million. Overall, and subject to external market factors outside of our control, our EVT financial year 2027 group outlook is positive, and we are confident in our group strategy. I would now like to thank the amazing team EVT, some of you are in this audience, and to everyone listening online and to the entire EVT team. The results we are delivering are a credit to you all.
Your commitment to deliver the best outcomes for shareholders and customers are incredible, and making EVT a great place to work every day, taking care of each other and making sure we are lifting everyone to deliver the best results. I am exceptionally proud of you all and confident that we have got the right people and capabilities to deliver our strategy, and on behalf of the board and myself, thank you to all of you. I would also like to thank everyone, all shareholders, for your support and interest in attending today's meeting, and for those participating online in this morning's meeting, thank you.
Thank you, Jane. I would have to say, good luck when you next meet the Wallabies. Look, I should comment that the results are outstanding, and they're not just short-term. What Jane has just outlined is the culmination of many, many, in case, years of work and dedication to executing a particular strategy. That strategy has been that of our CEO, and I thank her very much for it. Thanks indeed, Jane. Friends, there is no vote on this item of business. However, as mentioned, I'll call for any discussion towards the conclusion of the meeting. I'll now move to consider the second item, which is the adoption of the remuneration report. This report, it sets out on page 23 to 33 of the annual report.
It explains the structure of and the rationale behind the group's remuneration practices, and the link between remuneration of Key Management Personnel 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 who were KMPs during the year. It makes clear that the basis for remunerating non-executive directors is distinct from the basis for remunerating executives, including the CEO. Friends, based on proxies already received, we expect that whilst a majority of votes cast have been in favor of the resolution, we will receive more than 25% of non-excluded votes against the adoption of this report. I might ask Brett Chenoweth, as Chairman of the Nomination and Remuneration Committee, to comment on this further. Brett?
Okay, sure. Thank you, Alan. As Alan has said, a majority of the votes were cast in favor of the rem report, and I would like to further note that the votes against the resolution represent only 13% of the issued capital of the company. I know that Alan has spoken to many of our shareholders leading up to this meeting, and we have heard many messages of support, as well as questions and feedback on the rem arrangements of the company. For those shareholders voting against the rem report, we understand the role of the proxy advisors, some of whom have raised concerns regarding certain aspects of the group's remuneration arrangements.
As Alan has said in his address, some of these reports make comparisons between EVT and its index peers that do not take into account some of the challenges and complexities of our group, with its three separate operating businesses, substantial property portfolio, and obviously acting in multiple geographies. Suffice to say, we have great confidence in our management team. We strongly believe that our remuneration arrangements are consistent with the exceptional ability, contribution, and efforts of management to drive positive outcomes for the shareholders. I'll now hand back to Alan.
Right. Thank you, Brett. Accordingly, I now move the resolution. The next item concerns the re-election of Valerie Ann Davies. Valerie retires by rotation in accordance with the constitution. Her background and qualifications have been outlined in the explanatory notes for the notice of meeting on page 5 of the report. Friends, before moving this resolution, I would like to advise that Valerie has indicated she will not be seeking a further term beyond this 3-year term, and if deemed appropriate and desirable, she may in fact not fill the whole term. I would like to thank Valerie for her services to date, and her ongoing services in her next term. She has proven to be a strong contributor. She has also proven, contrary to what proxy advisors might think based on numbers, a very independent and forthright individual in her views on the company. Accordingly, I now move the resolution.
Thank you. Next concerns the re-election of Brett Chenoweth. Brett retires by rotation in accordance with the constitution. Brett's background and qualifications have been outlined in the notes to the notice of meeting on page 4 of the annual report. I move that resolution. The next concerns the reinsertion of the proportional takeover provisions. These provisions were initially introduced at the AGM in 1991, and are required to be renewed at least every 3 years. This most recently happened in 2023. The provision now requires reinsertion. Full details are included in the explanatory note to the notice of the meeting. Accordingly, I move the following special resolution, that the proportional takeover provisions in the form of Rule 6 of the Constitution of the Company be reinserted for a further period of 3 years from the date of this meeting. I move that resolution.
Next concerns the award of performance rights to our CEO under the Performance Rights plan. This plan provides an incentive for executives to achieve above-average performance over the medium to long term in the group's businesses, which will be reflected in higher group earnings and growth rates. Details of the plan are set out in the notice of the meeting. I move the resolution. Well, friends, that was the last item of formal business. I would now like to invite questions and comments, both from the floor and any that may have been delivered from our colleagues online.
At this time, you may also ask questions of the auditor about the conduct of the audit, the preparation and content of the audit report, and the accounting policies adopted by the company in relation to the preparation of the financial statements, and also to the independence of the auditor in relation to the conduct of their audit. David, do you have something on?
Yeah, we do have a question from a shareholder participating online. Thank you for doing a strategic review. It is probably a good and appropriate time, but one question, from your perspective, why now?
Why now? It is a great question. Look, because now is the right time, is the simple answer to that. Management's focus over the last five years coming out of COVID was on navigating recovery. I think pre-COVID, entertainment was in a different state to coming out of COVID. Our supply was great. In COVID, overnight, we went to zero revenue and had to work out how to operate and rebuild and grow. In terms of supply of films, following the COVID shutdown in supply, then there was the writers strikes, which reduced the supply. As a result, we built our fewer, better strategy, and we are really pleased with how that is performing, and you are seeing that demonstrated in the numbers, and it is the right strategy. We had to deal with a greatly changing environment in that business.
You will see from the numbers that it is not the size that it was pre-COVID because the size of that business has changed. But we are in a great position to maximize the earnings from that business now. At the same time, five years ago, we really had QT and Rydges as managed brands, but we did not have enough arms in our growth platform for hotels to really extend. We were concentrated on the Australia and New Zealand market, and we wanted to examine our potential offshore. We have now managed to build platforms where we can fully leverage our capabilities to grow in all segments of the hotel market in Australia and New Zealand and Southeast Asia. Building those platforms takes time. We have now got them, so we are ready to pursue those. At Thredbo, pre-COVID, it was a big discount market, beginner skiers.
Post-COVID, we turned left, and it was a fewer, better strategy. We created a premium resort, and that has paid us great dividends for a loyal audience and a high-yielding audience in that business. We also had to take our time to assess and understand the snow-making technology, which I can tell you, the price of that has changed greatly over five years and is now a viable offer. So what that means for us is we can take a marginal season of eight weeks and potentially extend that to 12, 14 weeks. So each of our businesses required strategies. In property, we had a property, but we were not property developers. So we drew a strategy where we knew that we wanted to own key city hotel properties that could underpin our growth.
And we have embarked on that strategy of having core and non-core assets and divesting them in a timely manner to maximize return for shareholders and to rightsize that portfolio. At the same time, as Alan's alluded to, we had IT catch up. We had a lot of maintenance CapEx catch up to deal with. We feel as a management team and as a group and the teams within it, that we are now ready and in great shape to determine what our future looks like, and that's why management made the recommendations, and we're reviewing that now.
Thanks. Friends, look, I'd also add in relation to the real estate portfolio, management has done a lot of work in terms of securing appropriate development application approvals. All of these have added to the intrinsic value and the saleability, particularly the two George Street sites. A lot of work went into those in terms of development, and a lot of time was needed to undertake that. We're there, and now we're doing the right thing with the properties. David, do you have anything else?
Nothing else online at the moment.
Yes. Yep. Who is it?
Thank you, Mr. Chairman. My name is Roman Knizhenikov, and I am long-term shareholder and representing my personal shareholdings, my company shareholdings, and self-managed super fund. I have three questions. Question number one, are you inspecting our properties? Because I had visited some of our properties, and they are in very bad conditions. Question number two, our shareholder discount. Originally, to my knowledge, they were designed to bring our shareholders to inspect our properties and, if needed, to contact our management if future action needed. Since you removed most of our discounts, and the ones that left are much more expensive than we can buy from third-party suppliers, is it a sign that you do not want us shareholders to visit our properties? And third question, I would like to know how secure is our customers' information.
In light of many hackers in Australia and around the world, I want to ensure that our private information of our customers stay secure and what are we doing to secure it. Thank you.
Jane, who would you like to hear from?
Me.
Okay. Thank you for your three questions. Yes, of course, we are out in the businesses all the time. In fact, I sometimes question why we have an HQ because part of our policy is making sure we are in our businesses. We also track at every level of our business customer sentiment actively, daily. Online, every online feedback portal. We are aware, we are not going to be perfect. In some situations, we have issues to resolve, but we know where they are, and we are very focused on them. But overall, a key KPI for our team is that customer sentiment continues to improve, and it is.
Thank you.
But we do go out all the time in the businesses.
David might comment, shareholders.
Oh, please, okay.
Sure, yeah.
Yeah.
On the shareholder discount program, and appreciate your comments on that, Roman. That is a longstanding program. I think we are relatively unusual now in ASX-listed companies having any shareholder benefits program, and we have maintained that. We do think it is important, and it helps support interest in the stock from a retail shareholder perspective. We do get good utilization of that program when we look at it, so we are happy with how it is used. In terms of the discounts, we do try and set those at a level that is fair to all shareholders, acknowledging that many shareholders may not live near an EVT location that they want to visit or may not be able to travel often.
For that reason, we do not want to have discounts that are so generous that they might be costing all shareholders too much money when we are trying to seek a way of fairly giving shareholders access to our experiences.
Thanks.
Did you mean to finish on customer data?
Oh, yeah. On customer data, this is a topic very close to my heart. I am the EVT privacy officer, so I lose sleep over this if we do not get this right. Our IT Director is here, too, Andrew. Andrew and I and the whole team are very focused on that. I think that starts with only collecting what we really need to collect. It is really important also to delete information when you no longer need it. Then obviously the cybersecurity arrangements around that. Of course, it is something that we are deeply focused on. When you look at what is happening more broadly in the market and the incidents that get reported, it is something that we routinely are asking ourselves questions about, but it is a really strong area of focus.
Thank you. Thank you, Roman. Have you got any other-
I just want to check something. I visit two properties, one in South Australia, one in Western Australia. Both of them needed major repairs. When paint falling on the walls, I do not think this is a four and a half stars hotel that we guys do. Sometimes previously, if it was-
Yeah, excuse me.
owners don't want to invest money, we will just tell them, "Look, we're not going to use our name," which is very good name.
Roman, perhaps, because we really welcome your feedback, perhaps what we could do is have a conversation afterwards and you can give me the locations.
Could we have a discussion afterwards? Yes.
I can follow up, because we want to get that right.
Great. Mm-hmm.
Morning, Chair. Stephen Mayne. Just firstly, some process issues. I am wondering if next year at the AGM, if we would be able to follow the agenda. Because I know that in board meetings, you do not read out the agenda and then say, "Does anyone want to talk about anything?" So you need to respect the AGM process and go through the five items one at a time, show the proxy votes, invite questions, et cetera. So I know it makes for a more efficient meeting, i.e., less questions, less debate, but this is the one
Yeah
day of the year for retail. So just from a governance point of view, it would be good if you could respect that, follow the agenda process, which I do know is ASA policy as well.
Okay. Yeah.
Yeah, Stephen, appreciate your feedback on that. We will take that.
I certainly take that on board. In other places, I do exercise that policy where you discuss, and the argument is you have a discussion on the resolution before shareholders have to cast their vote so they can hear the questions. So I do respect that, and we will take that on board.
Great. All right. Now at its heart, the AGM is essentially an election outcome announcement event. I just want to check. I have not checked the ASX announcement. Did you include the proxy votes this morning?
This was raised last year, and yes, we have included those in our announcement this morning.
Okay. All right. Apologies that I have not looked at it. You have obviously been hinting. So what exactly was the strike? What percentage?
It was around 30% against.
Of the eligible.
Of the, yeah, non-excluded votes.
30.92%.
Okay, and the vote against Jane's LTI grant?
Very small.
Very small.
0.24?
0.24.
Okay. That's no protest at all. You were hinting, with your comment about Valerie and proxy advisors, I think you were hinting that some people are questioning her independence, and that may have led to a protest vote. Has there been a protest vote on Valerie's re-election?
There was 8% voted against.
But Alan was able to vote on that, wasn't it?
Yes.
The biggest-
It was 8% of total votes, yes.
Yeah, that's right. The biggest dollar vote against was Rem or Valerie?
It would be-
Both
On the number of shares, it would be against Rem.
Rem. Okay. All right. Which proxy advisors recommended against, the three of them? Ownership Matters, ISS, and Glass Lewis?
Yes.
Comment and name.
Ownership Matters were in favor of all resolutions. ISS and Glass Lewis were against the Rem report and Valerie's re-election.
Okay. You've been out to see shareholders, you've argued the toss, et cetera. Are you open to making any changes? A lot of boards do. They get spooked into action by a strike because they fear losing their jobs with a board spill, which never actually happens. So what's your approach to the strike going to be? Is it going to be one of flexibility and movement, or are you going to be arguing the toss with not a lot of change?
Look, as Brett said, I speak to a number of shareholders. I will be consulting with shareholders throughout the year and prior to the next meeting. I am sure Brett, as Chairman of the Nom Rem Committee, will be reviewing all our policies in remuneration, in an endeavor to address any really major concerns that can be addressed.
That is right. We will spend time with the proxy advisors as well, of course, to make sure that they understand our position.
Great. All right. I have a few more, but I will just ask one more and then give someone else a go. Great that you are running a hybrid. I would normally be online, so well done for the hybrid. I would love you to do that at Carlton as well, Chair, if that would be possible. I would love to go to a Carlton meeting, but there are no online.
I will take that on board.
Yeah. Okay.
But it's not my place to speak about that here, as you know.
I know. I can't speak to you because I'm in Melbourne and you're running a physical meeting. I've just taken my one chance to ask for that. Just in relation to why now, and Jane Hastings' response, I bumped into David Kingston out the front. I think he's gone to Temple & Webster now. But when I've been tuning in in the past, him and his son Charlie Kingston have been calling for this sort of sweat the assets and review the properties, et cetera. Is there any element of why now, the pressure campaign by the Kingstons? Has that actually been a factor at all?
Definitely.
No?
No. If you'd listened fully to my answer, you will have understood what the five years has been like for this company in recovery mode. I think I covered that fully, that now is because we're at the point where we actually have established growth platforms that we're really clear on, and we've dealt with recovery issues that we needed to deal with.
I think the other point, Stephen Mayne, is that we've also got this complementary capital recycling program that's happening. It's a good time as you're doing that to review the broader structure of the group. We're also crystal clear on our long-term strategy and what we need to do. It's sort of the perfect storm.
All right. I'll give someone else a go. I'll come back.
Thank you. Charlie Kingston. I did not know that Stephen Mayne was going to make those comments. His comments relate directly to my question, which was not planned. Again, just on the why now, the strategic review, just correct me if I'm wrong, please, but Chair, in your remarks you said it was requested to assess management's recommendations. I'm just trying to understand. I mean, clearly you're the largest shareholder here, so you will either accept or not accept Rothschild's recommendations. From your perspective, was it you that prompted the strategic review? Everyone said, Brett, you just said you're in support of the long-term strategy. You're crystal clear. Everyone agrees.
I'm just trying to understand from you, Chair, if it was your prompting that wanted the strategic review and if you felt like there was something missing from the strategy which everyone today has endorsed. I'm just a bit confused on that, please.
Right. Certainly. Look, today I speak purely as a Chairman and Director of EVT. Management came up with the concepts after the work that Jane Hastings outlined in an answer to a previous question. A number of opportunities are before us as a company, and management put those forward. As Chairman of the company and a Director, I just totally have to support those because they are sensible, well thought through, and they can be seen as being for the benefit of all the shareholders.
Charlie, the other point is that the board and management are perfectly aligned on this, bringing in Rothschild was important because we wanted that sort of global view from a tier one investment bank who could test our thinking and make sure that we are thinking of all of the options that could be on the table. As I said, this is about realizing the potential of all of the divisions of this company and aligning our capital structure around growing shareholder value. Trying to get the best thinking externally, as well as a perfectly aligned sort of board and management position was the goal here, that is what we are working through.
Okay. Thank you.
Okay.
Just another two quick questions please. The comment that is often repeated is you are going to take a value first approach. What does that actually mean? Is there a number that you can put around value? Does that mean an EPS accretion or a book value first? It is a great statement, we all love value. But what does that mean? Because Chair, you have also said you are not going to invest in CapEx where it does not deliver an appropriate return. That sounds very logical, obviously.
Yep.
What does that mean? What is value first? In your view, what is an appropriate return, please?
Well, I think they are two different things when we are talking about disposals. Value is the best and optimum price you can get in the market for the asset you have. As I mentioned previously, a lot of work has gone into developing DA proposals for the two major George Street sites, and we believe that work, which is in some case over five years to achieve, has added significantly to that value. We will go to the market, and really, value is what the market will give you. In terms of the other issue of recycling into assets where we do not get an appropriate return, I think a classic example would be Rydges North Sydney, which was a property that was looking like, I think, AUD 75 million-AUD 80 million of upgrade needed.
Instead of undertaking that, we elected to sell the property, and we got, what, Jane, about AUD 70-odd million for it. That, to me, is adding value to the shareholders' pockets.
Can you put a number on it? I think the EPS target for Jane is minimum of 5% growth. You can get 5% of the bank today is an appropriate return, in your view, well north of 5%? I am just trying to understand how you think in terms of shareholder value on a per-share metric. Is there a number that you hold yourself to that?
Look-
It is going to be value creative if we get above 10% versus the alternatives?
Yeah.
Clearly, a lot of shareholders have always said you could do a buyback or you could do lots of things, given the apparent disconnect between the value and where you are trading. It is heading in a very good direction, so well done. But if you could just be more specific on an actual number target, that would be great. Thank you.
Yeah. Look, we do not have a targeted return on investment. We do obviously endeavor, as demonstrated by our other actions, look towards achieving the best possible and optimum return. That comes from minimizing expenditure and optimizing the operations of the investment. I think the second part, optimizing operations of the investments, as Jane Hastings has said in relation to cinemas, Thredbo, and the hotels, we are achieving vastly improved returns. We do not have a target, but we want them to grow.
Chairman, if I could just add a couple of comments. On Jane's incentive, it is a range from 5% to 20%, just in terms of that incentive target range. So yes, it is a minimum of 5%, and then it only caps out at 20% growth. I think that is just important to note.
Oh, that is right.
On returns, I think it obviously varies by division. For example, with cinemas, we talk about over 20% returns, circa 4-year payback on that investment. Cinema has a different risk profile to an owned hotel like Queenstown that we are investing in. It does vary by division, it is quite hard for that reason to give a generic overall guide on the return when they are different by division.
Thanks. Thank you. Just finally, the Thredbo CapEx, could you give us some clarity on how much that will cost? Clearly the valuation fall was quite significant. Off the top of my head, it was around 40% fall in the value of that asset. Is the CapEx required similar to that impairment?
We actually, I think I alluded to the fact that in that last valuation, it had that boomer season, trading season. When we look at the valuation, we kind of feel like it is 50% trading and 50% CapEx related, that CapEx in relation to Snowgums, Gunbarrel, sorry. Gunbarrel chairlift-
Doing snowmaking.
doing Snowgums and snowmaking.
Around AUD 30 or AUD 40 million, is that fair?
Yep.
Thank you.
I might just add that in relation to your earlier comments, that that expenditure is expenditure that will be critical to maintaining and increasing the revenue and earnings of the resort. It is going to be positive return, particularly the snowmaking components. Anything else online?
Nothing online.
Yeah. Do we want to come back to Stephen?
Just a couple of board questions. Is Peter not contesting again when he is next up for election?
When-
In those committee moves.
Well, Peter, when he was reelected two years ago, did indicate he may not see his full term.
All right.
That still is the correct situation.
May not? Or now that you've handed the committee chairs over, let's just say that next year will be the swan song. All the indicators are saying that. Is that right?
No, what I said was may not complete the full term.
Oh.
It's-
Definitely not running again. May not do see you next year.
No, I am not running again.
Yeah, okay. All right, because I usually like to ask long-serving directors when they, at their last AGM, to offer some exit reflections on the best couple of decisions the board made and any regrets. So, we could do it next year, but if you are not going to be here, Peter.
Okay. We might take that in mind where directors are stepping down or whatever.
Because they are often very honest on the way out. It is great. Maybe end of the meeting, perhaps. Brett's workload, so Chair of Tabcorp, Chair of CDC. Big play on the firmus there, Brett. Now our Chair, big strategic review. Could you just talk a little bit, particularly since you are up for election today, on what percentage of your work time you are currently giving this company? You obviously do not have a lot of bandwidth from an over-boarding point of view. Has that been raised by anyone? How are you managing your time with those three large and growing gigs?
You are the first person to raise it.
Yeah. It has been raised.
It has not been raised by anyone else. I certainly do not feel like I am over-boarded. As you say, there are two public companies in that mix, Tabcorp and EVT, and I think I have plenty of capacity to fulfill both of those roles. Certainly here, the independent Committee review is an additional time commitment. Remember, that is something that is a full board decision. It feels to me like that is not materially different to the full board work that we already do. We have done a lot of work historically on it. Look, short answer is, I do not feel like I have any time constraints or commitment problems here, and I am fully committed to EVT and the process.
How long has KPMG been our auditor for?
What was the question?
How long has KPMG been our auditor for?
Many years.
Have we ever run a full competitive tender for the audit since they have had the job? When was the last tender?
I am mindful of the nature of the hot topic of auditors, and I might ask David Grant as chairman of the audit committee to say a few words.
Yeah. Thanks for the question, Stephen. It is an entirely appropriate question. We do not resolve from the fact that we have had KPMG basically since their inception, which was I think late 1980s. I know you are across this, but just to bring everybody up to speed. The issue of tenure, the genesis of it is typically independence. Does the audit function lose its independence if it has been too long? We are very alive to that issue. I would make a few comments, though. We have mandatory rotation of partners every 5 years, so we get a fresh set of eyes.
Yeah.
We also have, under the audit arrangements, an independent quality review partner which is not customer-facing. I never see him or her. There is a person who has no attachment to us that thoroughly investigates all aspects of the audit. We run our own internal rigorous quality assessment of the audit. In terms of a tender, the possibility of going out to a tender remains a live discussion, and we certainly have not closed the door on it. Maybe if I can just give you a little bit of a color on our thinking there. Whilst clearly there has been some serious brand damage over recent times to KPMG, through our processes, we are very confident in the quality of our audit. That does not chase us off in itself to an audit tender.
I would also say that there are still processes in place, both regulatory and from a policy perspective. I think, in particular, the PJC, the parliamentary committee, will make recommendations to Treasury, which might impact the entirety of how the profession works. We will watch that with interest. Finally, from a practical perspective, running a detailed audit tender for a group that is complex as us is a big project. As shareholders know, we are doing a far-reaching strategic review at the moment, which is quite resource-intensive in itself. That on top of running the business, our board has to think about whether this would be the right time to do a tender.
I guess if I were to summarize where we are at, for those reasons, anything we do in relation to our audit will be done at the time of our choosing and with those factors in mind, and making sure that we have full clarity on the regulatory environment and the outcome of the entirety of the KPMG process.
Thank you for that. Just three final quick issues, and I'm done. Credit cards, the banning of the surcharges, has that affected us in any way? Also flowing into loyalty schemes. Poker machines, I've sort of noticed that Accor seems to be a lot more prominent attached to pokies club. They run the Labor Party's big Mercure in Canberra. A few people don't realize the Labor Party's got four poker machine venues. They've built a AUD 40 million Mercure there. Do we have a policy of not wanting to be associated with big pokies dens in the biggest gambling country in the world? How many hotels are we currently running, which are part of a gambling poker machine complex? Finally, the federal budget. All those changes, everyone's saying that's going to lead to more fully franked dividends. Is that the biggest factor for us?
Without wishing to pry, Chair, I'm guessing you're pre-1985 in terms of your holding in this company?
Some proportion of it would be.
Does that change anything for us in how you will run things?
We're all affected the same in relation to government policy. I've never met a tax ruling that affects one group and not another.
Right. But you're one of the few controlling shareholdings in the ASX, which is partially, you're saying, pre-'85. You and Gerry Harvey and maybe one or two others, but-
Well, thanks for pointing it out. I haven't focused on it.
Yeah. Anyway, finally, congratulations. That was probably your best year you've had. The stock's up at 15, so I know the Kingstons have got into you, but overall, I think you're performing really well. It's been a really impressive presentation today, so well done.
Thanks indeed, Stephen. Poker machines in hotels.
Sure. Sorry, I thought you sat down.
No.
I thought we were done. Poker machines, we don't have a policy against it, but we really had a very small footprint. Parramatta and Thredbo, which we have decided to exit. So no, we have no strategy to pursue growth in that area at this point in time.
Credit card surcharges.
Credit card-
Credit card surcharges, yes, of course. We have all been impacted by that. We have also managed to renegotiate terms to help offset part of that as well. It is a strategy everyone is dealing with, and we are working through it.
Stephen, your third one was?
Budget.
I think I got that.
Yeah, fine.
There you are. Yeah.
Okay, fine.
All right. Well, if there are no further questions. Oh, yes?
Thanks. Sorry. One very quick one. The comments or the order of talking about hotel proceeds, and to follow on from Stephen. No, we are not getting stuck in. Congratulations and well done on the strategic review. We look forward to the outcomes, but the order of how you have said proceeds or whatever may come from asset recycling is firstly growth, hotels, then debt reduction, and then potential special dividends. Is that your order of priority or preference?
That is certainly the summary that we provide, yes.
But as shareholders, we should think that is where you want to invest first into hotels, growth, then debt reduction, and then whatever is left over, dividends.
Yeah. Well, you might find that the debt reduction comes before the hotel reinvestment because that is an immediate benefit.
Yeah. Dividends are the last-
Collectively-
Yeah
No. Collectively, they are the objectives. I would not put a prioritization on any one except the disposals, of course.
Okay. Thank you.
Right. Well, thank you very much indeed. I must say, it does assist the board when we do get some worthy and relevant questions from the floor. It makes for a much more enjoyable time for us. Accordingly, I say that concludes the business of the meeting. Voting will close in 10 minutes, and the formal results will be announced to the ASX and on our website later today. I declare this meeting closed subject to the finalization of polls. In particular to those online, and also those of you who took the time to attend in person, thank you very much indeed, and I look forward to seeing you in 12 months' time. Thank you.